United States where Apple's iTunes sold

its 100 millionth download in July 

Canadian teens aged 12 to 

Canada clearly has a ways to go; one

17 listened to the radio an average

2004 survey found that only 15% of

8.5 hours a week in 2003, down

Canadian downloaders had ever purchased

from 11.3 in 1999.

a music file.

14

Signs of rapidly increasing

download sales in the United States in

2004, however, suggest that the market

Innovation in the 

has strong potential for growth.

Music Industry

There has been speculation that radio is

As in the past, the Canadian music indus 

the next traditional music medium to be

try will continue to adapt strategically 

adversely affected from the digital revolu 

to economic and technological changes,

tion. This is not immediately apparent

through creativity and innovation. A

from listenership numbers, as the average

recent demonstration of the industry's

number of hours per week Canadians 

ingenuity is the development of the

listen to the radio only dropped one hour,

online pay per download model.

to 19.5 hours per week, between 1999

and 2003. But for the next generation of

Some independent music labels, taking

listeners, the drop was more substantial:

advantage of their size and relative flexi 

Canadian teens aged 12 to 17 listened to

bility, have responded to the sluggish

the radio an average 8.5 hours a week in

recording market by shifting their business

2003, down from 11.3 in 1999.

15

The fact

strategy. Vancouver based Nettwerk, 

that teens' TV watching has shown a 

for one, has expanded its lucrative artist

similar drop, while time spent online has

management division, with the result 

grown, supports the hypothesis that 

that album sales now make up just 20%

the next generation will turn more to the

of the company's revenues.

16

Internet for its entertainment than to 

traditional sources.

y

8