Sound recording and music publishing, 2015
The Canadian sound recording and music publishing industry experienced a 3.0% decrease in its combined total operating revenues, from $880.0 million in 2013 to $853.9 million in 2015. This was accompanied by a 6.6% decrease in total operating expenses, from $789.3 million to $736.9 million over the same two-year period, resulting in a 3.4 percentage point increase in operating profit margin, from 10.3% in 2013 to 13.7% in 2015.
The largest industry group, record production and integrated record production and distribution, accounted for 48.9% of the total operating revenue, followed by music publishers (33.0%), sound recording studios (15.3%) and other sound recording industries (2.8%).
Record production and integrated record production and distribution
In 2015, the record production and integrated record production and distribution industry group had total operating revenue of $417.7 million in 2015, down from $481.1 million in 2013. Total operating expenses were $368.4 million in 2015, down 16.8% from 2013. This resulted in an 11.8% operating profit margin for 2015, compared with 7.9% in 2013.
Ontario accounted for 78.7% of the 2015 total operating revenue, up slightly from 78.5% in 2013. British Columbia and the territories also reported an increase of their share of the total operating revenue, from 3.4% in 2013 to 4.3% in 2015. Meanwhile, Quebec's share declined 1.1 percentage points, from 17.0% in 2013 to 15.9% in 2015.
Cost of goods sold was the largest operating expense at 28.5% for this industry group, followed closely by royalties, franchise fees, and memberships (27.0%), then salaries, wages, commissions and benefits (15.0%).
Sales of recordings declined by 8.7% to $309.0 million. Of this, businesses in the industry generated $137.1 million from the sale of compact discs, down 19.1% from 2013. A 12.0% decline in sales of digital music recordings was also reported, falling from $154.7 million in 2013 to $136.2 million in 2015. Other musical recordings generated $35.7 million in sales, up 146.2%.
In 2015, foreign-controlled companies in Canada generated 73.6% of the industry's total sales of recordings, with 7.4% of their sales from Canadian artists. This remained relatively stable from 2013 when they generated 76.9% of total sales, with 7.6% from Canadian artists.
In contrast, although Canadian-controlled businesses accounted for 26.4% of the industry's total sales of recordings, the sales generated by Canadian artists represented 64.0% of their totals, a slight increase from 63.1% in 2013.
Sales of recordings by music category were dominated by the popular music/rock genre, generating 77.5% of total sales. Music from the country and folk category decreased from $20.3 million in 2013 to $14.9 million in 2015 to contribute 4.8% of the total sales of recordings based on musical categories. The jazz and blues classification continued to capture a small market share of the audience at 1.5% in 2015.
This industry comprises establishments engaged in acquiring and registering copyrights in musical compositions and promoting and authorizing the use of these compositions. These establishments may own the copyright or act as administrators of the music copyrights on behalf of the copyright owners.
Music publishers posted $282.0 million in total operating revenue and $241.3 million in total operating expenses, resulting in an operating profit margin of 14.4% for 2015, up 3.2 percentage points from 2013. Royalties, franchise fees, and memberships accounted for 41.4% of the total expenses, while salaries, wages, commissions and benefits followed with 21.0%.
Revenues from royalty and licensing rights amounted to $148.1 million in 2015 for this industry group. Performing rights, the licensing of rights to such mediums as radio, television and live events, accounted for 48.7% of the total royalty and licensing rights revenue in 2015, up from 38.2% in 2013. Although there was a 16.6% decline in mechanical rights, from $25.3 million in 2013 to $21.1 million in 2015, synchronization rights increased by 38.5%.
Sound recording studios
Businesses in the sound recording studio industry primarily engage in providing the facilities and technical expertise for recording musical performances as well as providing audio production and post-production services for film, television and video productions. Services such as recording, mixing and mastering generated $130.5 million in total operating revenue in 2015 and $113.4 million in total operating expenses. This resulted in an operating profit margin of 13.1%, down slightly from 13.6% in 2013.
Salaries, wages, benefits and commissions was the largest expense item at 29.4% of total operating expenses. Other main expenses for this industry group were rental and leasing (10.4%) and cost of goods sold (10.2%).
Note to readers
Data for 2013 has been revised.
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