Montreal’s Distribution Select, the largest independent distributor of CDs and videos in Canada, is shuttering its operation July 2 due to declining physical music sales exacerbated by the pandemic, says its owner, Quebecor Sports and Entertainment Group.
The Montreal distributor, which represents a catalog of more than 3,900 physical audio titles, 1,300 DVD titles and 63,000 digital audio titles, struggled to sell physical product when non-essential goods became unavailable for sale in retail businesses in Quebec for most of the past 12 months. But like many distributors that relied heavily on physical sales, Distribution Select has also seen declining revenues in recent years as consumers’ preference has shifted to digital content.
“New technologies have revolutionized consumer listening habits and the shift to digital continues to transform the music industry,” Quebecor said in a statement last week. “The music distribution business has been disrupted by the changes, particularly the abrupt disappearance of physical media.”
Distribution Select leaned heavily on physical sales of French-language albums in the Quebec market. While it controls over 52% of the French music share in the province, between 2016 and 2020 the number of units it sold decreased by 54%, and album sales fell by 70% over the same period, according to figures provided to Billboard from Quebecor.
The media giant, which owns magazines, newspapers, television and radio stations, is still committed to supporting and developing the Canadian music business, says CEO Martin Tremblay. He pointed to the launch during the pandemic of streaming platform QUB musique (designed for local artists), the purchase of the 1,300-seat Théâtre Capitole in Québec City and last month’s acquisition of francophone label Audiogram.
“We will continue to be a leader and we plan to increase our investment in the industry,” Tremblay said.
Despite an increase in overall recorded revenues of 8.1% in 2019, Canada’s physical revenues declined by 11.3%, twice the rate of global physical decline that year, according to the IFPI. The closure of Canada’s leading independent distributor, Sound City Music Entertainment, likely contributed to a 30% dip in vinyl revenues. Revenues from CD sales and other physical formats actually increased 4.7% in 2019 in the country, the IFPI noted. Physical revenues fell by 1.7% overall in 2020 but vinyl revenues rebounded strongly, growing by 43.2%, according to the IFPI report released on Tuesday (March 23).
Quebecor owns four labels (Audiogram, Musicor, STE-4 and MP3 disques) and three performance venues (Videotron Centre, Théâtre Capitole and Baie de Beauport).
In addition to owning in-house label Musicor, Distribution Select deals with many Canadian labels, including ANALEKTA, RV international, Les Disques Tempête, MP3 (Mario Pelchat), Melon Miel (Ginette Reno) and international labels such as Wagram and AMPED.
Canadian music executives said Distribution Select’s decision to shutter operations could have ripple effects.
“This is a testament to a struggling industry,” Tim Potocic, chair of the Canadian Independent Music Association (CIMA), an advocacy group representing the country’s independent music sector, and co-owner of Sonic Unyon Records, tells Billboard. “Losing Select Distribution not only compromises the Canadian industry, but it puts the international labels at risk of not having boots on the ground in Canada to create awareness for their artists within our borders.”
Geoff Kulawick, president of True North Records and Linus Entertainment, predicts “there will be more changes in the Canadian physical distribution landscape in the near future,” while acknowledging he doesn’t use Distribution Select.
Potocic says CIMA will continue to lobby the government to make it aware of the hardships being felt throughout the entire independent music ecosystem.