The year 2005 ended with a healthy profit for Canada's sound recording and music publishing industries, despite a worldwide sales slump, according to a new Statistics Canada report.

In a new look at the record production, music publishing and recording studios industries, Statistics Canada reported that each segment posted a profit in 2005, despite the worldwide decline in record sales and competition from other areas of entertainment.

Canadian indie bands like Broken Social Scene leapt onto the international scene in 2005 as the country's music industry was making a tidy profit.
(Andrew Vaughan/Canadian Press)

"In total, the industry reported operating revenues estimated at $932 million," said the report, released on Wednesday.

"Estimated total operating expenses for these combined industries amounted to $815 million, resulting in an overall operating profit margin of 14 per cent."

Record production is the largest segment, Statistics Canada said, accounting for nearly 80 per cent of the revenue. Music publishing and recording studios represent roughly 10 per cent each.

Streamlining, new delivery channels help cut costs

Record producers racked up revenues of $767 million in 2005, an 8.6 per cent drop from 2003 — the last time Statistics Canada conducted the survey.

Despite this drop however, producers were able to cut their expenses by nearly 15 per cent to $713 million, ultimately resulting in a profit margin of seven per cent.

The firms attributed their success to a number of factors, including the streamlining and restructuring of operations, reducing costs and developing new methods of distribution and delivery targeting digital markets.

The Statistics Canada report also found that:

• Despite an ongoing sales slump overall, Canadians recording artists sold $123 million of music in 2005, up 3.3 per cent from 2003.
• Roughly 57 per cent of Canadian recordings came from Ontario, with 32 per cent originating in Quebec.
• Canadian artists also released 8.8 per cent more music (521 new releases) in 2005, though the overall number of new releases by Canadian and non-Canadian acts dropped 5.6 per cent (to approximately 3,900 new releases).
• The music publishing industry, which represents songwriters and promotes their work in TV, film and a variety of other media, posted operating revenues of $73 million in 2005, with an overall operating profit margin of 20.9 per cent.
• The sound recording studio segment posted a total operating revenue of $74.3 million, with an overall operating profit of 12.2 per cent.