Canadian Heritage Committee on May 1st, 2014

[Steven Kane]

I'll just add one other quick thing.

You did ask about publishing. There's clear evidence that publishing is a pennies business, and they do very well.

[The Chair, Conservative, Gord Brown]

All right. Thank you very much.

We're now going to move to Mr. Stewart, and we are going into a five-minute round.

Mr. Stewart, you have the floor.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Thank you, Mr. Chair.

Thank you to all the witnesses for coming today and presenting your views.

When I say I escaped from the music industry into politics, I think a lot of people question why I did that, but here I am today. I'm happy to take part in this study, and I'm glad to have you present today.

We've talked a lot about delivery and the wider range of choice, how people can access music. I'm wondering about new marketing tools.

How do you cope, as deliverers or producers of this music? How has marketing changed in the industry now? You could perhaps even think about how the government might help in some ways to facilitate any new approaches you've taken on marketing.

Mr. Mortimer-Lamb, since I'm from the west coast, perhaps we'll start with you.

[Simon Mortimer-Lamb]

Sure, okay.

Our approach to marketing is really about going where the fan is and where the potential fan is, and if that means that it's social media, then it's Facebook, and to a certain extent for certain artists it's YouTube as well.

So it's about marketing that can make those social connections back to the artists and tapping into that fan base with an affinity for that type of music or that particular artist. So, yes, it's still a social thing. It's an online thing that I think helps in a lot of cases. It's about analyzing lots of data to figure out where the activity is and where to focus our efforts.

In terms of the government's support and the Canada Music Fund, a lot of the dollars we receive are used effectively to go to those marketing initiatives and for us to be better and more effective at it. We continue to try to improve that, and those funds are a great assistance in that.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

We have heard from some festival organizers. I go on iTunes and I'm overwhelmed by the amount of choice that I have there, and so what I look for are clues from other sources to say, oh, I've heard of that name or something. I might listen to it or preview it.

So how do festivals tie in to that? Would you choose festivals over Facebook, and again, this is open to whoever would like to answer this. How do you help a new emerging artist get known these days?

Mr. Kane.

[Steven Kane]

I read with some interest the comments of Mr. Monahan of Bluesfest yesterday on the whole festival.

It might be the cart before the horse. A promoter like Mr. Monahan is not going to put an emerging artist on his main stage. It takes marketing dollars and investment to get an act to the point where someone is going to be intrigued enough at the festival to shift from one stage to another, or in fact just buy a ticket.

Marketing in the last 10 to 15 years has become a more expensive proposition. You have to hit a wider audience. You really have to target things whereas perhaps in the past you might have been hitting five or six publications and a handful of radio stations. You really have to lay out that plan so, again, you're hitting as many touch points as possible. This can be very expensive.

That's why in the new Ontario Music Fund, we're obtaining matching funds for every dollar that we spend on marketing an Ontario-produced recording.

Again, it allows us to extend and lengthen our reach so that we're able to go three or four singles deep on an album. We're able to take our time in setting up a record properly so that there's already audience engagement by the time your product hits either the digital services or the physical stores. So, again, within that tax credit model, if we are able to prolong our investment and mitigate some of our risks, we can bring these records to market much more effectively.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

Can I ask how much it would cost? I'm a new band and I'm pretty good or I'm in a band that's pretty good. How much would it cost to get somebody to the main stage of a festival? What kind of investment do you need to make as long as they're quality musicians? Can you give me a ball park range?

[Simon Mortimer-Lamb]

It's totally case by case. One thing, just as an aside, Nettwerk has prided itself—with the support of the CMF—on maintaining a good roster of staff to help drive a lot of these initiatives so we can do a lot of that internally. It really comes down to where you're going to target.

If you're going to hyper-target a market, you're going to spend money on advertising. If you're going to go for radio, you can really spend a lot. So it's very case by case. Sometimes it can be a heavy touch and light costs. Sometimes it can be high costs and a light touch and a few avenues to do it. But it really is case by case.

