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Toronto City Council Makes Landmark Commitment to Arts Funding: Music Canada

Toronto, January 16, 2013: On behalf of our members and partners, Music Canada wishes to congratulate Mayor Rob Ford and the Members of City Council for their commitment to increase funding to the broad spectrum of arts in Toronto, including the city’s diverse and authentic music cluster.

“Toronto is by any measurement, one of the most successful music markets in the world, evidenced by the diverse and authentic live music offerings found throughout the city on any day of the week. The business of music employs thousands of people, attracts visitors from down the road and beyond our borders, and makes the city a desirable place to live, work and invest. With today’s decision, City Council demonstrates that it recognizes the importance of the music cluster and opens the door to a new level of communication and cooperation. We commend the leadership of Mayor Ford and Councillors Gary Crawford and Josh Colle, who were integral to making this happen,” says Graham Henderson, President of Music Canada.

The 2013 Capital and Operating Budgets include a boost in arts funding derived from the billboard tax. Among the priorities listed in the motion put forward to the Executive Committee by Councillor Gary Crawford was “support for Toronto’s music cluster.”

“As one of the country’s premier music festivals, North by Northeast would like to offer sincere thanks and congratulations to the Mayor and City Council for recognizing the tremendous economic, cultural, and civic value of music on Toronto. The City’s firm support of artists, venues, festivals, and fans will help grow our already vibrant music scene into a global phenomenon that will attract and inspire the world,” says Andy McLean, Managing Director/Co-founder, North by Northeast.

“Toronto’s music community is one of the most vibrant and vital in all of North America, and we are both grateful for the City’s commitment to its health and excited about the possibilities it opens up for the continued growth of the sector. This announcement represents an investment in economic development, social health, and cultural heritage, all of which will return great dividends to the people of Toronto,” says Jesse Kumagai, Director of Programming for The Corporation of Massey Hall and Roy Thomson Hall.

Music Canada has published a report identifying opportunities for greater growth and promotion of the music industry in Toronto and is working with a coalition whose members include live music venues, festivals, concert promoters, music labels, recording studios, managers and artists.

– 30 –

For more information:

Amy Terrill – Vice President Public Affairs, Music Canada 647-963-6044

Music Canada is a non-profit trade organization that represents the major record companies in Canada, namely Sony Music Entertainment Canada, Universal Music Canada and Warner Music Canada. Music Canada also works with some of the leading independent record labels and distributors, recording studios, live music venues, concert promoters, managers and artists in the promotion and development of the music cluster.


Music Canada Congratulates Toronto’s Executive Committee on Support of Toronto’s Music Cluster

Toronto, January 11, 2013: Music Canada congratulates Mayor Rob Ford and the Executive Committee Members for their forward-thinking decision to approve a multi-year funding strategy which will increase the per capita funding of arts and culture; prioritize key initiatives including support for Toronto’s music cluster; and implement the Creative Capital Gains Report.

“This decision will lead to a stronger economic future for the City of Toronto,” says Graham Henderson, President of Music Canada. “It is through the leadership of Mayor Rob Ford, Councillor Gary Crawford who framed the motion, as well as all members, past and present, of the Executive and Economic Development Committees, that we will succeed in leveraging Toronto’s vibrant music cluster in order to stimulate employment, develop Toronto’s international brand as a music city, and attract further investment. We have developed a music strategy where everybody wins and are thrilled to have overwhelming support at City Hall.”

Among the recommendations in the Creative Capital Gains report was to develop a strategy to promote and foster Toronto’s music cluster. In February 2012 Music Canada presented research to support this initiative to the Economic Development Committee which passed a motion instructing staff to work with Music Canada and other music industry representatives to develop a plan.

“The progress made today would not have been possible without the enlightened decision-making by Economic Development Committee Chair Michael Thompson and Councillors Josh Colle and Shelley Carroll, as well as the bold initiative taken by Councillor Mike Layton who seized on the music opportunity created by the Creative Capital Gains report. This is an exciting step forward and we look forward to the support of City Council next week,” says Henderson.

