Music industries. While it is common speak in the singular of the music industry, especially in reference to popular music, music is in fact central to a number of different industries, each of which derives revenues from music in distinct ways. Instrument building, publishing, concert production, recording, and broadcasting are covered in separate entries within this encyclopedia. This article provides an explanation of the ways in which such industries interact.
A Range of Differing Industries
An overview of the range of industries in which music plays an important role is of more than academic interest, particularly in Canada. Music-related industries have significant differences in their degree of domestic ownership, the extent of government regulation, and the level of corporate or regional centralization. These differences are at the heart of tensions within the Canadian music industries, such as those between the needs of a publicly regulated broadcasting sector that uses music as its principal form of programming, and a non-regulated recording industry that supplies much of that programming. Such differences are reflected in the sorts of information accessible to scholars studying music in Canada. One may contrast the research focussed on Canadian broadcasting with the paucity of studies dealing with the manufacture, distribution and sale of musical recordings in Canada.
Training of the Talent Pool
As author Bernard Miège has noted, cultural industries (such as those involved in music) are not normally required to invest in the initial training and equipping of the people whose skills they depend upon (Mige 1989, p 23). While musicians' skills are traditionally self-taught or learned within publicly funded institutions, such skills are necessary to the music industries and serve to create a pool of talent for the industries. None of the industries discussed here could function in the absence of an informally organized culture of persons engaged in learning, composing, and performing within particular musical traditions. In Canada, the government has also played an important role in developing an infrastructure to foster musical talent.
The oldest of the music-related industries is that of the manufacturing of musical instruments; during the period 1880-1930 this was one of Canada's major industries. There has been a significant imbalance of trade within this industry, with Canada importing, in 1989-90, $129,952,000 worth of musical instruments, and exporting instruments valued at $21,675,000 (1989-90). It is interesting to note that at one time, the musical instruments which, according to government statistics, dominated Canada's instrument export trade were Duck decoys or Blown sound signalling instruments, items not normally associated with musical creation. In 1990, there were at least 85 firms in Canada that manufactured musical instruments. Such companies included Sabian Limited (considered the world's second-largest producer of percussion cymbals); Lasido Inc (guitars and accessories, including the Seagull and Godin brands); and Casavant Frres (a major builder of pipe organs).
Printing and Publishing
In Canada, the printing, publishing and retailing of music in notated form developed into a specialized business about the middle of the 19th century. It reached its peak 1890-1920 when numerous Canadian firms issued sheet music and a relatively large number of volumes, primarily for home, school and church use. In the following decades, the establishment of branches of foreign publishers (eg, Boosey & Hawkes, Chappell, Leeds, Oxford University Press, Ricordi, Peer-Southern Music) alongside Canadian-owned companies, improved access to musical literature. This access, in turn, resulted in an increase in school music programs and conservatory enrolment and led to a predominance of educational publications, the organization of performing rights societies (CAPAC 1925; BMI, later PRO Canada, 1940); merged in 1990 as SOCAN) which protected publishers' and composers' interests, and the founding in 1949 of the Canadian Music Publishers Association, created lobbying power. However, after a promising increase of concert music publishing in the 1950s and 1960s, the music publishing industry as a whole declined, despite measured subsidization and healthy markets for educational and choral music (seePublishing and Printing).
In 2005, music publishing in Canada generated more than $73million, with 74% generated through royalties.
Like many commodities, musical recordings may be described as passing through a three-stage lifecycle - production, distribution, and sale. While the last two are characterized by corporate concentration, the actual production is increasingly decentralized. Historians of popular music have pointed to a decline, beginning in the 1960s, in the number of arrangers and producers employed directly by record companies, and a corresponding rise in the use of independently contracted studios and production firms (eg, Frith 1981, p 102-10). Production companies may work on a project-by-project basis for larger recording firms, produce completed master tapes for independent release or for licensing to record companies operating in or outside Canada (eg, Beat Factory in Toronto), or become an integral part of independent record companies based around a limited roster of artists. An example of the latter is Moon Records, the original, 1973-4 record label and 1974-7 production company for the group Rush, which was replaced in 1977 by Anthem Records.
