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In 2009, the Canadian Sound Recording Industry experienced a 3.2% decline in its combined operating revenues from $887.3 million to $858.9 million.

The largest industry group, record production and integrated record production and distribution, accounted for about 69% of the total revenue, followed by music publishing at 18%, sound recording studios at 12%, and all other sound recording industries at 1%.

Record production and integrated record production and distribution

  1. In spite of declining revenues for a third consecutive year, the record production and integrated record production and distribution industry continued to experience an increase in profitability. Operating revenue decreased from $619.4 million in 2008 to $596.3 million in 2009. However, during this year businesses reduced their operating expenses by 7.3% to $498.9 million. These reductions contributed to an increase in the operating profit margin to 16.3% in 2009, up from 13.1% in 2008 and 11.8% in 2007.
  2. As in 2008, Ontario firms accounted for the vast majority of national operating revenues at 77.6%, followed by firms in Quebec with 18.6%. However, for Ontario this figure is down from 80.6% last year while Quebec's figure has increased from 15.7%.
  3. The largest proportion of operating expenses were for cost of goods sold at 32.0%, followed closely by royalties, rights, licensing and franchise fees at 28.1% and salaries, wages and benefits at 14.5%. These proportions are very similar to 2008.
  4. Revenue from sales of digital musical recordings, which include both individual tracks and albums, increased by 48.9% from $53.0 million in 2007 to $79.0 million in 2009. However, this did not offset the 25.9% decline in sales from compact discs from $393.8 million in 2007 to $291.8 million in 2009.
  5. From 2007 to 2009, sales of recordings declined by 22.2% reflecting significant drops in sales by Canadian and non-Canadian artists.
  6. As was noted last year, foreign-controlled firms generated the majority of industry operating revenues at 74.9%, and operating expenses at 72.3%. Compared with 2008, foreign-controlled firms saw an increase in their operating revenues and a decrease in their operating expenses, yielding a profit margin increase to 19.2% from 16.3%. During this period, Canadian-controlled firms experienced a much larger drop in both their operating revenues and operating expenses, which also resulted in an increased profit margin from 5.8% to 7.7%.

Music publishing

  1. Operating revenues in the music publishing industry increased 8.3% in 2009 to $153.5 million, while at the same time operating expenses rose by 4.8% to $137.8 million. The industry's profit margin grew from 7.3% in 2008 to 10.3% in 2009.
  2. The largest expense item in this industry is royalties, rights and licensing fees which comprised 45.2% of operating expenses, followed by salaries, wages and benefits at 21.4%.

Sound recording studios

  1. In 2009 the sound recording studio industry saw its operating revenues fall by 16.5% to $98.7 million from $118.3 million in 2008. Operating expenses also declined by a similar amount, from $102.2 million to $85.5 million, or 16.4%. These similar declines resulted in the operating profit margin being essentially unchanged at 13.5% in comparison with 13.6% for 2008.
  2. Almost one-half of the operating expenses in this industry were accounted for by salaries, wages and benefits at 31.5%, and subcontract expenses at 14.8%.