Canadian Music at a Crossroad: 10 Reasons Why Canada's Music Industry Needs a New Policy Framework

Head Table Guests

The Rev. Douglas Kramer, St. Philips Lutheran Church, Etobicoke; Anne Chain, 96 per cent average Student, North Toronto Collegiate Institute, Assistant Principal, North Toronto Orchestra and Co-op student, HH Angus and Associates Consulting Engineers; Ken Shaw, National Editor, CF TO Television and Director, The Empire Club of Canada; John C. Koopman, Partner, Heidrick & Struggles and Third Vice-President, The Empire Club of Canada; Trina McQueen, President and COO, CTV Inc.; Duff Roman, Vice-President, Industry Affairs and Digital Operations, CHUM Limited; Gary Slaight, President and CEO, Standard Radio Inc.; Claude Beaudoin, President and CEO, Telemedia Radio Inc.; Amber Meredith, Director, Artist Marketing, Sony Music Canada; and Steve Hoffman, Manager, SRO Management.

Introduction by Ann Curran

Michael McCabe

Wilf Carter, Hank Snow, Paul Anka, Neil Young, Joni Mitchell, The Band, David Clayton-Thomas, David Foster, Celine Dion, and Shania Twain. What do these 10 names have in common? They are--in a sense--""10 reasons why Canada's music industry needs a new policy framework.""

They are Canadian music artists-Canadian icons really-who had no choice but to go the United States to achieve their full potential. That's wrong. Sure, we want our stars to enjoy worldwide success. But, when Canadian artists are forced to choose between their dreams and their country, we all lose.

We should be able to foster the talents of our stars here in Canada. Think of how successful Quebec has been in fostering its own, distinct star system. People like Lara Fabian and Bruno Pelletier built successful careers in Quebec before going and conquering Europe.

There is no reason why the rest of Canada should not have the same success. Our country must be a place where music artists can establish rewarding careers. And then from their Canadian home base go out and conquer the world. That's what radio wants. That's what the music industry wants. And that's what I want to talk about today.

We have come together on the eve of Canadian Music Week-a celebration of our homegrown music and a reminder of the special business we all, both radio and the music industry, work in.

The music business is different from most others. Millions of people across the country and around the world feel a deep personal, emotional attachment to our product.

Together, we create and disseminate popular music. What we do has symbolic importance; in some cases national importance. As a result, I think it is fitting to ask ourselves: what is the state of Canadian music? After 30 years of government-mandated Canadian content requirements, how strong is our domestic music industry?

Surveying the landscape, it is clear that there is both cause for celebration, and cause for concern.

Celebration, because many of the biggest, most popular music stars in the world are Canadian-born. People like Bryan Adams, Barenaked Ladies, Sarah McLachlan, Shania Twain, and Alanis Morissette.

But there is also cause for concern. Speaking on behalf of Canada's private radio sector, I can tell you that many people are asking the same question: ""How are we going to get the Canadian music we need in the years ahead?"" Not just from the few international stars I've just listedbut from a broad and rich array of musical talent that Canadians want to listen to.

Private radio broadcasters accept the public-policy goals underpinning the Canadian-content requirements. But many in our industry are concerned about the continued shortage of high-quality Canadian music that appeals to a mass audience. In other words, Canada does not have enough music stars. This is a serious challenge, and one that cannot be overcome through government regulation. Statistics prove this beyond any doubt.

Consider the result of 30 years of mandated Canadian content on private radio. We have had 30 years of constant airplay, first at 25 per cent, then at 30 per cent and now at 35 per cent of a station's playlist. And yet sales of Canadian music have remained at only 10 to 12 per cent of the national total. By comparison, according the Department of Canadian Heritage, roughly 50 per cent of all books sold in Canada are Canadian-authored.

Perhaps a more telling illustration of the state of Canadian music can be found in the results of the auditorium tests conducted by broadcasters and the CAB over the years. For those of you unfamiliar with this method of public opinion research, what we do in auditorium tests is we bring together a random sample of 50 to 100 target listeners in a theatre or a hotel meeting room, and play a series of short excerpts from songs, which we then ask the audience to rate based on a number of different criteria.

What these auditorium tests clearly reveal is that there is a serious shortage of Canadian songs. In the rock category, favourable ratings come in at about 20 per cent and in pop/adult at about 14 per cent.

One recent study found that if you remove four major stars-specifically Amanda Marshall, Alanis Morissette, Tragically Hip and Shania Twain-the level of listener interest in Canadian music drops from 21 per cent to 12 per cent.

What does all this mean? Well, if the natural appetite for Canadian music is 10 to 12 per cent of sales and 20 per cent on the air, when 35 per cent of the music audiences are exposed to is Canadian, I think we can all agree that something is not working.

