Industry Profile - Music
September 2019 Profile
Ontario’s music industry is the largest in Canada, and is made up of a wide range of participants in all parts of the value chain involved in the creation, writing, production, publishing, distribution and presentation of original music. The industry includes musicians, songwriters, record labels, managers, agents, music publishers, concert promoters, presenters and more. The sound recording and music publishing landscape in Canada is dominated by large foreign-owned companies but has a strong independent sector comprising mainly small- to medium-sized companies. The vast majority of Canadian content is commercially released by Canadian-owned and controlled independent music companies.
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
- In 2017, the Ontario music publishing and sound recording industry generated almost 4,000 jobs, accounting for 42% of industry jobs nation-wide. This figure is approximately on par with the number of jobs generated in 2016.
- In 2017, the sound recording studio industry spent $18.5 million on salaries, wages, commissions and benefits, and the record production and distribution industry spent $59.1 million.
- A report commissioned by estimates that in 2013, Ontario’s live music industry generated 7,300 direct impact FTEs (Full Time Equivalents), 2,200 indirect impact FTEs, and 1,000 induced impact FTEs, for a total of 10,500. The live music industry also generated $152 million in direct labour income, $105 million in indirect labour income, and $48 in induced labour income for a total of $305.5. Music Canada
Revenues and Related Figures
- In 2017, Ontario exported close to $226 million in music publishing and sound recording internationally, up 11% from the previous year. This accounted for slightly over 60% of Canadian music publishing and sound recording international exports.
- In 2017, music publishing and sound recording generated $362.2 million in provincial GDP, up 5% from 2016. This accounted for 57.8% of the Canadian total GDP generated by this sector.
- In 2017, the Ontario record production and distribution industry had an operating revenue of $432.3 million, with an operating profit margin of 4.7%. The sound recording studio industry had an operating revenue of $64.9 million, with an operating profit margin of 14.4%.
- Between 2017 and 2018, the Canadian total recorded music revenue increased by 9.2% from US $639 million to US $698 million, and is projected to increase at a 6.0% compound annual growth rate (CAGR) between 2018 and 2023. The total live music revenue is also projected to increase, at a CAGR of 3.3%.
- Recorded music revenues in Canada have grown by a compound annual growth rate (CAGR) of 7.6% from 2014 to 2018. Streaming revenues have grown significantly more in the same time period, with a CAGR of 58.7%. However, this may be levelling off in recent years with only a 31.9% increase between 2017 and 2018 compared to over a 100% increase between 2014 and 2015, and 2015 and 2016.
- In 2018, the global music market saw a 9.7% revenue growth for in the 4th consecutive year of global growth, and the highest rate of growth since IFPI began tracking this data in 1997. The total global recorded music market revenue was US $19.1 billion. A significant portion of this increase can be attributed to the 21.1% rise in digital revenue, and particularly the 32.9% rise in paid streaming. In contrast, download revenue fell by 21.2% and physical format revenue fell by 10.1%.
- Consistent with this growth, digital music now makes up 58.9% of the global revenue, 37% of which is subscription audio streams, 10% ad-supported streams, and 12% downloads and other digital formats.
- It is estimated that by 2030, global music revenues will have reached $131 billion. Of this amount, $80 billion will be from recorded music, $38 billion from live music, and $12.5 billion from music publishing. This estimated increase is attributed to the increased spending of millennials and Generation Z over that of previous demographics.
- Canada is 9th of the top ten music markets of 2018, after the US, Japan, UK, Germany, France, South Korea, China and Australia, and followed by Brazil.
- Listening to music is a regular pastime for a significant number of Canadians. In a 2019 study by on leisure activities of Canadians, 51% of survey participants indicated that they listened to music at least once a day. BookNet
- An analysis of 2016 Census data recently published found that 91% of interviewed Ontarians listened to recorded music in some format. Fifty-seven percent listened to music on CD or vinyl, and 81% listened to digital music. These numbers are close to the national averages, with CD and vinyl being 3% lower nationally, and digital being 2% higher. Additionally, 46% of Canadians listened to live music, with 42% listening to pop music and 16% to classical.
