Foreign Companies Require Perspective, Say Canadians

Several Canadian music industry figures indicate that for foreign labels to maximize their sales in Canada, they need defined promotion and marketing strategies, including tour plans.
'We turn down 95% of the product we're offered,' says Jack Schuller, president of Festival Distribution in Vancouver. 'The only way we can sell a record is if it's exceptional and the act is active in touring here. Independent U.S. labels could do more to market their products here. Often they blow their budgets on the States, and we get 25 promos to get across the country. That happens all of the time.'
Dominique Zgarka, president of Koch International (Canada), which dominates Canada's distribution scene, says foreign-owned labels are now making demands on Canadian distributors that were unheard of a few years ago. Foreign-owned labels used to treat Canada as an export market, he says. 'Now they treat (Canada) as a real market, and they want promotion, marketing, and press,' he says. 'They want to see the newspaper clippings and SoundScan figures. Previously it was, 'Whatever you sell, it's a bonus.' '
Jim West, president of Distribution Fusion III in Montreal, concurs with Zgarka. 'Many people have expectations beyond anything you can imagine,' he says. 'People think that because Canada is such a big place they can sell so many copies, but this market has changed a lot in recent years.'
Alexander Mair, president of Toronto-based Attic Music Group, Canada's leading independent label, agrees that U.S. labels make unrealistic sales projections. 'Because we speak the same language and (are) on the same continent, there's an assumption of sales potential here,' he says. 'Canada is as competitive as any other market. If they're selling music for a niche, which most American indie labels are doing, they'd better make sure that niche exists in Canada.'
Zgarka, however, notes that with Canada's low currency-exchange rate, foreign-owned labels will see lower returns on distributed product here than they do elsewhere. 'It's hard for Europeans and Americans to understand that they make less per unit selling records in Canada than almost anywhere else in the world,' he says. Selling at higher prices, he says, doesn't work here. 'About 99% of our (distributed) labels make $1 less in Canada per record than in the U.S.,' he says. 'That's hard for them to swallow.'

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