The production stage of musical recordings includes the physical manufacturing of the media (vinyl records, cassettes, DVDs, CDs, digital downloads, etc.). Canadian companies unaffiliated with multinational firms have traditionally turned to custom duplicators for the manufacture of their recordings, but the number of such firms declined with the advent of digital recording. Multinational recording companies have been divided in terms of whether they own their own pressing facilities in Canada, in some cases owning their own duplication operations, or relying on outside firms for reproduction of compact discs (Billboard 1990). Cinram, a Toronto-based firm that became a prominent manufacturer of compact discs and other pre-recorded media, (such as DVDs), absorbed the pressing facilities of Quality Records (which, at one point in the early 1980s, manufactured 20 per cent of all recordings released in Canada) and expanded into the US market. By 1991 most vinyl recordings by major artists available in Canada were imported from the US. Despite the decline of pre-recorded music sales internationally, starting in 1999, album sales among top-selling Canadian artists increased by an average of 16 per cent per year 2001-5.
The involvement of major, foreign-owned recording firms in the Canadian market has become most evident in media distribution. Firms most commonly known as record companies (Universal Music, Sony Music, BMG, Warner, etc.) became dominant largely as a result of their distribution facilities. To facilitate the distribution of imported master tapes these firms established nation-wide distribution networks to maintain a steady flow of product. As a result, most Canadian record companies of significant size became affiliated with a multinational firm for distribution (eg, Anthem with PolyGram-Mercury, Capitol-EMI, or Warner Music)
The intricate relationship between Canadian-owned recording firms and multinational distributors can be demonstrated using the example of Attic Records of Toronto. At the beginning of the 1990s, Attic was distributed within Canada by A & M Records, but Attic itself regularly procured the Canadian release rights for records produced elsewhere, channelling these through A & M's Canadian distribution network. (Eg, one of these records, by Toronto rapper Maestro Fresh-Wes, was acquired from a US independent label, LMR.) Attic also signed its own artists to a variety of labels in foreign territories, and, in at least one case (that of singer Rita Coolidge), contracted with a non-Canadian performer for the worldwide release of her recordings. In countries such as Japan and South Korea, Attic entered into affiliation arrangements with local labels for the release of its recordings in these territories. When Attic ceased to operate in 1999, its publishing arm became part of The Song Corporation, which went bankrupt but in 2002 became part of Peermusic Canada.
Statistics compiled by the federal government have suggested that the value of recordings imported to Canada from other countries exceeds that of exported recordings by a factor of two to one. In 1988-9, $56.7 million worth of recordings were imported into Canada; during the same period, Canada exported $26.6 million worth. Many of those exports were of foreign artists, but the amount of Canadian music released increased by 8.8 per cent 2003-5 (largely due to digital downloads not involving the Canadian Recording Industry Association) and grew to 21per cent of total Canadian music sales, whereas the amount of music released by foreign artists dropped in Canada by 5.6percent. From 2003 to 2007, record production revenues dropped by 8.6percent to $767 million, but expenses also fell by 14.9 per cent to $713 million, resulting in a profit. Although the number of different album releases (Canadian and international) had diminished by 12-15 per cent 2000-3, by 2007 Canadas music recording industry was second in size only to that of the US.
While the distribution arms of multinational firms have dealt mostly with record retail chains, other distribution companies serviced alternative sales outlets. Canadian-owned distribution companies evolved, either by dealing with specialized musical genres (eg, Starsound of Toronto, with dance music) or by operating within geographically limited territories (as did Trans-Canada in Eastern Canada). Rack-jobbers have long been a force within the record industry, providing musical recordings (often of budget-priced items) to department and non-specialist outlets such as convenience stores or pharmacies. The Handleman Company and National Record Distributors were among the largest rack-jobbers operating in Canada. So-called one-stops, such as Cargo Records of Montreal, offered wholesale and mail order distribution of a wide range of recordings (often including imported items) to record retail stores, and were a principal source of stock for independently owned sales outlets.
The retail sector of the record industry is a complex one, involving a variety of national and regional specialty chains, department and other general merchandise stores and independent and online retailers, such as iTunes Canada. During the 1970s and 1980s, in a pattern observable in a number of countries, record stores increased their relative importance, in part by attracting the youth market for music recordings and in large measure as a result of their location in urban and suburban shopping centres. The urbanization of the Canadian population reduced the importance of general retailers within the record retail trade, leading many to concentrate almost exclusively on budget-priced recordings or those directed at the non-adolescent market (such as children's records).
