The Future of the Canadian Music Industry

Canadian Heritage has just released a new report [PDF version] on the future of the Canadian music industry that should be required reading for those engaged in music and copyright issues.  Written by Shelley Stein-Sacks, the former head of the government's Music Entrepreneurship Program, the report is remarkable for several reasons.

  1. The report is very realistic in its assessment of the challenges faced by the industry, pointing to the decline in sales following the CD replacement surge, the impact of Wal-Mart and retail channel changes, and the failure of the industry to provide consumers with music in the form and manner they were demanding. 
  2. It enthusiastically embraces the Internet and new technology, rejecting DRM-based solutions and acknowledging the potential of MySpace and Internet sharing to generate new revenues to replace those lost by declining CD sales. 
  3. It puts on the table the prospect of alternative compensation systems for P2P sharing. 
  4. It calls attention to the failure to digitize Canadian music, noting that government programs fund for the completion of CDs, not digitization that allows for downloads.  Further, it laments that much of the Canadian back catalog of music has never been digitized.
  5. There is not a single word about copyright reform.  Copyright is discussed within the context of licensing issues and the copyright board, but there are no recommendations calling for major copyright reform.
  6. It distinguishes between the music industry and the CD industry, with the former very healthy and the latter diminishing year-by-year.  Left unsaid, though no less important, is to distinguish between the Canadian music industry, which is dominated by independent labels, and CRIA, which largely represents the industry outside the country.

This is a useful report that deserves a wide audience as it stands in direct contrast to the doom-and-gloom promoted by CRIA and its allies.


  1. Assistant Professor, Mass Communication,
    Michael: Love the blog. A scan through the report raises some terminological issues, because one sense, this report is about the “independent Canadian music industry,” a term provided without definition, and in another sense the report, written in an incredibly breezy tone, is about music distribution and access. There’s very little “industrial” information here. What’s interesting about the report is that it is audience-centred, in that it recognizes the various ways in which Canadians gain access to music. This is a welcome change. What’s also interesting is that the government’s music policy — and the language it uses which blends industrial and cultural motifs more closely — may represent this front end of a new language that will apply across its other cultural policy “platforms,” including those old media, television and radio.

  2. Darryl Moore says:

    Inconsistencies in report
    Thanks Michael, I’ve only skimmed the report so far. It looks good, but one glaring inconsistency jumps out at me. At the beginning the author say two important things:

    “For all the talk about DRMs and what they mean, the use of DRMs to prevent piracy is a non-starter for many observers, particularly because most DRMs have been hacked already and those that haven’t will soon be.”


    “People tend to favour innovations that seamlessly integrate into their lives without obstacle.”

    That’s fine and I agree totally with both, however in the conclusions at the end the author also speaks of subscription models of music distribution:

    “In exchange for a monthly or annual fee, subscribers have unlimited access to a large library of titles playable on any Windows-media compatible digital music player including, naturally, your PC.
    The catch is that you don’t actually own the content – you have access to the music as long as you continue to subscribe to the service. Once you stop your subscription –the music disappears.”

    The problem is that to make this work requires DRM. The objections that the author made about DRM with regard to piracy are just as valid in this context as well. Also, they have yet to devise a DRM system which seamlessly integrates into any ones lives.

  3. Tobin Dalrymple says:

    student CU Journalism
    EMI, Warner, Walmart… but who exactly are the Canadian players in the music industry? Who, in Canada, does policies on recording industry affect? (with the obvious exception of the users.)

  4. Alexandre Racine says:

    @ Darryl Moore

    About the subscription models of music distribution, you said :
    “The problem is that to make this work requires DRM.”

    Not really. It could be streaming instead. There is a lot of other alternatives to technology. All of this is only software and you can do watever you want with software.

  5. Darryl Moore says:

    Streaming requires DRM too
    Alexandre, streaming is just a fancy word for “play it as you download it and then delete it”. There is no technological reason that anything which is streamed cannot also be saved. Hence the need for DRM. As you say “you can do whatever you want with software.”

    Subscription distribution models such as described here can only work with the assistance of DRM. Period.

  6. citing
    For those of you who are curious, the author of this study is Shelley Stein-Sacks, and it was released by CH in September 2006. Not exactly news.

  7. Aaron Maenpaa says:

    @Darryl Moore

    You could easily have a subsription model that doesn’t use DRM. Simply, allow catelogue access to everything while the subscription is paid. Songs are downloaded and saved to the client’s HDD, unprotected and in an open format. The client has easy access to all the music they want in a format that will play on their iPod/Zune.

    Once the subscription expires the client loses the ability to download *NEW* music.

    This system exposes a giant library of unprotected music to be downloaded once and shared with all your friends; however, this kind of convienience is already available for the price of a broadband connection, if you know where to look.

    There’s a subscription model. No DRM and an incentive to maintain membership.

  8. citing not enough …
    I think Charles up there is a bit harsh considering while the date of this report may be Sept 2006, its public release is subject to translation in both official languages. Trying to find a news release (none), it appears to be January 29, 2007, for the English version and January 11, 2007 for the French version, though the date of the webpage is not a true indicator of the publication date.

  9. Darryl Moore says:

    Doesn’t change the contradictions
    Aaron, you are absolutely right. As a mater of fact that is exactly the type of subscription I’ve had for various technical specification documents from IEEE. It works great, and that is the kind of subscription model I’d eagerly encourage.

    Now. Note that in my first post I pointed out the the author of the report said “Once you stop your subscription –the music disappears.” This sort of subscription DOES necessitate DRM, and is wholly inconsistent with her previous assertions regarding DRM.

    Also, in my second post I was quite careful in my choice of words which are still valid. “Subscription distribution models SUCH AS DESCRIBED HERE can only work with the assistance of DRM.”

    So, despite some very good posts which tried earnestly to mount criticism at my statements, I believe everything I have said stands 100% intact. 🙂

  10. Hi . I am the founder of Trend says:

    Javier Marti
    Hi . I am the founder of, a community of online amateur writers. We write about the future of everything. I would like to invite you to write an article on our website, perhaps based on what you are mentioning here. Maybe you can write “The future of the Canadian Music Industry”? It is up to you, you choose the subject.
    You can even re-use some of what you’ve written here, in the last part of the article, “your view and comments”. That would save you time and still be interesting for readers.
    Look forward to hearing from you

    Best regards
    Javier Marti
    [ link ]

    I have recently been going through your blog Michael and am intrigued by the numerous issues you raise. I also like how you have consistent readers who keep you on your toes and provide quality feedback.

    @Darryl: I would be really interested in talking to you for an assignment I have for school at Ryerson University. If you’re up for talking to me, please contact me at, it would be a HUGE help.

    Look forward to hearing from you

  12. “It distinguishes between the music industry and the CD industry, with the former very healthy and the latter diminishing year-by-year.”

    Michael, let’s keep in mind there is no major “music industry” (which am assuming you are referring to touring and the such, without that peski cd industry. The cd industry was the one enabling the “music industry” to proliferate and prosper. Without the recorded music industry, there isn’t much anything “new” to tour, Booking and agents and concert promoters may think they break bands…but they’re just a piece of the cd industry’s business plan. It starts long before the touring industry start making real money from artists.

  13. Interesting!