  –  30  –

For more information:

Amy Terrill – Vice President Public Affairs, Music Canada 647-963-6044

Music Canada is a non-profit trade organization that represents the major record companies in Canada, namely Sony Music Entertainment Canada, Universal Music Canada and Warner Music Canada. Music Canada also works with some of the leading independent record labels and distributors, recording studios, live music venues, concert promoters, managers and artists in the promotion and development of the music cluster.


The Rambler by Graham Henderson: Pandora opens the box

Graham_headphones3Blog ThumbnailThe Rambler is a column by Graham Henderson, President of Music Canada. Graham writes from time to time about developments in the music industry, new trends or just about music! Let’s face it, Graham has been around for a long time and has a lot to ramble on about.

It is not time to yet celebrate the trashing of Tim Westergren’s embarrassing bout of Congressional panhandling…but we are getting close. I can’t imagine that anyone in our industry is unaware that rather than update its business model, Pandora sided with entrenched media and Internet companies and went to Congress in an effort to force a reduction in royalty rates paid to performers. Separately, Pandora has sued ASCAP to lower royalty rates paid to songwriters — just for good measure.

Pandora’s Tim Westergren and Joe Kennedy complained to Congress that Pandora pays a high proportion of revenues in royalties. The problem with this argument is that Pandora CREATED the profit squeeze they complain of by adopting a business model that artificially limited advertising to a single minute every hour. Had Pandora adjusted their model by airing one minute more, Pandora’s profits would dramatically improve.

As David Lowery relates in the Trichordist, the Committee opened up a can of whup-ass on Pandora. Tim Westergren, who just a week or so ago happily showed up at the Future of Music conference (with tousled hair and a hoodie), dodged the Congressional lion’s den altogether. #Coward. Instead, Pandora sent its CEO, Joe Kennedy, to the slaughter.

And a slaughter it was. From all sides of the spectrum abuse was heaped on the idea that Congressional lawmakers should get involved in a private dispute over the payment of royalties–at rates that Westergren himself crowed only a few short years ago was a fine solution for Pandora. In fact, the entire event pinwheeled out of control when lawmakers started asking inconvenient questions about why performers were not receiving royalties when their music was performed on terrestrial radio. This plum presented itself to lawmakers because, inexplicably, Pandora had enlisted lobbying support from terrestrial broadcasters. Of course, terrestrial radio in the US does not pay a performance royalty for sound recordings played on their air. No one knows this better than the Members of the very Congressional subcommittee holding yesterday’s hearing. Rep. Sensenbrenner told Pandora that the subcommittee has devoted more time to this issue than any other in his long service. So for Pandora to throw in their lot with the broadcasters was a very odd choice of bedfellows that put the lack of a performance royalty for US terrestrial radio squarely on display – Member, after Member, after Member raised this issue.

As far as Pandora’s issue with rates–the Subcommittee members nearly unanimously asked “when is a deal a deal” and recited back to Pandora Tim Westergren’s own words from three years ago in which he had celebrated the end of the “royalty crisis!”

It is also worth noting that Rep. Jason Chaffetz, the bill’s author, got little or no support from his co-sponsors. Only one co-sponsor spoke and had little to say in defense of the bill. After sitting through an hour and a half of uniformly negative statements by his colleagues, Rep. Chaffetz became so agitated that he actually insulted the mother of the head of SoundExchange in an extraordinary breach of Congressional decorum. Moms are sacrosanct…even in the bear pit that is Congress. Stay classy, Congressman.

I have always thought Pandora’s choice of name might come back to haunt them. Those of you with even a passing familiarity with the classics will recall that the Titan Epimetheus (brother of the more famous fire-stealer, Prometheus) was given a “gift” by Zeus – it was the beautiful, god-crafted Pandora. Now his brother Prometheus had warned him NEVER to accept gifts from Zeus (the two were not exactly on good terms since Prometheus had been chained by Zeus to a rock for all eternity while his liver was repeatedly eaten out by a Vulture.)

Epimetheus forgot his brother’s advice. He accepted Pandora from Zeus and he was even more delighted when he saw that with Pandora came an unusual, sealed chest.

