All right, I will make an effort. My wife is from Val-d'Or so I have to speak French.
Thanks again.
The Canadian Independent Music Association, formerly known as CIRPA, has represented the interests of Canada's English-language domestic music production companies for 30 years. Today CIMA has over 170 member companies, including recording companies, music publishers, managers, agents, and other musical professionals from across the country.
CIMA is primarily concerned with the continued production and commercialization of English-language Canadian music and the support of the businesses and creative individuals who make Canada's music production industry unique in the world.
Canada produces some 2,000 new musical titles—that is albums in English—every year. This productivity has remained constant over the past several years despite the substantial issues faced by the industry with the advent of widescale file sharing. Canada has developed a system of regulated Canadian content requirements for radio, combined with financial supports from the Department of Heritage and others mandated by the CRTC to produce this outcome.
The Canadian system is much admired and often envied by other countries that did not have the foresight nor the political will to implement similar systems. Most of Canada's current musical production and most of the recent catalogue of musical works have been digitized and producers are aware of and are meeting the needs to distribute their works throughout the world in digital form with the correct formats and meta-data to allow the tracking of sales and distribution. This effort has been ongoing for some time, and it's beginning to show results as Canadian companies collect on international sales.
However, the digital age also brings with it a new means of promotion and a wide array of tools to encourage sales through creative marketing. It allows the media to access markets for new materials and makes worldwide distribution possible with considerably lower costs than in the physical world. Using social media and other tools makes it possible for our creators to connect in new and different ways with a much broader marketplace, and therefore brings Canadian creativity to a new audience.
The Canadian music industry has been one of the first of the cultural sectors to embrace this new reality and use it to our competitive advantage worldwide. The Canadian music industry has been one of the most innovative in developing a global marketing and distribution system, one where it's possible to sell Canadian content online in the newest and largest emerging marketplaces, like China and India and growing economies like Brazil, Russia, and Korea, as well as traditional marketplaces like the United States, the United Kingdom, and the European Union, where sales of recorded music are more robust, and in many cases improving.
Despite this progress, we are still hampered by widespread digital piracy in Canada, both at the level of individual consumers and on a more organized basis from P2P--peer to peer--sites, which operate without restriction. This has meant a well-documented, precipitous decline in domestic record sales. This decline has negatively impacted the ability of the domestic Canadian producers to create sufficient income to pay their debts and to reinvest in new materials, and most importantly, in Canadian artists and musicians.
Some pundits have suggested that this is only an issue that affects the largest players in the international music industry, but this is a fallacy and deflects attention from the Canadian situation, where small domestic players are more severely at risk than the international entertainment companies that operate in Canada.
Canadian sales of digital musical content are about half of that in the United States, and where Britain and Germany respectively have over 50 and 40 legal domestic download services, the Canadian number is less than half that, and many are simply white label copies of one another. And where mobility systems such as Nokia's come with music, and many others proliferate outside Canada, the Canadian market has been remarkably stagnant with respect to new music mobility services. We feel the lack of innovation in this area in this country is a major impediment to the expansion of sales opportunities for domestic producers.
In response to these challenges, domestically owned Canadian companies have become less dependent upon recorded music as a source of income and have developed other channels to create revenue. This new model, sometimes called the 360 business model or the holistic model, develops the artist's income potential through the sale of recordings in physical and digital form and includes revenue from publishing rights, TV and film licensing, live performances, and merchandise sales. Much of this business is done on the Internet and doesn't require a face-to-face business interaction. But at best, this is a promising transitional strategy, one that puts recorded music at risk and puts an enormous burden on the artist to tour.
Clearly that solution has its limits, and without some income from the recordings they produce, artists' careers will be short-lived, and the anticipated decline in recordings will certainly diminish Canada's reputation and cultural output.
Canada's creative industries must compete and succeed in a global marketplace. This is not news. But more than ever before, with the decline of the domestic market, success abroad will be critical to the long-term prospects of a musical act. At the same time, those countries where we are seeking access and success are increasingly active, using the same virtual tools the Canadians use to sell their materials and tours in North America.
European acts create their works and perform largely in English. MySpace pages representing foreign musical artists now number in the millions. Given this high level of competition, making a record and putting it out for sale on MySpace or YouTube just doesn't cut it. Where ten years ago a strong, independent Canadian artist might expect to sell 50,000 records in Canada, today 5,000 is considered exceptional. Award-winning acts will only sell 20,000 copies, at best, of their most recently released albums.
These numbers will not pay the bills. In the face of this limited success, Canadian acts are using public support and their own resources to tour abroad and to expand their audiences and create a market for their works. For example, as many as 350 Canadian musical acts might travel to Australia in any given year, and 140 might attend a South by Southwest music festival in Austin for three days in March.
This activity is critical to sustaining our industry. Although it may seem counter-intuitive that Canadians should perform abroad to sustain a cultural industry at home, we feel it is the only way we can continue to create sufficient commercial income to sustain our work. The more promising an act, if European and U.K. markets are examples of recent success, may foretell better prospects for Canadian popular music.
In order to continue to create and commercialize our popular music, governments at all levels must continue to invest in Canadian companies and artists, especially where access to foreign markets is concerned. As the organization most actively engaged in the development of music export opportunities, CIMA has led Canadian missions around the world. Our destinations include the U.K. and Europe, as far east as Bulgaria, Japan, China, Singapore, and Australia, South America, including Argentina and Brazil, and the United States, which continues to be our most important music export market.
With the help of the Ontario government we have engaged part-time representatives in London, Los Angeles, and Singapore to assist our companies and artists who wish to tour or sell in those regions. We provide an efficient and effective means of accessing these markets and supporting the Canadian musical brand in both languages.
We must thank the Department of Canadian Heritage for the ongoing assistance provided by the Canada Music Fund, and we can assure you that this assistance is used responsibly and productively. But more help is needed if we're to succeed in our goal of increasing Canada's worldwide music market share. In that light, benefits received in the form of copyright loyalties and levies, such as the private copying regime, will be critical to our ongoing success and should not be reduced or allowed to atrophy.
In the end, we should all remember that the success of Canadian music companies and their artists will be to every Canadian's benefit. Canadians recognize this and have always endorsed public sector support for their creative industries. Every Canadian takes great pride in the international success of artists such as Michael Bublé, Leslie Feist, Arcade Fire, Metric, and Bruce Cockburn. If you help us, we'll keep up the good work.
Thank you.