- Spotify has become the first online music service to reach 100 million paid subscribers. It added 4 million subscribers in the first quarter of 2019, more than the 3.3 projected, and expects a further 7-10 million this quarter. Active users (both paid and unpaid) fell slightly short of the 218.3 million projection, at 217 million.
- Amazon has over 32 million music subscribers across Prime Music and Amazon Music Unlimited. At 70%, Amazon music services also have a much higher rate of growth than Spotify’s 25%.
- The Music 360 Report: 2018 found that 91% of all Canadians say they listen to music. In comparison, 97% of Canadian teens and 96% of Canadian millennials report listening to music. Streaming is particularly taking off with Canadians, with 71% of Canadian music listeners streaming music online. Even more significantly, 93% of teens and 91% of millennials are listening to music online, indicating a further upward trend going forward. Playlist use also seems to be on the rise, with 98% of teen streamers and 96% of millennial streamers engaging with playlists, as opposed to 84% of all Canadian streamers. Nielsen Canada
- Statistics show a trend towards consumers listening to individual songs, rather than complete albums. In 2017, the number of total songs consumed increased by 40.1% from 2016. However, the total number of albums consumed only increased by 3.2%. This is likely due to the increase in stream usage, with subscription streams increasing by 85.6% between the two years, and ad-supported streams increasing by 30.0%.
- In 2018 in Canada, there were over 59 billion audio song streams, a 47% increase from 2017. The volume of on-demand music streaming including videos also increased, by 45%. Digital consumption increased by 22%, and vinyl by 25%. Total album equivalent audio consumption (which consists of albums, track equivalent albums, and on-demand audio streaming equivalent albums) has increased by 21%.
- Live music makes up 57% of total annual music spending for Canadians. More than half of Canadians (58%) attend at least one live music event per year, presenting significant opportunities for brands to engage with concertgoers.
- MTM released its Music Streaming Services report in October 2018. The report noted that one-third of Anglophone Canadians now listen to a streaming service, and that the groups most likely to use a music streaming service are Gen Zs (age 18-28), Gen Ys (age 29-37), and students. The most popular service among streamers is YouTube (93%), but other options are showing potential for growth.
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
- Despite streaming’s continuous rise in Canada, radio remains the number-one source for music discovery, with 66% percent of Canadian music listeners reporting discovering new music via the radio, 43% via streaming services, and 36% from friends/relatives.
- PwC predicts that the global music market (including live and recorded music, performance rights and synchronization revenues) will continue to see growth at a CAGR of 3.9% from 2017-2023, growing from US $53.8 billion to $65.2 billion over this period. North America will continue to be the largest regional market, accounting for about 40% of the total music market.
- The majority of this growth will be fueled by music streaming revenue, which grew by 28.8% in 2018, and is predicted to continue rising at a 12.2% CAGR between 2018 and 2023. Conversely, the revenue for physical recorded music is expected to decline, showing -8.5% CAGR over the same time span. Music downloading revenue has been hit even harder, dropping by 56.3% between 2013 and 2018, and is expected to continue to decline at -22.7% CAGR between 2018 and 2023.
- For Canada specifically, PwC predicts that the fastest growing segments will be digital music streaming at 13% CAGR, music synchronization at 2.1% CAGR, and digital recorded music at 8.9% CAGR. Segments expected to decline are digital music downloading (-26.8% CAGR predicted) and physical recorded music (-11.7% CAGR predicted).
- Audio stream consumption in Canada saw dramatic growth in 2017, increasing by almost 16 billion streams to 38 billion. Subscription streams have also increased their share of audio streaming, up to 78.9%.
- Multiplayer video games are emerging as a virtual concert venue. In February 2019, musician Marshmello hosted a concert in the popular online game Fortnite. It was attended by over 10.7 million people in real time, with additional tens of millions viewing it later on YouTube.
