The digital music industry in Canada is in a precarious position with little support from the federal government.
At least one in five Canadian digital music downloads are still delivered over the phone and at an estimated $1.4 billion a year.
Digital music services like Pandora, Spotify and Rdio have become big business, but many of the top players are still based in Toronto and Montreal.
The competition is fierce, and the music industry is paying a heavy price.
“Canada’s digital market is not sustainable and needs a lot of investment in its future,” said David Kestelman, co-founder and CEO of music streaming service TuneIn.
He’s hoping the music and radio companies will finally step up to the plate.
But with only two months left in the new year, he’s concerned the market may not be there yet.
“We need a lot more funding, more investment,” he said.
The industry’s biggest challenges are twofold.
First, most of the music market is still offline, meaning it’s hard for the average listener to find a streaming service or record shop to download.
And there’s no way to access the music when you’re travelling or without a mobile device.
In the digital era, Canadians rely on their phones, tablets and laptops to stream and download music.
In Canada, nearly one-quarter of all Canadians are still downloading music.
The digital industry has a long way to go, but with more than a million digital music stores and thousands of online radio stations, it’s a big market with plenty of potential to grow.
There are currently no plans to move digital music services to the Canadian dollar, but that could change in the future.
Canada is a country of 1.2 billion people and has more than 20 million music consumers.
For many of them, digital music is a natural fit.
There’s no shortage of services available, including Spotify, Rdio, Tidal, RdMix and Pandora.
But there are also thousands of smaller labels and independent artists who don’t have the ability to tap into those big brands.
And the music is often limited to a small audience, leaving most Canadians without a choice when it comes to what they can buy.
“I think it’s not sustainable,” said Stephen T. Brown, a Toronto-based music manager who specializes in recording, touring and performing with electronic music.
“The big labels can’t afford to do it.
I think they’re not really prepared to take the risk.”
Canada’s music industry needs to be ready for a shift to digital, said Brown, whose clients include Radiohead, M83, Mumford & Sons and Queen.
“That’s not going to happen overnight.
It’s going to take a little bit of time,” he explained.
He believes the industry needs a $1 billion investment to help it compete with big companies like Apple and Google.
“If we want to have a strong music business, we need a global music market, and we need to be able to play our best music in multiple languages,” he added.
It would also help if the music companies and labels could agree on a business model and revenue model that both can attract the biggest music fans and retain their support.
But it’s difficult to see that happening with the big companies.
Even though Pandora has more subscribers than Spotify, the two companies have a different business model.
Spotify charges subscribers $7.99 per month for unlimited access to their catalog of more than 150 million songs, while Pandora charges $8.99 a month.
If you have a Spotify subscription, you’ll be charged $2.99 for each song you listen to.
For every 10,000 songs you listen, you will pay $2 for the first year.
Spotify has said it will eventually move to a subscription model, but has yet to announce any details.
Tidal is currently the top streaming service in Canada with more subscribers and subscribers paying more than any other service.
Tides subscribers in Canada pay about $9.99 monthly per user for unlimited streaming, but they’re getting hit with new charges for unlimited downloading.
The company says it’s trying to reach out to its subscribers, but it’s also working to reduce its footprint.
“Over time, we’re going to continue to see this, and I don’t know if we’re getting there, but we’re definitely moving in the right direction,” said Tidal co-founders Mike O’Brien and Kevin O’Connor.
But for now, Tides customers are stuck with the same price as Spotify.
“It’s a bit frustrating,” said O’Leary, who was surprised to hear about the company’s new $1 bill.
“You don’t want to hear it’s the same $9 that they have in the US, or $10 as they do in Canada.
I’ve had to change the subscription from Spotify to Tides to keep the same cost,” he admitted.
Tids founder and CEO John Ridsdale says he’s hoping for