SLIDE 1 A 21st Century Industrial Strategy
Franco-Canadian Summit November 16, 2012
SLIDE 2
- Record companies’ total investment
in A&R and marketing tops $4.5 billion annually
- Labels have maintained A&R
spending at $2.7 billion – 16% of global recorded music revenues, despite the economic recession
- More than 70 % of unsigned artists
would like a recording contract
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Music companies invest a greater proportion of their global revenues in A&R than most other sectors do in research and development (R&D).
Music Companies 16% Computer & Software 9.6% Pharmaceutical & Biotech 15.3%
SLIDE 4
$
Advance $200,000 Recording $200,000 - $300,000 Two or Three Videos $50,000 - $300,000 Tour Support $100,000 Marketing and Promotion $200,000 - $500,000
Typical Investment by a Major Music Company in a Newly-Signed Artist
SLIDE 5
A majority of artists want to sign with a label
75% unsigned artists think a record deal is important in developing a career 76% value the promotional support 46% value the tour support 35% value the advance
SLIDE 6 “I've have one record left that I owe a major label, then I will never be seen in a situation like this again. If I could do what I want right now, I would put out my next album, you could download it from my site at as high a bit-rate as you want, pay $4 through PayPal. Come see the show and buy a T-shirt if you like it. I would put out a nicely packaged merchandise piece, if you want to own a physical thing. And it would come out the day that it's done in the studio, not this "Let's wait three months" bulls---.”
- Trent Reznor, Nine Inch Nails
2007
SLIDE 7 “The thing that I learned from Radiohead is, I don’t want to ask you what you think it’s
- worth. “Hey, I just worked a year on this
thing.” “Well, that’s worth 10 cents.” “Hey, fuck you!” The Saul thing was a lesson. I naively thought at that time that if you gave the public the choice of do the right thing or not, I thought people would actually do it. Five bucks for an album? And I found that most people, no, they really don’t want to do
- that. “
- Trent Reznor, Nine Inch Nails
2009
SLIDE 8 “It was...to have a team of people that are better at that [marketing and distribution] than I am worldwide...that felt like it was worth slicing the pie up monetarily. Our main agenda at the moment was to make people aware of it in the right context versus a little bit more money we might
And so far it's been pleasantly pleasant. Having people that actually kind of know what they're talking about. Having a team, it's been nice.”
- Trent Reznor, Nine Inch Nails
2012
SLIDE 9 “Artists and cultural workers tend to cluster. They create scenes that become destinations and economic engines.”
- Martin Prosperity Institute
Economic Activity of the Canadian recording industry
$400 Million
SLIDE 10
2605 jobs in recording industry 7420 jobs in live music High average salaries: $60,100
SLIDE 11 “It's never been easier to distribute creative work. At the same time, it's never been harder to get paid for it.”
- Rob Levine, Author, Free Ride
@RobertBLevine_
“Music is not free in the digital
- age. It’s just that artists are too
- ften not getting any of the revenue
that their music generates.”
- David Lowery, Artist, Camper Van Beethoven, Cracker
@davidclowery @thetrichordist
SLIDE 12 We're well over a decade into this utopia of demonetized sharing and almost everyone who does the kind of work that has been collectivized online is getting poorer. There are only a tiny handful of writers
- r musicians who actually make a living in the new
utopia, for instance. Almost everyone else is becoming more like a peasant every day.
Jaron Lanier, Author, You Are Not a Gadget: A Manifesto www.jaronlanier.com
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SLIDE 17 Much like the Fair Trade Coffee movement, consumers need to know who fairly includes music creators in the enormous value chain that is based on our collective
- work. It is a real shame that Pandora seems
determined to be on the wrong side of that simple, ethical equation.
Eddie Schwartz, Songwriter Association of Canada
SLIDE 18
says it will push down search rankings for pirate sites …. What does Carly Rae Jepsen say?
SLIDE 19
Putting Google to the test ….
On what page can you find a legal download?
SLIDE 20
Original Single first legitimate download link found on Page 6 ….
SLIDE 21
We looked at every single link on the first page of search results for “Call Me Maybe Download”. Google has no incentive to push these infringing links down. Every link except one apparently generates revenue for Google!!
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How do fans discover music?
SLIDE 24 The year is 1971 ….
Photo by: Ian Muttoo
SLIDE 25
The year is 2012 ….
SLIDE 26
What is the future of Canadian content?
SLIDE 27 What is our new industrial strategy? Providing Access
Music Canada’s guide to digital service providers considering entering Canada
http://musiccanada.com/Service ProvidersGuide.aspx
SLIDE 28
13 services have launched or expanded to Canada in 2011-12
SLIDE 29 Reaching the Tipping Point in Recorded Music Sales
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 2008 2009 2010 2011 2012* Physical Digital
*As at June 30, 2012 – note the majority of physical product is sold in the 4th quarter so year end market split is estimated to be evenly split between sectors
SOURCE: IFPI Recording Industry in Numbers
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SLIDE 31
Innovative Partnerships
Providing developers with access to content from some of the most successful artists in the world … thousands of tracks, video, artwork, photos and more!
SLIDE 32 2007 [-14%] 2008 [-6.5%] 2009 [-5.6%] 2010 [-11.8%] 2011 [+2.6%] 458 388 349 272 235 57 92 104 126 164 21 22 21 20 19 6 16 Physical Digital Performance Rights Synch Revenues
Source: International Federation of the Phonographic Industry
Canadian Recorded Music Sales Trend (US$ million, trade value)
Recorded Music Sales Trend
SLIDE 33
What is our new industrial strategy?
Kids who can play music make a society that can think critically.
Dan Mangan, Artist
Music Education
SLIDE 34 What is our new industrial strategy?
" I think it is very unlikely that I would have ever become president had I not been in school music from the time I was nine until the time I was 17. It taught me discipline and creativity. It made me see the world in different
- ways. It made me understand things in
different ways. "
Bill Clinton
Music Education
SLIDE 35 http://takelessons.com/blog/
SLIDE 36
What is our new industrial strategy? Tax Credits
Ontario is the 3rd largest centre for film and tv production in North America $1Billion contributed to Toronto economy by film and tv TIFF Bell Lightbox expected to generate $200Million economic activity in 5 years TIFF generates $67Million/year
SLIDE 37
What is our new industrial strategy? Export Marketing
RBC President and CEO, Gord Nixon, says, exporting is key to our recovery but … only 7% of small and medium sized firms export. 2010-2011 36 export initiatives in 18 countries
SLIDE 38 As foreigners pay more attention to the singers, slowly they develop a liking for Korea … and if they like Korea, they will buy more Korean things. This is what we’re trying to promote.
- Ma Young-sam, Ambassador for public
diplomacy at the Korean foreign ministry
“Gangnam Style” has become South Korea’s biggest musical export ….
SLIDE 39
What is our new industrial strategy?
Kerry King, Region of Durham’s Tourism Manager
Music Tourism
The economic spin-off of live events is invaluable to Durham Region, especially in downtown areas.
SLIDE 40
2000: $616 Million 2010: $1.6 Billion
160%
2005: $1.31 Billion
Case Study: Austin Texas
SLIDE 41
Have we really returned to house parties? Back to the future?
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MY WISH
SLIDE 43 https://www.youtube.com/watch?v=txTdiofEJwQ http://www.youtube.com/watch?v=DqUnsKMsRxM
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@Music_Canada @GFHenderson Music Canada musiccanada.com
