CM In Depth

The State of the Industry

This article orginally appeared in Canadian Musician magazine's 40th anniversary issue, published in March 2019.

By Andrew King

Streaming services. Copyright reform. The value gap. Music cities. There’s been no shortage of hot-button topics facing the Canadian music industry these last few years, though that’s basically been the case throughout Canadian Musician’s 40-year history. Still, as we approach a new decade, it feels like our current series of crossroads is especially pivotal, and that this is simultaneously one of the most exciting, challenging, and transformative times this industry has ever experienced.

With that, we thought it crucial to take a lay of the land and explore the timely subjects facing various factions of the creator community by speaking with some of the organizations that represent and serve them.

Of course, some of the ideas and initiatives they discuss may seem a little “insider baseball,” but whether they pertain to policy, profits, or internal programming, they all directly and significantly affect artists looking to carve out or continue their careers in this ever-evolving business.

Canadian Federation of Musicians

Alan Willaert, AFM VP from Canada

Alan-Willaert

The American Federation of Musicians of the United States and Canada (operating in Canada as the Canadian Federation of Musicians) is the largest union in the world representing professional musicians. www.cfmusicians.org.

CM: What are some of the key issues or trends currently facing your members or the Canadian music industry as a whole that you’ll be focusing on throughout 2019?

AW: At the CFM office in Toronto, we deal with a wide variety of services, ranging from immigration assistance (for gigs in the U.S.); the collection and distribution of New Use payments (royalties) for use of recordings; lobbying government for various issues such as copyright reform, changes to the labour code, and employment standards act; as well as serving on an advisory committee for NAFTA. Our office is negotiating and servicing national agreements with broadcasters, production companies, record labels, and festivals and settling claims for non-payment on behalf of our members. We sit on the executive committee of the International Federation of Musicians (FIM), an organization of musicians’ unions from more than 75 countries, as well as the Canada Council of the Canadian Labour Congress. We are the head office for 25 Canadian Locals, located in major cities from Victoria to St. John’s and providing services to 17,000 Canadian musicians.

CM: What are your ideal outcomes for some of these initiatives, and how do you plan to work towards them?

AW: Our efforts have, for 2019, achieved changes to the upcoming Passenger Bill of Rights, which establishes policies for how airlines accommodate musical instruments as carry-on luggage. We have just completed a successor agreement with the jingle industry and the CBC and have negotiations pending with TVO/TFO. In addition, we will be bargaining first-ever agreements with Bell Media, Rogers Communications, and Corus Entertainment. CFM is in the middle of negotiations with the Canadian Media Producers Association (CMPA) in an effort to ensure all independent production is done under a union contract with appropriate fees and benefits, which is especially important with the arrival of Netflix as a major producer. Musicians are protected by our agreements when they work Canadian Country Music Week, East Coast Music Week, and the JUNOs, as well as variety TV such as The Launch. Internationally, we work with our partners towards better compensation for artists on streaming services.

Canadian Independent Music Association

Stuart Johnston, President

Stuart-Johnston

CIMA is a not-for-profit national trade association representing English-language, Canadian-owned and controlled businesses of the domestic, commercial music industry from coast to coast to coast. www.cimamusic.ca.

CM: What are some of the key issues or trends currently facing your members or the Canadian music industry as a whole that you’ll be focusing on throughout 2019?

SJ: First, mandated funding from private radio broadcasters that supports several programs for the commercial music industry is forecasted to significantly decrease over the next five years. Revenues from both physical and digital album sales are plummeting. For the overwhelming majority of artists and producers, especially those in the independent sector, earning a living from streaming revenues is extremely challenging. Because a music company’s “product” is largely intangible intellectual property, the traditional banking system is reluctant to provide capital to music companies in the manner that it does for other industries. Funding and access to capital are the most significant obstacles facing our independent music sector.

Also, Canadian music companies, artists, and industry associations like ours are all actively engaged in global exporting. Per CIMA’s 2016 Music in Motion report, almost 90 per cent of those surveyed identify exporting as extremely important to their business, with almost 60 per cent noting it is necessary for their survival; however, music export investments cost double domestic activities and can cost 21 times more for breakout artists (per artist) than for emerging artists. This cost is highly burdensome and a significant barrier for our industry.

