Thank you very much, Mr. Chairman.
My name is Bob D'Eith, I'm the executive director of Music BC. I'm also the acting chair of the Canadian Council of Music Industry Associations.
To give you a bit of background, Music BC is a provincial music industry association. We provide advocacy, artist development, music business education programs, networking opportunities, export marketing initiatives, and funding resources. We have 1,000 paid members.
The CCMIA is a group of the provincial and territorial music industry associations that represent about 10,000 artists, labels, publishers, managers, studios, and producers from coast to coast to coast. The mandate of the CCMIA is to act as the national voice of the provincial and territorial music industry associations. The CCMIA membership consists of Music Newfoundland and Labrador, Music Nova Scotia, Music Prince Edward Island, Music NB, Music and Film in Motion Northern Ontario, Manitoba Music, SaskMusic, Alberta Music, Music Yukon, Music NWT, and Music BC. I'll refer to them as the MIAs. Please note that Music Ontario is run by CIMA and is not part of our organization.
That was background.
CCMIA and Music BC would like to thank the Canadian government and the Department of Canadian Heritage for renewing the Canada Music Fund. These funds, forming such private partnerships as FACTOR and Musicaction, have really helped to establish Canada as a leader in the world of music. We certainly deliver more than our fair share of internationally successful artists, and I believe this is to a great extent the result of public support of the music industry in Canada, so thank you.
In particular, the MIAs' memberships have benefited greatly from the Canadian Heritage collective initiative program administered by FACTOR. These programs help the MIAs to support their communities in many ways: education of artists and music industry personnel through career development programming on topics such as online and social media marketing, booking, touring, securing music placements for film and television; developing digital online initiatives such as as our tourhub national venue database; funding export marketing to key markets such as South by Southwest, The Great Escape in the U.K., and BIGSOUND in Australia, to name a few; bringing international buyers in with programs as Showcase PEI, BreakOut West, the ECMAs; developing and supporting music industry partnerships such as the Western Canadian Music Alliance, which produces BreakOut West; and of course, supporting amazing conferences and celebration of Canadian talent such as the Western Canadian Music Awards, ECMAs, CMW, North by Northeast, and many others. These are fantastic programs and essential to the health and vibrancy of the Canadian music industry. We really, really want to thank the Canadian government for continuing to support Canadian music in this way.
Now for the regional perspective, let me give you a bit of background.
Napster of course changed the entire landscape of the industry in 2000. Even though the original Napster is no longer with us, it really led the way to the erosion of the major label control of distribution worldwide. What resulted over the next 10 years was a paradigm shift in the distribution of recorded music globally. Physical sales, the foundation of record label financial stability, fell dramatically throughout the world. Unfortunately, legitimate online downloads such as iTunes did not bring up the gap. The result is a halving of worldwide record sale revenue and a massive downsizing of the major labels.
During the 1970s to the 1990s, record labels recognized that artists needed to be developed over a number of albums, but most major labels in that era often did not expect a return on their investment until the third album released. Today a lot of artists are lucky to get a single, it's so competitive. Artists are generally not signed nowadays without significant development from either themselves or an independent music company.
In Canada, 80% of the independent record labels and all of the major labels are located in Toronto; however, the new and emerging artists are located all over Canada. A concerted effort was made by Music Canada to consolidate and grow the Ontario-based industry. This has resulted in the Ontario government creating a $45 million fund for Ontario-based companies, including the foreign major labels.
This move is unprecedented in Canadian funding history. Luckily, with lobbying from CIMA, the independent sector in Ontario was also able to access that funding.
As it stands right now with annual reports, 59% of FACTOR funding goes to Ontario, and 50% of Radio Starmaker CCD goes to Ontario as well. In English Canada the majority of the music entrepreneurial component funding goes to Ontario companies. As 80% of the companies are in southern Ontario, that makes a bit of sense, but from the regional perspective there seems to be an imbalance.
The music industry has been redefined due to market pressures. As stated earlier, the new and emerging artists, to get the attention of the major labels or labels like Shauna's, often have to develop themselves. This artist development is happening right across the country in small and large communities. Nationally, artists and their teams are creating micro-entrepreneurial ventures to develop their careers. The role of provincial and territorial music industry associations in helping these artists and their teams has grown exponentially over the last 10 years.
While the CCMIA is the first to recognize and praise the amazing work of MEC, FACTOR, and Musicaction and Radio Starmaker, the CCMIA respectfully submits that the changes in the market should lead to more artist development at the grassroots level. We have some models that work. We developed a program in British Columbia called the Peak Performance Project. This marries education, marketing, and promotion, leverages every penny with sponsorship dollars, and also allows us to activate locally. It has been incredibly successful. We have had two Juno award winners, dozens of records released, international tours, and significant radio play.
The point is that the music industry associations provide locally activated artist development. What we would like the Department of Canadian Heritage to consider is that perhaps there needs to be some sort of balancing. In other words, we would like to see, from the music industry association point of view, more money spent in the regions for grassroots artist development.
In closing, I want to reiterate that certainly the music industry associations and the CCMIA completely support the positions of ADISQ and CIMA that were just made. There's absolutely no question that FACTOR, Radio Starmaker, and MEC, all these programs, are absolutely essential. We're just saying that perhaps there could be some balancing.
Thank you very much.