Now, don't get me wrong. I want to state very clearlyand I hope you all hear this and make note of it-I am not speaking in code. I am not advocating that we revisit the Canadian-content requirements; 35 per cent is our base. What I am saying is that the Cancon rule has done all that it can do. It has taken us to where we are today, where we have a good number of successful Canadian music artists; however it clearly can take us no further. While Cancon has helped lay a solid foundation for the emergence of Canadian stars, we cannot expect this governmental mechanism to nurture the next great flowering of Canadian music.

The private radio industry has long recognised this fact, and has taken a number of active measures to support the development of Canadian music talent. For example, private radio provides $1.8 million a year in direct cash contributions to such talent development organisations as FACTOR, MusicAction and other locallyfocussed initiatives. In addition, private radio stations spend $20 million a year in voluntary contributions to promote Canadian talent to listeners, as part of our industry's ongoing effort to build a strong Canadian star system.

Our industry created and funded the Canadian radio music awards, which as you know honour Canada's upand-coming music artists. One of the features of these awards is that nominees and their music are heavily promoted by private radio stations during Canadian Radio Music Month, a month-long run-up to the awards ceremony.

In addition to these initiatives, the private radio industry is going a step further to help Canadian artists succeed. As part of the CRTC's new benefits policy, private radio operations will direct a minimum of 6 per cent of the value of profitable radio ownership transfer transactions to benefit Canadian talent development.

Over the next eight to 10 years, part of this will be used to boost funding to FACTOR and/or MusicAction, which will receive an additional $18 million. During the same period, other talent development organisations will also see a funding increase of $9 million.

FACTOR and MusicAction work hard supporting the professional development of Canadian artists. They are doing the best they can under the circumstances, but they don't have enough resources. They must be able to support the critical mass and the quality of music necessary to create the base for a strong Canadian star system. The government has to provide them with those resources, and it has an opportunity to do so with Canadian Heritage's long-awaited Canadian Music Fund.

But I think as stakeholders in the music sector we must all ask ourselves: ""How can we make these different talent development programmes more effective?"" ""How can we ensure that they help achieve the goal we all share: a greater number of successful Canadian stars?""

One way is to encourage greater co-ordination between the various programmes. Another is to convince the government to shift its focus; instead of only giving one dollar to 100,000 different artists, in the name of cultural, social, regional and gender diversity, it should also be willing to give $100,000 to one artist-the artist who is going to make it big and create the music that millions of Canadians will listen to.

That is what private radio broadcasters are doing with our new Radio Starmaker Fund and its French-language equivalent, Le Fonds RadioStar, which have been created out of the 6 per cent pool I mentioned earlier. Over the next eight years, we are going to inject some $26 million into these two innovative new funding vehicles.

I'm very excited about these two new funds. We've succeeded in bringing together leaders from all the groups involved in the Canadian music sector; people like legendary music promoter Donald Tarlton of Donald K. Donald Group of Labels in Montreal, and Canadian music star Tom Cochrane. Both these people, and others who share their devotion to Canadian music, are members of the new board of directors for the Radio Starmaker Fund.

The concept behind these two funds is very simple: they are going to seek out and identify the most promising musical artists, and then provide them with the marketing and promotional support needed to help them become stars. Our business goal is very straightforward: we want to increase the supply of Canadian music that Canadians want to listen to. It's a revolutionary concept, I know: we intend to do nothing less than give the people what they want.

In launching the Radio Starmaker Fund and Fonds RadioStar, we agree with the thesis put forward by the Globe and Mail's Robert Everett-Green. In a recent article he suggested that the promotional muscle DreamWorks put behind Nelly Furtado's album was at least as important to its success as the airplay it received in Canada.

In effect, the driving philosophy behind our new funds is to focus on quality, not quantity. We strongly urge the government to do the same in the upcoming announcement of its much anticipated Canadian Music Policy. We believe that this goal represents a win-win-win solution, one that benefits the artists, the people of Canada and our two industries.

These two funds and the other measures I've described will go some way toward helping us achieve our goal. However, much more must be done. We must be willing to consider new approaches, new ways of doing things. As we begin a new century, we must set aside comforting old assumptions and confront the new reality. The reality of a global culture, where Canadian artists compete for listeners against those from around the world. The reality of digital technology, like Napster and MP3. The reality of changing demographics, consumer tastes and attitudes.

In order to succeed in the face of global cultural competition and address the challenges of new technology, we must pull together all the elements of the music business. Together we must unite in a common purpose: the promotion and development of our artists and their music.

Last month I saw an example of how this can work when the Barenaked Ladies tour came to Ottawa. In that instance, radio stations, TV stations, the concert promoter, the record stores, the record label and the artists all worked together on a variety of promotions that ensured maximum exposure for the show.

I know that this is not the only example of such a high level of co-operation and co-ordination, but what I'm saying is that we need more of it. And instead of spontaneous eruptions of co-operation, it should be standard practice.

