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How Does Canada’s Digital Music Market Really Stack Up?

CRIA's Graham Henderson has posted an op-ed in the Georgia Straight in which he repeats many of his comments from an earlier copyright consultation roundtable. Henderson points to U.S. sales and new services Europe such as Spotify and Nokia's Comes With Music to support his claim is that Canada is falling far behind its counterparts in the digital music sales and services.  In Canada, he says the choice is just between iTunes and illegal (it is rather amazing to see the person who launched Puretracks now ignore it).

Yet Henderson's claims simply don't stand up to scrutiny.  First, digital music sales as a percentage of total sales in Canada is ahead of every major European country. While the U.S. is indeed ahead of Canada, the IFPI reports that Canada is ahead of France, Britain, Spain, Belgium, Italy, Germany, Switzerland, the Netherlands, Austria, Sweden, Czech Republic, Finland, Greece, Hungary, Norway, Poland, Portugal, and Russia.  Canada also leads countries such as Australia, New Zealand, Hong Kong, Singapore, Taiwan, Mexico, Argentina, Brazil, and South Africa (percentage of digital sales are highest in countries where physical sales are virtually non-existent such as Indonesia and China). In fact, of the top 20 global markets for recorded music, the IFPI says that Canada ranks 5th for the percentage of digital sales.  Overall, Canada's digital market stands 7th worldwide, while ranking 6th for all recorded music – in other words, about what you would expect. Not exactly the laggard that CRIA claims.

Second, Canada trails the U.S. in the digital sales as a percentage of total sales, but digital music sales growth in Canada has outperformed the U.S. for the past three years according to Nielsen Soundscan data. Indeed, the IFPI notes that Canada's growth rate is ahead of the global average. In comparing with the U.S., Canada is starting from a lower base, but Apple iTunes launched much later in Canada and it has failed to seriously target French language music sales (effectively cutting out a chunk of the Canadian market).

Third, recent reports note that services like Spotify are promoted by the major labels who hold an ownership stake, but artists actually receive very little.  Moreover, Canada has been home to new services such as SpiralFrog, which launched in Canada before the U.S.

Fourth, Canada's private copying levy has provided hundreds of millions of dollars in compensation for personal, non-commercial copying that may include downloading.  Given that revenue, it should come as little surprise to find that many groups representing artists are focused on retaining or expanding the levy as their key issue, not the reforms promoted by CRIA.

13 Comments

  1. No real options
    As a Linux user iTunes isn’t an option for me. I won’t buy music with DRM. Amazon would be great if they sold outside the USA. So I keep buying CD’s or the occasional iTunes purchase from my work PC. I don’t know many industries that purposefully put hurdles in the way of customers that are eager to buy.

  2. Yes, he is missing some alternatives. I’m a fan of eMusic (indie artists, mostly, and the software doesn’t try to manage all of my music in the annoying fashion that iTunes has tried). The problem is that there are a lot of annoying roadblocks as Canadian consumers attempt to buy in the way that the media’s promoting south of the border. As Adam said, we can’t buy through Amazon. Many artists aren’t signed on distribution deals here with the corresponding outlets that promote them in the states, leading to confusion.

    So, like Adam, I’m often resorting to ordering my CDs and ripping them once they arrive. Slow but sure!

  3. poor options
    I have a download membership with Magnatune.com, but, of course, probably count towards American music purchases if any. Digital music sales have always been limited by ease and availability. When you can get better quality music much easier from a file-sharing site, it’s obvious the big names aren’t even trying. Shouldn’t Sony be able to provide a better music acquisition experience than a group of rag-tag fans? I assume the RIAA folks are going to use this to support their claim that Canada is a pirate haven, but low sales are simply an artifact of low quality of salesmanship -it’s as simple as that.

  4. Puretracks
    Adam,

    As Dr. Geist slyly notes, Puretracks.com is a Canadian alternative to iTunes that Henderson chooses not to acknowledge.

    Initially, it launched as a DRM’ed WMA-only mess, but began introducing some tracks in MP3 format in 2007. Now, as far as I can tell, everything is available in MP3, with only some tracks also available in WMA as well. There seems to be no difference in pricing between the two formats.

