The Year in Brief: Music and Radio

  • Music Policy and Programs
  • Broadcasting Policy and Programs (Radio)

The music industry in Canada generates more than $3 billion in economic activity every year: $1.5 billion through commercial radio, $750 million through concerts, $695 million through recordings, and $120 million through performing rights.34

Music was one of the first cultural industries to feel the impact of the digital revolution. Today, 63 percent of Canada’s youth purchase digital music, and 59 percent say they have downloaded music for free.35 However, the two most popular formats for listening to music remain radio and CD, with 83 percent and 72 percent of Canadians listening to music on these formats respectively.36

Technology has not only changed how music is delivered, creating new digital pathways and altering the face of retail, but also the roles played by various industry participants. While there has always been a degree of crossover in the roles performed by various players in the industry, these lines are becoming increasingly blurred.

Despite declining revenues from sales of sound recordings, Canada today is home to more music creators and entrepreneurs than ever before, and more revenue is being earned from the performance of Canadian music works in Canada and around the world. When surveyed, 90 percent of Canadians say they feel music by Canadian artists is of better or equal quality than music by foreign artists, and 86 percent believe that listening to music contributes to their quality of life.37

Key stats

  • More than 7.3 million Canadian albums were sold domestically in 2007.38
  • Canadian artists represent almost one‑third of all music listened to by Canadians.39
  • In 2007, 91 % of Canadians over the age of 12 listened to the radio and 80 % tuned into stations with a music‑based format.40

Pursuing our priorities

The Cultural Affairs Sector of Canadian Heritage works to ensure that Canadians create and have access to their own musical works.

  • In 2007-2008, 346 albums were approved for funding through the Sector’s CMF. George Canyon, Kaïn and Wintersleep were among the artists who received this production funding.
  • In 2007-2008, the Sector funded the activities of 22 Canadian independent sound recording firms. Prior to 2007, these companies released 147 albums by Canadian artists such as Pierre Lapointe, Pascale Picard and the Joel Plaskett Emergency.
  • Canada is home to more than 1,200 Canadian radio and audio services.
  • Canadians living abroad or travelling around the world can access Canadian programs and reports. More than 350 radio stations in 70 countries broadcast Radio Canada International content.
  • Sales of full-length downloaded albums and downloaded singles have nearly doubled each year for applicants to the Music Entrepreneur Component of the CMF since they began selling their works online.

The following chapter provides further details regarding the results our activities bring to Canadians.

Results

Music Policy and Programs

The Cultural Affairs Sector helps ensure that Canadians have access to a variety of music choices by Canadian artists, and helps Canadian artists reach both domestic and international audiences. Its primary tool since 2001 has been the Canada Music Fund (CMF), which comprises seven complementary funding components administered directly by the Sector or in partnership with federal agencies (Canada Council for the Arts and Library and Archives Canada) or industry organizations (FACTOR, MUSICACTION and the SOCAN Foundation). The Sector continually adapts its programs and policies to align with the challenges and opportunities presented by the new digital world and the forces of globalization.

Funding and investment

The number of albums (a term that encompasses both physical and digital recordings) released by English- and French-language Canadian artists has increased since the inception of the CMF in 2001. These recordings span the full range of musical genres from classical, country and folk to pop/rock, jazz and blues. In 2006, 2,345 albums by Canadian artists were released, up 32 percent from 2001.41

In 2007-2008, 346 albums were approved for funding through the CMF’s New Musical Works Component (administered by FACTOR and MUSICACTION) and the Canadian Musical Diversity Component (administered by the Canada Council for the Arts). While this is slightly lower than the 354 works in 2006-2007, it represents an increase over each of the preceding five years of support.

The Music Entrepreneur Component (MEC) of the CMF, administered by Canadian Heritage, funded the production and promotion activities of the 22 largest Canadian independent sound recording firms in 2007-2008, aiming to increase their national and international competitiveness and position them for success in a digitized global economy. MEC-funded labels released 147 albums by Canadian artists in 2006-2007.

Production funding and other support offered by the CMF, such as marketing and touring, have helped Canadian artists storm the domestic sales chart. The number of albums on the Nielsen SoundScan top 2000 chart that received production support through the CMF has increased over the past seven years from 63 in 2001 to 87 in 2007. The number of albums on this chart released by artists who at some point in their careers have received CMF support totalled 259 in 2007.

Success story: Polaris Music Prize

The Polaris Music Prize honours, celebrates and rewards creativity and diversity in Canadian recorded music with an annual award and follow-on marketing for albums of high artistic integrity regardless of genre, professional affiliation or sales history. Of the 30 albums nominated for the Polaris award from 2006 to 2008, 28 were created by artists who had received CMF funding at some point in their careers.

Capacity building and development

The number of Canadian creators and publishers receiving performance royalties from the Society of Composers, Authors and Music Publishers of Canada (SOCAN) has dramatically increased since the inception of the CMF, by 34 and 20 percent respectively.42 A new CMF component was launched in 2007-2008 specifically for publishers: the Music Entrepreneur Component—Aid to Canadian Music Publishing Firms. The results of this component will be monitored and reported over time.