[The Chair, Conservative, Gord Brown]

Okay, thank you very much, Mr. Stewart.

We're now going to go to Mr. Dykstra and I believe you're going to split your time with Mr. Weston, is that correct?

[Rick Dykstra, Conservative, St. Catharines, ON]

I might split it with him and I might not. I haven't really decided. We'll see.

[The Chair, Conservative, Gord Brown]

You have the floor.

[Rick Dykstra, Conservative, St. Catharines, ON]

Thank you.

Mr. Kane, it's been interesting for us because one day we're hearing from one group that says things are in dire straits and extremely difficult and that they don't know how the industry's going to survive. Then today, we've had the opposite, in the sense that....

When I look at the recording industry and the impact of live music—and I guess I should be asking those who are negative toward the industry right now when they're here—there's more live music being played, there's more live music being created, there's more live music happening across the country and around the world. It seems to me that the demise of the industry is more around the executive side of the industry than it is about the music and the live playing of music. I wonder if you could comment on that, because just yesterday we had almost the exact opposite position being held by a couple of those who were presenting. You mentioned Mr. Monahan.

I wonder if you could comment on it.

[Steven Kane]

What's the old Mark Twain quote, “The rumour of my demise has been greatly exaggerated”?

[Rick Dykstra, Conservative, St. Catharines, ON]

Right.

[Steven Kane]

Look, we are in an incredible transitional period. The recorded music industry has had to face new barriers. We've had to rethink how we're doing things. In terms of the great panacea promise of “Tour, tour, tour—you'll make your money on t-shirts and shows”, there is truth to that. It's what musicians have always done. They've always released a record, toured, and had income from there.

In Mr. Monahan's remarks yesterday, he talked about supply and demand, the laws of scarcity. I would ask you to consider this about the panacea of the live world. Every musician I know has to stay on the road twice as long as they had to. What happens when you go to a festival, when you go to a club, and you and all of your peers, that middle class of musicians, are on the road at the same time? How long will that demand remain? How long does a decent paycheque, a decent payday, come from clubs and promoters when they can turn around and take a band that's maybe had a couple of hits...which used to be able to get you the opening slot on a big tour, or perhaps your own tour of theatres? Now you're lucky if you don't have to do a buy-on to somebody else's big tour and lose money touring.

We have bands on the road right now. We have a band that's about to do the Warped tour. They're not going to make any money. Do you know who's going to make up that shortfall for them, who's going to make sure they can get from show to show, and have a pizza at the end of the night and a place to sleep? Their record label. It's called tour support, and it's one of the marketing tools that the industry still brings to a band's career. We understand that if you want a long career, you'd better get out there and touch people, you'd better have some hit records that radio can play, and you'd better build a solid, solid tour business.

To the idea that the recorded music world lives in some kind of vacuum and is not part of an ecosystem that helps build such festivals as Bluesfest or the Toronto Jazz Festival or Osheaga, they're all part of that ecosystem; none of us live in a vacuum. If one of us goes down, it has a huge effect on the rest of this community. Without record labels investing in new artists, who will these festival owners put on their main stage?

[Rick Dykstra, Conservative, St. Catharines, ON]

I guess this is like the “dawning” of a new era, though I don't know if you'd use the word .

Simon, perhaps you could respond to this. We're going through this huge transitional phase, and we'd better just learn how to deal with it and move forward versus trying to think that we're somehow going to be able to attach ourselves to what happened in the past—i.e., the sale of CDs. I'm sure you've had a chance to read the transcripts a little with regard to the witnesses we've had here. They tell the exact opposite story that you're telling us: there is no money at all to be made from streaming, it's 0.00005¢ per, and at the end of the year they might make $47 or $48. You're taking sort of the opposite position there.

How do we as a committee, when we're looking at recommendations, square these two circles?

