Mr. Chair, members of the committee, my name is François Bissoondoyal, chairman of the board of directors of RadioStar and also Director of Disks for l'Équipe Spectra.
Before giving you a brief history of Fonds RadioStar, its objectives and its results since we have witnessed changes in Canadian music consumption, first allow me to thank you for having invited us.
Fonds RadioStar was created in 2001. It is a not-for-profit organization born out of the CRTC's 1998 policy concerning commercial radio. This policy provided for a financial contribution of 3% of the purchase price of radio companies to a marketing fund for Canadian culture.
With the goal of promoting French-language Canadian culture, and targeting emerging artists in particular, Fonds RadioStar was officially launched in August 2001, before the first impacts of the changing consumer behaviour in the digital world were being felt by the music industry.
Since its creation, Fondation Musicaction has managed RadioStar, under the authority of an independent board of directors which is separate from that of Musicaction. Fonds RadioStar thus also benefits from expertise and optimal resources to carry out its mandate.
Also, this double management system by Musicaction and Fonds RadioStar as well as national marketing programs under the Canada Music Fund allow us both to ensure that these programs are complementary and can be leveraged, and to avoid duplicating expenses. In this way, we ensure that the fund is meeting its objective of intervening later in the marketing process than other sources of funding.
I will now discuss access to funds.
Funding is available for recent and existing albums that are already on the market. In the case of a record label recognized for promoting new artists, this funding is available one month before the launch, after providing proof that an initial investment in the project has been made.
Since 2007-2008, the return has been based on meeting a sales threshold which varies depending on the musical genre and the number of albums produced by the artist in question. This is a simple and objective criteria which reassures the client that his or her request will be granted if he or she meets the necessary threshold. And indeed the acceptance rate for projects received since this change has been around 99%. This criterion also gives companies the flexibility of investing at the moment that best suits them to ensure the best possible conditions for their artists' development projects to succeed.
One of the other fundamental principles of the fund, we should remember, is to give priority for funding to emerging artists. The thresholds are lower for first albums, facilitating access to funding. On average, since 2007-2008, 65% of projects that were funded were associated with artists who had produced no more than two albums in their career.
Here are a few figures and results associated with this funding.
From its foundation until the last fiscal year in August 2013, Fonds RadioStar has supported the second marketing phases of 544 albums. These albums are associated with 371 different artists and 9 projects are associated with artists' groups. More recently since the overhaul of 2007-2008, 200 albums which received funding and which came out between 2008 and 2012 generated total sales of a little over 2.8 million units. Out of these albums, 22 received certification, 10 platinum and 12 gold.
Looking beyond albums and artists, over 12 years the fund has directly supported the activities of 145 different companies, including 121 record labels and 24 different concert producers. It has also indirectly supported people working in the marketing of an album, including radio promoters, press relations representatives, concert agents, Web promoters and so on. On this last point, analysis of investments in these projects shows there has been a clear change in marketing strategies, which are now more focused on current music consumption trends.
We should not abandon traditional music marketing methods, but we need to be present in different spaces. Today, strategies are emphasizing Web promotion, notably the production of images for the Internet and support for on-stage performances. Over the last 3 years, 45% of investments have been directed to these areas; 25% toward the Web and 30% toward the stage — compare to 28% in 2004-2005.
To ensure that our initiatives remain relevant, we are continually adjusting the fund based on an analysis of the trends and on consultation with industry.
For example, once the new revenue resulting from the Bell-Astral transaction was confirmed, and after consultation with industry representatives, the fund, with the approval of its board and of the CRTC, immediately adopted a series of measures to bolster the available funding. Given that there is a desperate need in terms of promotion, notably because of the industry's transition towards digitalization, we decided to act as quickly as possible while reserving some of that revenue to extend the life of the fund. This flexibility also allows us to promote alternative initiatives to funding individual projects, and this benefits the industry as a whole.
Recently, in 2012, the fund added a “Collective Projects” Component to its marketing assistance program. This component supported a study concerning consumption habits, sociodemographic trends, the search for new content, and new purchasing processes for francophone music content, which involved 5,000 respondents. The results of this study were included in a practical guide which is available on the Web to all of the players in the music industry.
To conclude, allow me to make a few observations concerning the issues that the industry is currently facing.
Firstly, the democratization of the means of production has led to an abundance of content on the market. As a result, while it is necessary to have original and high quality content, to stand out, marketing is increasingly important.
Secondly, the diversification of promotion and distribution channels, the increase in marketing and international competition costs, notably involving huge stars, require increasingly large marketing budgets. Apart from a few instant successes, most careers develop over a much longer period than before, and even established artists practically have to start at square one or work very hard to maintain interest. So we need to invest more.
For us the goal is to ensure fair access to funding and to maintain a fair balance between demand and the fund's objectives and financial capacity.
Thank you.