Duncan McKie: FACTOR Is A World Leader With A Strong Future

As Minister of Canadian Heritage Mélanie Joly outlined the country’s cultural future in late September – with a focus on establishing Canada’s musical talents on the world stage - the Foundation to Assist Canadian Talent on Recordings (FACTOR) finds itself in the thick of it.

FACTOR funding in the export areas of Collective Initiatives and New Musical Works has increased substantially, and organization president Duncan McKie says he’s happy the Feds are empowering FACTOR to play an integral role in this particular initiative.

"(Minister Joly) mentioned FACTOR and Musicaction, our sister organization in Montreal, exclusively in her remarks about developing cultural trade," McKie tells us in a recent FYIMusicNews exclusive interview.

"The reality is that a lot of Canadians don’t do well in the music business until they do well outside of Canada, so that phenomenon is recognized. It’s great to see that the government of Canada has placed their confidence in ourselves and Musicaction. They’ve increased our funding now for two years in a row in the music export area, for both individual artists to tour and for events that support collective activities outside of Canada; that’s a part of their strategy. They heard the message from the industry, and they responded."

As a result, FACTOR has been able to contribute funding for several global outreach events.

"We started receiving additional money one fiscal year ago, which we invested in a number of events outside of Canada," McKie says. Among those mentioned, Reeperbahn, Fête de la Musique (in partnership with Musicaction, with Sam Roberts and Yann Perrault headlining) and Seattle Upstream Festival (featuring 11 bands over three nights) as examples.

"Some were one-offs," he explains. "We helped CIMA stage a Grammy showcase and business meeting in Los Angeles. We also financed an expanded presence at SXSW.”

FACTOR also gave enhanced funding to regional music associations across Canada for export activity development.  

So, it’s no wonder that in the wake of a positive year-end report released just days ago (but back-dated to March 31), McKie says FACTOR’s 2017-2018 fiscal year finds his organization in good shape.

“We’re at about the same level as we were at this time last year,” McKie reports. “The numbers are a bit higher because we’ve got a bit more money for export activities from the federal government. Our revenues are solid, assured through the CRTC’s mandated contributions from radio and the feds.”

But, as we have become aware, there are music industry trends that are necessitating change.

For example, FACTOR is now placing more of an emphasis on live performance over recording.

"Commensurate with the decline in physical sales there’s been an increase in the need to support people going on the road to tour, especially outside of Canada," he says. "Recorded music is vital as part of one’s business plan, but as part of the income plan it’s obviously less important than touring - the critical component in creating income.

“The emphasis on touring will grow: that’s a no-brainer. Live performance is where people are going to try to make a significant amount of their income. The government wishes to continue to invest in export activities, cultural diplomacy, and trade. We’re going to see a significant effort on the part of Canadian cultural players to get out there and start to work in foreign markets.”

But recordings haven’t been forgotten, either, with FACTOR making allocations for the digital space.

"The necessity of finding access to digital recordings is something we are well aware of and support to ensure that Canadian recordings are available digitally around the world. Part of this is how a release date occurs in all countries at once, and people want to get on the road to support it.  So, to a sub-degree, that’s the new strategy."

At home, McKie says FACTOR has a number of mandates.

“While the focus tends to be on outbound cultural and trade activities,  establishing relationships and trying to find ways to develop commercial opportunities for our artists outside of Canada, it’s also our responsibility to ensure that everyone here has the opportunity to participate in our programs.

“We’ll be making a significant effort to ensure that they do, that they understand how they work and what is required of them as applicants, as well as the resources to make successful applications. We deal with all of Canada. We know the challenges we have to meet. We have a limited amount of resources, a big country to cover and all kinds of demand, but that’s a priority.”

Outreach to Indigenous populations is also paramount.

“We’ve been making some headway in trying to get indigenous people involved in our programs from both from the South and the far North - and from visible minority populations from centres like Toronto, where there is a growing and vibrant hip-hop scene,” McKie explains.

McKie says the same flexible funding consideration will be given to business applicants.

"We’re very supportive of developing the infrastructure," McKie notes. "It’s essential that our funding programs reflect how that infrastructure is organized and the way people are investing their money. So, to the degree that they’re configuring to multi-service businesses, we’ll be setting our programs to support them. I think you’ll see a more flexible approach in evaluating companies for funding eligibility, taking into account that diversification. That isn’t as well-reflected in the way we do business today, but that’s a direction we have to go.

"That’s what’s going to keep the Canadian infrastructure healthy: they’re going to tell us how their businesses are organized and our programs are going to reflect that."

Although it has yet to play an essential role in FACTOR evaluations, McKie says it's only a matter of time before streaming will be introduced into the equation.

"We’re going to integrate streaming income into all our evaluative processes once we have a consistent and stable source of information for that," McKie promises.

"Can people get money by submitting their success stories in developing those streams? Yes. They can get money from us to do that. We had a standalone program for the development of digital products that had music market implications. We’ve done a lot of that, whether it’s a co-sponsor, co-supporter or on our own.  We’ve funded quite a few apps - which are popular -  but we’ve also funded larger-scale businesses to service the music industry in other ways through the digital program funded by the Canadian government."

Another issue FACTOR is paying attention to is gender inequality in the music industry. Addressing board parity has been reflected in the appointments earlier this year of eOne VP Meg Symsyk as Chair, as well as Arts & Crafts' Publishing Director Amy Eligh, Bell Media CHUM-FM Program Director Sarah Cummings and singer-songwriter Andrina Turenne to the FACTOR Board.

"That is something that has obviously been an issue in the business," McKie notes. "We have to make sure that there aren’t any systematic biases in any of our programs to eliminate any groups unfairly. That’s another important priority for us going forward."'

When it comes to the recent decision of Bell Media to shutter video project financer MuchFACT, McKie said that FACTOR probably wouldn't pick up the slack of the annual $2M loss of Bell's funding.

"We haven't seen the full impact of it yet," says McKie, whose organization contributes approximately $850K annually towards video-related projects. "There's not a great deal we can do about that. We do have money for videos - sometimes it's embedded in other programs as part of a marketing follow-up financing for sound recording. It's something we're certainly going to be watching very closely and continue to be discussing with the board. But I don't think we can fill that void."

McKie says he's also concerned about the day "when many of these radio benefits expire."

"That creates some challenges for continuing to fund at the same level," he admits, but points to FACTOR's strong financial standing as a possible relief.

"Luckily, we’ve accumulated a bit of a reserve, so we can depend on that to produce an income. Beyond that, we may find ourselves spending some of the capital - that’s an alternative. We have a pretty good reserve, accumulated through contributions from radio over the period where they were putting in a significant amount due to the large-scale transactions that occurred around between 2007-2009."

As for sourcing out other funding to compensate for radio's future shortfall, Duncan McKie bluntly admits it's not up to FACTOR to suggest any.

“We don’t have a role in advising governments on how to create new methods of funding," he says. "Our job is to do an outstanding job of administering the money so that the industry can say, ‘Yes this is a good system that works and shows results.'  The industry itself has been really responsible in dealing with our funding, so they can show positive results where governments and others look at them and say, ‘Hey, that system really works!' 

"Not only does it work, but other countries emulate it,  they come to Canada to find out how it works. We are the singular model for developing multi-partner funding systems through music in the world, and we do it best - and that’s a good thing!”

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