Why? For a very simple reason: partnership yields results. When we're all reinforcing each other, when we're all delivering the same message, we are building awareness. We are creating the buzz that leads to record sales. We are creating Canadian stars.

One of the first steps toward greater co-operation is to strengthen the partnership between the radio industry and the music industry. If we are going to produce high-quality, popular Canadian music, we need a strong music industry and a strong radio industry, both working closely together.

Right now, the balance that has traditionally existed is in danger of breaking down. Perhaps the most telling example of this is in the area of copyright. Now this is neither the time nor the place to get into an in-depth discussion of the copyright issue. Suffice it to say that we must work together to ensure the copyright burden is never so great as to hamper radio's ability to carry out its part of the bargain, which is to provide exposure to Canadian music stars.

After all, with the addition of a tariff for the so-called reproduction right to the two existing copyright tariffs, radio may find itself under the obligation of spending a total of over $50 million a year in copyright tariffs. This burden could have serious, negative consequences. For example, the proliferation of significant new rights payments can hold back investment in new technology by the radio industry.

As American radio moves to new platforms, like the Internet or satellite broadcasting, Canadian radio must be able to keep pace. After all, we are entering an era where listeners will be able to tune into any radio station in the world, at the office, in their car, or walking down the street. In that world, Canadian radio's competitive advantage-the thing that sets us apart in the 500-channel wireless Internet universe-is always going to be the fact that we play Canadian music. However, for this to be an advantage, Canadian music has to appeal to the widest audience possible. We need more international stars, like Celine Dion and Shania Twain.

That kind of pressure, the need to compete against the rest of the world, is bound to put pressures on the music industry as well. I have no doubt that, in the next few years, Canadian music companies are going to face some difficult questions, just as the radio industry did in the 1990s.

For example, should there be consolidation within the music industry? In an era when Canadian companies are banding together to hold their own against foreign competitors, shouldn't the Canadian music industry be considering a similar approach? Does it make sense that there are 239 small companies in the Canadian music industry fighting over $200 million in business, while a handful of multinationals control $1 billion of Canadian record sales? Is it in the interest of Canadian artists that only 23 Canadian sound recording companies have revenues greater than $1 million?

While I recognise that small companies play a crucial role in the music production chain-since they are often the early breeding ground for the stars of the future-I must nonetheless ask the question: ""Do these small Canadian companies have the resources they need to give artists the promotional and marketing support demanded by global competition?""

As the Canadian music industry addresses these challenges, it is in everyone's best interest that our two industries work together. After all, we have a history of partnership. The music industry produces the content for radio, and radio acts as Canadian music's number-one talent agent, giving music the exposure that is so crucial to sales success. Echoing many other studies, in a 1996 Angus Reid report, Canadian music buyers identified radio as by far the most influential factor in their music purchase.

More importantly, perhaps, is the intimate connection created by radio between the music and the listener. I think Rush captured it best in their great hit, Spirit of Radio: ""Invisible airwaves crackle with life. Bearing a gift beyond price, almost free.""

This connection will doubtless continue as radio continues to extend its reach. It is becoming a multi-platform medium in its own right, combining broadcast signal, digital radio, satellite carriage, transmission via the Internet, and whatever the next emerging phenomenon is-all simultaneously.

As we go forward, government will continue to have an important role to play in ensuring the future of Canadian music. Perhaps most importantly, government has to develop a flexible, forward-looking policy framework to support our shared goal.

At the beginning of my remarks, I mentioned 10 Canadian artists who were forced to emigrate to pursue their music careers. In closing, I would like to mention 10 other names.

They are 10 names chosen from among the many nominees for Canadian broadcasters' 4th Annual Canadian radio music awards. I'd just like to add, as an aside, that this year the awards are being hosted by Leslie Neilsen, a star who actually got his start working as an engineer, disc jockey and announcer at a Calgary radio station. The awards ceremony will be held three days from now, on March 31.

The 10 nominees-the 10 emerging stars-are Danko Jones, Amanda Stott, Rubber, Souldecision, Bratt Pack, Sarah Harmer, B4-4, Nelly Furtado, Johnny Reid, and Choclair. They are the Canadian music stars of tomorrow, the dreamers, the poets, the artists who capture our hearts and move us-in the concert hall, in our living rooms or on the dance floor.

For their sake, and ours, all of us who are stakeholders in the music industry must embrace change. We must be willing to consider new partnerships, new practices and new policies.

In doing so, we can re-energise our music sector. We can unlock the potential of these and other gifted artists, give them the opportunity to sing out with pride and passion in a myriad of languages and styles, so that Canada's voice is heard in every corner of the world.

It's all about the music. At the end of the day, that's all there is.

Thank you very much.

The appreciation of the meeting was expressed by Ken Shaw, National Editor, CF TO Television and Director, The Empire Club of Canada.