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In 2010, the combined operating revenues for the Canadian sound recording industry totalled $819.9 million, down 4.9% from 2009. This represents another year of decline in revenues for this industry.
The largest industry group, record production and integrated record production and distribution, accounted for 67.4% of the total revenue, followed by music publishing at 18.1%, recording studios at 13.1% and finally, all other sound recording industries at 1.4%.
Record production and integrated record production and distribution
A 6.4% decline in operating revenues combined with a less than 1 percent drop in operating expenses resulted in a decrease in operating profit margins for companies in the record production and integrated record production and distribution industry. Operating revenues fell from $590.4 million in 2009 to $552.7 million in 2010. Businesses managed to reduce slightly their operating expenses from $495.1 million to $492.1 million for an overall operating profit margin of 11.0% for 2010 down from 16.1% in 2009.
At the provincial level, Ontario establishments accounted for 81.6% of the operating revenues, followed by Quebec firms with 14.8% and British Columbia at 2.4%.
Cost of goods sold accounted for the largest industry operating expense at 31.4%, followed closely by royalties, rights and licensing fees at 28.7%. Salaries, wages and benefits claimed an additional 15.0% of the total operating expenses. These ratios are similar to the distribution for 2009.
Music publishing
Despite a decrease in operating revenues from $159.6 million in 2009 to $148.3 million in 2010, the music publishing industry's operating profit margin showed a slight increase in 2010 at 10.3% up from 10.0% in 2009. This was due to a stronger decrease in operating expenditures from $143.6 million in 2009 to $133.0 million in 2010.
Royalties, rights, licensing and franchise fees accounted for 46.2% of total industry operating expenses, followed by salaries, wages and benefits at 15.1%.
Sound recording studios
Sound recording studios generated $107.4 million in operating revenues, an increase of 7.9% from 2009. However, operating expenses increased by 11.3% in 2010 to give an overall operating profit margin decline of almost three percentage points from 13.0% in 2009 to 10.2% in 2010.
Salaries, wages and benefits accounted for the largest portion of total industry operating expenses for sound recording studios (30.0%), followed by cost of goods sold (13.0%), subcontract expenses (9.6%) and rental and leasing (9.1%).
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