How did we get here?
The state of the Canadian music industry and how it has been affected by the pandemic and music streaming.
Pre-pandemic, Canadians were very engaged with the music industry. In 2016, there was widespread attendance at performances and arts events, with eight in 10 Canadians having attended at least one such event that year, according to a survey conducted by the Department of Heritage and Canada Council for the Arts. Leading in popularity were music performances, making up 61 per cent of reported attendance. Canadians widely agree that arts and culture leads to an array of social benefits.
In 2018, Canada’s cultural sector generated $56.1 billion and supported more than 655,000 jobs. Culture accounted for 2.7 per cent of Canada’s overall GDP in 2018. The share of culture jobs in the country’s economy was stable at about 3.4 per cent, but that share was trending in the direction of slow growth.
In Canada’s most populous province, Ontario’s music publishing and sound recording industry provided over 4,000 jobs in 2018, making up almost 45 per cent of the 8,986 industry jobs nationwide that year.
When the COVID-19 pandemic had finally reached Canada in spring 2020, leading to a ubiquitous shutdown, the country’s music industry was far from immune. In October 2020, Hélène Laurendeau, deputy minister of the Department of Canadian Heritage, said of the cultural sector in Canada, “These sectors were among the first to experience the impact of the pandemic, and will likely be among the last to suffer.”
Real GDP in the arts, entertainment and recreation sub-sector dropped to around 50 per cent of where it had been prior to the pandemic. The total labour force in the performing arts, sports, entertainment and related industries decreased by 19.2 per cent in September 2020 compared to September 2019.
“The COVID-19 pandemic has had a profound and widespread impact on Canada’s professional musicians,” according to a July 2020 report from Music Canada, which surveyed Canadian music artists in mid-2020. “As they rely heavily on live, in-person performances for their professional motivation and income, the complete shutdown of all live events has severely reduced their incomes and impacted their creativity and ability to produce music.”
Live music is increasingly the way that music artists support themselves financially. In a given year, bands and artists would perform an average of 96 times across Canada and globally. It is estimated that the revenue musicians generate from performing live helps support about 11.5 people, like band members and other crew. The pandemic has severely hampered Canadian musicians’ ability to sustain themselves, with 85 per cent agreeing that they will have a hard time making a living if they can’t perform live, based on those surveyed by Music Canada.
The average number of bookings per musician went down from 2019’s average of 87 to eight for 2020. This contraction in the sphere of live performances extends further in the future: about three in four Canadian musicians report that bookings for 2021 are “lower than usual.” That mild statement describes a much more grim predicament faced by artists and bands in this moment.
Dawn Després-Smyth is the member services coordinator at the Music Industry Association for New Brunswick.
Describing how this trend has played out among its New Brunswick-based membership, Després-Smyth said, “It’s been devastating, there’s no other way to say it. We can try to put a brave face on it, but a lot of artists are choosing to not pick up their instrument anymore.”
Després-Smyth described the challenges artists in the province face with the push and pull of public health guidelines. “They’ve tried booking things, and then oh, it gets canceled, because now we’re in isolation, and they try again, and they try again and it keeps getting put back, and cancelled. So people are feeling very, very discouraged.”
Based on the feedback she has received from the association’s membership, she estimates the share of artists in that province facing lower bookings is more prevalent than the percentage of artists surveyed in the Music Canada report.
Even with the eased travel restrictions in the Atlantic Bubble last year among East coast provinces, Després-Smyth noted that agreement existed relatively briefly. The bubble existed between July 2020 through to November, with three member provinces suspending cross-border travel due to an uptick in COVID-19 case numbers.
Dawn Després-Smyth said that many New Brunswick musicians are facing a unique set of challenges when it comes to performing live amid the pandemic. Photo by Frederic Gayer.
Ottawa-based Brendon Bartlett and Tiffany Williams create music under the name Unsociably High. Photo courtesy of Brendon Bartlett and Tiffany Williams.
Brendon Bartlett and Tiffany Williams make up the duo in Unsociably High. The Ottawa-based Indie soul jazz duo have been making music since 2018. Bartlett is a multi-instrumentalist who has been making music since he was 12 years old.
