New data released on state of the Canadian music industry
Statistics Canada has just released highlights from the 2007 edition of its biannual survey of the Sound Recording and Music Publishing Industry in Canada (h/t Kevin Stolarick). Industry sales are down but profit margin is up:
Operating revenue for the record production and integrated record production and distribution industry fell from $712.3 million in 2006 to $683.0 million in 2007. However, operating expenses fell even more from $644.4 million in 2006 to $605.2 million in 2007. As a result, operating profit margin rose from 9.5% in 2006 to 11.4% in 2007.
Sales by Canadian artists are down much less than sales by American artists. I wonder if this statistic is influenced by people buying CDs at live shows as a memento, while they would otherwise download illegally if they had never seen the artist live:
Sales of recordings fell 16.7% over the period 2005 to 2007. Most of the decline is due to the 20.0% decrease in sales of recordings by non-Canadian artists. By comparison, sales by Canadian artists declined 3.7%.
Sales might be down but supply is up, a continuing challenge for the traditional music industry:
More music was released in 2007 compared to 2005. The overall number of new releases increased 9.0% to just over 4,478 releases.
The last number also has me thinking about the increased role of gatekeepers in keeping track of all this music. A few years ago, when it became clear that music would become easy to download and omnipresent, there was a lot of talk of “the death of the DJ” – everyoney would make their own playlists via iTunes, Last.fm, and so on.
But my perception is that the power of radio DJs, club DJs, and key press outlets (including blogs) has actually increased. As the costs of production and distribution continue to be driven downward, I think listeners look to gatekeepers more than ever to help them sift through the ever-increasing flow of music.
You touch on some important points here! No surprise, the rippling ramifications of technology and ‘illegal downloading’ have more music being made at lower costs but sales declining at the same time. This situation of oversupply puts even more pressure on the producers of music related content to promote and differentiate their products but, as you allude to, also raises the status and importance of the gatekeepers who help consumers navigate the crowded marketplace.