The Underachieving Tariff 8 and Other Scary Stuff

November 1, 2014

Alan Willaert  -  AFM Vice President from Canada

As consumers of music shift toward the “all you can eat” digital streaming services as the preferred platform, that should create more revenue for musicians, right? Musicians don’t need to be signed to a major label to distribute their recordings, and that means more airplay/streams and therefore more earnings, correct?  In a word, no.

The major labels of the past counted on the millions generated by the mega-hits in world sales to fund the research and development to discover and groom the stars of tomorrow. In Canada, over the last dozen years, those millions have dropped by 50%, leaving the majors scrambling for new business models, because the return on streaming is but a fraction of what album sales used to be.

In the September 2013 International Musician, I reported on how little the musicians actually earn per stream, from the various established services. From a different perspective, in most countries a massive worldwide hit with more than 100 million streams, could generate between $130,000 and $220,000 for the label and artist. However, thanks to the shortsightedness of Canada’s Copyright Board, in the improbable event that a song actually generated 100 million streams in Canada, Tariff 8 allows for a staggering $10,200.  That’s one-tenth of what is paid elsewhere. More significantly, this allows for a 90% discount to the larger US-based streaming companies, which rings the death knell for any Canadian service that attempts to compete.

How did this happen? Essentially, the Copyright Board, after years of deliberation, decided to stay asleep and merely use a rate for Tariff 8 that has been in place for dozens of years; an old rate for a new right and tariff. One has to ask, why? Have the Tory government and big business’ (i.e., broadcasters) influence, and low regard for creators, copyright, and the arts managed to infiltrate even the Copyright Board?

Coupled with the steadily declining income derived from live performance opportunities, this is the last thing Canadian musicians needed. A recent study of artists and cultural workers in Canada by Hill reveals that Canadian artists are more than twice as likely to be required to have more than one job in order to make ends meet, compared to the overall workforce. Here are some other frightening facts:

• There are approximately 33,750 professional musicians and singers in Canada, with a rate of self-employment many times higher (80%) than the labour force average.
• Artists have much higher levels of education than the average workforce, with 44% having a BA or higher (double that of the overall labour force).
• The average individual income of the workforce is $48,100; the average individual income for musicians and singers is $17,699, but the median individual income for musicians and singers is $11,431.
• Interestingly, the male/female split for musicians and singers is 50/50.
• The highest earnings are in the 45-54 years old demographic.
• The number of artists has increased by 50% since 1989.

While those numbers are frightening to musicians, let’s have a look at the bigger picture. At 3.4% of Canada’s total Gross Domestic Product (GDP), and $53.2 billion in revenue, the Arts and Culture industry in Canada is larger than the accommodation and food services industry ($30.6 billion), and twice as large as the agriculture, forestry, fishing, and hunting industry ($23.9 billion). More specifically, revenue from live performance is in excess of $2 billion, and from sound recording, $500 million.

With that kind of staggering profit, why then, is the median income for musicians (not including their multiple jobs) half the $22,600 low-income cutoff for a single person living in a community of 500,000 people or more? Yet, it is the employers that claim poverty and continue to pressure musicians to perform for less, or nothing. Where is the money, if not in the pockets of musicians?

Its high time for AFM members to start acting as such. The internal competition and eagerness to work for less, in a misguided attempt to attract more work, only weakens the organization, and with it, threatens our livelihoods. It’s time to remember why the AFM was formed in the first place, unite, and by doing so, give it the strength to overcome the outside forces that conspire to destroy it and all organized labour. Demand what you’re worth, and demand that it’s on an AFM contract.

The AFM is my union. It’s yours too, isn’t it?

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