CIMA and the Music Industry...

Something I stumbled across the mainstream music news today.  The Canadian Indie Music Sector recently did a survey of artists in Canada, specifically indie artists and how much they impact Canadian finances (among other fine points of interest).  But before we jump right into it, I wanted to give you a small overview of who's asking the questions and making the fancy charts you see in the report.

So who are the CIMA?

The Canadian Independent Music Association (CIMA) is the national trade association representing the English-language, Canadian-owned sector of the independent music industry. CIMA’s membership consists of Canadian-owned companies and representatives of Canadian-owned companies involved in every aspect of the music, sound recording and music-related industries. CIMA’s mandate is to ensure the long-term development of the sector and to raise the profile of Canadian independent music both in Canada and abroad.

The report speaks for itself and it rather easy to follow (didn't use too many acronyms and industry language).  It covered a wide range of topics and questions that many people in the industry would find useful and vital to their existence in an ever changing industry.

Some of the key highlights of Sound Analysis report were:

- In total, the industry generated approximately $292 million in revenues in 2011, and contributed more than $300 million in GDP to the Canadian economy.

- Artists generated another $79.4 million in revenues.

- In total, the industry had a GDP impact of $8.2 million per $10 million of industry revenue, meaning that for every $10 million of revenue generated, the independent music industry added $8.2 million to the Canadian economy.

- As a whole, the industry generated an average $1.22 return in taxes for every $1.00 in support from the federal and provincial governments.

- Almost half of the music firms in Canada  – 46% -- are sole proprietorships.

- More than 13,400 Canadians are employed in the industry, 67% of which are artists.

- 60% of the industry earns $50,000 a year or less in gross revenues, while the top 10% earn more than $500,000 annually. (See chart below)

- Approximately 73% of these revenues are earned in Canada.

- While employment figures will be presented in the economic impact section (see Section 3.2), the
survey did reveal that the average industry wage for employees of independent music companies in
2011 was approximately $22,250. It also revealed that the average music industry full-time employee
worked an average of 33 hours per week, with part time employees working an average of 7.7 hours
per week.

For artists, the average income earned from music-related activities in 2011 was approximately $7,228.  However, it should be noted that these artists only spent approximately 29 hours per week on music related activities. When examined on the basis of Full Time Equivalents (FTEs), the average music related 

income from artists rises to an estimated $9,336 (in 2011).

- 53% of independent music companies are bullish on their future, expecting business to grow by 10% or more.

Page 17 of the report also caught my attention with the growing age of digital music and streaming services.  The section was titled "Streaming Music: An Emerging Revenue Stream?"

Interviews for this study revealed that some independent music companies, predominantly those with strong cash flow, expect to invest in streaming initiatives. However, businesses are divided on the impact of streaming. Some view streaming as an important source of revenue for the future, while others expect streaming to continue eroding sales revenues, and that the paltry revenues derived from streaming will not offset such losses.

Interviews also revealed that for those companies generating notable revenues from streaming, the majority come from markets outside of Canada, such as the US, UK and Europe. However, these companies expect the still nascent streaming market in Canada to prosper as mature companies such as Spotify enter the marketplace.

As you can see from the interviews that major record companies (predominately ones from the US, UK and other European countries) have their foot in the door with the investment or eventual investment of streaming media services, as physical sales have continued to decline, despite recent reports that the music industry made a profit over 2012.

You can read/download the full PDF version of the report here.  I think this solidifies the point that the independent music scene creates a lot of revenue and work for Canadians, but fails to compensate (specifically artists and even front line workers) effectively.  I mean, how many of you can live off less than $10,000 a year?