“I definitely always loved to sing,” said Williams. “But I’ve always wanted to take vocal lessons to just advance a bit more.” They both took lessons, and eventually performed at their first open mic at a local bar. At that stage, the duo were experimenting with their sound and playing live shows throughout the city, eventually working their way up through bigger venues.
When the pandemic hit, the inability to perform live was not just financially difficult, but also emotionally fraught. “”I was so unmotivated,” said Williams. “It’s been an emotional journey for sure.” Bartlett said, “It’s certainly a good time to create but at the same time, we just want to perform so badly.” For the group, performing live represented more than a sum of money: they derived a large source of satisfaction and excitement from the visceral experience of sharing their work with a room full of people.
Prior to the radical disruption brought about by digital file sharing, the music industry worldwide saw consistent growth in revenue, due in part to their ability to control the number of physical copies distributed. Photo by Erika Ibrahim.
By the end of the 1990s, the global recorded music industry had enjoyed consistent decades-long growth from sales of individual records, cassettes, and eventually compact discs. This financially rosy period was abruptly halted by the advent of file sharing—most notably with Napster—and the increasing ubiquity of the internet.
This break from the industry’s status quo helped to create new ways of circulating and assigning dollar values to recorded music. More specifically, the pre-internet era music industry’s success was largely predicated on its ability to control the physical distribution of recorded copies. The very foundations of the industry were shaken when music was freed from a physical object: the ways music is distributed, consumed, monetized, and remunerated have changed radically. And those digital shifts are still underway.
In the intervening 20 years, the industry has endured several technological disruptions. Digital distribution methods proliferated, moving away from physical sales and toward digital song and album downloads as with the iTunes store, non-interactive webcasting which is akin to digital radio, such as Pandora and iHeartRadio, and finally with on-demand streaming services like Spotify and Apple Music.
In the early 2010s, streaming services began popping up, with limited presence in Canada to players such as the now defunct Rdio, and CBC Radio Three. Apple pivoted away from selling music via the iTunes Store and toward streaming in 2014 with the purchase of Beats Music. Spotify became available in Canada in 2014, three years later than its entry into the American market. The move to roll Spotify’s service out in Canada occurred not long after a Copyright Board of Canada decision that clarified royalty rates for streaming services, pegging it at 10.2 cents in royalties for every 1,000 plays. Re:Sound, the organization that secures music royalties in Canada, advocated for a royalty rate of $1 to $2.30 per 1,000 streams.
At the time, the Swedish streaming service boasted about 50 million active listeners globally. Today, it’s by far the largest subscription music streaming service, whose number of active listeners hovers around 346 million. At the same time that streaming services were gaining a larger market share, the music industry as a whole was struggling, still battered by the disruptions wrought by peer-to-peer file sharing at the turn of the century.
“It’s only the last six years in Canada, really, that streaming has been anything significant,” said Jeff Vidler, founder of Signal Hill Insights, which researches trends in the audio industry. “It’s been sort of on the fringes. When Spotify launched in Canada, then that sort of turbocharged the whole thing, and there was phenomenal growth over a period of a few years.”
“Canada has been playing catch-up, but streaming levels in Canada are not quite as high as they are in the US, but they’re actually getting pretty close to that now,” said Vidler.
Global on-demand song streaming increased by over 22 per cent in the period of 2019 to 2020 alone, from 1.8 trillion streams to 2.2 trillion, according to a report by MRC Data (Formerly Nielsen Canada). During the same period in Canada, on-demand audio streams increased more than 16 per cent, from 75.8 billion streams to 88 billion.
Until relatively recently, selling physical copies of albums and á la carte digital downloading (via the iTunes store, for instance) were the primary way that artists and labels made money.
Jeff Vidler, founder of Signal Hill Insights. Photo Courtesy of Jeff Vidler.
Brian Fauteux has been researching music industries and music radio broadcasting for about 10 years. The University of Alberta professor said, “When you have streaming music listening becoming dominant, and it not providing much revenue back to artists, you do have sort of a unique problem of this moment where you can find yourself in a situation like many artists have in the pandemic.” Fauteux continued, “Without that touring component, or without other revenue streams potentially, it exposes the inability for a dominant mode of listening to provide artists with much financial return.”