- Statistics Canada reports that between 2013 and 2015, the Canadian sound recording and music publishing industry experienced a 3.0% decrease in total operating revenues. The largest segment of the industry, recording production and integrated recording production and distribution, generated 48.9% of total operating revenue. Ontario’s share of national record production and distribution operating revenue was 78.7%. Overall sales of recordings declined by 8.7% in the country to $309.0 million.a
- In early 2017, music retailer HMV went into receivership and by April had closed 100 stores across the country. It was reported that the company owed its leading suppliers $56 million. Ancaster-based retailer Sunrise Records is expanding from 10 locations by taking over 70 former HMV stores.b
- Music funding organisation FACTOR announced the cancellation of its loan repayment policy as of April 1, 2017. Instead, the organization will exclusively provide funding in the form of grants.c
- Ontario artists among 2017 Juno Award winners include The Weeknd for Single of the Year, Shawn Mendes for Artist of the Year, and The Dirty Nil (represented by Dine Alone Records) for Breakthrough Group of the Year.
- According to IFPI’s Global Music Report, Canadian artists Drake, Justin Bieber and the Weeknd were among the top 10 artists and best sellers of 2016, with Drake being #1. In addition, Drake’s Views album is listed as #3 in the top 10 albums of 2016, and his single, “One Dance” from the album was listed as the top digital single of 2016.d
OMDC Industry Profiles receive a full update once per year. The interim update summarizes key changes approximately six months after the profile’s release.
The Canadian music industry includes a wide range of artists and entrepreneurs who create, write, produce, publish, and distribute original music. The industry includes musicians, songwriters, record labels, managers, agents, concert promoters, and music publishers. The market in Canada is dominated by the large foreign-owned record and publishing companies but has a strong independent sector comprising mainly small- to medium-sized companies whose lines of business range from artist development to publishing, managing, and touring. The vast majority of Canadian content is commercially released by Canadian-owned and controlled independent music companies.
Ontario’s music industry produces a number of critically acclaimed and best-selling artists, labels, and events:
- Ontario artists among 2016 Juno Award winners include City and Colour for Artist of the Year, Walk Off The Earth for Group of the Year, Alessia Cara for Single of the Year, Whitehorse for Adult Alternative Album of the Year, and Emilie-Claire Barlow for Vocal Jazz Album of the Year.
- Both The Weeknd (Best Urban Contemporary Album, Best R&B Performance) and Justin Bieber (Best Dance Recording) were winners at the 2016 Grammy Awards.
- Ontario artists were featured prominently on the 2016 Polaris Music Prize shortlist, including Basia Bulat, Jessy Lanza, PUP, and U.S. Girls Past Polaris Prize winners represented by Ontario labels include Buffy Sainte-Marie (True North Records), Feist (Arts & Crafts), and Inuk artist Tanya Tagaq (Six Shooter Records).
- The 2016 Prism Prize – Grand Prize, a national juried award established in 2013 to recognize artistry in Canadian music videos, was awarded to Ottawa’s Kalle Matson (HOME Music Co.), while the Audience Award was presented to Toronto’s Death From Above 1979 (Last Gang Records).
- For the second year in a row, Drake held the title of Spotify’s most-streamed artist in 2016, with 4.7 billion streams.
- Toronto’s BadBadNotGood was named 2016 Album of the Year by BBC 6 Music, and Ottawa DJ outfit A Tribe Called Red’s track “R.E.D.” was named #1 on CBC Music’s top 103 songs of 2016.
- Ontario is home to many first-rate music festivals in a variety of genres, such as Ottawa Bluesfest, Hillside Festival (Guelph), Boots & Hearts (Oro-Medonte), Toronto Urban Roots Festival (Toronto), Field Trip (Toronto) Niagara Jazz Festival (Niagara-on-the-Lake) ,and NXNE (Toronto).
- The Ontario Live Music portal promotes concerts occurring across the province.
- Canadian Music Week is the largest music conference in Canada and is recognized as one of the premier entertainment events in North America.
Industry Size and Economic Impact
The following information on revenue, employment, and the consumer market should be considered a snapshot of activity in the industry based on the best available information.
Employment and wages
- According to Statistics Canada, Canada’s record production and integrated record production and distributors paid out a total of $63.3 million in salaries, wages, commissions, and benefits in 2013.1 In 2013, music publishers paid out $12.6 million and sound recording studios paid out $28.9 million in salaries, wages, commissions, and benefits.2 The salaries, wages, commissions, and benefits associated with Ontario’s record production and integrated record production and distribution sector accounted for $45.6 million in 2013.3
- Employment data collected by Music Canada suggests that in 2010, the total economic impact of the Canadian recording industry was $178.8 million in wages and salaries, and 3,322 jobs.4 This data includes both the foreign-owned multinational record labels as well as the Canadian-owned and controlled segment.5 Moreover, this report indicates that Ontario’s share of this total employment impact was 2,605 jobs and $144.9 million (including direct and indirect impact).6
- In a report by the Canadian Independent Music Association (CIMA) measuring the economic impact of the independent, Canadian-owned and controlled segment of the music industry, it was noted that this sector generated 13,459 FTEs in 2011.7 Please note that this figure includes artists.