- Independent Canadian EDM record label Monstercat is pioneering a new alliance between the music and video game industries. The label signs artists on a track-by-track basis rather than album-by-album or longer, and then makes those tracks available to video game streamers to play in the background of their videos for a $5 per month subscription fee.
- WINTEL 2018 reported that 2017 was a very successful year for the global independent industry. Independent labels saw 11.3% year-over-year revenue growth, in comparison to 10.2% growth for the rest of the market. Independent labels saw a 1.5% increase in market share, to 29.9%. Additionally, independents experienced a 46% increase in streaming revenues, suggesting that discoverability algorithms on streaming services are positively impacting smaller creators.
- Independent labels are underperforming slightly in Canada compared to global averages, with 54% of artists choosing to renew their contracts with independent labels as opposed to 77% globally. Independent record labels also make up only 25% of the Canadian market share, as opposed to 40% globally. However, this number is up 5% from 2016, whereas the global percentage has only increased by 2%.
- In a 2014 survey of live music in Ontario, 34% of respondent music companies said they had been in business for more than 20 years, with the same number having been in operation for six years or fewer. With only 6% still in the start-up phase (in operation for less than a year) and 12% in the 1-3 year range, this could suggest a dropping off of the development of new companies.
- Sony Music Entertainment has announced that they will be adding two new payment features: “Real Time Royalties” and “Cash Out.” The former will allow artists to get immediate updates about royalty earnings and account balances on a monthly basis, removing the need for artists to wait for periodic reporting cycles. Analytic tools will also be available to help artists interpret the data from their Real Time Royalties portal. “Cash out” will allow artists to withdraw any amount of their payable balance on a monthly basis.
Global and Domestic Issues
- In August 2018, the CRTC announced that from 2019 to 2022 major television groups in both language markets will be required to allocate an average of $5.5 million per year to support the production of musical programs by FACTOR and MusicAction.
- On the basis that it would have been unenforceable, in April 2019 the Ontario government abandoned a proposed amendment to the Ticket Sales Act designed to make scalping less profitable by capping ticket resale prices at 50 per cent above original face value.
- The 2019 Provincial Budget included a significant cut to the Ontario Music Fund (OMF), reducing the fund from $15 million to $7 million per year. Industry consultations will be held to determine how the OMF should be changed going forward to reflect these cuts.
- A coalition of 42 music community groups formally signed “The Canadian Creative Industries Code of Conduct,” which aims to combat harassment, discrimination, violence and bullying within the Canadian music community. An Education, Training and Safe Support Committee has been formed by members of the coalition to provide training and resources to music industry professionals in these areas.
- The established a national training program to teach live music industry professionals about ensuring safe spaces and practicing harm reduction to reduce overdose, harassment, assault and discrimination. Canadian Live Music Association
- Toronto record label announced an initiative to better serve the mental health of the acts it signs, allowing a stipend of $1,500 to be spent at the discretion of the artist or band on mental health related expenses. Royal Mountain Records
- In February, the U.S. Copyright Royalty Board officially published a 44% increase to royalty rates for songwriters and publishers. However, the increase was challenged by Spotify, Pandora and Google, supported only by Apple. David Israelite, president of the American National Music Publishers’ Association (NMPA) accused the streaming companies of “declaring war” on songwriters by challenging the increase.
- released a report which discusses further steps in addressing the “value gap,” namely the divide between artistic content creators and companies who profit from the distribution of the content. “Value gap” is calculated by comparing the inflation and real GDP growth since 1997 with reported music revenues. This study finds that the value gap for Canadian recorded music since 1997 is $19.3 billion, with $1.6 billion in 2017 alone. Music Canada
- As part of the federal review of the Canadian Copyright Act, the released its report, Shifting Paradigms, which looks at remuneration models for artists and creative industries. The report calls attention to failings in Canada’s safe harbour laws, recommends combating modern forms of piracy, and suggests removing from the Act exemptions that limit fair compensation for creators. Standing Committee on Canadian Heritage
- Concluding the Copyright Act review, the released its report, Statutory Review of the Copyright Act. The report made 36 recommendations related to radio royalty exemptions, safe harbour provisions, copyright terms, private copying, and other issues. Standing Committee on Industry, Science and Technology
- Streaming services are improving discoverability for bands in secluded regions such as many parts of Northern Canada. However, as a result of increased streaming, these bands are forced to rely on touring and live shows as their major source of income rather than album sales.
