Lefsetz Letter � Guy Hands/Terra Firma/EMI

Lefsetz Letter
Guy Hands/Terra Firma/EMI

This is one of those *must* reads, if you want to know where the music biz is today worldwide.

This is a dust bowl situation without an apparent known self-cure.

This week in Canada, 19 employees got pink slipped from Universal. Who is left in Canada doing any work for the majors? Some EMI, Warner, and Sony/BMG layoffs were done earlier, to the Universal announcement this week, and yet this was a branch plant industry reporting only 1,600 full time employees in the foreign controlled sector (CRIA) v. 681 in the Canadian controlled sector, in 2003.

In 2003, that group had a total of 100 new Canadian artist releases. Now? Take a guess from Statistics Canada data yourself.

(202 in 1998, 166 in 2000 using census survey types)

In 2005, from we can guess thanks to a change in methodology and coverage by Statistics Canada, that employment dropped 16% in 2005 from 2003 using salaries as a poor proxy. Project the line. Tack on announced layoffs, and you are left with maybe a bit over 1,000 employed people left, in the foreign controlled sector. That is a drop of almost 600 people.

Major doubt is present however when Statistics Canada reported 904 new Canadian artist releases in a census report on the sound recording industry in 2003, but now backcasts using its new methodology from sample data, in its 2005 report released November 16, 2007, only 479 for the same year?

Is Canadian Heritage paying attention?

This is a big shake of my head here.

Maybe Michael Geist can take a look at this and ask for some answers? If we have garbage statistics as to judge our industry, if we are going to help it along as we ordinarily do as fine Canadians, and this is culture, what is Statistics Canada up to? It appears to be a very legitimate question only few would know to ask. Michael is one of them.

Whatever many employees are left, this is a very nervous bunch of mostly Canadian music diehards I would guess without any hope for an answer in any copyright reform, at anytime, anytime soon from the Canadian government. Copyright reform was a huge red herring and total waste of energy in my opinion for the CRIA.

Some may find that fine and dandy, and we'll let the market forces decide. Big bad Music is getting its just deserts, blah, blah, blah.

Just remember for whatever it is worth, it was not an indie or domestically controlled label that launched worldwide "our" Canadian Music poster children on the world stage. It was Sony/BMG, Universal, EMI and Warner.

Yes, Nettwerk has its share and others likely do too.

It hurts to watch this play out.