He was told NOT to open it under any circumstances. One day when her husband was away, Pandora, consumed with curiosity (a fatal flaw “programmed” into her by Zeus himself), was unable to resist her impulses – she opened the chest. The moment she did, out flew a ghostly parade of demonic forms that represented every evil Zeus had wished to visit upon mankind. Men and Women had, for example, been free from work – they lolled around living off the largesse of heaven and the gods. After the chest was open, they were condemned to actually WORK for a living.

Well, Westergren, it appears, has opened his own version of this chest….and what demon has he unleashed. It looks Pandora is going to have to WORK to adapt their business model to the market…there will be no heavenly handouts from the congressional gods. But he can hope: Pandora did.

Graham Henderson is the President of Music Canada. He also writes on an eclectic range of topics on his personal blog at


The Rambler by Graham Henderson: Still Searching for Results in Google’s Wasteland of Illegal Sites and Takedown Notices

Graham_headphones3Blog ThumbnailThe Rambler is a column by Graham Henderson, President of Music Canada. Graham writes from time to time about developments in the music industry, new trends or just about music! Let’s face it, Graham has been around for a long time and has a lot to ramble on about.

As readers will know Google announced in August that they were going to update to their search algorithm in an effort to push pirate sites down in rankings. While it sounded like a good thing I decided to periodically undertake a reality check. My early tests suggested that nothing had actually happened – there were no change in the rankings. It was starting to feel like Google has just made another empty promise to help creators. Later I blogged how Google let Grooveshark back into their App Store – a decision which seemed incomprehensible given their publicly stated desire to enhance the results for legal music sources. Then there came Google’s promise to remove pirate sites from Autocomplete returns; a promise that was also shown to be more talk than action.

So I took a moment to see how Canada’s Carly Rae Jepsen is faring a few weeks on. Where are the legal sites; is it easy to find legal sources for music? Well, you can see the mountains of DMCA take-down notices that have accumulated. By the second page, about half the returns are takedown notices. Is this Google’s way of helping?


Google’s Transparency Report gives a glimpse into the problem – over 7.5 Million takedown notices in the past month. Here you will find the Vancouver-based isoHunt, ranked at #5 for most take-downs received – an ignominious distinction. Now, as an example, here is one of the DMCA notices sent by our British colleagues, the BPI. You can see they sent takedown notices to 20 sites on behalf of Interscope.

It is interesting to see how Google has chosen to handle these notices. Chilling Effects is a website that archives these takedown notices. Ellen Seidler has previously described this as a “clearly an ill-conceived attempt to intimidate those whose rights have actually been infringed.” A quick look at the sites that BPI was targeting shows that they clearly are not legitimate outlets – they are pirate organizations who distribute Jepsen’s work for their own profit.

CarlyRaeTakedownsUnfortunately the legitimate retailers are still hidden behind pages of pirate sites, plus the DMCA takedown links. Anyone interested in acquiring music legitimately has to wade through a wasteland of illegal sites and takedown notices. It is patently ridiculous. I would again compare the situation to that of someone interested in buying a Black and Decker toaster.


Buyers are sent straight to a plethora of legal sites. Wouldn’t the web be a better place for artists, consumers, and digital entrepreneurs if search engines promoted legitimate sites instead of leaving them behind in the pirate site/takedown notice wasteland?

So, ten weeks in…Google’s promise to “help users find legitimate, quality sources of content more easily” has turned out to be as empty as we thought it was at the outset.

Graham Henderson is the President of Music Canada. He also writes on an eclectic range of topics on his personal blog at


The Rambler by Graham Henderson: A #RUSHTheVote update

Graham_headphones3Blog ThumbnailThe Rambler is a column by Graham Henderson, President of Music Canada. Graham writes from time to time about developments in the music industry, new trends or just about music! Let’s face it, Graham has been around for a long time and has a lot to ramble on about.

Earlier this month, the Rock and Roll Hall of Fame announced the nominees for the 2013 induction class, and for the first time, allowed music fans vote for the five artists they believe to be most deserving of induction. With nearly 25% of the vote, RUSH is currently leading the way in the online poll to determine the “fans’ ballot” that will be tallied along with the other ballots to choose the 2013 inductees! Following behind them are Deep Purple at 17% and Heart at 12%. Voting continues until December 3, so there’s still time to #RUSHTheVote and make sure this iconic Canadian band gets their due in the Rock Hall.