- A 2019 report about representation of gender, race and ethnicity in music recording released a number of findings about the presence and absence of minority demographics in the industry.
- Across 600 examined songs between 2012 and 2018, no more than 28.1% were by female artists, with an average per year of 21.8%, and a low of 16.8% in 2017. The representation of women in non-performing roles was even lower, with 12.3% female songwriters and only 2.1% female producers.
- A higher percentage of artists were members of what the report refers to as “underrepresented racial/ethnic groups,” with a low of 30.7% in 2013 and a high of 55.6% in 2018, with a yearly average of 44%.
- Apple announced that it will be shutting down its 18-year-old iTunes in favour of creating separate apps for music, TV and podcasts on Apple devices. iTunes will continue to function as it is on Windows PCs.
Government Support and Other Funding
- The Canadian 2019 federal budget released in March committed $20 million over two years to the Canada Music Fund. This initiative, along with the aforementioned CRTC funds, will result in a total of $40.7 million in new investments at the federal level by the end of a five year period.
- The federal government also announced $50.25 million in support for festivals and series presenters over two years, 2019-20 and 2020-21: $16 million through the Canada Arts Presentation Fund, $14 million through the Building Communities through Arts and Heritage program, and $20.25 million through the Celebration and Commemoration Program.
- The Ottawa municipal government has approved a $25,000 Ottawa Music Development Fund to build and support the local music industry. This is the first step in a three year $300,000 music strategy.
- has added a new funding component to its Support for Eligible Music Companies program, called Songwriter Support for Music Publishers. This new component provides grants for Music Publishers, with up to $10,000 for publishers rated 2 or $20,000 for publishers rated 3. The program will begin accepting applications in fall 2019, for a Nov. 21, 2019 deadline. FACTOR
- The Royal Bank of Canada (RBC) committed an additional $900,000 over three years to its Emerging Artists Project, following up on the 2018 launch of the MVP Project grant for the creation of music videos in partnership with and administered by the Academy of Canadian Cinema & Television. The first round of the MVP Project opened in October, and the majority of the 300 applicants were from Ontario. Twenty-two percent of the applicants in this first round were in the pop genre, 12% were rock, 10.5% were R&B, and 10.2% were hip hop.
- The Ontario Music Fund (OMF) is a $7 million fund administered by Ontario Creates and designed to strengthen the Ontario music industry and to enhance Ontario's position as a global music leader. The OMF has four streams: Music Company Development, Music Industry Development, Music Futures, and Live Music.
Ontario’s music industry produces a number of critically acclaimed and best-selling artists, labels, and events:
- At the 2018 Awards, Ontario’s Shania Twain won the Apple Music Fans’ Choice Award, Meghan Patrick won the Female Artist of the Year award, The Reklaws won the Sirius XM Rising Star award and Single of the Year and Top Selling Canadian Single of the Year went to Chills, by James Barker Band. CCMA
- For the second consecutive year, Drake took home the three largest BuzzAngle Music awards: Artist of the Year, Album of the Year, Scorpion, and Song of the Year, God’s Plan.
- At the 2019 JUNO awards, Avril Lavigne won the JUNO Fan Choice Award. Shawn Mendes won five awards, including Artist of the Year, Single of the Year for “In My Blood,” and Album of the Year for Shawn Mendes. The Arkells won the award for Group of the Year, as well as Rock Album of the Year for Rally Cry. A number of Ontario artists won Album of the Year awards, including Bahamas (Adult Alternative Album of the Year for Earthtones), Dizzy (Alternative Album of the Year for Baby Teeth) and Jeremy Dutcher (Indigenous Music Album of the Year for Wolastoqiyik Lintuwakonawa).
