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The Future of Digital Music Start-Ups is Not in Canada
If some of the speakers at this year’s Canadian Music Week are to be believed, our country’s red tape is stifling online music innovation locally while the rest of the world is getting on with giving things away for free.
While many look forward to CMW for its plethora of show-going opportunities, the annual affair also draws thousands to its exhibit floor, award shows, and four music conferences, held at the Royal York Hotel over five busy days. Industry types crammed the hotel’s second and third floors Thursday, busily attending panel discussions that promised insights into how the music business could stay afloat in the era of free downloading and distracted consumers.
Most of yesterday’s “What Does the Next Decade Have in Store?” panel focused on the Vevo video-sharing empire and its charismatic CEO, Rio Caraeff, whose ideas on sharing data seemed downright hip, considering his audience of music magnates. Vevo, whose partners include music labels and YouTube, makes money from advertising and provides high-definition music videos and concert exclusives. It also gives a comparatively high percentage of profits back to the labels and artists, its head honcho said on Thursday.
But while Caraeff sang the praises of the open web’s money-making opportunities, others on the panel said it’s just not that easy here in Canada. American panellists noted they were surprised to arrive at the conference to discover many of their favourite music-sharing services aren’t available north of the border—a symptom of a greater issue, according to their Canadian counterparts.
Take, for example, music-prediction service Pandora Internet Radio, which launched in 2005 but ended its service in Canada (and the rest of the world) in 2007, due to a slew of regulatory hurdles and legal issues.
“There’s not even a licensing structure available that would allow a webcaster to stream legally outside the U.S.,” Pandora founder Tim Westergren posted on the site’s blog in May of that year. “I’ll reiterate our commitment to fighting as hard as we can to fix this absurd problem.”
Fast-forward four years: Pandora is still offline here, and Canadian copyright issues remain in a multi-year holding pattern. None of the government’s three (poorly received) copyright reform bills since 2005 have made it anywhere, thanks to a series of elections that left them on the order paper.
“This endless round of copyright reform is debilitating to our industry,” said Canadian Recording Industry Association president Graham Henderson. “We have to know what the rules are so we can build our business around them.”
Meanwhile, web music start-ups must go through a royalty-setting process with the Copyright Board of Canada that is glacially slow, effectively stifling innovation.
“You have to move at lightning speed to capture these opportunities,” Henderson said, pointing out that start-ups especially must seize on trends quickly in order to launch a well-received product. “I’m not blaming the regulating body, but if you can’t get a hearing on an important tariff for a year and a half, that’s a long time.