Industry Profile - Music
Interim Update to January 2021 Profile
- As of a report released in December 2020, the Canadian independent music industry had seen a revenue drop of $233 million since the start of the pandemic, with a 79% income drop from 2019 in the live sector. The sound recording/distribution sector is expected to see a 32% decline in revenue, and music publishing is expected to see a 44% decline. It is estimated that the industry will not recover to pre-COVID levels until at least 2023.[a]
- The Canadian Live Music Association has taken action to raise awareness and promote advocacy for the live music sector, using hashtags #ForTheLoveOfLIVE and #HardestHit to highlight their efforts. Working with the Coalition of Hardest Hit Businesses, they have been petitioning for support from the federal government, including increased emergency funds and the extension of wave and rent subsidy programs.[b]
- A late 2020 Canadian national survey exploring public perceptions about the impact of COVID-19 on live music found that as of February 2021, most live music lovers (91% of respondents stated that they liked or loved music) plan to return to seeing live music once it’s permitted, with 88% planning on attending outdoor concerts, 82% planning to go to a local bar or pub to listen to live music, and 81% planning to attend indoor concerts.[c]
- As restrictions lift and it becomes possible for bands to return to performing live shows, a significant backlog is forming for limited performance spaces and time slots, particularly with the closure of many venues during the pandemic. This is a particular challenge because many roadies, stage hands, and technicians have retrained in other careers due to loss of work.[d]
- After a significant dip to $102.7 million in Q2 2020, the Canadian music publishing and sound recording industries have recovered significantly, returning to pre-pandemic levels with $143.1 million in Q1 2021.[e]
- As venues and events reopen, requirements are increasingly being put in place to mandate that patrons provide proof of vaccination in order to attend live music shows. Ontario has implemented a proof of vaccination requirement in a number of venues, including restaurants, bars and nightclubs; meeting and event spaces; and concerts, music festivals, theatres and cinemas. Similar systems have been implemented elsewhere in Canada, and internationally.[f]
- In 2019, the Canadian music publishing and sound recording industries generated $572.5 million in GDP, $346.5 million of which came from Ontario. The industries also generated 8,286 jobs, 3,700 of which were in Ontario.[g]
- Canadian audio on-demand streaming finished 2020 with a 16.1% increase in streaming time over 2019. However, streaming increased by 22.6% worldwide, showing a greater appetite in other jurisdictions. In early March 2020, Canadian streaming was up 21.3% over the same period in 2019, suggesting Canadians streamed less music after lockdown measures went into effect.[h]
- Although some degree of return to physical concerts is expected, developments around virtual concerts are valuable to consider in the long term. There are a number of challenges to consider in normalizing virtual concerts (such as potential for tiered ticket pricing, anti-piracy measures, bandwidth considerations, etc), but there are also benefits such as increasing international reach and potentially allowing for larger audiences.[i]
- On June 2, 2021, the Canadian Independent Music Association, ADVANCE (Canada’s Black Music Business Collective) and Breaking Down Racial Barriers brought together Canadian music industry leaders to sign “The Declaration to End Anti-Black Racism in the Canadian Music Industry.” The goal of the Declaration is to build an inclusive Canadian music and entertainment industry by addressing anti-Black racism in the system and working environments of the industry.
- There is an ever-increasing discussion in the music industry about whether or not the payments offered by Spotify are fair to artists, with critics pointing to a lower per-stream payment than other services, as well as a perception that the recommendation algorithm is skewed in favour of major label artists. There has been growing pressure on Spotify to address these concerns as a result of competitors increasing their rates, and advocacy on the part of artist and industry organizations.[j]
- A recent study by the Canadian Radio-television and Telecommunications Commission on commercial radio found that 68% of Canadians listen to commercial radio on at least a weekly basis, which is more than any broadcast platform. In contrast, 39% of respondents reported listening to streaming music services on a weekly basis. Commercial radio is considered the most important broadcast platform to have access to, particularly for music and local news.[k]
- Ontario was well represented at the 2021 Juno Awards. Shawn Mendes won the Juno Fan Choice award, and the Arkells won Group of the Year. The Weeknd won three awards for Single of the Year (Blinding Lights), Album of the Year (After Hours), and Artist of the Year. JP Saxe won Breakthrough Artist of the Year, and Crown Lands won Breakthrough Group of the Year.