CM: What are your ideal outcomes for some of these initiatives, and how do you plan to work towards them?

SJ: CIMA has been aggressively lobbying the federal government for a permanent increase to the Canada Music Fund (CMF) of $10 million a year to support the industry’s exporting initiatives. The CMF assists artists and entrepreneurs with sound recordings, music videos, touring and showcasing, and marketing and promotional initiatives in an increasingly global, digital marketplace. It also allows Canadian consumers to access high-quality music choices. This support is leveraged by the music sector for much-needed capital into the professional and artistic development of emerging Canadian artists.

We’ve also been actively engaged in both the Copyright Act Review and the Telecommunication and Broadcasting Act Review.

Canadian Live Music Association

Erin Benjamin, President & CEO

Erin-Benjamin

The Canadian Live Music Association is the voice of Canada’s live music industry, advancing and promoting its many economic, social, and cultural benefits. www.canadianlivemusic.ca.

CM: What are some of the key issues or trends currently facing your members or the Canadian music industry as a whole that you’ll be focusing on throughout 2019?

EB: The CLMA will address a variety of key issues in 2019. We’re launching our Raising the Bar program to bring training and best practices regarding safer spaces, harm reduction, and event safety to members and the industry. We’re also leading “Re:Venues: The Importance and Impact of Toronto’s Live Music Venues,” a ground-breaking study seeking to demonstrate the contributions and impacts stimulated by Toronto’s live music venues.

We’re leading discussions and advocating where necessary – for example, with Health Canada and the cannabis industry. We’re building a better relationship between SOCAN and the live music sector, advocating for fair policy and legislation on issues that impact the sector at every level of government. Of course, we’re also continuing to support municipalities in their efforts to become “music cities” and working with the tourism sector to leverage the value of live music more effectively and drive music tourism.

CM: What are your ideal outcomes for some of these initiatives, and how do you plan to work towards them?

EB: Our ideal outcomes include bringing the sector together to advance dialogue; to raise awareness of the economic, social, and cultural importance of all live music stakeholders; and entrench the value of the contributions made by our members and then see that value reflected in policy, funding, and legislative action and change.

Canadian Music Publishers Association

Yaka Somasunderam, Communications Coordinator

Yaka-Somasunderam

The Canadian Music Publishers Association seeks to create business opportunities for its members and promote their interests and those of their songwriting partners through advocacy, communication, and education. www.musicpublisher.ca.

CM: What are some of the key issues or trends currently facing your members or the Canadian music industry as a whole that you’ll be focusing on throughout 2019?

YS: We are actively involved in the Federal Government review of the Copyright Act. Large, profit-driven tech companies have been able to profit immensely from the creations of rightsholders without fairly compensating, if at all, the creators of the works and the companies that invest in them. We also have an out-of-date private copying regime that doesn’t accommodate present-day audio recording devices such as digital recorders and tablets, as well as technologies that have yet to be invented.

Women make up less than three per cent of music producers worldwide. We need to challenge this and be part of a solution.

Export is a key driver of growth for Canadian music publishers. 68 per cent of our members’ revenues are now from foreign sources compared to 28 per cent in 2005. Our 2018 Export Ready, Export Critical report notes that fundamental elements of publishing success anywhere in the world are having the right songs and the right relationships, with each of these elements feeding the other. The report is available on our homepage.

CM: What are your ideal outcomes for some of these initiatives, and how do you plan to work towards them?

YS: The Federal Government needs to fix the exceptions in the Copyright Act that have created a value gap and make our private copying regime technologically neutral. This is further outlined in the position paper on our website’s resources page. This year, we will be continuing our efforts to show our government that the changes that need to be made would have an incredibly positive impact on the livelihoods of music creators, their publishers, and other companies that invest in them.

We’re launching our first Women in the Studio Program in March. Five producer-writers will participate in a curated series of technical and networking opportunities at the JUNOs, CMW, and other events throughout the year. Follow us on social media to hear more about the program.

We are also looking forward to 2019 with our Create song camps and trade missions to Nashville, the U.K., and Calgary, as well as a return visit to the Banff World Media Festival.

