Evidence of meeting #21 for Canadian Heritage in the 41st Parliament, 2nd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.
A recording is available from Parliament.
Executive and Co-Artistic Director, Lula Music and Arts Centre, Lula Lounge
Yes, I think that would help the artists working in different genres outside the commercial mainstream.
President, Canadian Independent Recording Artists' Association
Not only in the different genres, other than pop commercial hits, but also in communities coast to coast.
Conservative
Ted Falk Conservative Provencher, MB
You've also indicated that not everyone is going to be a Wayne Gretzky and that is the reality of it. Yet it doesn't mean that we don't appreciate watching Hockey Night in Canada or any other sporting venue that may suit our fancy.
When we do have Wayne Gretzkys, such as recently we had intervention here from Brett Kissel, a recent Juno award winner, what do you see as their role? The CMF has made an investment in their careers; according to his testimony, it added the impetus, at the right time, for him to be successful. Could you expand a little bit on what a return on that investment should look like?
Executive Director, Canadian Independent Recording Artists' Association
Absolutely. His success is a clear accolade to what FACTOR and similar organizations are doing. We strongly believe that sort of intervention needs to continue. We need to see artists having the opportunities all along that supply line, from when they enter into the music industry to the point where Brett is now playing internationally, releasing albums, and winning Junos. That is the role of FACTOR, that is the role of similar organizations, such as Radio Starmaker and other star makers.
What Brett Kissel explained while he was here presenting is that he was fortunate to have the support of family—grandparents I think he mentioned. He mentioned a new guitar. For others, that might be $1,500 for that first music video, or $1,000 to go towards a demo, or $5,000 to go towards a new website. There are a lot of musicians and I would argue that the majority of musicians in Canada, pre-Brett Kissel's current stage, don't have that same support from grandparents or family. This new component, this new third as we've been explaining, could be that support system.
Conservative
Ted Falk Conservative Provencher, MB
I understand that.
Maybe I'll ask my question a little differently. How should artists like Brett Kissel be giving back to the industry?
Executive Director, Canadian Independent Recording Artists' Association
One of the programs we have at CIRAA, which is probably our most coveted program, is our mentorship program. What we do is that we work closely with established, successful, Canadian artists. This month, for instance, we have Wayne Petti of Cuff the Duke, who's an award winner who has travelled the world, played with some of Canada's most notable bands. We have Jordan Hastings of Alexisonfire, which is also an incredibly notable act straight out of Canada. We will accept applications until the 15th, and once we get new mentees, these artist-entrepreneurs, as you were referring to, we'll pair them up to work one-on-one for three months. That's something that CIRAA does. The mentee doesn't have to pay; the mentor doesn't pay. We actually pay this mentor to work one-on-one to offer career advice and opportunities. With the mentorships we've seen, and we're now in our fifteenth round, these relationships continue to last. We're seeing songwriting credits. We're seeing shows, live performances at notable venues, notable events. We're seeing breakthrough opportunities coming from this program, and that's something that someone like Brett Kissel, at this point in his career, could offer to someone else.
President and Chief Executive Officer, National Music Centre
I can add something to that, if there's time.
Brett Kissel is an extraordinary individual. He goes over and beyond most artists in his ability to reach out to people and to engage. I think other artists who don't have his personal abilities as a communicator can do other things to give back. I think they can, in our case, record an oral history of what made them successful, what inspired them to be successful. That's something that the National Music Centre could broadcast and make available. They can donate instruments, part of their ephemera, their manuscripts, the things that inspired them, their creative works that they can leave as legacies, which can be tools for education and inspiration. I see this every day. When somebody sees a piano that was played by a certain Canadian artist or a guitar or a set of original lyrics that penned a particular song, it's inspiring to kids. I've seen kids' lives transformed by seeing these things. So they can give back those kinds of things as well, if they don't have Brett's personality. Brett's pretty special in that regard, but I think there are other ways that they can give back as well.
Conservative
The Chair Conservative Gord Brown
Thank you very much. We're almost out of time, but we have just a minute or so for Mr. Stewart to get one question in.
NDP
Kennedy Stewart NDP Burnaby—Douglas, BC
Thanks for coming.
I'm struggling with this notion of established versus emerging artists, and I'm just hoping that you can help me with that. What in your mind is an established artist, and what's an emerging artist?
Do all emerging artists want to become established artists? I think of the 19,000 people you consider independent artists. Do they all want to become established artists, or perhaps it is only the 3,500 people who apply for FACTOR grants who want to be established artists?
