How Canadian artists survived the Napster boom

Written by Ian Gormely

By 2002, a decade of hard work was finally paying off for the members of Sault Ste. Marie's Treble Charger. The band's platinum-selling 2000 album, Wide Awake Board, was its most popular yet. The video for "Hundred Million," from Treble Charger's 2002 followup, Detox, featured cameos from Avril Lavigne and members of Sum 41, Swollen Members and Gob, all at the peak of their careers. The song was getting heavy rotation on MuchMusic and on the radio. 

"Our shows were growing," recalls Treble Charger singer and guitarist Greig Nori. "Our fanbase was getting bigger and bigger."

But sales of Detox "were far less than the one before," he says. The record eventually went gold, reaching only half the sales of Wide Awake Board. 

A lot of factors go into making hit records. But there's little doubt that a teenage coder from Boston played a significant role in Treble Charger's declining sales. Twenty years ago this summer, Shawn Fanning released Napster into the world — and broke the music industry almost over night. 

"With Wide Awake Board, digital downloading didn't affect our sales," says Nori. "But Detox was right when everything was becoming available free online."

Two decades later, Napster's legacy remains in flux. Some say it ruined everything. Others praise the freedom it gave artists. In Canada, its effects were mixed. Hip hop, which today is one of our biggest cultural exports, was effectively set back a decade. 

But it also levelled the music industry playing field. Many lesser known artists, particularly indie rockers like Broken Social Scene, Arcade Fire and New Pornographers, were able to make sense of the file-sharing chaos and build careers outside of Canada that once seemed unattainable.

"Digital distribution, both in its illegal and legitimate forms, made it possible for artists to reach international audiences like never before," says Kieran Roy, president and co-owner of Arts & Crafts Records, whose roster includes Broken Social Scene, F--ked Up and BadBadNotGood.

Fanning started circulating his creation amongst a small group of friends as the music industry was enjoying its best year ever. Buoyed by the CD boom and the teen pop bubble, revenues hit an all-time high of $21.5 billion in 1999. MP3s were already six years old, but hard for the average user to find online.

Napster changed that by connecting users — and their MP3 collections — to one another. The service had roughly 80 million users per month at its peak. It burned bright, but was short lived. Napster was shut down after just two years amid a flurry of lawsuits brought against the company by record labels and artists over copyright infringement. 

The popular narrative has, not incorrectly, focused around the economic havoc it wrought. CD sales plummeted, and revenues went into a tailspin. The industry bottomed out in 2015 when overall sales were a paltry $6.9 billion, a third of their peak just 15 years earlier. The erosion of income hurt labels and artists alike. 

In an era where Drake dominates charts globally, it can be easy to forget how fragile the state of Canadian hip hop was at the dawn of the new millennium. Although Canada, and Toronto specifically, had long been a hotbed for talent, few had managed to break through in any significant way. 

They were just getting their feet wet and learning the ropes in the industry and then the rug was pulled out from under them​​​​.- Mark Campbell, founding director of the Northside Hip Hop Archive

It had seemed like 1998 was a turning point. Toronto MC Choclair finally convinced radio programmers that Canadian hip hop was commercially viable with his gold-selling single "Let's Ride," and Rascalz posse hit "Northern Touch" gave the scene its very own anthem. Choclair was signed to Virgin Records. Kardinal Offishall was signed to MCA Records. Saukrates had a deal with Geffen Records. 

"They were just getting their feet wet and learning the ropes in the industry and then the rug was pulled out from under them," says Mark Campbell, founding director of the Northside Hip Hop Archive and an assistant professor at Ryerson University's RTA School of Media

Canadian labels remained unconvinced of the commercial potential of homegrown hip hop, so when digital downloading began eating into albums sales, says Campbell, the three rising MCs lost their record deals. 

Napster also eliminated the leverage held by the industry gatekeepers who separated artists from their audience. In the current digital age, alerting fans to new music is as simple as a tweet and a pre-order link. That wasn't always the case. 

"Labels, distributors and retailers all stood between artists and fans," says Roy. "Napster … opened the floodgates and forever changed the status quo." 