Canadians have taken up the challenge – including politicians at every level. Minister of Canadian Heritage James Moore helped get out the vote to his Twitter followers, as did MP Brian Masse. David Zimmer, MPP for Willowdale, the area where Geddy and Alex grew up, also promoted the #RUSHTheVote movement online as well as inside the Ontario legislature. At the municipal level, Toronto councillor & staunch music supporter Josh Colle helped spread the word online. Sunrise Records is hosting the poll on their site as well, which Universal Music’s deep catalog division is directing traffic to.

This outpouring of support is just another reminder of the impact and value our music has to Canadian culture. That’s something that’s always worth supporting and promoting, so please take a minute and help #RUSHTheVote!

Graham Henderson is the President of Music Canada. He also writes on an eclectic range of topics on his personal blog at


The Rambler by Graham Henderson: Music Tourism – Cranking it up a Notch

Graham_headphones3Blog ThumbnailThe Rambler is a column by Graham Henderson, President of Music Canada. Graham writes from time to time about developments in the music industry, new trends or just about music! Let’s face it, Graham has been around for a long time and has a lot to ramble on about.

Music tourism is big business and represents a major opportunity for Toronto and Ontario. This is one of the primary conclusions from Music Canada’s study on accelerating the music industry in Toronto that we released in June this year. And people are taking notice.

In 2011, Music Canada commissioned two landmark studies. The first was designed to estimate the economic impact of the recorded music and live performance sectors in Canada. Music Canada retained the services of PwC to perform the former study and the Titan Music group to perform the latter.

The impact study was released publicly at our Annual General Meeting on June 13th in Toronto. Then, the following day, at NXNE, we released Accelerating Toronto’s Music Industry Growth, Leveraging Best Practices from Austin, Texas. The two studies were designed to work together and to afford for the first time an understanding of the importance of recorded music and live performance to the economy of Ontario and, in particular, Toronto.

This is familiar history by now. What may not be known is the extent to which these studies have gained traction in the music community and at all levels of government. While the role our community plays in weaving the cultural fabric of our country is well understood in the general population and is understood by the federal government and to some extent at the provincial level, the importance of music as an economic driver in Canada was virtually unknown. Assistance was provided to the music community, not because it was thought to be an important economic actor, but because it was “the right thing to do”, because it was thought possible in this way to safeguard a distinctive Canadian culture. No government ever thought to assist the music community in the way, say, the film and the video game sectors are supported – because it is a large, vibrant, desirable economic actor. It’s the difference between looking at music as “art” or as “commerce” – a key difference noted in our second study between Toronto and Austin. In Toronto, and indeed in Ontario and Canada, the tendency is to look at music as “art”.

Well, the PwC study established beyond a doubt that music was about high quality jobs, largely focused in the younger demographic. It proved beyond a doubt that music had an economic impact and not just a cultural one. This is an impact that, by the way, extends far beyond our borders. I would argue that Canada, Ontario and Toronto have failed utterly (to their collective detriment) to recognize the importance of music to the cultural and economic cocktail that makes up “brand Canada”. The cultural and economic one-two punch of music makes it more than a lightweight, more than a middleweight, it makes music a HEAVYWEIGHT. Understanding this has helped us to bring music in from the “policy maker’s cold”; it has helped us to gain respect for our community; it has put us on the map.

And speaking of maps, one of the more stunning conclusions of the PwC study was that the majority of economic activity in the music sector is concentrated in Ontario and particularly the GTA: over 80% of it. For a province and a city desperate to differentiate themselves from other regions, a healthy and in the case of live performance, booming, music sector represents a godsend. Aside from the sort of intangible benefits that a thriving music sector can lend to a city (as so amply demonstrated in the writing of Richard Florida), aside from the jobs it can provide to enthusiastic young people, there is yet another aspect which has gone completely unnoticed and undervalued: music tourism.

