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A Market Analysis for

Interscope Records

Simone Santos

Project & Portfolio II: Business and Marketing

Full Sail University
February 26, 2020
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EXECUTIVE SUMMARY

This is a market analysis report for Interscope, Geffen, A&M Records (IGA), a major

record label that has shown remarkable success in the music and recording industry. Since the

records label’ inception in 1989, it has been an active innovator and driver of music’ pop culture

in the U.S. and abroad. This report will show its financial position, success in the music

industry, and strong market potential. It will show how new Latin music artist’ and a preeminent

marketing strategy can help revamp the company and grow the fan base. At the end of the report,

the recommendations for the company are based on capitalizing on the recent prosperity of the

Latin music market to draw in new enthusiasts, lead on the charts, and increase streaming

revenues.

OBJECTIVE

The main reason for this report is to help Interscope, Geffen, A&M Records become one

of the more competitive major record labels on the Latin Pop/ Hip-hop music scene. All of the

information has been put together to show that IGA can become an even stronger record label by

capitalizing on the expansion of the domestic and global Latin music markets.

RESEARCH METHODOLOGY

This research was gathered during the month of April. All of the information collected

was based on internet research from news articles containing both, qualitative and quantitative,

company and financial information. All of the data incorporates current developments and trends

in the music and recording industry including the rate of streaming in correlation to the Latin
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music market. The only inaccessible data was on-going and current at the time of producing this

report.

RESEARCH AND KEY FINDINGS

Interscope, Geffen, A&M Records is a flourishing major record label that grossed an

estimated $600 million in 2018. They are a subsidiary of the largest record label in the world,

Universal Music Group. IGA fell short to sister-company, record label, Universal’ Republic

Records which grossed a reported $625 million in 2018. Both yielded to competitor, Warner’s

Atlantic Records that grossed approximately $680 million that same year. However, IGA has

managed to increase its market share value by 10 percent with its most recent break-through’ in

pop, hip-hop and r&b. In 2019, Recording Industry Association of America Year-End reported

UMG’s recorded music revenues were up 18.5 percent (7.87 million dollars) with North America

accounting for $2.9 million of those dollars. Overall, in 2019 music revenues grew by 11.6

percent, music publishing revenues grew by 9.2 percent, and streaming accounted for 80 percent

of all recorded music revenues in the U.S.

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Collectively YouTube, Spotify, Apple Music reported a sum of approximately 1.15

trillion music streams total. That is why when 95 percent of the total U.S. Latin music market is

comprised of streams, as it is,

it’s essential that a pop-culture record label such as IGA occupy that high-potential market.

This past year, IGA’s music sensations, Eminem, Billie Eilish, Selena Gomez, Summer

Walker, and DaBaby have all simultaneously contributed to the label’s notable successes and

market gains. However, only popstar Billie Eilish holds the title of being Billboard’s Artist of the
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Year and has Album of the Year to back it up. She is 2019’s best seller in music’s consumption

value, hence, Interscope Record’s most valuable player.

Billie Eilish’s debut studio album “When We All Fall Asleep, Where Do We Go?” sold a

reported 2.5 million album-equivalents, surpassing Arianna Grande and Taylor Swift by a

minimum 400,000 copies. In January, she won four Grammy Awards in all major categories, and

she’s currently writing/producing the theme song for ‘James Bond’, the new film.

With all of that being said, she is only eighteen years old and just warming up.

Label giant, Kendrick Lamar has a devote fan base of core hip-hop followers who are highly

anticipating the announcement and release date of his next project. In 2018, he produced the

soundtrack for Marvel Studios, ‘Black Panther’ film which sold over 154,000 copies its first

week. In 2017, Lamar released ‘Damn’, his fifth studio album which was the biggest debut of

2017 selling 603,000 album-equivalents in the first week. Lucky for hip-hop fans, and lucrative

for IGA, Lamar is reportedly finished with the production of his sixth studio album.

Interscope, Geffen, A&M Record’s neo-soul styled, r&b balladier, Summer Walker’

debut studio album ‘Over It’ released last October and received 154.7 million on-demand album

song streams. She earned the most streams by any female, including Beyonce’s ‘Lemonade’, in
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r&b history. ‘Over It’s’ songs are also the second most streamed of all r&b recordings behind

Republic Record’s ‘Starboy’ by The Weekend. It is safe to say that IGA is on fire with its hot list

of hip-hop, pop, and r&b artists.

The aforementioned artists successes do not negate the fact that the most rapid growth

seen in the music industry comes via streaming. In 2018, Latin singer, Ozuna was YouTube’s

most viewed artist of the year. There is a direct correlation to draw between success in the Latin

music market and that of the high rate of music streaming. It only demonstrates how IGA is

booming and most profitable in other areas/genre’s of the market and where the most lucrative

and strategic plays have been played, and where there is a need for creative emergence and

development at IGA. The Latin music market it where the highest streaming consumption is

valued and where IGA could use the most innovation. Khea and Dimelo Flow are talents,

recently added to IGA’s artist roster however, they have yet to reach an eminent level of Latin

pop profitability yet.

