Foreign Labels, Distribs Boost Profiles Despite Recent Closures, Market Seen As Ripe

Foreign-owned labels and distributors are increasingly pursuing sales opportunities in Canada despite the recent closures of two prominent independent distributors.
The year-end bankruptcy of Montreal-based Cargo Imports and Distribution (Billboard, Jan. 24) and the Feb. 19 closure of the music distribution wing of Denon Canada, a division of Georgia-based Denon Corp. (Billboard Bulletin, Feb. 23), both rocked Canada's independent distribution world.
Despite these closures, a number of foreign-based firms have beefed up their activities in the Canadian marketplace in the past year. These include the labels Beggars Banquet, Rykodisc, and Velvel, each of which established offices in Toronto in 1997, as well as Putumayo World Music and the three affiliated Nashville labels Oh Boy!, Red Pajamas, and Blue Plate Music.
Allegro Entertainment Canada--a division of Portland, Ore.-based Allegro Corp., which has been active in Canada for a decade--substantially expanded its activities here last year. The company recently appointed longtime retail veteran Randy Williams as its Canadian sales manager to oversee its eight-person national sales force.
Independent distribution in Canada is dominated by U.S.-owned Koch International (Canada) in Toronto, followed by such Canadian-owned distributors as St. Clair Entertainment Group, Distribution Fusion III, and Madacy Entertainment Group in Montreal; Page Music Distribution, Outside Music, and Trend Music Group in Toronto; and Festival Distribution in Vancouver.
Long-term commitment
'We look at our market as being a North American market, and we have a long-term commitment to (distributing) in Canada,' says Joseph Micallef, president of Allegro Corp. (U.S.). 'Our presence there has been driven by that (philosophy). As our Canadian business has grown, it has required more infrastructure, and we've been devoting more resources to it.'
Micallef adds that operating in Canada has become more attractive in recent years due to its increasing retail similarities to the U.S. 'HMV is now a major player in both the U.S. and Canada,' he says. 'Tower (Records) is now in Toronto, and Virgin, which began as an American (retailer), is now in Canada with a store in Vancouver.'
Cambridge, Mass.-based Rounder Records, which distributes several labels in addition to its own releases, says it has been in discussions in recent weeks with Warner Music Canada, Universal Music Canada, and PolyGram Canada. The final agreement, expected this month, concerns Canadian distribution of Rounder's roster and its affiliated labels.
'Canada is very important to us, and we need to be working with someone who is going to be out there making a concerted effort on our behalf,' says John Virant, president/CEO of Rounder Records. 'We're working with a number of Canadian artists, and we want to work with even more.' In the U.S., Rounder distributes titles on its affiliate labels by such Canadian artists as Raffi, Natalie MacMaster, Lynn Miles, Joseph Cormier, and Connie Kaldor.
RECEPTIVE AUDIENCE
Other U.S.-based independent labels are discovering receptive Canadian audiences for their roots, world beat, folk, jazz, and blues catalogs.
'Canada is proving to be a huge market for us, and it's going to be even bigger,' says David Hazan, senior VP of 5-year-old Putumayo World Music, distributed by Koch International (Canada). 'We're being so aggressive (in Canada) because we believe that Canadians are, arguably, more receptive to different cultures and music, which makes them natural candidates for our CDs (of) music from around the world.'
Underscoring the label's strong musical ties to Canada, Hazan points out that over the years Putumayo compilations have featured a number of Canadian artists, including fiddler MacMaster; singers Cookie Rankin, Mary Jane Lamond, and Pamela Morgan; and guitarist Brian Hughes. Canadians are also prominently featured on the label's first video release, 'Celtic Tides.' Due to be released Sept. 22 in North America with a related CD and a book, the project features performances by and interviews with by Canadians Lamond, MacMaster, Loreena McKennitt, and Ashley MacIsaac.
Dan Einstein, who oversees the Nashville-based Oh Boy! label and its affiliated Red Pajamas and Blue Plate Music labels, says a tightening U.S. music market has been forcing many American labels to expand elsewhere.
'We thought we were perhaps sleeping on our potential with other markets, particularly with Canada,' he says. 'We're far (enough) along the learning curve (that) we can take what we've learned (in the U.S.) and apply the same programs to Canada. The results have been very immediate.'
With a production and distribution agreement with EMI Music Canada effective in March 1997, New York-based label Velvel made its first strategic move into the international market.
'Canada is a key territory, and it's next door to us,' says label president Bob Frank. 'It was the first territory we did a deal in outside of the U.S. and the first territory we opened an office in.' Frank says that with the recent hiring of Derrick Ross as GM of Velvel's Canadian operation, the label intends to allocate more resources for Canada.

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