The reason we commissioned our unprecedented “tale of two cities”, comparing the music scenes in Toronto and Austin, was to demonstrate exactly how valuable an asset music can be to a local economy. The Austin study demonstrated in a graphic manner what a community like Austin can do when it harnesses the economic potential of music: it is worth hundreds of millions to the economy, possibly billions.

Beginning in the late 1980s, and founded largely on two principal assets, Austin City Limits and the SXSW music festival, Austin developed a plan and worked what amounts to an economic miracle. The economic impact on the economy was astonishing, first measured at around 600 million dollars, it rapidly almost TRIPLED. Austin began marketing itself as the Live Music Capital of the World and ensured that visitors don’t go home without experiencing live music.

The result? Nearly half of all economic activity generated by the commercial music sector in Austin is music tourism – about $800 million in 2010. Austin’s two largest music events, South by Southwest Film, Interactive and Music Conference, and Austin City Limits Festival, each grew by $25 million per year from 2005 to 2010. A whopping 20% of the economic activity generated in ALL tourism in Austin is attributed to music tourism.

Now, imagine what Toronto and Ontario could do….if they only understood the nature of the asset and had a plan. As the study’s authors pointed out, Toronto starts from a place far ahead of where Austin is even now. Toronto has the 4th largest number of live music establishments per capita in North America; we have world class recording studios; we produce international stars who have received their start in the Toronto music scene, creating a bevy of musical “landmarks” for the avid fan; Toronto is home to the head offices of all three major labels and 16 of the largest domestic independent labels. Any night of the week you can find music of every genre, from every Diaspora of the world – performed at famous, brilliantly equipped venues such as the Horseshoe Tavern and the Molson Amphitheatre. Toronto is, without a doubt, the music capital of Canada and one of the great music centres of the world.

People already travel to Toronto to see concerts, festivals and to experience the myriad of diverse live music events the city offers. This organic activity has created a strong foundation. It’s time to crank it up a notch or two.

It’s time to INVITE people to our city to experience live music.

This idea has galvanized two levels of government. At the City of Toronto, the Economic Development Committee, with strong leadership from Councillors Thompson, Colle and Carroll, received the Austin study with enthusiasm, sending it to staff with a demand that they bring forward recommendations. Support has been voiced across the political spectrum at council and right to the Mayor’s office. At the Provincial level, the Minister of Tourism, Culture and Sport, The Honourable Michael Chan, who seems to be remaking himself as the “music minister”, similarly sought ideas from his staff about how to harness the power of music tourism. My impression is that at both levels of government, the uptake is moving at near light speed. Both City and Province are behaving in an exemplary, entrepreneurial and business-like manner.

One very concrete example of our progress can be found here.  For the first time Ontario Tourism has undertaken a specific focus on music. Their fall travel guide highlights live music events in Ontario – music festivals, concerts and clubs get profiled beside some of the more traditional features like fall driving trips and wine and culinary experiences. Though surprisingly slower on the uptake, Toronto Tourism seems to be recognizing the potential as well. In a recent interview on Here and Now, Andrew Weir of Tourism Toronto mentioned the music scene as a key attraction for overseas visitors.

Toronto and Ontario have one of the most active and most diverse live music markets in the world. It’s time we started telling someone. The new, global digital environment has changed the rules of the game for all of us. In the music industry, we need a new industrial strategy. Music tourism represents an enormous opportunity to stimulate the live music sector, generating more activity, gigs and dollars, and thereby creating a healthier, more vibrant music industry for all. Our country’s musicians are under unprecedented pressure, it is increasingly difficult for them to make a living as professional musicians. One way we can help is to attract tourists to Ontario and Toronto….it could be the difference between two paying gigs and one, or one instead of none. The treasure is here. Let’s bring the world to Ontario to find it. We are home to one of the great musical wonders of the world.