- Toronto-based Cadence Weapon won the 2021 Polaris Music Prize for the album Parallel World.
Ontario Creates Industry Profiles receive a full update once per year. The interim update summarizes key changes approximately six months after the profile’s release.
a Nordicity, The Impact of COVID-19 on Canadian Independent Music, December 7, 2020, p. 4.
b CLMA, “Urgent Call to Action,” Canadian Live Music Association, December 2, 2020; Coalition of Hardest Hit Businesses, “Coalition of the Hardest Hit Businesses Calling on Government to Protect Travel and Tourism in Canada,” Canadian Live Music Association, July 6, 2021.
d Joel Dryden, “Rush back to the road is on as musicians battle for concert slots,” CBC, June 13, 2021; Anne Steele, “As Concerts prepare to Return From Pandemic lockdown, Roadies Have Moved On,” The Wall Street Journal, March 29, 2021.
f Chris Willman, “For Those About to Vax: Why Vaccination Proof Is Suddenly Becoming a New Standard for Concert Entry,” Variety, August 19, 2021; Office of the Premier, “Ontario to Require Proof of Vaccination in Select Settings,” Ontario Newsroom, September 1, 2021.
i Music Business Worldwide, “Why the music industry must think big about livestreaming: ‘could an artist following in Freddie Mercury’s footsteps execute the same call-and-response with an internet audience?’,” Music Business Worldwide, December 7, 2020.
j Randall Roberts, “Does Spotify pay artists a fair rate? Here’s what musicians, managers and Apple Music have to say,” Los Angeles Times, April 19, 2021; Ben Sisario, “Musicians frustrated with streaming services’ paltry payouts are fighting back,” The Globe and Mail, May 8, 2021;Adam Parness, “Why Spotify’s ex-global head of music publishing thinks streaming services should be paying songwriters more money,” Music Business Worldwide, March 8, 2021; Lanre Bakare, “The music streaming debate: what the artists, songwriters and industry insiders say,” The Guardian, April 10, 2021.
k Canadian Radio-television and Telecommunications Commission, Attitudes and opinions towards commercial radio in Canada, December 18, 2020, p. 6.
Music Industry: January 2021 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.
- In July, the Ministry of Canadian Heritage announced Phase 2 disbursement of the Emergency Support Fund for Cultural, Heritage and Sports Organizations. Of this phase, $20 million will go to Musicaction and FACTOR to help support live music venues, and an additional $5 million will go to the music industry more broadly.
- The federal Fall Economic Update was released on November 30, 2020, and included a pledge of $181.5 million in 2021-22 to support the planning and presentation of both live and digital COVID-19-safe events and arts presentations, and to provide work opportunities in these sectors.
- Abacus Data has conducted a national survey of Canadian professional musicians on behalf of Music Canada, to determine the impacts of COVID-19. The study found that the ability to perform live is viewed as extremely important to Canadian musicians, both as a means of earning their livelihood, and to make their careers feel fulfilling. Isolation and physical distancing also make it difficult for artists to record music.
- Eighty-five per cent of Canadian professional musicians say that they will have a difficult time making a living as a full time musician if they aren’t able to perform live. The impacts of COVID-19 on live performance will continue to be significant going forward; 76% of musicians reported that bookings for 2021 are lower than usual.
- COVID-19 puts live music performers in a uniquely precarious position. As of May 2020, 70% of Canadian Live Music Association members were not eligible to receive government assistance. Ninety-six per cent of music venues were at risk of business failure, and 70% had already begun to lay off staff.
- Not only are these closures damaging to the live music industry, they also have negative repercussions on the city, province, and country. As of early May, at least eleven Toronto venues had already closed, each marking the loss of an average of 10 full time equivalent jobs, $575,000 in annual GDP contributions, and $148,000 in provincial and federal taxes.