Sloan's Jay Ferguson remembers the hoops he and his bandmates would jump through in the mid-'90s, just to make sure the group's biggest fans knew there was new material on the way. He and bandmate Chris Murphy would sit on the floor of the offices of their independent label Murder Records, folding mailouts with info about the latest Sloan 7", and sealing them into envelopes to send to fans. 

A few would write back indicating the releases they wished to purchase, including a cheque or even cash as payment. The band would then mail what they'd ordered back. "It's like a two-and-a-half month process just to buy something," Ferguson says. 

Today, like most artists, Sloan hosts a digital store on its website where it offers special digital-only releases and deluxe editions of its most popular records for the most dedicated fans. "Now it's so instantaneous, that connection to the fanbase," says Ferguson. "Maybe there are downsides, but it's been a real bonus for us."

Napster's 2001 demise didn't solve the digital piracy problem. Rather, it left a void that was quickly filled by similar peer-to-peer file-sharing services like Gnutella, Kazaa and BitTorrent. The iTunes store, which launched in the spring of 2003, brought a modicum of stability and control back to music distribution. But, by then, the cat was out of the bag. To paraphrase an old tech adage, music wanted to be free — and fans were more than willing to accept that price. 

What the switch to digital distribution (both legal and illegal) meant often depended on where an artist sat in the music industry hierarchy. "There was a levelling of the playing field that happened between emerging and independent artists," says Roy. "And the superstar major label artists that previously dominated the industry."

Metallica's Lars Ulrich became the face of the establishment's resistance to digital music piracy. In May 2000, he made headlines when he hand-delivered the names of more than 300,000 Napster users sharing the band's music to the company's offices in San Mateo, Calif. Established bands like Metallica saw the service as a threat. 

Smaller and independent artists, who saw very little financial return from album sales, were more open to the potential benefits. Many artists saw file-sharing as just another way to expose new listeners to their music. 

"If you have nothing to lose and everything to gain, then it's great," says Jim Guthrie, who was playing in the band Royal City in the early 2000s. "I just felt like, you know, the internet is working when you're not. You know, when you're sleeping, people are sharing your music and that was exciting." 

Digital distribution also flattened the industry geographically, putting Canadian artists on even footing with their American peers. For decades, the Canadian music industry operated in parallel to its American counterpart, with many U.S. labels opening Canadian operations and signing Canadian acts. Yet many lacked the reach or autonomy to break an artist in the States. Even Canadian hockey-rink institutions like the Tragically Hip and Our Lady Peace were unable to duplicate that success in America. 

Rich Kidd, a Toronto-based MC and producer, says that he's even heard stories of major labels intentionally leaking music onto illegal music downloading services. "[It] helped expose those artists to a global online audience." 

"I was selling more and more albums and I had a way better career than I ever had in the '90s." ​​​​​​- Broken Social Scene's Brendan Canning

By 2005, bolstered by better access to U.S. markets and positive reviews from new and influential online press, Canadian bands like Broken Social Scene and Arcade Fire were simultaneously building audiences on both sides of the border. Toronto and Montreal were being heralded as new indie-rock hotbeds. 

Broken Social Scene's Brendan Canning had been in many notable bands throughout the '90s, including hHead and By Divine Right with fellow BSS bandmate Feist. Suddenly, with the switch to digital, he says, "I was selling more and more albums and I had a way better career than I ever had in the '90s." 

Rich Kidd says the shift has definitely helped Canadian artists. Carly Rae Jepsen, who finished third on the fifth season of Canadian Idol, took off internationally when "Call Me Maybe" became a viral hit. "You don't have viral hits without people digitally consuming your music," says Rich Kidd. 

Jepsen's success is part of the disproportionate commercial and critical success of female pop artists over the past decade, where artists like Taylor Swift, Robyn and Charli XCX have captured the cultural zeitgeist in a way their male counterparts have not. Toronto-based pop singer and songwriter Raffaela Weyman, who performs as Ralph, says that the internet has helped facilitate that. "There's less of this feeling of 'there can be only one,'" she says. 