Graham Henderson is the President of Music Canada. He also writes on an eclectic range of topics on his personal blog at


New bilateral agreement between US and Canada opens the flow of royalties to Canadian labels and performers

An historic agreement has been reached between Re:Sound Music Licensing Company and SoundExchange to ensure that Canadian rights holders receive royalties from US uses of their work licensed by SoundExchange. The agreement covers all Canadian rights holders signed to AVLA, ACTRA, Artisti, MROC, and SOPROQ.
“This agreement unlocks new sources of revenue for AVLA members and is an important step forward in our Canada-US relationship,” says Graham Henderson, President of AVLA.  “Canadian labels and performers will now be able to collect royalties accumulated from the use of their recordings on US satellite radio stations like SIRIUS XM, internet radio stations, streaming services and cable TV music channels south of the border.  Most importantly, they don’t have to join SoundExchange in order to do this, but as a result of the bilateral agreement, can collect their earnings through the organization in Canada to which they already belong.”
The first distribution to rights holders will occur in 2013.
Bilateral agreements of this kind are an important source of future revenue.  Hopefully, this is the first of many agreements of its kind with countries around the world who are signatories of the WIPO Performances and Phonograms Treaty (WPPT).

The Rambler by Graham Henderson: Sam Sniderman, “Et in arcadia ego”

Graham_headphones3Blog ThumbnailThe Rambler is a column by Graham Henderson, President of Music Canada. Graham writes from time to time about developments in the music industry, new trends or just about music! Let’s face it, Graham has been around for a long time and has a lot to ramble on about.

I don’t know why we find events like this shocking. We all knew Sam was very old, we all knew his health was declining, but when the news comes that an icon, someone who has inspired us our whole life, has died, it always hits us like a bolt out of the blue. The first reaction is invariably shock and disbelief which then settle into an over arching, brooding gloom that will often not lift for days. Flaubert wrote of this in Madame Bovary, saying, “Anyone’s death always releases something like an aura of stupefaction, so difficult is it to grasp the irruption of nothingness and to believe that it has actually taken place.” So it is with Sam.

Do I need to say his last name? Does anyone? If you said, “Sam is dead”, who in Toronto, who in Canada (of a certain age, at least), would not know immediately that you were referring to our Sam Sniderman, better known, perhaps, as Sam the Record Man.

Oddly, I never actually met Sam in my career as a music lawyer or industry “insider”. But I DID meet him as a fan, as a teenager in search of records, on the floor of that amazing music store – perhaps music warehouse is a more apt description. He seemed to be ubiquitous. He was unfailingly polite, and unfailingly customer-oriented and unfailingly RIGHT. He knew music inside out and could correctly answer any music question ever asked of him. And if he wasn’t there, one of his astoundingly knowledgeable employees was there to help in his place.

Anyone growing up in Toronto will have a Sam story. I grew up waaay out in the suburbs, so for me, the Sam era was ushered in with….the GO Train — in 1968 or so. The routine was simple. Up early, mom delivers a fast breakfast and you were out the door for the half hour walk to the train – in all weather. In Toronto, you disembark, grab the subway and trudge up the stairs at the Dundas station to emerge… the BIG CITY!! Wide eyed and breathless. And what did the big city, mean to, me? It meant Sam the Record Man. For hours I would coast up and down the aisles looking at album covers, asking questions, and eventually buying all too few records – restricted by a young boy’s allowance.

It was Sam who created the magic. Sam who had the vision. Sam who created a store like no others. Sam who literally defined an era. Sam, you will be mourned, and you will be missed but you will NEVER be forgotten. As the Romans would say in their spare, incisive language, “Ave atque Vale, Sam Sniderman”. Hail and Farewell. It falls now to us, those he left behind, to honour his memory with our recollections.

Graham Henderson is the President of Music Canada. He also writes on an eclectic range of topics on his personal blog at


Music Canada Congratulates Toronto Mayor Rob Ford on Successful Chicago Delegation

TORONTO, 20 September 2012 /CNW/ – As the Team Toronto Business Mission to Chicago concluded, Music Canada praised Mayor Rob Ford for leading this important mission to help improve relations and foster opportunities between the two cities.

“Mayor Ford and his colleagues have brought together a talented and dynamic delegation of business and civic leaders who will help to foster the next generation of investments between Toronto and Chicago,” said Graham Henderson, President of Music Canada. “We are keenly aware of the unique challenges facing Toronto businesses and, on behalf of our members who employ hundreds of Torontonians, we are grateful for the opportunity to help protect jobs and foster economic growth in our city.”