    Originally, Puretracks required an ActiveX component to download purchased music, but now everything can be done through an ordinary browser.

    Puretracks is a perfectly viable solution for Canadian users of alternative platforms to buy major-label music.

  5. Brendon J. Wilson says:

    His argument isn’t about copyright…
    …but rather it’s a stinging indictment of the sluggish pace of innovation in Canada. I agree with him that it’s a problem that these services aren’t being developed by Canadians – instead, we end up buying them from others. That’s the real problem…we’re turning into intellectual property sharecroppers.

  6. No real options
    As a Linux user iTunes isn’t an option for me. I won’t buy music with DRM. Amazon would be great if they sold outside the USA. So I keep buying CD’s or the occasional iTunes purchase from my work PC. I don’t know many industries that purposefully put hurdles in the way of customers that are eager to buy.

  7. He is in fact spreading at least some misinformation
    The CRIA website provides links to the following sites from their Industry page:

    Archambaultiz (link broken)
    Bonfire at Futureshop
    eMusic
    ITunes Canada
    MuchMusic
    Napster Canada
    Puretracks
    Rogers MusicStore
    Sympatico MSN
    Telus
    Yahoo! Music
    Zunior

    If one reads Henderson’s article, MOST of the sites that the CRIA links to are illegal. Claims like this affect his credibility when acting as a spokesman for the “industry” (or rather that part of the industry that pays his wages).

  8. better option
    I download music from jamendo ( http://www.jamendo.com/en/ ) it’s free,completely legal and unencumbered with drm or copyright. You can support the artist if you wish. There is a vast library of music, some a little rough but some real gems can be found,none of the pre packaged bland pap that the record companies promote!!

  9. Jake Daynes says:

    Pirate Party of Canada
    Hey everybody, I’m Jake, Marketing and Public Relations Director of the Pirate Party of Canada, just wanted to let everybody know that we also have an op-ed coming out in the Georgia Straight, though not directly a response to this article, I hope that it gets the point across.

  10. Jake Daynes says:

    Pirate Party of Canada
    Hey everybody, I’m Jake, Marketing and Public Relations Director of the Pirate Party of Canada, just wanted to let everybody know that we also have an op-ed coming out in the Georgia Straight, though not directly a response to this article, I hope that it gets the point across.

  11. : how music industry got into deep sh!t it is now in
    On p2pnet, someone called “V for Vendetta” posted a link to the following article:

    Part 1: http://www.p2pnet.net/story/27344

    Part 2: http://www.p2pnet.net/story/27258

    At the start of a comment post marathon, “Jon, here is another article on the entertainment kartels,” says V for Vendetta.

    “The article is an opinion piece by a Russian musician Dmitry Silnitsky and it is called ‘Beat-to-Bit’,” he says, going on,

    “It talks about the path of the music industry from its glorious seventies to the desolate state of today. Insightful like ‘When Pigs Fly: The Death of Oink, the Birth of Dissent, and a Brief History of Record Industry Suicide’ by Demonbaby.”

    The original article is a blog post in Russian and, “A translation job was started on the community site,” says VforV, adding:

    “It is almost finished, only proofreading in English is required. If anyone has time and can help finish it, just join translated.by and contribute.”

    I hope that this article makes Canadians think about their relationship with music and music industry. There are MANY questions to ask both the industry and our government.

  12. Puretracks
    Dave,
    Thanks for pointing me back to Puretracks. I remembered it from it’s WMA/Active-X days but hadn’t looked at it in a long while. When I went looking for an iTunes alternative recently I checked Futureshop.ca but they seem to have dropped Bonfire a while back. I had forgotten about Puretracks. I bought a single from my Linux machine yesterday and was pretty happy with it. It’s not as convenient as iTunes but I guess I didn’t jump into Linux for it’s convenience. :) Now I’ll just have to find a convenient way to manage my music library without the niceties of iTunes.

  13. Sev Prince says:

    Doing It The OLd School Way
    Puretracks is good for some things, yes, but an Mp3 file on my computer still can’t beat an actual record in my hand. Yes, I said *record*. As in those big round discs made of vinyl that you put on a turntable and actually listen to, not scratch it back and forth and calling yourself a “dee jay” and the results “music”. Heh, my cat could do that. ;-)