- Even live music venues that are able to continue to operate at some capacity are facing challenges in the form of insurance. Many venues are seeing unprecedented increases in insurance premiums, and some are unable to renew insurance policies that expired during the pandemic at all.
- In an attempt to address the unprecedented challenges faced by live music venues during COVID-19, Toronto City Council expanded the Creative Co-Location Facilities Property Tax Subclasses to provide additional property tax relief to live music venues that meet eligibility criteria. This will grant property owners access to a 50% property tax break on properties that operate primarily as live music venues. As of late July 2020, Toronto City Council added an additional 45 eligible live music venues to this tax relief subclass, which combined will see an estimated $1.7 million in tax relief.
- Ontario music recording studios were given permission to reopen in May 2020 as some COVID-19 restrictions were lifted, allowing some return of normalcy to the music recording industry. There has thus far been no indication that they will be closed again as restrictions are re-imposed.
- The Event Safety Alliance has released a comprehensive guide to assist event planning professionals and venues in some degree of reopening while COVID-19 remains an ongoing risk. Among other advice, the guide emphasizes the need to educate attendees, as well as highlighting objects and areas that should be prioritized for cleaning and disinfecting.
- In the COVID era, live streaming is becoming a key staple for music artists to boost their following. A Chartmetric study shows that live streams by popular artists virtually guarantee increases in online followers, and that artists making guest appearances on other live streams also see significant benefits.
- Please visit Ontario Creates’ website for more information on our COVID-19 response plan.
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 2018, the Ontario music publishing and sound recording industry generated over 4,000 jobs, accounting for 44.8% of the 8,986 industry jobs nation-wide. This figure is approximately on par with the number of jobs generated in 2017.
- The sound recording studio industry spent $18.5 million on salaries, wages, commissions and benefits in 2017, and the record production and distribution industry spent $59.1 million.
- A study by Circum on behalf of Music Publishers Canada and the Association des professionnels de l’édition musicale shows that employment has increased in the Canadian music publishing sector, with respondent companies collectively employing 213 full time individuals. This marks a 16% increase from respondents in 2016, though the 2020 respondents indicated only employing 128 individuals in 2015, for an increase of 66%.
- Live music venues are a huge driver of employment in the music industry. In Toronto alone, music venues represent the equivalent of 10,500 full-time jobs.
- The Indigenous music industry is a strong economic driver in Canada. In 2018, it supported over 3,000 full time positions, although only 23% work in the industry full time. Indigenous musicians earn an average of $47,200 per year, though almost half of this income comes from non-music sources.
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 2018, music publishing and sound recording generated $384.2 million in provincial GDP, up 4.2% from 2017. This accounted for 60.3% of the Canadian total GDP generated by this sector, up from 57.8% the previous year.
- Between 2015 and 2018, the Ontario percentage of the national sound recording GDP contribution has, for the most part, increased.
- 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%.
- The Canadian music industry generated US$1.45 billion in 2019. It is projected that 2020 will mark a significant drop of -31.4% to just under $1 billion, followed by a dramatic increase over the following two years for a combined annual growth rate (CAGR) of 3.12% between 2019-2024. This is slightly below the projected global CAGR for the same time period, which is 3.51%.
- Canada’s music publishing industry has seen steady increases, with an 8.6% average annual increase between 2016 and 2020, with revenues of $277 million in 2020. The vast majority of these revenues (92%) are generated in Ontario.
- The global music market saw a revenue growth of 8.2% in 2019, with 24.1% growth in paid streaming service revenues. This was counterbalanced by a decline of -5.3% in physical music revenue.
- The largest revenue source globally in 2019 was subscription audio streams at 42%, followed by physical sales at 21.6%.
- A Nordicity study on the Toronto music ecosystem found that Toronto live music venues contribute $453.5 million in direct GDP, $200.2 million in indirect GDP, and $198.5 in induced GDP, for a total GDP contribution of $638.2 million.