- A report published by Music Canada suggests that the impact of Ontario’s live music industry was measured at 10,500 FTEs in 2013 (including direct, indirect and induced impacts), and resulted in $305.5 million in labour income.8
Sound Recording and Music Publishing in Canada, operating revenues by industry sub-category, 2013
Revenues and related figures
- In 2013, Canada’s sound recording and music publishing industry generated total operating revenues of $799.7 million.9 The record production and integrated record production and distribution segment accounted for 59.5%, the music publishing segment accounted for 24.0%, sound recording studios accounted for 14.3% and ‘other sound recording industries’ generated 2.2%.10
- While no Statistics Canada data currently exists to quantify province-specific music publishing data, Ontario generated $372.7 million in record production and integrated record production and distribution revenues in 2013, with a corresponding 8.3% operating profit margin.11 Ontario accounts for 78.3% of this operating revenue.12 Furthermore, sound recording studios are responsible for $54.5 million in operating revenues, with an operating profit margin of 12.3%.13
- According to the data collected through the Culture Satellite Account, Ontario’s sound recording cluster (from the industry perspective) generated $245.7 million in GDP in 2014.14 The Culture Satellite Account data also suggests that Ontario’s sound recording sector generated 4,125 jobs in 2014 (from the industry perspective).15
- In 2013, the Canadian sound recording and music publishing industry generated $165.4 million in total music publishing royalties and rights.16 From this amount, $64 million was generated from performing rights (38.7%), followed by $25.3 million from mechanical rights (15.3%).17
- In 2013, Canada’s sound recording and music publishing market earned $334.1 million in overall sales, with the majority attributed to the sale of compact discs ($164.6 million), followed by digital music recordings (singles) with $85.9 million, and digital musical recordings – albums ($68.9 million).18 The sale of other formats of musical recordings, including vinyl and DVD audio, were estimated to have generated $14.8 million in revenues in 2013.19
- According to the 2016 Global Music Report from IFPI, the Canadian music market grew by 8.3% in 2015, which more than doubled the growth rate experienced by the global music industry and marked the first instance of revenue growth this century for Canada.20
- According to PricewaterhouseCoopers (PwC), Canada’s music market was worth $1.11 billion in 2015, and is forecasted to grow at a compound annual growth rate (CAGR) of 1.2% over the period of 2015-2020.21 The live music segment, encompassing consumer spend on tickets and sponsorship revenues, represented US $692 million in 2015.22 PwC data represents consumer spending on music at the retail level and excludes music publishing activity.
- CIMA’s Sound Analysis report estimates that in 2011, Canada’s independent music industry generated approximately $292.2 million in revenues.23
- A recent report published by the Worldwide Independent Network (WIN) highlights that the market share of the global independent record label sector is 37.6%, and that this segment is worth $5.6 billion.24 In terms of Canada-specific data, the report values the Canadian independent market share of recorded music revenues at 21%, with their share of digital market revenues at 23%.25
- A recent report from Music Canada reports that live music companies in Ontario generated $628 million from live music related activities, with almost 40% of those revenues generated via ticket sales.26
Canadian Music Market Revenues, by component, 2015-2020
- Nielsen’s 2016 Mid-Year Music Canada Report, covering the period of Jan 1 – June 30, 2016, shows that total music consumption is up 7.4% compared to the same period last year.27 This includes album sales, track-equivalent albums, and streaming equivalent albums. While on-demand streaming increased by 75.6% over last year in the first six months of 2016, both overall album sales and digital track sales were down 19.4% and 22.8% respectively year-to-date over 2015.28 The sale of physical formats remains in decline as well (-16%), though the sale of vinyl LPs has increased by 39% year-to-date over 2015.29
- Moreover, the ways in which Canadians are spending on music and music-related products are changing. Nielsen’s data suggests that in 2016, 55% of all music expenditure was dedicated to live events (including live music concerts, admission to music festivals, small live music sessions, and DJ events), compared to 51% in 2015.30
- The growth of streaming services globally has been well-documented, with 71% of global internet users accessing licensed music services, and 48% of all internet users paying for music in some capacity.31 In Canada, 27% of all internet users have accessed a licensed audio streaming service in the past 6 months, and 11% of internet users using paid, licensed audio streaming services in the past 6 months.32 Notably, data from Nielsen suggests that Canadian teens and millennials have more than doubled their spending on streaming in the last year, from 3%-7% in both cases.33
- The growth in subscriptions to paid, licensed music services is considered to be a major opportunity for the Canadian and global music industry, with paid streamers considered to spend 2.7 times as much on music as consumers who utilize ad-supported, free-to-consumer streaming services.34
- YouTube remains the most popular music service globally, with 82% of those using YouTube doing so to access and consume music content.35 In Canada, 76% of YouTube users access music content.36 Notably, YouTube’s use is more prevalent as an on-demand music platform, and less so for discovery purposes, with 85% of Canadian YouTube music users preferring to listen to music that they already know.37
Trends and Issues
This section provides information on industry growth rates, trends, and burgeoning issues for the Canadian music industry.