President, Canadian Independent Recording Artists' Association
We recently conducted a nationwide survey. We got 900 responses, and 79.7% considered themselves professional musicians and aspired to make a living making music. So about 20% consider themselves hobbyists.
NDP
President, Canadian Independent Recording Artists' Association
It's the cost-benefit analysis for one. There's the time to apply, to be registered, to have a marketing plan, so that maybe you get $1,000 that you're likely not going to get, on a program that really only encourages the recording of demos and nothing innovative, and so on. The programs are stale and are not connected with the current needs of this community. So they are not applying basically because of the cost-benefit analysis of doing so.
NDP
Kennedy Stewart NDP Burnaby—Douglas, BC
And is this something you found in your survey, or is this something that you're extrapolating from that?
President, Canadian Independent Recording Artists' Association
I spent my entire adult life in this field, and I own a company called Indie Pool with 15,000 of these people. I am in direct communication with them. We, the association, survey them. We speak to them. They call us.
Executive Director, Canadian Independent Recording Artists' Association
Just to briefly step in as well, in the same survey, I don't have the statistics, but—
Conservative
The Chair Conservative Gord Brown
I'm sorry, we are out of time. We do appreciate your input today, and if you have any other contributions to make to our study, you can send them to us in writing. We're still be taking input for this study over the next couple of weeks.
I'd like to thank our panellists for being with us today, and we will briefly suspend.
Conservative
The Chair Conservative Gord Brown
We will call the 21st meeting of the Standing Committee on Canadian Heritage back to order for the second hour.
We have with us three organizations. First from Stingray Digital, we have Eric Albert and Mathieu Péloquin; from Google Canada, we have Jason Kee; and from Deezer, we have Justin Erdman.
Each organization will have eight minutes, starting with Stingray Digital. You have the floor for eight minutes.
Mathieu Péloquin Senior Vice-President, Marketing and Communications, Stingray Digital
Good afternoon. Thank you for inviting us to present to the committee.
I am Mathieu Péloquin, Senior Vice-president, Marketing and Communication. With me today is Eric Albert, Executive Vice-president.
Stingray Digital is the leading multi-platform music service provider in the world, with more than 100 million subscribers in 113 countries. Geared toward individuals and businesses alike, the company's commercial entities include leading digital music and video services, Galaxie, Music Choice International, Concert TV, and The KARAOKE Channel. The company also offers music solutions to more than 70,000 businesses via its Stingray360 division and music licensing service through Stingray Music.
Stingray Digital is headquartered in Montreal and has over 200 employees and offices across Canada, as well Los Angeles, Miami, London, and Tel Aviv.
In Canada, up to 60% of Canadians with access to pay television will listen to a Galaxie channel in a given month, as reported by our quarterly listenership tracking survey from Vision Critical.
Stingray is firmly rooted in Canadian culture, and with its extensive international presence our services provide an unparalleled window for the promotion of Canadian artists abroad. We greatly appreciate the opportunity to share with you our thoughts and ideas, with the objective of further strengthening the Canadian music industry.
To address the committee's question on the impact of government support on the Canadian music industry, we'll focus our comments primarily on three specific areas of the music creative and distribution flow. They are creation and production, distribution, and global scope.
I will now turn the floor over to my colleague, Eric Albert.
Eric Albert Executive Vice-President, Stingray Digital
First, on the creation and the production side of the equation.
Other participants in these proceedings have provided excellent comments and ideas regarding the production aspects of the Canadian music industry value chain. We would like to echo and re-emphasize that a sustainable pipeline of high-quality musical content is crucial for the success of Canadian services like Galaxie. Being a service regulated by the CRTC that is 100% based on music, having access to a large amount of high-quality content is a must to meet our Cancon requirements while ensuring that we deliver a credible service that Canadians will want to listen to.
Canadian music listeners, like consumers around the world, want to listen to good music regardless of whether it is classified as Canadian content or not. As such, it is imperative that a sustainable music creation echo-system flourishes to ensure a constant availability of content that Canadian consumers will want to listen to.
Canadian content quota rules imposed on regulated broadcasters have greatly helped in providing a window to showcase Canadian artists. Canada is a relative small market in the global music industry, yet Canadians constantly produce content that receives international recognition, thanks in part to programs like the Canadian-content development funding provided by regulated broadcasters.
