Year Of Turmoil Leaves Canadian Music Biz Bruised

Canada's music industry is still reeling after a chaotic year of plummeting record sales, bankruptcies, and the diminishing exchange value of the Canadian dollar, which is down 6% against the U.S. dollar since the start of the year.

The latter issue caused turmoil for Canada-based promoters and indie distributors, labels, and artists either recording or producing videos outside the country.

Prior to the Sept. 11 terrorist attacks on the U.S., Canada's music market was already locked into an 18-month sales slump. Industry sources anticipate that music sales in Canada will dip a whopping 9%-10% in value and unit sales from 2000 figures, which in turn were down 7.5% in value and 6.4% in units from 1999.

Sam Insolvency

The insolvency of Canada's longtime retail giant, the Sam the Record Man chain, illustrates the harsh brutality of trading in Canada's music market. The Toronto-based firm filed for bankruptcy in October, owing about $6.5 million Canadian ($4.2 million) to major record labels. Eleven independently owned franchise stores across Canada still continue under the Sam banner, but 26 of the 30 stores operated by the Sniderman family across the country have since closed. Assets have yet to be finalized by the liquidator.

Poor market performance—a 64.5% decline in operating profits to $6.2 million Canadian ($4 million) despite a sales increase of 7.3% to $447 million Canadian ($284 million) for the year ended April 28—led to several purges at Toronto-based HMV North America in 2001. Other than its 12 U.S. outlets, the majority of HMV's 100-odd North American stores are in Canada. Among those pink-slipped were GM of U.S. operations Lesya McQueen, VP of distribution Roger Whiteman, VP of operations Bruce Helbein, creative manager Arthur Jelilyan, and joint directors of purchasing Sue Duck and Philippe Eloy.

Also rocking Canada's music industry was the bankruptcy of 2-year-old Toronto-based independent music group Song Corp. in May, with liabilities of $8.2 million Canadian ($5.3 million). Leading the list of more than 500 unsecured creditors was the Netherlands' Roadrunner Records, at $356,400 Canadian ($229,000). Assets of Song Corp. are yet to be negotiated for sale by the liquidator.

Meanwhile, extensive staff changes and layoffs amply reshaped the industry in 2001. There were surprising top-executive layoffs and turnovers at both Warner Music Canada and Sony Music Canada, and entertainment conglomerate Corus Entertainment trimmed its 3,500-employee work force in November by 100 positions. Among the departures were Balmur Corus Music (BCM) president Tony Baylis in Toronto and BCM VP/GM Tinti Moffat in Nashville.

In January, Randy Lennox was promoted from president to president/CEO of Universal Music Canada. He replaced Ross Reynolds, who was then appointed chairman emeritus in charge of overseeing a program promoting Canadian culture established by Vivendi Universal. In September, Reynolds was also named chairman of the Canadian Academy of Recording Artists and Sciences, which co-produces the annual Juno Awards.

MTV Canada and four other new music channels were among 90 new digital channels launched Sept. 7. MTV entered Canada as part of a licensing deal between MTV Networks and Calgary-based Craig Broadcast Systems.

Following a fallow period lasting two years, there were signs in 2001 of a talent turnaround for Canadian music. New Canadian talent breaking internationally included singer/songwriter Nelly Furtado; rockers Nickelback, Kittie, and Sum 41; and country singer/songwriter Carolyn Dawn Johnson. Among new acts making their mark at home in 2001 were Wave, Swollen Members, the Be Good Tanyas, Joydrop, By Divine Right, Hawksley Workman, Thrust, and Emm Gryner.

There were strong showings by veterans Diana Krall, Barenaked Ladies, and Leonard Cohen internationally and domestically; and by Canadian veterans Amanda Marshall, David Usher, the Tea Party, Bif Naked, and Sloan on the home front.

Furtado was the big winner at the Juno Awards, held March 4 in Hamilton, Ontario. On the strength of her DreamWorks debut, Whoa, Nelly!, the 23-year-old singer won awards for top new solo artist, top songwriter, and top producer (with Gerald Eaton and Brian West). She also earned top single for "I'm Like a Bird." Barenaked Ladies took home a trio of trophies—for top group, top album, and top pop album—for Maroon (Reprise).

With five major category wins, Arista Nashville's Johnson swept the Canadian Country Music Awards Sept. 10. She took home the trophy for top female, won awards for top album (Room With a View), and clinched the Rising Star newcomer award. Johnson's hit "Complicated" won top single and top song honors. Other winners included Universal's Jason McCoy, who was named top male, and the Wilkinsons, who won the top group award for the second year in a row.

Finally, after a lengthy battle with cancer, Canadian jazz patriarch Moe Koffman died March 28. In his five-decade career, Koffman released 30 albums, playing saxophone, clarinet, and flute. He is best-known for his 1958 international hit, "Swingin' Shepherd Blues."