The operating profit of companies in the Canadian music industry, including recording companies and publishers, dropped significantly in 2006, according to numbers provided by Statistics Canada, the country's government-run statistics organization. The year 2006 is the latest set of figures published by StatsCan.

The organization said sales and profitability declined for Canadian recording companies during the year, with revenues declining to C$712 million ($693 million) from C$765 million ($744 million), a drop of 6.9%.

Operating expenses fell by only 3.0% during the period to C$644 million ($627 million), noticeably less than the 14.9% reduction from the year prior. Profit margins for the record production industry during the 2006 period declined to 9.5%, with an overall operating profit of $67.9 million.

StatsCan says the majority of record production industry revenues, approximately 63%, continued to be generated by foreign-controlled companies. Domestically owned record companies had a slightly higher operating profit margin of about 10%, StatsCan added, with operating revenues climbing 86.6% to $253.6 million ($246 million) in 2006. Market share of overall industry revenue was also higher -- jumping to 36% in 2006, up from 19% in 2005.

Operating revenues for the music publishing industry rose 4.8% from 2005 to C$124.2 million vs. $120 million, StatsCan says, though operating expenses increased more than twice as fast to 11.8%, reaching C$111.7 million ($109 million), leading margins to decline by 4.6% to 10.1%.

In the sound recording studio industry, the smallest of the three fields, total operating revenues dropped 10.4% to C$82.9 million ($80.1 million) in 2006, while operating expense also declined by 11.7% to C$72.5 million ($70.5 million).

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