Stingray, for example, through it's Galaxie Rising Stars CCD program initiatives, supports dozens of events each year directed toward emerging talent. With the increased popularity of unregulated streaming services that do not have CCD contribution obligations, the Canadian music industry could be at risk of losing a significant funding source directed toward the development of local content. Though it would technically be possible to impose CCD funding requirements, or Cancon quotas, on unregulated entities, an alternative may be to offer fiscal incentives to companies to provide assistance for the creation of Canadian content, with further incentives provided for broadcasting increased levels of Canadian content.
Let us now turn to distribution.
As mentioned earlier, the ability to produce high-quality Canadian content is of fundamental importance to a healthy music industry. But an efficient distribution chain for that content is equally important. Today, we have two main processes that are peculiar to music consumption. One is discovery, the other is validation.
The discovery process exposes the average consumer to new songs or new artists that would not generally be heard on conventional commercial radio. The validation process complements the discovery process. It happens when an artist is broadcast on commercial radio, and generally means that the artist has reached a certain level of fame and success.
As Annie Laflamme and Scott Hutton, from the CRTC, said when they appeared before this committee, commercial radio in Canada is doing relatively well and continues to play a very important role in ensuring our industry's success, specifically in terms of the validation process.
The sustainability of the Canadian music industry has to depend on the emergence of new artists of quality. Hence the importance of continued investment in our creation and production capabilities. We also believe that more effort and more resources could be invested in order to make sure that those emerging artists have access to the highest possible number of platforms on which to showcase their talent.
In that context, increased support and direction could be beneficial for Canadian entrepreneurs wishing to start distribution companies focusing on discovering new artists.
The complex and uncertain rights and royalties regime that exists in Canada today creates a barrier to entry to a lot of entrepreneurs who could otherwise become great promoters of both emerging and established Canadian artists. As suggested by other witnesses, the committee should propose increased support to the Copyright Board of Canada to accelerate rate-setting proceedings that would provide increased certainty around costs of launching and operating music services in this country.
Secondly, the committee could recommend the creation of an industry task force that would focus on simplifying and streamlining the management of rights and royalties in this country. This task force should include representatives from all components of the value chain including creators, producers, broadcasters, distributors, and collection societies. Topics addressed by this task force could include, for example, a standardization of content metadata, which would ensure that content used is accounted for and that the proper stakeholders receive compensation for the use of such content.
We'd like to comment briefly on the economics of the music industry value chain, specifically in an era of digitization and decreasing overall revenue for the industry. You have heard several witnesses comment on the chasm that exists between the significant number of plays of certain songs on streaming services, while royalties received by stakeholders as a result of these plays are quite low. Some have suggested that music services should pay higher royalties for the use of music so that the creators get fair compensation.
We agree completely and support all initiatives that would result in proper compensation received by the artistic community. We would suggest, however, that increasing royalty rates paid by music services may not be a long-term solution to the imbalance of royalties paid by services and royalties received by rights holders.
Certain well-known services available internationally today pay between 50% and 70% of their revenues in rights and royalties, and identifying a sustainable business model for these entities has proven to be a challenge. Subscription models are starting to show very positive trends, but it will take time to modify the habits of consumers so that subscription-based services reach critical mass. Education of the marketplace on the value of music is one solution to this dilemma. One thing is clear, though: for an industry to succeed in the long term, all components of the industry value chain need to be profitable to survive. This applies to the Canadian music industry as well, and higher royalty rates may not be the only solution.
Lastly, I have a word on globalization. The music industry is increasingly global and to succeed, scale is becoming a key requirement. As mentioned previously, Stingray now operates in 113 different countries, providing unparalleled opportunities for Canadian artists to be heard internationally. Canada needs to continue its efforts in the fostering of an environment where companies like Stingray can succeed in Canada and use this success as a foundation for international growth and expansion.
Globalization also means that the definition of a Canadian citizen now includes ethnicities and languages beyond English and French. This country's growing population of ethnic groups should not be overlooked in this process, and the definition of Canadian content has to be inclusive of these multicultural groups.
Conservative
The Chair Conservative Gord Brown
I'm sorry, I'm going to have to cut you off there. You're well past, but you will have a chance to expand on it in the questions.
Thank you very much.
We'll move on to Mr. Kee from Google Canada. You have the floor.
Jason Kee Counsel, Public Policy and Government Relations, Google Canada
Thank you very much, Mr. Chair.
My name is Jason Kee, and I am the public policy and government relations counsel at Google Canada. Some of you may not recognize me because I'm actually wearing a suit. I promise I'll establish my technological bona fides by reading my comments off a tablet.