Faced with shrinking market shares, fragmenting audiences, disappearing brick-and-mortar recorded music retailers and a continued double-digit decline in compact disc sales, Canadian independent record labels that exclusively sold and distributed CDs until a few years ago are acting as agents and booking concert tours for their artists.
They have formed in-house management companies, and bought ticket agencies and digital download retailers.
“The entire music industry is changing, and nobody knows what it’s changing into, so everyone’s trying to create new strategies that work for them,” says Lloyd Nishimura, president of Toronto’s Outside Music, whose company has expanded into artist management with a roster that includes sibling songwriters Matthew and Jill Barber and the Hylozoists.
“I don’t think it’s that much of a stretch if you’re a management company to have in-house booking or other music-related businesses.”
“It’s a necessity,” adds Geoff Kulawick, president of Burlington-based Linus Entertainment, True North Records and The Children’s Group.
Kulawick, who launched a booking agency under the True North banner in 2008 to promote such developing label artists as Lynn Miles, Catherine MacLellan and Madison Violet, says a hands-on approach to careers is essential these days.
“We can’t be operating in the music space and sell only one aspect of it,” he says. “We’re moving from being a record company to becoming a music experience company, and anything that’s connected to the music experience that we can monetize, we want to be there.”
Nishimura, whose company has expanded to include a stake in digital retailer Zunior.com and handle the business affairs of musicians, says the Internet has fragmented audiences to a point where marketing can be a challenge.
“With the Internet, people have exposure to every single artist around the world all at the same time, so it is just difficult to stand out from the crowd,” says Nishimura.
At the same, Nishimura says the potential opportunities through the still-evolving digital market are limitless: “There are so many different ways that digital revenue comes in.”
These companies aren’t alone. In July, publicly traded Somerset Entertainment Income Fund, a Toronto-headquartered specialty music label formed on the backbone of the late Dan Gibson’s groundbreaking nature recordings, purchased digital music retailer Puretracks for $3 million.