Growth rate and industry trends
- PwC anticipates that global consumer spending on total recording music revenue (including physical and digital formats, streaming, and on-demand services) will rise over the period of 2015-2020 at a rate of 0.9% CAGR.38 Globally, 2016 marked the first year where spending on digital was greater than spending on physical, and its market share is anticipated to rise to 73% by 2020.39 PwC also notes that streaming is anticipated to become the single biggest source of recorded music retail sales by 2018, fully overtaking spending on physical formats.40
- Over the period of 2015-2020, PwC anticipates that Canada’s total recorded music revenue will continue to fall at a rate of 2.9% CAGR, as a result of falling physical recorded music revenues and digital recorded music revenues.41 However, over this same period, the market share of streaming services is expected to account for 56% by 2020.42 The Canadian live music market has also been highlighted as an area of growth for the music industry, and PwC expects that the market will be worth US $819 million by 2020 with a CAGR of 3.4%.43
- Globally, the music industry is undergoing an important shift away from physical and digital download products, accompanied with high growth in consumer spending on ad-supported and subscription streaming services. In 2015, digital revenues accounted for 45% of total global revenues.44 Streaming revenues, which have increased by 45.2% in 2015, now account for 43% of overall digital sales, though revenues from ad-supported streaming services only account for 4% of total global music industry revenues.45 In terms of streaming’s global audience, ad-supported services now reach 900 million people worldwide, and the United States alone has experienced a 93% increase in the number of streams in 2015.46
- Digging deeper into the phenomenon of streaming in the Canadian music market, Nielsen highlights that music consumption patterns are increasingly shifting towards mobile, particularly for teens and millennials. Currently, 90% of Canadian consumers listen to music, with an average listening time of 24 hours per week.47 Specifically, 56% of teens and millennials listen via smartphones in a typical week, compared to 34% of Canadians.48
- Despite the increasing popularity of streaming services, radio remains the primary driver for music discovery in Canada (52% using over-the-air AM/FM radio for discovery, and 21% listening to AM/FM radio online).49 Moreover, online AM/FM radio is the most popular discovery tool for millennials, though discovery via online streaming services is growing.50
- Export continues to be a critical business activity for music companies in Ontario, Canada, and beyond. A recent study commissioned by CIMA suggests that export activities are a key part of the business plans for 87% of Canadian music companies, with 50% of companies viewing exports as necessary to their survival.51 Moreover, conducting export activities, including performance tours, showcases and festivals, radio and press promotional tours, and business meetings, often cost over twice as much as comparable activities undertaken in domestic markets.52 Despite the barriers posed by the high costs of export initiatives, companies spend 21 times as much per breakthrough artist as other artists they represent, due to the potentially lucrative and time sensitive returns on that investment.53
- The Music in Motion report notes that the United States, Europe and the United Kingdom form the top three export markets for Canadian companies54, while recent export market research undertaken by the Canadian Association for the Advancement of Music and the Arts (CAAMA) has explored the opportunities offered by Ireland, the United Kingdom, Australia, and New Zealand.55
Global and domestic issues
- Accessing international markets for export and export-related activities continues to be a challenge to the Canadian music industry. In particular, the immigration and tax policies adjudicating entry into the United States have been identified as an obstacle for Canadian music industry professionals and artists who wish to conduct business in the United States. A report from CIMA identified the two main obstacles as: the administrative costs associated with crossing the border (including the cost of P2 visas) and the cost of compliance with the American withholding tax regime.56
- Copyright remains a critical issue for the Canadian music industry, particularly as a mandated review of the 2012 Copyright Modernization Act is on the horizon in 2017. Recent copyright-related developments include the term extension of copyright on sound recordings and performance in 2015 from 50 years to 70 years57, as well as the introduction of a federal private members bill (Bill C-299) to introduce a similar term extension applicable to Canadian authors, composers, and music publishers.58 Moreover, a recent report published by the Standing Senate Committee on Banking, Trade and Commerce calls for a full review of the Copyright Board of Canada, an economic regulatory body that has been criticized by music industry trade organizations for previous decisions such as Re:Sound Tariff 8, to take place during 2017.59