- SOCAN has released key 2019 financial results, showing that there was an 8.2% increase in total collections by member music creators, music publishers and visual artists compared to 2018. Domestic collections increased by 10%, international royalty collections increased by 2.2%, and revenue from digital sources increased by 37.6%.
- Canada was the eighth largest international music market in 2019, following the USA, Japan, the UK, Germany, France, South Korea, and China.
- Across a number of global jurisdictions in 2019, there was a 33.5% growth in paid streaming subscribers. Eighty-nine per cent of people surveyed use online on-demand streaming services, with the fastest growing age group being individuals from 35-64.
- Twenty-three per cent of individuals surveyed globally reported using illegal stream ripping services and 27% had used copyright infringement to obtain music in the previous month, showing that while music streaming is highly popular, piracy is still of significant concern. Music piracy has also increased dramatically since the advent of COVID-19 and stay-at-home orders.
- Streaming is dramatically replacing the sale of music in Canada. In 2019, there was a 31.2% increase in on-demand audio song streams, and a 59.7% increase in on-demand video song streams. In contrast, there was an overall decline in sales in most formats, including physical album sales (-23.3%), digital album sales (-24.5%), CD sales (-26%), and digital track sales (-27.6%). The only sale format which increased was vinyl LP sales, by 2.2%.
Trends and Issues
This section provides information on industry growth rates, trends, and burgeoning issues for the Canadian music industry. Key issues include music streaming services, diversity, and live performances and online shows.
Growth Rate and Industry Trends
- Live music performance is an essential component of the Canadian music ecosystem. In 2019, Canadian professional musicians spent an average of 49 days on tour, and perform an average of 96 concerts or live events in a typical year.
- The most popular music genre globally is pop, followed by rock, oldies, hip-hop/rap, dance/electronic, indie/alternative, k-pop, metal, R&B, and classical.
- In light of COVID-19 restrictions, music venues are moving to virtual formats for performances. In Toronto, a number of popular, landmark venues will be livestreaming high quality performances from their stages to paying music fans at home. It is possible that livestreaming will continue to be popular after COVID restrictions are lifted, as they allow shows to reach a wider audience.
- The potential impact of virtual concerts is significant, and likely to become even more so as the world continues to grapple with COVID-related restrictions. A concert by artist Travis Scott in the video game Fortnite drew 12 million concurrent viewers, and Scott saw corresponding dramatic increases in popularity on a number of music streaming services.
- A study from the American Music Producers Guild showed that a startling number of music producers and sound engineers perform free work, with 88% having been asked to work for free over the previous three years, and 71% performing such work for at least one client.
- As music apps and streaming services have gradually become more popular over the last several decades, the prevalence of album listening is decreasing. A UK survey found that the majority of participants under the age of 25 are more likely to arrange music into custom playlists than listen to albums, and 15% had never listened to a full album.
- With the rapid growth of video streaming services, there has also been a significantly increased demand for sync licensing, a license format which specifically allows for the matching of licensed music with the visuals of a movie, TV show, video game, etc.
Global and Domestic Issues
- The CRTC has launched a consultation on commercial radio, to determine whether Canadian content regulations for both music and news should be maintained, decreased, or increased, as well as whether multinational streaming services should be required to contribute to the system.
- City of Toronto amendments to noise bylaws are positive news for the live music industry. These new policies provide quantitative decibel limits for amplified sound, as well as an adjustment to point of measurement for decibel levels which will now be measured from the point that the noise is heard, rather than the property line of the sound source.
- Following the surge in visibility for the Black Lives Matter movement in the spring and summer of 2020, a variety of steps are being taken by the music industry to address systemic racism.
- Following the birth of the #BlackoutTuesday hashtag in early June, many major music companies pledged large amounts to charities aimed at combatting systemic racism.
- ADVANCE, Canada’s Black Music Business Collective, launched in July 2020 with a mandate to improve the experiences, treatment and retention of Black people in the Canadian music industry.
- American advocacy group Black Music Action Coalition (BMAC) was formed in response to this rise in support, in an effort to hold companies and organizations accountable to the pledges they’ve made.