On the other hand , their label-mate, the “King of Reggaeton”, Daddy Yankee has been

the labels front-runner in Latin pop music cultivation for close to two decades already. Presently,

IGA has not experienced any successful artists volume growth since the surge in Latin music
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streaming in 2017, and Daddy Yankee’s feature on Luis Fonsi’ (Universal Latin) global chart

topper, ‘Despacito’ is now old news.

The evolution of the Latin music market has become increasingly spicy, in the U.S. There

are a number of Latin pop artists featuring on English-speaking pop songs. As an societal ode to

the rise in Latin music popularity, the NFL’s Superbowl LIV even featured its first Latin half-

time show performance on February 2, 2020. A high-demand Latina artist coincides with the

direction and future of music’s pop culture. IGA has a great potential to capitalize in the Latin

music market with the right Latin artist and marketing strategy derived from and towards

streaming.

CONCLUSIONS

When combining Interscope, Geffen, A&M Records financial state, their charting and

sales successes and the role that they play in the market, one can see that IGA’s has great

positioning in almost all aspects of the company. This should continue into the future. Many

segments of IGA are sustaining growth. IGA is doing almost everything possible to lead and

continue to boost UMG as the most successful major record label in the world. IGA has an
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impeccable and intriguing pop culture history. They have a wealth of fans across a span of

geographic locations and demographic segments in appropriation with the music that they

produce, record, publish and distribute. A new Latin label superstar would be a strategic play

with the rise of the Latin music market in correlation to streaming.

RECOMMENDATIONS

Going forward, the biggest thing that Interscope, Geffen, A&M Records needs to do is to

consider how to capitalize on the rapidly growing Latin music market. They must consider how

substantial streams have become in respect to global, and non-English speaking music. There

are a growing number of domestic music enthusiast who besides English-speaking pop music

enjoy Spanish speaking pop music as well. Although, Spanish is the second most spoken

language in America to English, it is also the second most spoken language in the world, behind

China, and with English being the third most popular globally. Generally, there’s a strong

relationship between Latin and American cultures, as well as, Spanish and English languages in

present-day domestic society. A number of Latin pop artists are currently featuring on English-

speaking pop songs. IGA should increase their hold on global music interests and specifically the

Latin music market. Streaming has enhanced reachability and Latin music fans are unceasingly

active. Signing a fresh, new Latin artists today has the potential to be as big as Billie Eilish now

that streaming accounts for 95 percent of the U.S. Latin music market. Gaining new fans will

bring in a lot more revenue and the majority of that revenue will go into developing current and

signing new artists.

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REFERENCES

Bossi, Andrea. (2020, January 10). There Are More Than One Trillion Music Streams, In U.S. During 2019, Record
High. Forbes. Retrieved from https://www.forbes.com/sites/andreabossi/2020/01/10/over-one-trillion-music-
streams-in-us-during-2019-record-high/#3b33676e104a

Caulfield, Keith. (2019, October 13). Summer Walker’s ‘Over It’ Earns Biggest Streaming Week
Ever for an R&B Album by a Woman. Billboard. Retrieved from https://advance-lexis-
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Exposito, Suzy. (2019, March 27). Latin Music Revenue Growing By Double Digits, Says RIAA
Report. Rolling Stone. Retrieved from https://www.rollingstone.com/music/music-latin/riaa-
report-latin-music-18-percent-growth-812794/

RIAA Year End Latin Music Revenue Report. (2018). Retrived from http://www.riaa.com/wp-
content/uploads/2019/03/RIAA-2018-Latin-Year-End-Music-Industry-Revenue-Report.pdf
Levin, Nancy. (2019, October 4). 10 Largest record Labels in the World. Largest.org. Retrieved
from https://largest.org/entertainment/record-labels/
Sisario, Ben. (2017, April 24). Kendrick Lamar’s ‘DAMN’ Earns the Biggest Debut of 2017.
The New York Times. Retrieved from https://www.nytimes.com/2017/04/24/arts/music/kendrick-
lamar-damn-billboard-debut.html

(2020, February 28). The music industry was left for dead a few years ago. Now it's booming
again. CNN Wire. Retrieved from https://advance-lexis-com.oclc.fullsail.edu/api/document?
collection=news&id=urn:contentItem:5Y9N-82H1-DY7V-G0TB-00000-00&context=1516831 .

(2020, February 11). Interscope Didn't Just Own the Grammys - It's Ruling Oscars Music,
Too. Variety. Retrieved from https://advance-lexis-com.oclc.fullsail.edu/api/document?
collection=news&id=urn:contentItem:5Y63-NMK1-DYJW-X3VM-00000-00&context=1516831 .

Steve Knopper. (January 30, 2020 Thursday). Billie Eilish's Grammy Awards Come Amid
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(2019, September 25). Streaming Now Accounts for 95% of the U.S. Latin music market. High
Resolution Audio. Photo retrieved from https://www.hiresaudio.online/streaming-now-accounts-
for-95-of-us-latin-music-market/