SOCAN Royalties (2007)*

Recipient

Number

Dollars ($ million)

Writers

23,636

62.6

Publishers

5,269

55.9

TOTAL

28,905

118.5
*Excludes special performing rights and private copy distributions.

The Sector uses the Nielsen SoundScan top 2000 sales chart to monitor sales of albums by Canadian artists. It is an excellent proxy for the entire Canadian market, as it covers approximately 66 percent of all album sales captured by Nielsen SoundScan each year.

Nielsen SoundScan Top 2000 Chart—Domestic Sales: 2001 to 2007

 

2001

2002

2003

2004

2005

2006

2007

Total Sales

 42,393,000

 34,659,000

 31,865,000

 34,014,000

 33,788,000

 32,137,000

27,738,000

Canadian Album Market Share

16.0%

22.2%

24.0%

25.0%

22.6%

22.3%

26.5%

Number of CMF Albums

63

68

76

87

98

98

87

While sales of sound recordings in Canada have fallen significantly since the turn of the decade, albums by Canadian artists constitute a greater proportion of those sales than they used to. Their domestic market share reached an all-time high of 26.5 percent in 2007. Equally, sales of albums by Canadians increased from 6.8 million in 2001 to 7.4 million in 2007 despite an overall drop in industry sales.

The shift away from physical formats
Both English- and French- language firms receiving MEC support have seen significant decreases in domestic sales of physical albums by Canadian artists, while MEC‑funded instrumental firms—which include companies focused on either classical or jazz music—have seen domestic sales increase over the past three years.

Given the limited size of the Canadian market, international sales have been crucial to the viability of MEC-funded companies, representing more than half of sales for English language firms and doubling those for French language firms since 2002‑2003.

While MEC-funded labels continue to see their sales of physical albums fall, they are slowly beginning to reap the rewards of digital sales. The 19 sound recording firms that have applied for MEC support each year since its debut in 2005-2006 have seen significant digital gains. Led predominantly by firms that release the majority of their albums in English, sales of full-length downloaded albums and downloaded singles have nearly doubled each year for MEC applicants since they began selling their works online.

Unit Sales of Eligible Physical Albums by Language of Firm

 

Domestic

 

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

English

510,128

857,518

548,344

272,363

201,143

French

1,548,264

1,948,645

1,403,375

1,402,802

1,205,977

Instrumental

289,688

230,684

203,482

255,890

306,485

Total

2,348,080

3,036,847

2,155,201

1,931,055

1,713,605

 

International

 

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

English

300,582

225,668

277,843

229,023

269,482

French

55,064

64,747

160,469

127,783

123,343

Instrumental

89,391

120,380

109,267

66,478

77,061

Total

445,037

410,795

547,579

423,284

469,886
Source: MEC database

Results

Radio Policy and Programs

The radio component of the Cultural Affairs Sector’s Broadcasting Policy and Programs operates similarly to the screen-based component. Broadcasting Policy and Programs results that pertain to both radio and screen-based media are presented in the Onscreen section of this report—highlights specific to radio are found below.

Radio revenues have grown at an average rate of 6 percent since 2003, and for the past several years radio has enjoyed record levels of revenues and profitability. Like other broadcasting industries, radio has also experienced considerable consolidation. In 2007, the five largest radio groups accounted for 70 percent of all radio revenues, as opposed to 44 percent in 1999.43 The CRTC’s 2007 examination of its approach to media consolidation and the diversity of voices in Canadian broadcasting previously mentioned applies also to radio broadcast companies.

Digital radio offers higher quality sound, more channels and a more efficient use of radio spectrum. Unlike television, there is no deadline for the transition to digital radio broadcasting in Canada.

Radio broadcasters today use the Internet to broadcast online—growing their audiences by extending their reach literally around the world. According to a 2006 study, 90 percent of radio stations are reaching their audiences from this platform.44 In 2007, the number of satellite radio subscribers grew to 750,000 for Sirius Canada and 400,000 for Canadian Satellite Radio (CSR).

Capacity building and development

One of the key directives of the Sector for radio is to ensure that diverse and excellent Canadian cultural works are accessible to Canadians and to the world. Through the work of the Sector directly through the CRTC, this directive is being fulfilled:

  • Canada is home to more than 1,200 Canadian radio and audio services.45
  • Canadians living abroad or travelling around the world can keep in touch with their country every day—more than 350 radio stations in 70 countries broadcast Radio Canada International programs and reports.
  • Canadians listen to an average of 18.3 hours of radio per week.46
  • Private radio revenues grew from $1.2 billion in 2003 to $1.5 billion in 200747
  • The number of persons employed in the radio industry grew to 10,169 in 2007.48
In 2007, the number of subscribers to satellite radio grew to 750,000 for Sirius Canada and 400,000 for CSR.49 American parent companies, Sirius and XM, have since merged.

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