By connecting users — music fans — with music, Napster foreshadowed the social experience that typifies today's online experience. Previously, most of the web was static; a one-way street. Napster was the bridge into the interactivity of Web 2.0. 

Weyman points to Katy Perry tweeting about Toronto pop artist Allie X as an example of how digital distribution has helped women amplify one another's work online. "There's a feeling of power that women are trying to take back right now, of trying to support each other and expose each other the best that they can." The post-Napster internet facilitates just that. 

This new global digital paradigm has allowed artists to connect fans across the world with their music in previously unimaginable ways. But they still needed to make the shift from what marketers call awareness to conversion: going from listening to a record on your iPod to buying a ticket to a show.

"99.9 per cent of artists have to play in front of people to maintain fans," says Tim Potocic, co-founder of Hamilton-based Sonic Unyon Records, whose roster over the years has included Hayden and Thrush Hermit. "Broken Social Scene and artists like that, they really beat the pavement. They built real fans. They went to these cities and encouraged people to come see them live."

Hip hop is unique in that it tends to operate on a much more regional scale than most genres — the city you represent matters. Campbell says that after Choclair, Kardinal and Saukrates lost their record deals, there wasn't "a lot of major noise in the Toronto hip-hop scene. There's lots of local artists circulating locally, but nobody is leveraging the technology to the benefit of their career." 

It wasn't until the end of the aughts when Drake figured out how to leverage online platforms like Blogspot, where he launched his early mixtapes, that the tides for Canadian hip hop started to shift. 

"[Drake] would not be where he is if he entered the music game in the '90s," says Rick Kidd. "He came at a time where music websites and online music libraries were becoming the main way we listen to music and grew with his audience through those means."

"Anyone can be on Spotify," notes Weyman, of the subscription-based audio streaming giant that launched in 2006. When given the right opportunities, small artists can sit next to big artists on the all-powerful Spotify-curated playlists, which now make up a third of all listening time on the service. "As an artist of my size and calibre, it's been a really huge help to spread my music internationally."

Today, Drake is the undisputed champion when it comes to streaming. As of December 2018, the 6 God's music had been streamed more than eight billion times on Spotify alone, making him the most streamed artist in the platform's history. This comes as other popular streaming platforms like Apple Music, Google Play and Tidal have contributed to becoming the dominant distribution method for music. Rather than offering downloads for users to store on their phones or computers, these services host the music on their servers, transmitting or streaming them, on-demand, to users (their "offline" listening option limits access to a user's account). Streaming now makes up almost half of global music revenues. 

That's good news for the major labels. Both Universal and Sony have equity in Spotify (Warner and Merlin, a digital rights agency for independent labels, divested in 2018). But it's bad news for artists. 

People can steal music just as easily as they ever could. But they still pay for streaming services.- Jim Guthrie

Streaming services pay notoriously low royalty rates. Spotify pays just $0.004 per stream, while Apple Music offers a princely $0.007. An increasing number of musicians are speaking out, and industry groups, like the Songwriters Association of Canada, have similarly lobbied for higher royalty rates. 

"I'd rather they just steal it from me then, and say, 'Oh, you know, here's a cheque for six cents," says Guthrie. 

All of the artists and industry figures interviewed for this story agree that streaming services have work to do when it comes to artist compensation. But they admit to enjoying the services as fans.

"I love Spotify; I use it all the time," says Treble Charger's Nori. "I just have this terrible guilt the whole time I'm using it that none of [the money] is going to the artist. It's going to record companies." 

In 2016, music industry revenues increased from the previous year for the first time in a decade and a half, a trend that continued in 2017 and 2018. Some see this as a sign that the wild west created in Napster's wake didn't completely devalue music in the eyes of fans.

"People can steal music just as easily as they ever could," says Guthrie. "But they still pay for streaming services." 

However, many simply see this as a way for the major record labels to reassert their control over distribution. "The principles are the same," says Potocic. "It's just that the mechanisms are a little bit different." The most successful artists just know how to manage them. 

Rich Kidd agrees. "We will always have gatekeepers, as long as we have different levels in the music industry."