- BMAC released a public letter signed by a large number of major musical artists calling for greater support for Black executives in the music industry, particularly in roles beyond just “urban” music.
- Spotify continues to be a major player in the international music industry, with a number of new developments:
- Spotify ended 2019 with 124 million premium subscribers and 153 million free subscribers; 29% more free subscribers than the end of 2018. However, in spite of climbing revenues, Spotify was still operating at a loss of $84.8 million. The company’s losses have continued into 2020, although user base continues to grow.
- An artist petition called “Justice at Spotify” has garnered a great deal of support. The petition demands that Spotify pay musicians a minimum of one cent per stream, as opposed to the current payments of half a cent or less, depending on factors such as artist region.
- The Spotify for Artists app has been redesigned several times. In 2019, it was updated to provide artists with real-time listening stats for their music. The app update also provides additional data on milestones such as followers or playlist adds. In 2020, the artist dashboard was combined with the label dashboard, to allow labels and distributors to access and manage artist profiles.
- Streaming services such as Spotify may mark the end of the traditional Top 40 Chart. In their 2020-21 Q2 results, Spotify identified that their top tier (meaning acts which share 90% of the streams on their platform) now sits at 43,000 artists.
- Since early 2020, YouTube has been testing a feature called “Applause”, which allows viewers to donate to content creators directly by clicking a microtransaction button on a video. However, it is thus far unclear how much of the money goes directly to artists. The Applause feature is not currently available in Canada.
- A report prepared for Music Publishers Canada (MPC) by Circum Network Inc provides a profile of members of MPC and the Association des professionnels de l’édition musicale. Among other findings, the report shows that over half of Canadian headquarters among respondent organizations were located in Ontario.
- Even before the advent of COVID-19, live music venues faced a number of issues, including increasing property values; gentrification and changing neighbourhood demographics; increasing insurance costs; barriers to entry for newer, less visible venues; and difficulties with fostering artist development.
- A number of organizations are recognizing the importance of providing support to allow female-identifying musical artists to succeed. Among these initiatives are: SOCAN’s Her Music Awards; the Girl Connected Music Mentorship program (by Lola Plaku in partnership with the Canadian government and FACTOR); and Keychange, a worldwide initiative partnering with music festivals to commit to gender parity in their lineups by 2022.
- The Canadian federal government has pledged $500 million to establish a COVID-19 Emergency Support Fund for Cultural, Heritage and Sport organizations impacted by the pandemic. Phase 1 provided top-ups to recipients of a variety of programs, including the Canada Music Fund (CMF). Phase 2 provided funding to professional organizations who may not have been included in Phase 1, which included $20 million for the live music industry. Phase 2 also included $52.1 million to all other cultural organizations, including $5 million specifically for sound recording studios and other music organizations that are not CMF recipients.
- 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. A full 2020 budget has not been released due to COVID-19.
- The federal government has introduced Bill C-10, which would make significant changes to the Broadcasting Act. The Bill, if passed, will expand the authority of the Canadian Radio-television and Telecommunications Commission to give it authority over online video and music streaming services, and to potentially require them to financially contribute towards and promote Canadian content.
- At the federal level, support to the sound recording industry comes through the Canada Music Fund, administered by the Department of Canadian Heritage, as well as through the Canada Council for the Arts.
- Other organizations and funds such as FACTOR, the Radio Starmaker Fund (private, non-government support), and provincial arts councils, including the Ontario Arts Council, provide a variety of assistance programs to the Canadian music industry.
- The Ontario Music Investment Fund (OMIF) is a $7 million fund administered by Ontario Creates and designed to provide targeted economic development to the province’s vibrant and diverse music industry. It supports companies with strong growth potential to maximize ROI and create more opportunities for emerging artists to record and perform in Ontario. The OMIF has three streams: Creation, Initiatives (including sub-stream of Global Market Development for Music Managers), and Live Music.
Ontario’s music industry produces a number of critically acclaimed and best-selling artists, labels, and events.