- A critical concern for the global music industry is the persistence of the “value gap”, defined as a market distortion where there is a “dramatic mismatch between the volume of music streamed globally and the rewards that this has generated for rights holders.”60 This phenomenon is reflected in the fact that there are an estimated 900 million global users of ad-supported streaming services generating a total of USD $634 million, while the 68 million global users of subscription-based streaming services are responsible for generating USD $2 billion for rights holders.61 In its latest report, IFPI argues that this problem has arisen due to the misapplication of safe harbour provisions.62
- There is a growing focus on the economic and socio-cultural potential associated with cultivating ‘music cities’. The concept, defined by Music Canada in their The Mastering of a Music City: Key Elements, Effective Strategies and Why it’s Worth Pursuing report, is a city or community of any size with a vibrant music economy. By developing these music cities and allowing them to reach their potential, it is possible for communities at the city level to drive economic growth, job creation, increased spending, greater tax revenues, as well as cultural development. Examples of music cities include Austin (TX), Melbourne (AUS), Berlin (GER), and Toronto.63 Moreover, the concept of music cities (and how to grow them) has been picked up by the private sector, including the Canadian Chamber of Commerce, resulting in the publication of The Music Cities Toolkit.64
- The findings or recommendations associated with the Canadian Content in a Digital World consultation, undertaken by the Department of Canadian Heritage, may have an impact on the music industry. Given that funds like the Canada Music Fund, for example, fall under the scope of this consultation, the resulting recommendations and potential changes may have a key impact on the music industry. The findings from this consultation process are anticipated to be made public in 2017.
- At the federal level, support to the sound recording industry comes through the Canada Music Fund, administered by the Department of Canadian Heritage and FACTOR, as well as through the Canada Council for the Arts. Other organizations and funds such as FACTOR, the Radio Starmaker Fund (private, non-government support), and provincial arts councils, including the Ontario Arts Council, provide a variety of assistance programs to the Canadian music industry.66
- In May 2013, the Ontario Ministries of Tourism, Culture and Sport and Finance announced the creation of the Ontario Music Fund (OMF), which allocated $45 million over three years to the Ontario music industry starting in 2013-14. In the 2015 Ontario Budget, the government committed to the continuation of the OMF, at $15 million per year. The goals of this fund are to strengthen the Ontario music industry and to enhance Ontario’s position as a global music leader. The fund is administered by OMDC and has four streams: Music Company Development, Music Industry Development, Music Futures, and Live Music. In addition to direct company support, OMDC also provides assistance for export development initiatives for the music industry through support of international missions, such as various international music missions with CIMA, as well as support to Canada Stands and showcasing activities at major markets including SXSW (USA), Reeperbahn (Germany), and The Great Escape (UK).
Profile current as of December 16, 2016
1 Statistics Canada, Table 361-0034 – Sound recording and music publishing, summary statistics, every 2 years (dollars unless otherwise noted), CANSIM (database). (accessed: 2016-12-02). Live music revenues are reported under the Statistics Canada product “Performing Arts” and music revenues cannot currently be disassociated from other performing arts such as opera, theatre and dance. Moreover, music is included in the “Promoters (presents) of performing arts, sports and similar events” dataset, but cannot be extracted.
14 Statistics Canada, Table 387-0013, Culture and sport indicators by domain and sub-domain, by province and territory, industry perspective, annual (dollars unless otherwise noted). CANSIM (database). (accessed 2016-12-02).
20 Music Canada, “Canada Outpaces Global Music Revenue Growth in 2015 but Outlook Remains Cautious”, accessed at http://www.musiccanada.com/news/canada-outpaces-global-music-revenue-growth-in-2015-but-outlook-remains-cautious/ on 2016-12-12.
25 ibid, p.40-42
27 Nielsen Canada, “Nielsen Releases 2016 Mid-Year Canada Music Report”, accessed at http://www.nielsen.com/ca/en/press-room/2016/nielsen-releases-2016-mid-year-canada-music-report.html, July 7, 2016, accessed on 2016-12-12.
31 International Federation of the Phonographic Industry (IFPI), Music Consumer Insight Report 2016, September 13 2016. p. 5
32 ibid, p. 6
34 ibid, p.7
36 ibid, p.12
37 ibid, p.12
49 ibid, p.5
54 ibid., p.13
55 OMDC, Research Funded by OMDC
58 Society of Composers and Music Publishers of Canada (SOCAN), “SOCAN Welcomes the Tabling of Private Member Bill C-299”, June 17, 2016.
61 ibid., p.22
62 ibid., p.23
65 The information included in this section is an overview of some of the government assistance to the music industry. This is not intended to be a comprehensive list of government assistance available.
66 FACTOR administers funds from the federal government, as well as from Canada’s private radio broadcasters’ contributions towards Canadian Content development. The Radio Starmaker Fund was established by the Canadian Association of Broadcasters, and is funded by contributions from Canadian private radio broadcasters.