MediaPolicy’s speech to Digital Media at the Crossroads: an update on regulating music streamers in Canada

February 13, 2025

Last weekend I did a little speed-dating at the 2025 Digital Media at the Crossroads conference. I had fifteen minutes to give an update on what’s up with the CRTC’s regulatory path for music streaming.

That wasn’t a lot of time. Things like “should we overhaul the ‘MAPL’ eligibility formula for Canadian songs?” just fell by the wayside. But I hope the conference delegates found it a useful summary.

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I think the reason that I was invited here today is that I wrote a couple of blogs back in fall in response to the music streamers’ petition campaign “Scrap the Streaming Tax.” 

That campaign was launched by Digital Media Association, the American lobby organization that speaks for the foreign music streamers Spotify, Amazon, Apple and Google’s YouTube. The face of the campaign was Bryan Adams, our own legendary rock star.

In the next 15 minutes I’m going to give you a brief overview of what might happen in the CRTC’s implementation of the Online Streaming Act, Bill C-11 for the audio industry, in particular the music streamers. 

Last June the Commission handed down a cash levy of 5% of Canadian revenues to the music streamers — much to their dismay— and next month we expect a notice of consultation that should put discoverability of Canadian music squarely on the table. 

That’s assuming an election doesn’t sideswipe the Commission’s work.

I don’t have to tell any of the radio broadcasters in the room that audio is the neglected child of the broadcasting system, a much smaller ecosystem by revenue than its big brother television and video streaming.

It’s difficult to find an explicit policy discussion of why we regulate the broadcasting of music, whereas there’s plenty of that kind of public debate about television.

What video and audio have in common of course is that Canadian music, like Canadian television or any other kind of mass media, swims up current in a continental market dominated by large foreign-owned media giants. 

So we regulate in order to carve out an adequate space in the Canadian mass market for Canadian songs, composed and performed by Canadian artists.

I suggest that means we are not content that a handful of high achievers like Drake, The Weeknd, Justin Bieber and Tait McRae have become international superstars.

For Canadian music to have real prominence and presence in our domestic market we have to nurture a musician middle class in Canada, which is a small market, and especially Québec, which is an even smaller market. 

Ditto, ditto for Indigenous music.

If that’s why we regulate, we then have to consider what we’re up against in terms of the distribution of music in Canada, and the distribution of the money made from that.

Streaming is now the dominant distribution architecture .

And streaming is run by an oligopoly of foreign media companies.

Let’s just look at a couple of slides here.

You’ve probably seen this one: streaming saved the music industry from piracy and financial oblivion… and then became its master. 

Streamers are now the retail face of the recorded music industry and the ingestion point for two thirds of its income.

When streamers distribute that revenue they keep a third for themselves, half goes to labels and artists, and 15% goes to songwriters.

Canada is a rich market for a small country. Canadian consumers are significant streaming adapters on a per capita basis.

Two-thirds of Canadians are on streaming platforms, listening to about 15 tracks per day. Ninety per cent of Canadians under the age of 30 are signed up for streaming; it’s clearly the future of the industry for as far as we can project.

The streamers themselves may not be a tech bro oligarchy, but they are an oligopoly. And Spotify stands first, with twice as many paid subscriptions as its fellow giants.

What’s more, the streamer oligopoly negotiates licensing fees with another cartel, the major music labels. 

Such is the market power in the industry that carves up the revenue pie, which arguably results in more financial precarity for artists and songwriters than might otherwise be the case.

As I mentioned, Canada hits above its weight in music consumption but also is an overachiever in producing global superstars.

Check out this Spotify Top 10 artists list.

But the question for Canadian media policy is not whether a handful of Canadian stars become rich and famous, it’s whether we are filling the music distribution pipeline with enough good music to achieve an adequate share of the domestic music market for our own artists.

In short, the question is whether we can nurture a Canadian musician middle class where enough artists can make enough money over a long enough time to develop their craft and their audience.

Broadcasting regulation and adjacent public policy like the Canada Council address this problem on both the supply side and the demand side.

What do I mean by that?

We stimulate audience demand through radio airplay quotas and financial support, usually through media funds like FACTOR, for sound recording, live performance and marketing.

We stimulate the supply of musician income from music sales and licensing, radio royalties and support for other income generating gigs.

One of the frustrating things about public policy in this area is that for a variety of reasons we don’t have good data on musician incomes.

But we do have data on consumption of Canadian music, and when it comes to consumption on the biggest platform, music streaming, it’s underwhelming to say the least.

This slide shows that Canadian musicians have only a ten per cent share of the Canadian music streaming audience. 

Here are two benchmarks for that 10%. 

The unregulated market in theatrical release films has infamously resulted in a three per cent (one per cent in English Canada) revenue share for Canadian films in our own domestic market. 

At the other end, the CRTC’s radio airplay quotas range from 35% to 65% airplay for Canadian music or French language music.