[Simon Mortimer-Lamb]

Even just thinking about the Canadian market on its own, about its streaming opportunities, its reach to the consumer is not sufficient enough. We have to get that scale, we have to get that reach. Piracy is still a problem. It always will be. We need tools to battle that.

In terms of giving access and providing legitimate modes and means for people to experience music, we need to raise the profile of that. We need to get more consumers using it. I think allowing that certainty for some of these retail models to come into the market is really, really important.

Streaming is pennies, but look, we have Canadian artists who have some streaming income in Canada. It's not very big. The streaming income around the world for them, and the performance revenues they receive as well, are good. All I'm saying is that we need to make improvements in the landscape in Canada to improve our own home market.

[The Chair, Conservative, Gord Brown]

Thank you very much.

Mr. Nantel, you have the floor for five minutes.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Thank you, Mr. Chair.

Mr. Mortimer-Lamb and Mr. Kane, I want to let you know that the information you are providing us is very useful.

Mr. Mortimer-Lamb, you were talking about the joint promotion that's been happening in Sweden.

I insist again, please send us any info you've got on this, because you were talking about the telecoms and the streaming services working hand-in-hand showing up as a big offering. But it also comes back to Mr. Kane's saying that we want the Copyright Board of Canada and everybody involved to make this business model work.

I'm going to ask you a question that we will not be able to answer, because I will have Mr. Alain Chartrand's point of view on this, given that what you're referring to is a market thing. We all know that in Canada we have two cultures, two official languages, which make things much more complicated. You did refer also to the tour support that you guys provide.

This leads me to my question for Mr. Chartrand.

You organize festivals all across the country. You have artists such as Vincent Vallières, who is with Spectra Musique, and who will be doing shows all across the country this fall. Do you get tour support? Do the two cultures make things more complicated in terms of establishing a business model and providing access to business people?

[Alain Chartrand]

I will tell you about the work we do. What we do is put newcomers on the stage. We create an event where the focus is on the fact that the performers are still unknown. By creating this event, we provide the opportunity to introduce them.

This leads me to the marketing aspect. I think of it very specifically in terms of new technology and in terms of the impact it can have on an organization of our size. It changes everything and also means that the process must be as integrated as possible in terms of the work of producers, artists and distributors. This is a bit beyond our capacity because it is very expensive to ensure you are visible on television or in the papers. At this time, the ability to reach people through social media is increased greatly by the fact that the artists will themselves send out information. This adds to the information put out by producers and distributors.

Regarding the English/French duality, there obviously is not much of a francophone music industry outside Quebec. Associations are the ones that support the artists and help them develop. In some regions, living as a francophone is a bit like playing an extreme sport. These are quite significant challenges for young artists.

New technologies and social media are clearly very important to young artists in terms of marketing. It is also very important to have the ability to create content with local artists within these various communities. I think it is important that they be able to do so.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Is tour support still provided, either by major or independent labels, whether they are Canadian or from Quebec? Is the government providing enough support for cross-Canada efforts related to our heritage and both official languages?

[Alain Chartrand]

As for government support for this project, it was a long-term endeavour. However, I must say that we are quite satisfied with the heritage recognition for this project. It is particular in that it involves investments in various heritage sectors in a variety of regions. At first glance, it may seem like it is another Quebec project. However, what is particular in this case is that it is really Quebec reaching out to francophone communities to create a project together.

Regarding tour support as such, some artists and their record labels do have access to funds for producing, exporting, marketing and distributing works by the artists. Companies receiving funding from SODEC can choose to set aside a certain amount to potentially put towards a tour. However, tour support as we saw previously, from multinationals, provided to foreign artists, is no longer available.

[The Chair, Conservative, Gord Brown]

Thank you very much.

I'd like to thank our witnesses for being with us today. We're sorry for the inconvenience. I appreciate your patience helping us through this today. If you have any other contributions you wish to make to our study, please send them to us in writing.

The meeting is adjourned.