Canadian Musical Reproduction Rights Agency

Veronic Syrtash, SVP, Business Affairs & Corporate Development

Veronica-Syrtash

CMRRA, a SoundExchange company, represents nearly all music publishers doing business in Canada, including large multinational and independent music publishers and individual self-published songwriters. www.cmrra.ca.

CM: What are some of the key issues or trends currently facing your members or the Canadian music industry as a whole that you’ll be focusing on throughout 2019?

VS: CMRRA is the most reliable resource and steadfast advocate for music publishers – including self-published songwriters – in Canada. CMRRA licenses dozens of digital services, including all major online music retailers operating in Canada, and leads the business of licensing, collecting, and distributing reproduction rights royalties.

We’ll continue to fight to protect the value of the reproduction right on many fronts, including securing hard-fought tariffs and favourable licensing terms. We’re the right choice because we have been instrumental in attaining some of the highest royalty rates in the world and establishing productive relationships with our licensees that promote the prompt payment of rightsholder royalties.

We will continue to build on our proven track record in addressing the complexities of work-by-work royalty invoicing and back-claim processes in order to provide transparent reporting to all of our music publisher clients.

CM: What are your ideal outcomes for some of these initiatives, and how do you plan to work towards them?

VS: CMRRA will continue to establish strong relationships with and pursue licenses for digital services as they enter the Canadian market. We will launch new IT tools and solutions that provide unprecedented visibility into music use metadata so that publishers and songwriters can benefit from the company’s broader mission of making the business side of music easier for creators. CMRRA will continue to advocate for changes to the Copyright Act to ensure that music publishers and songwriters are paid fairly while also addressing the value gap that has emerged over the last decade.

Canadian Private Copying Collective

Lisa Freeman, Executive Director

Lisa-Freeman

The Canadian Private Copying Collective (CPCC) collects and distributes private copying levies on behalf of our member organizations, representing songwriters, recording artists, music publishers and record companies. www.cpcc.ca.

CM: What are some of the key issues or trends currently facing your members or the Canadian music industry as a whole that you’ll be focusing on throughout 2019?

LF: Technology makes it easy to copy music to listen to wherever, whenever. Creators license those copies wherever possible, but they can’t license everything, like copying from illegal downloads. That’s why, since 1997, the Copyright Act allows creators to be remunerated for unlicensed copies through a levy (royalty) on sales of blank audio recording media. But only media, not devices.

Unfortunately, that means that since 2008, levies can only be collected on recordable CDs. As CD-Rs die out, compensation for creators has plummeted from $38 million in 2004 to $2 million in 2017, but Canadians still copy lots of music. In a 2018 survey, we found there were over 18 billion tracks of music stored on Canadians’ cell phones and tablets, and almost one third of them were copied without a licence. That means the music’s creators received nothing for 2.7 billion copies made in just the past year.

CM: What are your ideal outcomes for some of these initiatives, and how do you plan to work towards them?

LF: The Copyright Act must be amended to make this regime technologically neutral, so it can keep up with how Canadians consume music. Then CPCC could ask the Copyright Board for levies on smartphones and tablets, where most private copies are made. Proposed levies would only be around $3 per device because when everyone pays a little, it amounts to a lot – and helps keep Canadian creators making music. Other minor amendments would clarify that this legislation isn’t about offering or obtaining music, just copying that cannot be controlled. CPCC and 22 others made these recommendations through the government’s 2018 review of the act, and we continue advocating.

Before legislative change could be implemented, CD-R levies will likely cease entirely. CPCC and supporters are therefore also seeking in Budget 2019 an interim Private Copying Compensation Fund of $40 million per year for 2019-2022.

Music Canada

Graham Henderson, President & CEO

Graham-Henderson

Music Canada is a passionate advocate for music and those who create it. We represent the major record labels – Warner Music Canada, Sony Music Canada, and Universal Music Canada – and work to improve the music ecosystem in this country. www.musiccanada.com.

CM: What are some of the key issues or trends currently facing your members or the Canadian music industry as a whole that you’ll be focusing on throughout 2019?