- At the 2019 Grammy awards, Drake won Best Rap Song for “God’s Plan.” Daniel Caesar won the award for Best R&B Performance for “Best Part,” a collaboration with H.E.R.
- At the Prism Awards, the music video for “Work” by Charlotte Day Wilson (directed by Fantavious Fritz) won the Grand Prize. “Freudian, a Visual” by Daniel Caesar (video by Keavan Yazdani and Sean Brown) won the Audience Award.
- Toronto-based artist Jeremy Dutcher won the 2018 Polaris Music Prize for his album Wolastoqiyik Lintuwakonawa.
Profile current as of August 2, 2019
- ^ , Table 36-10-0452-01 – Culture and sport indicators by domain and sub-domain, by province and territory, product perspective. (Accessed June 19, 2019). Statistics Canada
- ^ , Table 21-10-0055-01 – Sound recording and music publishing, summary statistics. (Accessed June 19, 2019). Statistics Canada
- ^ , Live Music Measures Up, December 2015, p. 27. Music Canada
- ^ , Table 12-10-0116-01 – International and inter-provincial trade of culture and sport products, by domain and sub-domain, provinces and territories (x 1,000,000). (Accessed June 19, 2019). Statistics Canada
- ^ , Table 36-10-0452-01 – Culture and sport indicators by domain and sub-domain, by province and territory, product perspective (x 1,000). (Accessed June 19, 2019). Statistics Canada
- ^ , Table 21-10-0055-01 – Sound recording and music publishing, summary statistics. (Accessed June 19, 2019). Statistics Canada
- ^ , Global Entertainment & Media Outlook 2019-2023, “Music, radio and podcasts,” June 2019. PwC
- ^ , Closing the Value Gap: How to Fix Safe Harbours and Save the Creative Middle Class, June 2019, p. 24 Music Canada
- ^ , Global Music Report 2019, 2019, pp. 6, 12, 15. IFPI
- ^ ibid., p. 13.
- ^ Daniel Sanches, “Goldman Sachs Says Global Music Revenues Will Reach $131 Billion by 2030,” , June 5, 2019. Digital Music News
- ^ , Global Music Report 2019, 2019, p. 13 IFPI
- ^ Shimona Hirchberg, “Canadians and their leisure time: Leisure study part 1,” , April 2, 2019. BookNet Canada
- ^ Hill Strategies, “Arts, culture, and heritage participation in Canada’s provinces and largest census metropolitan areas in 2016,” Hill Strategies, March 20, 2019.
- ^ Lucas Shaw, “Spotify tops estimates with 100 million paid users,” , April 29, 2019 The Toronto Star
- ^ Daniel Sanchez, “Amazon Music Unlimited and Prime Music Have a Combined 32 Million Subscribers – And a 70% Yearly Growth Rate,” , July 11, 2019. Digital Music News
- ^ , Canada Music 360 2018: Report Highlights, pp. 4-5. Nielsen Canada
- ^ , BuzzAngle Music 2017 Canada Report, January 2018, p. 8. BuzzAngle Music
- ^ Nielsen Canada, “Total Album Equivalent Audio Consumption in Canada Increase 21% in 2018,” , January 8, 2019. Nielsen Canada
- ^ , Canada Music 360 2018: Report Highlights, p. 9. Nielsen Canada
- ^ , Online Audio Redefined: Music Streaming Services, October 25, 2018. MTM
- ^ , Canada Music 360 2018: Report Highlights, p. 7. Nielsen Canada
- ^ , Global Entertainment & Media Outlook 2019-2023, “Music, radio and podcasts,” June 2019. PwC
- ^ ibid.
- ^ ibid.
