Statistics Canada Reports Canadian Music Industry Turning Healthy Profit

The official Canadian Music Week won't take place until March in Toronto, but this week the Canadian government has staged its own Canadian music week.  Days after the release of the Industry Canada commissioned study on the correlation between P2P and CD sales, Statistics Canada has just released a report on the state of the sound recording and music publishing industries in Canada.  Notwithstanding the doom and gloom from industry associations, Statistics Canada paints a much different picture. 

According to Statscan, "Canada's sound recording and music publishing industries turned a relatively healthy profit in 2005, despite the worldwide decline in record sales and increased competition from other forms of entertainment."  Highlights from the release include:

  • each of the three major segments of the Canadian music industry (record production, music publishing, and recording studios) turned a profit in 2005
  • operating profit was estimated at 14 percent for the industry
  • the recording industry's revenues declined from 2003 to 2005, but profitability increased from 0.1 percent to 7 percent.  Global restructuring, lowered costs, and digital distribution were cited as the primary reasons for the profit increase.

The news was also very good for Canadian artists.  Their sales increased by 3.3 percent and now account for 21 percent of total Canadian music sales.  Even more noteworthy, Canadian artists continued to release more music – an increase of 8.8 percent, while foreign artists (those backed by CRIA) dropped by 5.6 percent.  In other words, while CRIA was giving dire speeches in 2005 claiming that Canadian artists could not find labels to invest in them, the data shows that the market for Canadian artists was growing with more releases and more revenues.


  1. Dorkmaster Flek says:

    This data needs to be shoved in the face of the policy makers! This is exactly what we’ve been saying for the last year. Canadian artists and publishers are doing just great now that they’ve abandoned the CRIA and their obsolete business model. Digital downloads aren’t hurting them at all. On the contrary, they’re contributing to an increase in sales and profits due to easier access and lower distribution costs. Canadian artists want nothing to do with the CRIA/RIAA and their ways. This fact needs to be emphasized during this shaky period of seemingly inevitable forthcoming copyright reform. Keep fighting the good fight Professor Geist. 🙂

  2. Aaron Lemur Mintz says:

    There’s a statement by Stephen Colbert (it may be older than that) which seems to fit in with all of the recent news. “It’s well-known that truth has a liberal bias”. Liberal isn’t quite the correct word here, but it’s close.

    I wonder what the trends are for record production company concentration – I’d assume that as digital distribution & buzz-creation gets easier, that the concentration would drop, but we need some post-05 data for that, probably.

  3. Edward Palonek says:

    Edward Palonek
    Edward Palonek from [ link ]’ target=’_blank’>link ]
    The issue here is not about profits made as much as it is about breaking the law. The other flip side of the issue is the “potential” profit lost by the music industry… Edward Palonek: While that is a valid point, due to the CRIA/RIAA fight for the lost potential profit, we as a society are deprived of certain liberties. As a result we are becoming a society that is forgetting all about personal freedoms and are unwilling to do much about it. The average Canadian is a passive person, if it wasn’t for talented people like Michael people would be even more passive. Keep up the good work Michael, and thank you.

    Edward Palonek
    [ link ]’ target=’_blank’>link ]

  4. Here’s an article that looks at the flipside to the profit made…

    [ link ]

    Wall Street analysts are downgrading the stock of Warner Music Group which has caused their stock prices to tumble. The analysts have seen the trend of big acts like Radiohead, Nine Inch Nails and Madonna moving away from record labels and decide to release albums on their own terms. They don’t believe that the recording industry is adapting well enough to the digital music landscape.

    If the backlash from consumers and music listeners are not having any effect on the recording industry, perhaps their shareholders may be more successful.

  5. Edward Palonek says:

    Interesting article Thomas, and I do agree with some points, especially with the fact that recording industry historically has been very slow to change… too many middle man?
    [ link ]

  6. gord nickerson says:

    Each term i ask my students how many own mp3 players – and it is now approaching 100% of the class. I also ask how many own traditional stereo sets – speakers/amp/cd player and that percentage has been in decline for many years. The conclusion is that CDs – the preferred distribution method of the major record companies, no longer meets the needs of many people. You have to buy the cd, rip the tracks, add the metadata and transfer the music to your preferred listening device. This is an inconvenience to the consumer. The industry may get more restrictive IP laws passed, may sue more people, and stay with its expensive distribution model, but it is hard to stay in business forever if you don’t meet the needs of your customers.

  7. Edward Palonek says:

    Professor, well said. Edward Palonek™ And for that reason companies like Apple saw tromendous oppurtunity to distribute music online. Record companies are hindering the technology and in turn they will suffer as more competitors will come online.
    Edward Palonek
    [ link ]

  8. How is having a music week in Canada going to affect the industry? Do you think it will have a positive aspect on the music industry?

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  9. Titanium Search
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  10. Titanium Search
    How is having a music week in Canada going to affect the industry? Do you think it will have a positive aspect on the music industry?

    Please go to for more info.

  11. Ty Christian Wilson says:

    Hey man great article! I’m a young musician that wants to get to know my industry better, where can I go to get credible information on trends in the Canadian Music Industry?

    Thanks Ty Christian Wilson