A&R remains a fundamental part of a label’s structure. New talent must be found and fostered.

Building artists’ careers

While record companies are always looking to discover and break new talent, they also want to develop long-term relationships with the artists they sign. Part of the role of an artists and repertoire (A&R) team is to help its successful artists develop their career in music.

A label can work with a developing artist to help them realise their vision of how they want their music to sound. Julie Greenwald, chairman and COO of Atlantic Records Group, home of artists including Alt-J, Bruno Mars and David Guetta says: "We listen to their demo, we talk to them about what they were hearing in their head when they wrote the song; we sit them with songwriters who can help them fine tune their lyrics and producers who can create the sound they were originally imagining."

Record labels can help developing artists by opening the door for them to work with the best talent in the music business. Daniel Glass of Glassnote Records emphasises the importance of collaboration: "We can help artists create their records, making available writers, mixers, mastering experts, producers. It's about a network of contacts." He cites the examples of the band Little Green Cars, 19 year olds from Dublin, whose music he introduced to Markus Dravs, the Mumford & Sons producer, who loved it and subsequently worked with them.

Record labels work with developing artists and help them put together a body of work. This may involve developing tracks the artist has written, commissioning new music from songwriters offered by music publishers, or creating a cover version in which the artist brings their qualities to a track that has been previously recorded. Ashley Newton, president of Columbia Records US, says: "A&R in its purest form is identifying unique talent and encouraging them to dig deep and create remarkable artistry. Some artists are truly self-supporting in this respect while others require a level of expertise, resource and evangelical enthusiasm in order to realise their full potential."

Building a catalogue, going global

Many record labels are also conscious that they want to further develop a historic catalogue that has been built up over many years.

"Every morning when our elevator door opens I am confronted by our photographic Hall Of Fame which includes Miles Davis, Johnny Cash, Bob Dylan, Leonard Cohen, Barbra Streisand, Bruce Springsteen and David Bowie and it reminds me of the ridiculously high standard the label has set in our 120 year history. It's both a daunting and inspirational way to start the day."

Ashley Newton, president, Columbia Records US

Helping artists break into new markets is a major way in which a label can add value to artists' careers. Frank Briegmann of Universal Music Group Central Europe and Deutsche Grammophon, points to the success of Swedish artist, Avicii, whose single Wake Me Up went Platinum in 24 countries, while he also enjoyed five million album sales, one billion streams and one billion views on YouTube. "The potential for international success is bigger than it used to be, the barriers are coming down. When you put a song on a digital platform you expose it to the world."

A changing media mix

The marketing and promotion of artists is one of the largest items in a record company's budget. In a competitive market, it is essential for an artist to enjoy promotional support if they are to have an opportunity to connect with a wide audience.

The media mix used to promote artists has changed dramatically in the last few years. Social media channels now complement, but have not replaced, traditional gatekeeper media such as radio and television.

"The mere existence of streaming services will not create hits or break artists. You still need an army of people to amplify the artist's message, helping them cut through the 30 million tracks out there to draw attention to their great album. In fact, given many streaming services are global platforms, they make the thoughtful, creative and global campaigns organised by record companies even more important."

Stu Bergen, president, international, Warner Recorded Music

The growth of online media has meant that record companies have to spend increasing resources to supply the content that these channels need. It has also meant that record labels have more options when it comes to promoting new music.

Using brand and synchronisation deals

Brand partnerships have been an area of growth in the recording industry over the last few years. Record companies have expanded the teams responsible for this area, often hiring in people with backgrounds in creative, media and sports agencies to bring in the expertise they need. They work to deliver the right partnerships for artists who are seeking to generate the widest possible variety of revenue streams.

"Record companies understand artist positioning. It's in our DNA. So we are well placed to ensure that any brand proposition and artists' objective are aligned."

Alison Boucher, vice president, brand partnerships, Sony Music Entertainment

Synchronisation deals are now a mainstream part of the recording industry's revenue mix. These commercial arrangements see music used in films and television programmes, as well as advertisements. Revenue to record companies from such deals was worth US$322 million in 2013, and they can be used to help break an artist in a particular market.