Toronto is home to one of the largest and most vibrant music clusters in the world including major and independent music companies, talented artists and musicians from every genre, world-class recording studios and some of the greatest live music venues. From iconic spots like the Horseshoe Tavern to hugely successful Molson Amphitheatre, Toronto is host to live music every day of the week. And two of Toronto’s studios were listed among the top ten recording spaces in the world in 2011 by Mix Magazine. Music Canada’s Vice President Public Affairs participated in the mission.

“Now more than ever, in light of worldwide economic challenges, we need a focus on creating jobs and fostering economic development in Toronto,” said Henderson. “We are proud to have been part of the Mayor’s mission to Chicago and look forward to finding new opportunities to grow Toronto’s economy and keep our city moving in the right direction.”

Music Canada is a non-profit trade organization that represents the major music companies in Canada, namely EMI Music Canada, Sony Music Entertainment Canada, Universal Music Canada and Warner Music Canada. Its members are engaged in all aspects of the recording industry, including the manufacture, production, promotion and distribution of music.

For further information:
Amy Terrill – Vice President Public Affairs, Music Canada 647-963-6044


The Rambler by Graham Henderson: “If the Facts Won’t do…”

Graham_headphones3Blog ThumbnailThe Rambler is a column by Graham Henderson, President of Music Canada. Graham writes from time to time about developments in the music industry, new trends or just about music! Let’s face it, Graham has been around for a long time and has a lot to ramble on about.

The debate about the effect of piracy on creators can become exceedingly tedious at times. A veritable cottage industry has grown up around it, enriching a few academics who made a killing producing studies that purport to show that piracy has had no adverse effect on the music industry. A good example of this took place right here in Canada.

A few years back bureaucrats in the Department of Industry took it upon themselves to pay for a study that purported to analyze the effect of theft on the market for music. Incorrectly claiming that no studies on this subject were available in Canada (in fact two had been produced), and incorrectly claiming that no suitable, unbiased Canadian researchers were available, the bureaucrats contracted with a little known Danish academic named Birgitte Andersen, who was then employed as a Reader at Birkbeck College in London, England. Why her? Well, the bureaucrats alleged that she was the only unbiased candidate they could find. However a simple Google-based literature review readily revealed a history of anti-corporate, anti-copyright rhetoric.

For example, in a 2005 article titled “The Social and Economic Effects of Copyrights in the Music Industry”, Ms. Andersen characterized copyright as a “weapon” used by “multinationals” to attack creativity:

“Critical law and economics suggest the copyright system can act as a vehicle for the crude expression of commercial power relations and, in the specific case of music, a weapon by multinationals against the creative independence of small countries and producers. (p.132)”

Sigh. Now THAT is hardly what I would call unbiased.

All of which leads me to believe that the bureaucrats at Industry had to know both with whom they were dealing and what they were buying.

In any event, she was paid $24,999 for this study. An amount which conveniently skirted Treasury Board rules requiring a public request for proposals for any contracts for services exceeding $25,. This is a rule designed to protect the Canadian taxpayers from the misuse of their hard earned tax dollars. Additional sums were apparently paid to polling firms and for subsequent analysis.

As was extensively documented by Professor George Barker, Ms. Andersen first produced a study which incredibly concluded that theft of music increased the sales of music. Then, after an avalanche of criticism here, here, and here, she back-slid and revised and rewrote her study, saying there was no effect positive or negative. (Although Industry Canada continues to this day to post the original, abandoned study.) Finally the data she used to reach these dubious and contradictory conclusions was rigorously analyzed by Professor Barker, who showed that it had been either misunderstood or misrepresented in both of the previous studies. Professor Barker found that a full analysis of all the data – including that inappropriately ignored by Andersen — clearly demonstrated that piracy hurts the sale of music.

To which I think the disinterested observer would heave a huge sigh and say…”Well, D’uh!!”