GH: Throughout the Canadian Copyright Act review that commenced in 2018, it was clear that all corners of the music industry are experiencing the adverse effects of the value gap – the discrepancy between the massive music consumption that occurs online and the inadequate compensation to the creators of that music.

The biggest takeaway from the review is that the value gap is a real phenomenon hurting creators that desperately needs to be addressed. Stakeholders across the industry were unanimous in recommending a set of solutions to ensure music creators are paid whenever their work is commercialized by others.

Addressing the value gap will continue to be Music Canada’s primary focus for 2019, through the review and by other means. We’re also committed to improving the music ecosystem in a number of ways, working with industry partners and all three levels of government to create a more prosperous, more sustainable, safer, and more inclusive music industry.

CM: What are your ideal outcomes for some of these initiatives, and how do you plan to work towards them?

GH: Our ideal outcome in addressing the value gap in Canada is to create favourable legislative, regulatory, institutional, and funding frameworks so that the entire Canadian music industry can prosper. For example, at the institutional level, we’re working to enhance the effectiveness of the Copyright Board of Canada. Legislatively, we’re working to ensure the Copyright Act review yields real and meaningful results, strengthening the business climate for music creators.

Another powerful way we’re working to address the value gap is by empowering artists to become advocates and to share their stories with political decision makers, their peers, and music fans. We’ve also convened a new advisory group with a strong artist contingent to help guide our policies and initiatives.

Ultimately, Music Canada is determined to foster an environment in which music businesses can thrive and artists can have long and prosperous careers.

SOCAN

Michael McCarty, Chief Membership & Business Development Officer

Michael-McCarty

SOCAN administers licenses for the public performance of music; matches those performances to rights-holders; represents reproduction rights for visual artists, music creators, and publishers; and ensures that members receive what they earn from their work. www.socan.com.

CM: What are some of the key issues or trends currently facing your members or the Canadian music industry as a whole that you’ll be focusing on throughout 2019?

MM: As music and screen media move to streaming, there is a disconcerting trend of substantially lower levels of consumption in Canada of music created by Canadians on these platforms compared to radio or TV. We must ensure that Canada’s current success – even its dominance - in globally popular music is not only sustained, but justifiably increased. The problem of “discoverability” has emerged with the popularity of streaming services. As with many new technologies that are quickly adopted, the potential negatives take more time to be realized, but once they are, it is essential to correct them quickly. Canada’s musicians and music creators know all too well about discoverability challenges, and SOCAN will continue to work to alleviate the situation and help course-correct streaming so that the growth of streaming platforms only has positives for Canadian creators.

CM: What are your ideal outcomes for some of these initiatives, and how do you plan to work towards them?

MM: SOCAN will continue to engage government at multiple levels to consider how Canadian music is made available and discovered. This includes Canadian screen productions on streaming platforms. Tough questions must be asked and addressed: Are playlists, recommendation engines, and algorithms fair? Or are they biased towards non-Canadian works and productions? Is Canadian culture adequately supported? Should the government work to ensure that streaming platforms favour the discoverability and availability of Canadian culture? The ideal outcome would see the introduction of legislation to ensure the continuation and update of highly successful methods to promote visibility and awareness that guarantee strong availability, as well as incentives for screen producers to work with Canadian composers.
SOCAN will continue to foster the development of new Canadian music by assisting with the careers and business of music creators and music publishers. The domestic and global success of Canadian music – artists, songwriters, beat-makers, screen composers, music publishers – not only must be sustained, it must be accelerated.

Re:Sound

Arif Ahmad, VP, Legal Affairs & General Counsel

Arif-Ahmad

Re:Sound is the Canadian not-for-profit music licensing company dedicated to obtaining fair compensation for artists and labels for their performance rights. We collect and distribute royalties to creators through our member organizations and directly. www.resound.ca.

CM: What are some of the key issues or trends currently facing your members or the Canadian music industry as a whole that you’ll be focusing on throughout 2019?

AA: Artists and record labels are not receiving fair compensation for their work because of two exemptions under the current Copyright Act which unfairly deprive them of millions of dollars in royalties each year.