- Although Ontario artists did not receive any 2020 Grammy awards, contributions by powerhouse artists such as Shawn Mendes, Drake and Jessie Reyez were acknowledged with a number of nominations.
- Ontario was well-represented at the 2020 Juno Awards. Among the winners were Avril Lavigne for Juno Fan Choice; Shawn Mendes for both Artist of the Year and Single of the Year (Señorita); Loud Luxury for Group of the Year; and Alessia Cara for Album of the Year and Pop Album of the Year. Ontario Music Fund-supported artists who took home awards include Jessie Reyez, iskwē, REZZ, PUP, Meghan Patrick, Lee Harvey Osmond, and The Glorious Sons.
- Ontario artists dominated the 2020 Polaris Music Prize shortlist nominations including: Caribou, Jessie Reyez, Lido Pimienta, Pantayo, US Girls and Witch Prophet.
- Shawn Mendes won five awards at the 2020 SOCAN awards, including the International Song Award, International Achievement Award, and Songwriter of the Year in the performer category. Ontario-raised artist Frank Dukes also won a Songwriter of the Year award in the producer category. Ontario-based artists and productions won other awards as well, including Murdoch Mysteries for Domestic Television Music Award.
Profile current as of December 2020
3 David Coletto, Crowded Out, July 2020, pp. 4-5.
4 ibid, p. 15.
5 Nordicity, Re:Venues: A Case and Path forward for Toronto’s Live Music Industry, 2020, pp.6-7.
6 ibid p.7.
8 News Release, “Toronto City Council approves property tax relief to help sustain live music venues”, Toronto, May 29, 2020; FYI Staff, “Toronto Tax Break To Help Music Venues”, FYI Music News, June 7, 2020; CBC News, “Dozens of Toronto live music venues to get tax break to help ease COVID-19 pressures”, CBC, August 20, 2020.
14 Circum, Profile of Members of MPC and APEM, 2020, July 2020, p, 12.
15 Nordicity, Re:Venues: A Case and Path forward for Toronto’s Live Music Industry, 2020, p.6.
17 Statistics 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).
22 Circum, Profile of Members of MPC and APEM, 2020, July 2020, pp iii, 7.
23 ifpi, ifpi Global Music Report 2020 – The Industry in 2019, 2019, p. 6.
24 ibid p. 13.
25 Nordicity, Re:Venues: A Case and Path forward for Toronto’s Live Music Industry, 2020, p.6.
27 ifpi, ifpi Global Music Report 2020 – The Industry in 2019, 2019, p. 13.
28 ibid, p. 6; ifpi, Music Listening 2019, 2019, pp. 6-7.
31 David Coletto, Crowded Out, July 2020, p. 6.
32 ifpi, Music Listening 2019, 2019, p. 15.
45 Marsha Sliva, “Spotify Reaches 124 Million Premium Subscribers – But Quarterly Losses Top $85 Million”, Digital Music News, February 5, 2020; Georg Szalai, “Spotify Hits 138 Million Paid, 299 Million Total Users”, The Hollywood Reporter, July 29, 2020.
46 Dylan Smith, “More thatn 9,000 Artists Demand 1 Cent-Per-Stream Minimums from Spotify”, Digital Music News, October 27, 2020; Dylan Smith, “How Much Does Spotify Pay Per Stream? Here’s the Latest Data”, Digital Music News, August 17, 2020.
47 Ashley King, “Spotify for Artists Gets an Overhaul – Now Shows Real-Time Listening Stats”, Digital Music News, September 24, 2019; Ashley King, “Spotify Combines Artist and Label Analytics Dashboards – New Interface Launches”, Digital Music News, May 18, 2020.
50 Circum, Profile of Members of MPC and APEM, 2020, July 2020, p, 7.
51 Nordicity, Re:Venues: A Case and Path forward for Toronto’s Live Music Industry, 2020, p.6.
53 Government of Canada, Economic and Fiscal Snapshot 2020, August 2020, p. 109; Government of Canada, “Questions and answers – COVID-19 Emergency Support Fund for Cultural, Heritage and Sports Organizations, Government of Canada, October 2, 2020.