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Combined operating revenues for the Canadian Sound Recording Industry totalled $887.3 million in 2008. The largest industry group, record production and integrated record production and distribution, accounted for about 70% of the total, followed by music publishing at 16%, recording studios at 13% and finally, all other sound recording industries at 1%.

Record production and integrated record production and distribution

  1. Despite a decline in revenues, profitability for the record production and integrated record production and distribution industry grew for the second consecutive year. Operating revenue fell from $673.7 million in 2007 to $619.4 million in 2008. However, businesses managed to reduce their operating expenses by 9.7% to $538.2 million. This helped push the operating profit margin to 13.1% in 2008, up from 11.4% the previous year.
  2. Ontario firms accounted for 81% of national operating revenues, followed by Quebec firms at 16%.
  3. Cost of goods sold accounted for the largest industry operating expense at 32%, followed by royalties, rights and licensing fees at 27% and salaries, wages and benefits at 14%.
  4. Foreign controlled firms continued to generate the bulk of industry operating revenues (71%) and expenditures (68%) in 2008. Operating revenues for foreign controlled firms fell by roughly 11% from 2007 to $427.3 million. Canadian controlled firms generated $177 million in operating revenues, which was relatively unchanged from the previous year.

Music publishing

  1. Profit margins declined in the music publishing industry even though revenues increased. Operating revenue increased from $122.9 million in 2007 to $141.7 million in 2008, while operating expenditures rose from $109.2 million in 2007 to $131.4 million in 2008. As a result, the industry operating profit margin dropped from 11.1% in 2007 to 7.3% in 2008.
  2. Royalties, rights and licensing fees accounted for about half of total industry operating expenses, followed by salaries, wages and benefits at 18%.

Sound recording studios

  1. Sound recording studios generated $118.3 million in operating revenues, a 12.8% increase from the previous year. However, industry operating expenditures rose even further (up 15%) to $102.3 million in 2008, resulting in a slight decrease in the profit margin, at 13.6% in 2008, down from 15.2% in 2007.
  2. Salaries, wages and benefits accounted for the largest portion of total industry operating expenses at 33%, followed by cost of goods sold at 11%.