There’s enough information about artist compensation from music streaming that we can estimate that a “musician” —which is a business with multiple artists and mouths to feed—  has to stream about 6 million songs annually on Spotify to earn $100,000 USD from all income sources.

And if you’re wondering how many Canadian bands achieve that 6 million, and who they are, you are out of luck. As I say, data poverty is really holding back public policy here.

The Canadian economist Gerry Wall looked into this a few years ago for Heritage Canada and concluded that, putting aside a few superstars, not enough Canadian musicians were making enough money. He concluded that ‘there has been a “hollowing out’ of the middle class of music creators.’ 

Then we have the dire case of Québec and French language music. If ever there was a canary in the coal mine for Canadian culture, the dramatic under consumption of French language music on streaming platforms would be it. 

The Canadian francophone market is obviously small at 8 million in population and some argue that the small market problem is compounded by streamer algorithms that are believed to confer prominence on songs that have reached at least one million plays, again a small market challenge.

The outcomes couldn’t be worse.

Eight per cent of streamed music in Québec is French language. 

The highest ranked streamed French language song, in Québec, is in 49^th place.

Let that sink in.

I asked the Digital Media Association about that, and the publicist hired by DIMA for Scrap the Streaming Tax campaign issued a statement saying….that the global export market for French language music is strong and that the top French language song in North America belongs to Patrick Watson, a well-known Québécois artist.

As for the 8% outcome for French language music streamed in Quebec, the publicist opted not to return my email. 

How will our broadcasting regulator respond to these issues, the under consumption of French language streamed music and the broader problem of nurturing a Canadian musician middle class?

As you know, the Commission handed down a five per cent cash levy on the streamers this last June. 

I believe the streamers were genuinely gob smacked by this.

The Canadian content cash levy on radio broadcasters is a tenth of that, at 0.5%.

The music streaming tax in France is 1.2%.

The streamers should have expected something more than the half-per cent that radio broadcasters pay, since radio broadcasters make such dramatic airplay contributions to Canadian music.

And the streamers also knew that Sirius Radio, which has much softer CanCon airplay quotas than conventional radio, pays 4%.

But it didn’t assist the streamers that at every opportunity they have told Parliament and the Commission that they have no interest in taking any additional steps to make Canadian music more prominent in their playlists and streaming channels.

The trouble is, Parliament ordered it so.

Here’s the text of section 3(1)(r) of the Online Streaming Act, an amendment sponsored by the Bloc and supported by the NDP and the Conservatives in committee.

It says music streamers must use any means at its disposal to recommend and promote Canadian songs.

I’d suggest to you that “any means” includes integrating a higher prominence for Canadian songs into playlist algorithms.

But the CRTC, perhaps unintentionally because they were preoccupied with YouTube videos, appeared to rule this out within hours of the Online Streaming Act becoming law in April 2023. 

However, the federal cabinet left the door ajar on this in its Policy Direction to the CRTC in November 2023.

The streamers’ pitch on its current efforts to promote Canadian songs and Canadian artists is that if you ask for Canadian, you will get it. 

They will curate all-Canadian playlists. 

They will promote Canadian new releases. 

They will engage in musician development, sponsorship, and workshops. 

And they want those efforts to be the sum total of their promotion of Canadian content.

But under no circumstances do they want their proprietary and secret algorithms to be regulated for outcomes or anything else. 

That’s obviously a hard-line position, and perhaps that’s to be expected in the first sovereign country to propose regulated prominence outcomes in music streaming.

This is not like video streaming, where the EU plowed the regulatory furrow before we did.

It’s too bad we are so entrenched at this moment. 

There do seem to be win-win regulatory solutions. 

For example, Spotify has a third-party research paper posted on its website that suggests that reserving a prominent space on the home screen for local content works well for local artists and delivers better results for the streamer objective of keeping people listening longer and without interruption. 

There are obvious discoverability tools that the Commission could order including home screen prominence for local content and Canadian airplay quotas for the DJ-curated channels that the streamers carry, for example Apple Music does a lot of this.

But moving the needle of Canadian music consumption, especially in Québec, may require more dramatic measures.

So if we ever get to this Commission consultation on audio streaming I would expect a showdown on song curation and recommendation algorithms.

In the meantime, the streamers are engaged in an all-out campaign to sabotage Canadian regulation.

As you may know, they are challenging the 5% levy in court. They are running their publicity campaign in Canada.

My guess is they have given Conservative MPs an earful by now and are hoping Pierre Poilievre will become Prime Minister and “Kill Bill C-11.” And they are running to US legislators in Congress to put the Canadian Online Streaming Act in the trade war crosshairs. 

There’s so much drama and chaos in our relationships with American media companies and American Presidents, I wouldn’t want to predict what happens next. The velvet gloves are off. 

Like everything else in broadcasting regulation, we take it day by day. 365 days per year.

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