In the past, some of Canada's major record retail chains have been owned by multinational recording firms, but this tendency has declined since the early 1980s (notably through the sale of A&A; Records by CBS to Toronto-based investors in 1981). By 1991, as A&A; and Discus Records of Canada faced possible bankruptcy and multinational retail chains such as HMV, Future Shop and Best Buy Canada extended their operations in Canada, a significant restructuring of the record retail sector in Canada seemed imminent. The new importance of record stores as outlets for the sale of videocassettes, DVDs, videogames, and other forms of entertainment media has made this sector turbulent but attractive to entertainment companies operating on a global basis. The success of online retailers such as Amazon.com (Amazon.ca) coincided with a downturn in the financial viability of conventional record stores by the late 1990s. Moreover, the rise of file-sharing and digital downloads starting in the late 1990s prompted the industry's most significant restructuring in decades, with many prominent Canadian record stores and chains (notably Sam the Record Man, once the nation's largest music recording retailer, with 130 stores) going out of business. Sams flagship store in downtown Toronto closed in 2007.
Tours and Other Live Performances
The business of live pop music performance is often seen as little more than an adjunct to the marketing of recordings, and indeed, the tendency since the 1960s has been for performance tours to be intimately linked to the release and promotion of new recordings. This fact should not, however, obscure the importance of live performance in the perpetuation and popularization of many musical traditions. In relatively small record markets, such as that for francophone performers in Canada, live performances are an important and reliable source of income. For certain relatively specialized musical styles - ranging from alternative rock to the music traditions of ethnic populations in Canada - live performance tours offer the primary means by which dispersed communities are able to continue their involvement in a shared cultural heritage.
In 1988, according to figures compiled by Statistics Canada, 88 companies were involved in the organization of live musical performances. These performances attracted almost three million attendees, and the live performance industry earned revenues exceeding $82 million. Expenses incurred by these performances, however, exceeded $83 million, one symptom of a slump in the live concert industry that continued through the 1990s. Performance revenues recovered; gross revenues for live music performances in Canada in 2005 were estimated at $752.8 million.
Sports Performance Venues
Venues for live musical performances in Canada are owned and operated by a range of private, semi-private and public entities within Canada. Government-owned concert halls and arts centres, and university-based entertainment spaces have all emerged as important sources of revenue for their respective owners. With the growth of pop and rock concerts since the 1970s, venues traditionally used for sporting events - such as the Montreal Forum, Toronto's Maple Leaf Gardens and Air Canada Centre, the Canadian Games Sportsplex in Lethbridge, and Vancouver's General Motors Place - became important sites for live performance. One consequence of this development has been the growing convergence of interests (and of ownership structures) between venue operators, the owners of major league sports teams and large corporations anxious to market their products to fans of popular music. In 1990, for example, Concert Productions International (CPI), partly owned by the Labatts brewery, obtained exclusive rights to hold concerts in the Toronto SkyDome (the Rogers Centre), beating out another corporate entity co-owned by Molson and MCA. In 2006, a controlling interest in CPI was acquired by the US-based concert promotion company, Live Nation.
The profitability of large-scale concert tours is often dependent upon a combination of corporate sponsorship (often by breweries or soft-drink manufacturers) and the sale of merchandise (such as T-shirts) in concession stands leased from venue owners.
Sources of Income for Musicians
While the business of live performances is a significant economic activity in its own right, it is often one of many activities through which musicians support themselves. Composers derive income from publishing and mechanical rights (seeCopyright); revisions to copyright legislation increased the income generated from record sales (mechanical rights). The Neighbouring Rights Collective of Canada (NRCC) was created in 1997, its goal being to ensure performers and record companies are compensated for public performances and radio airplay.
Another source of income for musicians is the creation of commercial jingles, from which Canadian musicians in 1990 earned $1 million per annum. Commercial jingles are also an important source of revenue for recording studios, particularly since Canadian broadcasters have been encouraged by tax legislation to broadcast commercials recorded in Canada.
The use of recorded music in film and television soundtracks has long been a significant source of income for composers and musicians, many of whom do soundtrack work to supplement earnings from concert music composition or popular music. (See also Film scores; Incidental music.)
Musical activity within Canada takes place within a complex web of regulatory activities and public initiatives that range from the granting of liquor licences to Canadian content regulation with respect to broadcasting. (See also CRTC.) In contrast to the US, government intervention in the music industries in Canada is evident both in the regulation of commercial activity and in policies that provide active support for a wide range of musical endeavours.