- ^ , BuzzAngle Music 2017 Canada Report, January 2018, p. 5. BuzzAngle Music
- ^ Cherie Hu, “Why the music industry needs the video gaming industry’s help to scale virtual concerts,” , April 8, 2019. Music Business Worldwide
- ^ Emily Gera, “Record labels have a new target: streamers and gamers,” , July 26, 2019. The Verge
- ^ , WINTEL Worldwide Independent Market Report 2018, December 2018, p. 8. Worldwide Independent Network
- ^ ibid, p. 9; Worldwide Independent Network, WINTEL Worldwide Independent Market Report 2017, October 2017, p. 12.
- ^ , Live Music Measures Up, December 2015, p. 14. Music Canada
- ^ Tim Ingham, “Sony Music to Deliver ‘Real Time’ Royalty Data to Artists, and Enable Monthly Cash Withdrawals,” , May 20, 2019. Music Business Worldwide
- ^ Press Release, “CRTC Announces $5.5M Towards Canadian Musical Programs,” , August 30, 2018. CIMA
- ^ The Canadian Press, “Ontario just scrapped a ticket resale cap meant to keep scalpers’ profits down,” , April 15, 2019. CBC News
- ^ David Farrell, “Music Funding Halved in Ontario Budget,” , April 17, 2019. FYI Music News
- ^ Corey Poole, “Release: 42 Canadian music community groups commit to fostering safe and respectful workspaces,” , March 16, 2019. Music Canada
- ^ Raising the Bar, “Raising the Bar: Helping to Make Every Live Music Space a Safe Space,” , 2019. Raising the Bar
- ^ Ben Rayner, “Toronto indie music label Royal Mountain steps up with a first – a fund for artists’ mental-health needs,” , February 5, 2019. The Toronto Star
- ^ Paul Resnikoff, “U.S. Copyright Royalty Board Officially Submits a 44% Songwriter Streaming Royalty Increase – Publishers Say a Spotify Challenge Would be ‘Declaring War’,” , February 6, 2019; Daniel Sanchez, “NMPA President Says Spotify Treats Songwriters Like Uber Treats Drivers: ‘Is One Better Than the Other?’,” Digital Music News, May 13, 2019. Digital Music News
- ^ , Closing the Value Gap: How to Fix Safe Harbours and Save the Creative Middle Class, June 2019, pp. 19, 18. Music Canada
- ^ FYI Staff, “Music Canada Hails Parliamentary Report on Copyright,” , May 16, 2019. FYI Music News
- ^ David Farrell, Federal Report Pushes For Changes to Canada’s Copyright Act,” , June 5, 2019. FYI Music News
- ^ Jackson Weaver, “A problem of popularity: How Canada’s northern musicians are hurt by lack of access,” , June 15, 2019. CBC
- ^ Dr. Stacy L. Smith, Marc Choueiti and Dr. Katherine Pieper, Inclusion in the Recording Studio?, February 2019, pp. 2, 3.
- ^ ibid., p. 14.
- ^ Lanre Bakare, “Apple expected to close iTunes after 18 years,” , June 2, 2019; Andrew Hayward, “iTunes shutting down: when and why it’s happening,” The Guardian, June 7, 2019. techradar
- ^ Elise Roiron, “Today’s Federal Budget Amps Up Support for Canadian Music,” , March 19, 2019. Canadian Independent Music Association (CIMA)
- ^ Canadian Arts Presenting Association, “Additional Funding for Festivals and Series Presents On Its Way,” , June 19, 2019. Canadian Arts Presenting Association
- ^ OBJ staff, “Council Oks new fund to boost music industry,” , June 26, 2019. Ottawa Business Journal
- ^ External Source, “FACTOR Adds Songwriter Support for Publishers,” , August 9, 2019. FYI Music News
- ^ Karen Bliss, “Royal Bank of Canada Boosts Annual Funding to video Project for Emerging Artists,” , May 16, 2019. Billboard