TORONTO: When it comes to music industry exporting strategies, government programs need to provide more public funding and greater flexibility, says a new report commissioned by the Canadian Independent Music Association (CIMA.)

The report, Music in Motion: An Analysis of Exporting Canadian Independent Music, also finds that six out of 10 Canadian music companies feel that exports are critical to their survival and that small independent music businesses are more likely to spend 21 times more on export activities for breakthrough artists than they do for artists at other stages of their career.

"This actually puts numbers to - and affirms - what we've always known through experience and through anecdotes," says Stuart Johnston, CIMA president, regarding the study that was conducted by Nordicity and partially funded by the Ontario Media Development Corporation. "Exporting, now more than ever, is an important component to the business and artistic strategies of our businesses and our artists."

Johnston also says the study definitively declares that Canadian music is now a borderless commodity.

"It reaffirms the fact that music has no borders now - it is a global market, period," says Johnston. "So that strategy and that approach has to be taken into account by any artist and the companies that support them when they're commercializing their music."

The study finds that exports represent a key part of the business plan for 87% of Canadian music companies, but that export activities can cost over twice as much as comparable domestic activities.

Although an estimated $8M to $10M is government funded support for Canadian music company export activities, most companies don't perceive those activities to be adequately supported by the existing suite of government funding programs.

"We know for a fact that the existing programs are oversubscribed," says Johnston. "There is tremendous pressure on existing public programs and if you've just looked at the way FACTOR has evolved and other programs, they're moving more and more into tour support, marketing and promotion, all of the export-related strategies from existing programs. So the growth of the industry - the global demand and the global approach - has all made the existing programs oversubscribed."

Compounding the issue is the fact that some of the contributors to those funds, due to factors like radio station ownership consolidation, may actually be providing less cash than ever.

"We've seen in the past some retreat from funding in years gone by on the Canada Music Fund side," says Johnston. "We know that the Canadian content development (CCD) funding stream from private radio, from the broadcasters, seems to have reached its zenith and it might actually be retreating. In FACTOR's annual reports, they're predicting that CCD funding is going to be dramatically reduced over the next five years.

"So all of that adds up to a situation where there's tremendous pressure on the funding programs."

Johnston says that one hopeful indicator when it comes to federal funding is an expected increase that kicks in on April 1 to help all cultural industries.

"We are encouraged that in this fiscal year, the government re-introduced the old trade routes and pro mart programs, which are the programs that help the creative industries get to markets outside of Canada," Johnston notes. "This year, they've earmarked $10M. Next year, starting April 1, they've earmarked $25M, but nothing beyond that. Of course, those funds are for the entire cultural industry.

"So parallel to this report, CIMA has been advocating for the Canada Music Fund to be increased to $30M from its present, roughly, $25M-$26M that will provide some relief on some broader programs. And, through the lens of their exporting support, dedicate a $10M fund for the music industry to export.

"We're hoping that this report will actually shine a light and quantify how important it is for our music companies and our artists to market around the world. There is a dramatic need to provide the seed funding that our companies can then leverage into the investments of the careers of their artists.

In addition to prohibitive costs that limit numerous exporting companies' participation in activities due to financial risk, the rigid deadlines imposed by such funds make it difficult for reactionary planning.

The Music in Motion report found that the average time required for companies to plan and achieve their expected ROI results, could take as long as 12-13 months. The companies also expressed that funding deadlines do not accommodate a timeline that will aid their planning, along with stringent eligibility requirements that dismiss specific projects or artists as ineligible.

Work visa requirements from the US, the UK and Europe also play havoc with planning, the report finds, as well as inadequate funding caps for touring.

"(Our) independent sector has all the challenges of regular small businesses from other sectors," Johnston adds. "It's compounded by the fact that cash flow and access to capital are two of their key challenges, because banks don't provide the capital to this sector as they do to many other small business sectors across Canada."

But Johnston also says the findings in Music in Motion aren't all negative.

"The report also shows that there's good news: These folks are extremely entrepreneurial," he states. "So it shows the very strong business acumen of our music community; it shows the very strong and talented artistic acumen of our artists, songwriters and our composers and performers. We have a very strong base and this report shows that we are competitive. We're very fortunate to live and work in a society that values our art and our culture, so that there are public dollars flowing into the sector that then can be leveraged for these investments.

"So there's some really good news here."

The results are based on 99 responses from an online survey conducted by Nordicity, the Toronto-based consulting firm that specializes in policy, strategy, and economic analysis in the media, creative, information and communications technology sectors in August and September: a response rate of approximately 53%.

The majority of respondents were generated from Ontario, with Western Canada, Quebec and Atlantic Canada accounting for the remainder. There were no responses from Prince Edward Island-based businesses.

Nordicity also consulted with the Department of Canadian Heritage, FACTOR, MusicAction and each provincial music organization in accumulating report data.

CIMA's Johnston says he hope that Justin Trudeau's government will take this report to heart.

"I'm hoping that the government sees this and it actually affirms what their political goals have been with this government in terms of supporting the creative industries," he tells FYI. "It puts some numbers and some context around not only the importance of the market, but the costs of getting into that market. So it's really a reality check for the government as they're making their decisions and doing their budgeting, to give them the information that they need to make the decisions that are going to be helpful to our members."

 Other survey bullet points:

- 90% of the companies had 15 or fewer full-time employees
- The majority - 65% - were micro-sized business with fewer than five full-time employees
- Most companies sampled are active in at least three musical genres
- Sales, streaming, and business meetings were the most heavily represented export activities undertaken by companies in the sample, with the breakdown as follows:

• Streaming - 81%

• Sales/distribution - 79%

• Business meetings - 78%

• Showcases/festivals - 63%

• Licensing/publishing - 62%

• Performance tours - 57%

• Radio/press promo tours - 53%