As recently as this week researchers at Carnegie Mellon University published a literature survey calling into question the dubious and counter-intuitive conclusions researched by researchers such as Andersen, writing,

“Our review finds that, when viewed as a whole, the academic literature strongly suggests that piracy harms media sales: the vast majority of academic papers — particularly those published in peer-reviewed academic journals — find evidence of harm from piracy. This conclusion is consistent with reviews of the academic literature by Stan Liebowitz in 2006 and by Felix Oberholzer-Gee and Koleman Strumpf in 2009, but includes more recent studies — and we believe these recent papers make the case of harm from piracy even stronger than what the literature suggested just a few years ago.”

However, as Barry Sookman showed, in the meantime anti-creator activists avidly utilized the study to attempt to stave off much needed copyright reform. Despite a clear statement on the Department of Industry’s website that this was NOT an Industry Canada study, professors such as Michael Geist repeatedly referred to it as an Industry Canada study – I assume to give it heft and gravitas. How disappointing.

Meanwhile, reality bites. In an interview with the BBC, Omniphone’s CEO attributed his company’s recent swing to profitability to crackdowns on piracy sites:

“Mr. Hughes told the BBC that his company had invested about $60m (£37.5m) in its platform over the past half decade to get to this point.

He added that recent high profile efforts to crack down on file-sharing sites – including internet service providers (ISPs) blocking access to The Pirate Bay, and the closure of the Demonoid BitTorrent tracker – had helped drive up earnings as users had been encouraged to opt for legal streaming alternatives.

“A corner has been turned – there is no doubt,” he said.

“I don’t think the growth that we’re seeing now, or that’s projected in the future, could happen if we didn’t turn the corner. The music industry was bought to its knees by piracy almost simply because the files were small so they were the first [type of media] to go.

“Therefore the music industry adapted first, it tried to fix itself first, and I think it has made big strides.”

In addition to the erroneous studies feeding the idea that piracy was at worst benign, the anti-creator lobby became extremely adept in crafting straw men which they deployed like a veritable legion of doom. Here is a terrific recent example: the now ubiquitous Tim Berners-Lee opining yet again on the merits of an unregulated internet:

“There’s been this assumption that the web is only there for stealing music and that the most important industry is the media industry. But I think it’s reasonable that I should pay for music.”

The reporter noted that this was said with a mocking tone. Who EVER said that the most important industry was the media industry? Who EVER said that the web was only there for stealing music? Are these rhetorical exaggerations designed to make a point? I doubt it. This is a straw man built to be conveniently dispatched with a supercilious and knowing sneer.. . At least he concedes that it is “reasonable” that he should pay for the fruit of the musician’s labour. Thanks for the magnanimity, Tim.

The creation of false information paired with argumentative techniques that would not pass muster in a high school philosophy class have been a blemish on the debate about what is right and wrong in the digital environment for years. But as Omniphone so eloquently demonstrates, while the situation remains dire, “a corner has been turned”. And it has been turned not only because brilliant and innovative new services have been introduced, but also because the market place has been afforded a degree of protection from parasites like The Pirate Bay and Demonoid and now more than ever, thanks to recent legal changes in Canada enacted by our Conservative Government, IsoHunt.

As my good friend Neil Turkewitz wrote to me the other day:

“With the expansion of services like Spotify, there has been a lot of talk about how innovative business models can make inroads into piracy. That’s a good and partially true narrative, but it overlooks that it is a two way street, and that enforcement against unauthorized services is itself a foundational component of allowing services like Spotify to take hold, and that enhancing responsibility in the internet environment is a critical factor in nourishing new services, and allowing them to gain a foothold in the marketplace. And gaining a foothold in the legitimate marketplace is only the starting point. Piracy has driven the perceived value of recorded music to zero, or near zero, and advertiser-supporter services can hardly sustain the vitality of the music community. Enhancing the transition to paid services is going to require much more success in marginalizing unauthorized services.”

And unless and until intermediaries like Google continue to do more than simply paying lip service to the problem (see, for example, the recent decision to omit The Pirate Bay from autocomplete), we will wallow in the slough of despond.

Graham Henderson is the President of Music Canada. He also writes on an eclectic range of topics on his personal blog at


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