First, commercial radio stations receive an exemption from paying royalties to artists and record labels on their first $1.25 million in revenues. This exemption is an unnecessary subsidy for a highly profitable commercial radio industry, discriminatory against performers and makers of recorded music, discriminatory against other music users, and the only exemption of its kind in the world.

Second, the definition of “sound recording” deprives performers and makers from receiving public performance royalties when their sound recordings are used in TV or film. This exemption applies only to performers and makers and does not exist in many other countries.

CM: What are your ideal outcomes for some of these initiatives, and how do you plan to work towards them?

AA: Our goal is to ensure artists and record labels are fairly compensated for their work. These two issues impact rights holders financially. Over the 20 years that the $1.25 million commercial radio exemption has been in effect, it has cost a struggling music industry and, specifically, performers and makers a whopping $122 million in lost revenue, while providing an unwarranted subsidy to large and highly profitable commercial radio corporations. The exclusion of recorded music used in TV and film in the definition of a “sound recording” in the Copyright Act costs performers and makers of sound recordings approximately $45 million a year in lost royalties in a time when the music industry is adjusting to new methods of music consumption and declining sales of physical records and downloads in favour of music streaming. Re:Sound, supported by numerous other organizations representing music creators (including CFM, ACTRA, Artisti, Music Canada, CIMA, and SOCAN) hopes to see these two unfair exemptions removed as a result of the current five-year review of the Copyright Act.

Songwriters Association of Canada

Zoë Cunningham, Executive Director

Zoe-Cunningham

The S.A.C. exists to nurture, develop, and protect the creative, business, and legal interests of music creators in Canada and around the world. www.songwriters.ca.

CM: What are some of the key issues or trends currently facing your members or the Canadian music industry as a whole that you’ll be focusing on throughout 2019?

ZC: First, copyright protection. S.A.C. advocates for copyright reform and has taken every step to assist the government with its consultation and review of the Copyright Act. Next is fair compensation. We conducted research and presented “The Study Concerning Fair Compensation for Music Creators in the Digital Age” to top-level decision makers and created Fair Trade Music to certify transparency and fair remuneration along the music value chain. We’re also focused on ending harassment, and joined the Canadian music community to support the Canadian Creative Industries Code of Conduct to ensure a healthy culture with zero tolerance for all forms of harassment. Finally, we’re celebrating diversity as the voice of creators that unites the music community. We produce an annual Black History Month series and live broadcast performances for International Women’s Day and PRIDE Week. S.A.C. is also committed to pursuing gender parity on our board of directors.

CM: What are your ideal outcomes for some of these initiatives, and how do you plan to work towards them?

ZC: The government should do what they need to update, improve, enforce, and uphold copyright protection for creators, even when under considerable pressure by tech giants to reduce creator rights and in the face of the review of the Copyright Act and the Broadcast and Telecommunications acts. We want Fair Trade Music to become an international standard by collaborating with all stakeholders to put enforceable policies in place even for small non-profits, small businesses, and individual performers -- policies that are understood as the standard operations in all of the work spaces and relationships that are really unique to creators. Finally, the diversity celebrated in the music community will be reflected in S.A.C. governance and programming.

Women in Music Canada

Samantha Slattery, Chair & Founder

Samantha-Slattery

Women in Music is a non-profit organization dedicated to fostering gender equality throughout the Canadian music industry. www.womeninmusic.ca.

CM: What are some of the key issues or trends currently facing your members or the Canadian music industry as a whole that you’ll be focusing on throughout 2019?

SS: The main challenges facing women in the music industry are opportunity – both professional and creative – compensation, and inclusion. In the near future, we’ll be focusing on creating and developing opportunities, mentorship programs, continual learning, helping to make connections, and advocating on various fronts to combat these challenges.

CM: What are your ideal outcomes for some of these initiatives, and how do you plan to work towards them?

SS: Put simply, our goal is increased female representation through all areas of the industry, in a fair and equitable way. We have a number of initiatives currently on the go and in development to encourage this outcome, with the launch of our pilot entrepreneur accelerator this spring at the forefront of our efforts.

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Michael Raine is the Senior Editor at Canadian Musician, he is also a co-host of the popular Canadian Musician Radio weekly podcast.