Private radio funds as essential as public funds, FACTOR tells CRTC

Commercial radio broadcasters are asking that their Canadian Talent Development contributions go to two funds instead of the current four. One of the funds which stands to lose is the Foundation Assisting Canadian Talent on Recordings (FACTOR). Below is a submission from FACTOR outlining the group’s contributions to Canada’s music scene. FACTOR…was founded in 1982 with an annual budget of $200,000 and currently administers just over $12 million annually to support the production, marketing and promotion of Canadian artists. FACTOR supported sound recordings by Canadian artists have sold over 30 million copies worldwide with a retail value in excess of $680 million. …FACTOR is very proud of its proven track record of maintaining low administrative costs. The goal of the foundation is to maximize funds to support the artists and while 12.5% of federal funds can be utilized for administration costs, we are pleased to report an average of 10.46% for the past six years. $23.6 million was received from Canada’s private radio broadcasters in this period and, $1.9 million (or 8%) of these funds were utilized to cover administration expenses. The balance of the administration costs were covered by funding from Canadian Heritage. …The funding that FACTOR receives from Canada’s private radio broadcasters combined with the funding from the Department of Canadian Heritage has allowed the artists to truly benefit from this public/private collaboration. With FACTOR administering contributions from various radio stations and then having the ability to blend them with the public funds, FACTOR is in a position to grant the necessary period of time for an artist to start and complete their recording projects. An initiative that receives public funds exclusively would be forced to start and complete their projects within FACTOR’s fiscal year (April 1 – March 31st). Were this to occur a number of challenges would arise. They would include, but not necessarily be restricted to:policy deadlines interfering with the creative process, suppliers possibly inflating/increasing their rates at specific times of the year, the risk of projects being completed to meet financing deadlines and, therefore, not being the best an artist could produce (i.e. mediocre projects) …With the combined revenue streams of the federal Government and Canada’s private radio broadcasters, the amount of funding required from radio to offset the costs of operating FACTOR are kept to a minimum. The agreement that FACTOR has entered into with the Department of Canadian Heritage allows FACTOR to claim 12.5% for administrative expenses. While FACTOR users that as a rule of thumb for all revenue, the actual administration costs have been lower than 12.5% which allows more funding to be put into the programs. It also means that fewer radio dollars are spent on administration. …For some artists and their projects, radio plays a very significant role in their success….Canadian recordings for radio airplay is the reason that Canada’s private radio broadcasters assisted in the creation of FACTOR in 1982. It is still a point for consideration when projects are being assessed for funding. It is especially important when it comes to funding sound recordings for commercial release and for those projects and genres for which radio airplay potential exists.

Private radio funds as essential as public funds, FACTOR tells CRTC

Broadcast | March 24, 2006

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