CMPA: Capital Funding Critical For Global Growth
A new report finds that sales outside Canada have become a significant driver of sector growth with two-thirds of revenues today coming from foreign sources.
By External Source
The CMPA study titled ‘Export Ready, Export Critical: Music Publishing in Canada’ found that sales outside Canada have become a significant driver of sector growth with two-thirds of revenues coming from foreign sources. The swing marks a complete reversal of business activity from a decade ago. The bottom-line impact of this shift has been significant, resulting in more than $120 million in revenue increase among the song publisher associate members since 2005.
"Spearheaded by many small- and medium-sized companies, the sector is growing and expanding its reach, especially when it comes to making sure Canadian songs and songwriters are heard across the world," says Vince Degiorgio, chair of the CMPA board and owner of Cymba Music. He added that the report underscores how closely the industry's goals are aligned with the federal government's cultural and economic strategies identifying Canadian creative industries as a significant innovation sector.
The 46-page document, funded by the Ontario Media Development Corp.) is being released ahead of Canadian Heritage Minister Melanie Joly's Creative Industries Trade Mission to China, taking place from April 9 to 13.
The study notes that even setting aside the specifics of the Canadian market, international trade just makes sense in a world that is flat on a digital level. "One hit song in a foreign market, one television commercial in Australia, or one placement in a movie that is played all around the world, can make up two-thirds of a royalty statement. Why would music publishers not export," the study says.
The United States and Europe remain priority markets because of size, language, cultural affinities and strong copyright regimes, however China, India and Africa are important emerging markets.
Margaret McGuffin, CMPA ED, says the $125 million investment announced under the Creative Canada policy for the country's first Creative Export Strategy must support music publishers if the industry is to continue and expand its global success. Eligibility for export funds remains a critical issue to address, especially given the high-risk nature of music publishing investments at home and abroad.
"We thank the government for acknowledging in the 2018 budget that 'exports are vital to the growth of our companies and economy. They help to turn small companies into big ones,'" McGuffin says.
The study comes at a rapidly changing time in the music sector, with revenue structures increasingly built around streaming and digital platforms. “The continued success of Canada's music publishers will rely on copyright policy meeting these new challenges and funding programs that allow Canada's music publishers to innovate, invest in creators and compete globally,” the CMPA said in a media statement released Sunday.
From the report:
The discussions and research in this study highlighted some very consistent views on the international trade of both Canada’s music publishers and their partners around the world.
Export is essential not just for growth but survival in a competitive international industry.
Market intelligence and relationships are key, and can only be built and sustained by regular and extensive presence on the ground in foreign markets.advertisement
Travel is expensive but irreplaceable both for publishers and for writers to develop that Intel and those relationships.
The role of a music publisher has expanded in recent years around the world to meet songwriters’ needs, notably in A&R investments, because it can pay off in increased publishing activity.
Audio-visual licensing has grown in importance for all markets, including music used in video games, trailers, and commercials.
Copyright protection and collective licensing infrastructure are significant factors in the relative attractiveness of a market, including Canada.
To succeed anywhere, publishers need the right songs and the right relationships. Both require extensive investmentadvertisement
International competition is fierce for good writers, catalogues of hit songs and opportunities to sub-publish for others. The more money publishers have, the more they invest. But with little understanding in the financial sector of the economics of music publishing, access to capital is limited, especially for smaller publishers. This makes it difficult to finance the catalogue acquisitions, staffing, technological investments, and writer advances that would make Canada's publishers of sizes more competitive.
Federal government funding for the music industry and for export are currently not designed optimally for growing publisher export activities.
Industry-wide initiatives that support export through the trade associations like publisher/songwriter trade missions, B2B networking events, and technology summits are very effective.
– A PDF file of the CMPA study can be read online here.