‘Final nail in the coffin’: Why SiriusXM dropping CBC Radio 3 is ‘potentially catastrophic’ for Canadian artists

Earlier this month SiriusXM Canada quietly dropped CBC Radio 3 from its programming.

For fans of the beloved digital station, which curated an eclectic mix of indie and alternative music, the decision is inconvenient — listeners now have to visit CBC Music’s website to access the Radio 3 playlist.

But for many musicians, the change is potentially disastrous, as it eliminates royalty revenue generated from satellite radio — widely considered one of the last viable sources of income for independent Canadian artists. Insiders say that the move will make it even harder for musicians and local record labels to survive in an already precarious industry.

“It’s a massive blow for indie artists,” Kamilah Apong, the singer for the disco-house band Tush, told the Star. “A lot of us have already been reorganizing our lives to find ways to make money. This feels like the final nail in the coffin.”

Independent record labels, such as the Toronto-based Telephone Explosion Records, are also fearing the worst.

“The loss of this income will mean immediate negative changes (including potential employment cuts) to the music industry in this country,” Telephone Explosion co-owner Jon Schouten told the Star.

“This could dramatically reduce the amount of Canadian independent music created each year, and weaken a concert industry that’s still reeling from COVID losses. We’re looking at a potentially catastrophic situation that will have ripple effects for decades.”

The decision to remove CBC Radio 3, along with CBC Country and two French-language ICI Radio-Canada stations, was made by SiriusXM.

“CBC/Radio-Canada was contracted to provide streams to SiriusXM for a number of years. Our contract was completed, and SiriusXM has decided to program their own channels going forward,” CBC Music explained in a tweet.

When asked to comment, SiriusXM Canada directed the Star to an online statement on its website regarding programming changes: “We remain committed to Canadian music and artists, and our Canadian lineup of programming will continue to reflect that.”

Streaming vs. satellite radio

In the era of music streaming, it is notoriously difficult for the majority of musicians to earn money off of their music.

Record sales — that is, the physical purchase of vinyl or CDs — have cratered over the past decade. Meanwhile, platforms like Spotify and Apple Music pay fractions of a penny per stream — according to the music publication Producer Hive, it takes 125 streams to earn a dollar on Apple Music, 314 streams to earn a dollar on Spotify, and 500 streams to earn a dollar on YouTube Music.

Most independent artists, therefore, rely on “neighbouring rights” revenue — or royalties — generated from radio, television and commercials. In Canada, these royalties are typically collected and distributed on a quarterly basis by performance rights organizations like SOCAN and ACTRA RACS.

The most lucrative distributor of royalties in Canada, however, is SoundExchange, a non-profit organization that covers “non-interactive streaming services,” including SiriusXM.

Copyright law requires that SiriusXM pay 15.5 per cent of their gross revenue to Sound Exchange, which translates to about $1 billion dollars per year. For artists, that works out to around $50 per spin, divided between the artist and the owner of the songs master (typically the record label).

In other words, while a few hundreds streams on Spotify might earn an artist a single dollar, having a song on regular rotation on SiriusXM might generate thousands of dollars in quarterly revenue.

Neighbouring rights are also essential for the daily operation of record labels.

Jean-Philippe Bourgeois is an artist manager and radio tracker with Mothland — a Montreal-based company that acts as a booking agency and record label. He told the Star that nearly all the artists Mothland represents have landed on the CBC Radio 3 rotation, generating income that is in turn used for marketing, vinyl production and third party publicists.

“It’s expensive to market a record,” he told the Star. “For independent labels that was one of the sole ways — aside from grants — that they can they recoup their investment or maybe make a bit of money.”

Why CBC Radio 3 matters

If you tune into CBC Radio 3, you’re almost guaranteed to hear something new.

Launched in 2000 and syndicated for satellite radio in 2005, the station plays a freeform mix of various genres, from indie rock to jazz to alternative hip hop to electronica.

According to Max Turnbull, the bandleader for the Toronto-based pysch-jazz collective Badge Époque Ensemble, CBC Radio 3 is one of the few places that remains dedicated to platforming independent or underground artists that listeners will not hear on commercial radio stations like Indie88 or 102.2 the Edge.

“CBC Radio 3 is not your conventional corporate radio,” he explained. “It’s public programming, which is not mandated by the bottom line necessarily.”

As a musician and producer, Turnbull has been making and performing music in the local scene since 2008, he didn’t register his catalogue with SoundExchange until 2018.

“I was amazed. The first (Badge Époque Ensemble) record — which I considered to be a very independent, local kind of project — started generating revenue, in large part through CBC Radio 3,” he told the Star. “And at that time, it felt like the difference literally between conceiving of myself as a professional musician or not. Before that I had never received, quarter over quarter, some thousands of dollars.”

It’s its online statement, SiriusXM pointed out that the digital station The Verge “continues to offer the best in new and emerging Canadian indie and alternative music, including many of the artists heard on CBC Radio 3.”

But Turnbull and other insiders say that the remaining indie/alternative stations on SiriusXM, including The Verge, are guided by corporate editorial interests, and are more likely to resemble mainstream commercial radio.

“I’m deeply skeptical that replacing a channel that was occupied by a public radio station — with its mandates for diversity, inclusion and fostering independent artists — with a SiriusXM brand will be nourishing for truly local communities,” he said.

Indeed, replacing CBC Radio 3 on channel 162 of SiriuxsFM is Mixtape: North, a station dedicated to Canadian hip hop and R&B. An announcement by SiriusXM says that the station will play artists “like Drake, the Weeknd, Tory Lanez, Jesse Reyez, Kardinal Offishall, k-os and Choclair” — all established and commercially successful artists who already reside on corporate radio.

Dire times in the music industry

Unfortunately, SiriusXM’s program changes arrive at a moment when independent artists are already struggling to survive. A perfect storm of the COVID-19 pandemic, local venue shortages and record–high inflation means that touring — once a vital source of income — is for many artists a financial risk.

Even established indie artists are feeling the crunch. Earlier this month, Animal Collective cancelled its European tour because they “could not make a budget for this tour that did not lose money even if everything went as well as it could.” In September, Santigold cancelled her tour, noting that the last several years in a “relentless industry” has taken a toll on her mental and physical health.

“We’ve lost touring. We’ve lost direct album sales. And now, folks are losing our royalty payouts from radio,” Apong told the Star. “So it’s just like another blow, and so I think a lot of artists are pretty distraught.”

For Turnbull, the disappearance of CBC Radio 3 from SiriusXM is part of a larger economic trend that has seen locally-sustained markets or communities absorbed by massive tech companies like Amazon or Spotify.

“This really isn’t an isolated problem,” he explained. “This is a symptom of a deep stratification that’s happening economically and culturally, where it’s literally boom or bust. You’re either like a millionaire off music, or it’s a hobby for you. And there’s increasingly a thin line between those two realities.”

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