Music industry sales plunging: StatsCan
Canada’s sound recording industry is suffering from plunging sales and profits resulting in fewer opportunities for Canadian artists to record, a new study says.
The industry has experienced six years of declining sales, according to a Statistics Canada study released Wednesday. In 2003, the industry had $708.7 million in sales, down 20.5 per cent from $891.6 million in 1998.
StatsCan pointed to illegal downloading, file swapping and competition from other media as likely causes for the drop.
Music by Canadian artists took a hit, with $110 million in sales in 2003, down from $154 million in 1998. However, Canadian artists’ share of the market for music sold in Canada remained the same, at 16 per cent, as sales of recordings by foreign artists fell even more sharply.
Declining profitability in the industry has led to lower investment in new Canadian recording artists and music, according to the Canadian Recording Industry Association (CRIA).
“You have to treat a study like this as a wakeup call,” says CRIA president Graham Henderson. “This is a terrible situation.”
The CRIA estimates that sales of pirated sound recordings drained $23.5 million from the Canadian market in 2003.
It is lobbying for changes to copyright laws that would put Canada in line with its international partners in protecting against piracy and clarifying electronic rights. A bill has undergone first reading in Parliament, but any changes likely wouldn’t take effect for more than a year.
The hardest hit part of the industry is rock and pop, the sector where music is most likely to be downloaded, the StatsCan study showed.
Henderson said industry studies show that independent artists are being squeezed. “We have standout artists in this country who don’t generate enough money from their record sales to keep their careers going,” he said.
Sales of classical, country, jazz and blues continued to rise and consequently made up a larger share of the market. Sales of music-themed DVDs and concert videos also appeared to be up.
Since 2003, increased opportunities for legal downloading, chiefly through Apple’s iTunes, have begun to reverse the decline in the industry in some countries. In Canada, sales are not falling as quickly and may have stabilized, Henderson said.
Recording companies issued 5,619 new releases in 2003, down from 6,654 in 2000. Only 904 belonged to Canadian artists, the first time in more than five years that their output fell below the 1,000 mark.
There were 300 recording companies in 2003, with many smaller record labels entering and leaving the market rapidly.
Profit margins fell to a slim 2.6 per cent in 2003, down from 11.9 per cent in 1998, a year before Napster introduced illegal downloading to the world. Company profits in Canada combined totalled only $30.5 million.
According to the 2003 Survey of Household Spending, Canadian households spent an average of $118 annually on recordings, but almost $464 on rental of cablevision and satellite services.
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