First, I want to thank you very much for allowing me the opportunity to speak to the committee today.
In my 28 years in the music industry I've been lucky enough to see the music business from many sides. I spent 12 years with the major record label Universal Music. Additionally, I spent 12 years of running my own independent record label, Curve Music, as well as my own artist management company, Cerberus Artist Management.
In addition, I was the inaugural executive director of the Radio Starmaker Fund in 2001. I was responsible for helping set up the fund as well as operate it in its first few years. More recently, I was the vice-president and general manager of FACTOR, the Foundation to Assist Canadian Talent on Recordings, but I have now returned once again to my companies.
I can certainly speak about the necessity for cultural funding for the arts at length, especially given the more difficult climate for artists and music companies. I am of course happy to answer any questions you have for me; however, I also thought it vital that I present some additional impacts that the music industry is facing, specifically related to the digital landscape.
While the onset of paid digital music streaming services seems to somewhat be eroding the illegal download Issue and of course making music accessible to many people on a more immediate basis, it is also creating a number of other issues, the main one being that it is driving the sale value of a single song and recorded songs' value down to micro-pennies.
When the major record labels opened up their catalogues and new releases to streaming companies such as Pandora and Spotify, it was done by negotiating massive advances from the said streaming companies to the major labels, in the millions of dollars. Although the majors still see the same net profit on a single stream that an independent company or as an independent artist does, neither the independent labels nor the artists have seen any type of advance from the streaming services and must solely rely on the very low per-stream payment.
As an example, an artist whom I previously worked with named Peter Katz,who was originally signed to both my record label and my artist management company from 2007 to 2011, recently provided me with his financials for the last six months of streaming of his most recent album release, Still Mind Still. Between September 2013 and February 2014, Peter Katz's album was streamed 7,794 times on various streaming services. He was paid the grand total of $47.96 for that. With 11 songs on the album, this means that Peter was paid 0.0006 cents for each song on an album or 0.006 cents for the entire album. Compare that, if you will, to the $9.99 for the album or the 0.99 cents you would get for a song on iTunes.
On the publishing side, since Peter Is a self-contained songwriter, he wrote all the songs on his album. Despite how bad these numbers are for Peter, if you were, say, a songwriter who wrote only one of the songs on his album, your mechanical licence for a song on that album from a streaming service would be 0.00006 cents. You can see that it's not only extremely difficult to make a living as a performer and songwriter selling your music, but virtually impossible as a songwriter only. At 0.006 cents per album, you would need to stream millions of albums to even make a decent living or, as is the case for most artists these days, simply not make a living in music.
We can also use the example of David Lowery of the American band Cracker, who has openly published on his Facebook page his songwriting royalties from streaming services that Pandora, the streaming service, paid him. He received $16.89 for more than one million plays of the band's 1991 hit song “Low” during the last three months of 2012. While Lowery only owns 40% of the song as a songwriter, when you add the other writers into the share, for a total of $42.23 that Pandora would have paid all songwriters, it's embarrassingly low.
We need to investigate and to attempt to set up some legislation that ensures that artists, labels, and songwriters are paid fairly for the use of their music through digital services. Since these services may already be making millions or will eventually be making millions, it's even more imperative.
Since sales of music have been virtually eliminated as a way to make a living only for artists, then touring has become one of the few ways to both advance your career as an artist and make a living as an artist. Support for touring is crucial, both domestically and internationally. In fact, very few acts can make a living simply touring in Canada alone.
The plan for a touring artist must encompass all countries and territories around the world, as many as possible, in order to build a viable career of both touring and selling music. The international marketing and touring of an artist is extremely expensive. As well, while recording costs are decreasing, the cost of actually marketing and promoting albums is not decreasing. As any independent label or artist will tell you, they must view the world as their marketplace now and must plan to tour and promote themselves and their careers internationally.
We must ensure that there are further funding models in place to allow artists and record labels to properly market their products, both domestically and internationally. In addition, there need to be more funds directed to export-ready artists to help them tour internationally. It is also key to ensure that funding is available for cultural trade missions for both artists and companies to showcase their material in foreign territories.
Thank you.