The Trouble with FACTOR

by Paul Lawton

THE MANDATE: FACTOR Supports the Independent Canadian Music Industry

The mandate for FACTOR in Canada says that it is “dedicated to providing assistance toward the growth and development of the Canadian independent music industry.”

The money FACTOR provides to Canadian musicians is set for a wide number of activities – recording a demo, full length sound recording, market and promote an already existing album or showcase and tour domestically and internationally. FACTOR supports many facets of the infrastructure which must be in place in order for artists and music entrepreneurs to progress into the international arena.

In theory, FACTOR is a wonderful enterprise, a granting agency that is hands out merit-based funds to bands, labels and music businesses across the country. The funding, in their words, has seen “so many success stories,” all in the name of helping Canadian musicians and music related businesses compete in the global music market.

THE REALITY: FACTORY Supports a small percentage of well connected insiders.

FACTOR approval numbers show an overwhelmingly small number of bands and labels getting a disproportionately large share of the funding.

I made a spreadsheet of all the available funding approvals FACTOR over the last decade. That spreadsheet is really big, and is available to download: HERE.

Here are the top ten recipients of FACTOR funds over the last decade. I’ve also included the name of the label or company working with the band to get this funding approval, how much THAT company has received under various programs, the type of music and the region that that the band comes from, and the distance from the production company/label to the FACTOR offices.

Top Total FACTOR funding 2003-2013
1) The Trews $620,000.00 represented by Bumstead Productions ($1,059,168.00) (Hard Rock / Maritimes) 16.4 KM from Bumstead Productions to FACTOR offices

2) Metric (+Emily Haines) $510,847.00 represented by Crystal Math Music Group ($1,057,610.00) (Indie / Ontario) 16.0 KM from Crystal Math Music Group to FACTOR offices

3) Stars (+Amy Millan) $370,441.00 represented by Various/Arts and Crafts  ($1,608,705.00) (indie / Quebec) 16.0 KM from Arts and Crafts to FACTOR offices

4) Midway State $359,231.00 represented by Crystal Math Music Group ($1,057,610.00) (Indie / Ontario)   16.0 KM from Crystal Math Music Group to FACTOR offices

5) Justin Hines $339,974.00 represented by              Orange Lounge Recordings ($500,000.00) (Singer/songwriter / Ontario) 16.0 KM from Orange Lounge Recordings Group to FACTOR offices

6) Manafest $319,833 (Christian Hip Hop / Ontario)

7) Two Hours Traffic $297,876.00 represented by Bumstead Productions ($1,059,168.00) (indie / Maritimes) 16.4 KM from Bumstead Productions to FACTOR offices

8)      Young Galaxy $264,116.00 represented by Paper Bag ($1,593,984.00) (Indie / Vancouver) Paper Bag Records is 17KM from FACTOR offices

9)      Danny Fernandes $251,648 represented by CP Records $978,899.00 (club music / Toronto – Shawn Desman’s younger brother) 15KM to FACTOR offices.

10)   Jason Collett $245,638.00 represented by Arts & Crafts ($1,608,705.00). 16.0 KM from Arts and Crafts to FACTOR offices

BROKEN FUNDING SYSTEM

It isn’t the purpose of this article to suggest that FACTOR should stop handing out grants to musicians. Instead, we call on FACTOR to stop handing out grants to business people who exist to prey off Canadian musicians. There is a very big difference between funding a musician and propping up lecherous business practices.

FACTOR’s internal guidelines and lack of National outreach has lead to a corrupted system that has lead to a have/have not Canadian music system. If the mandate is helping disseminate Canadian music, FACTOR is really only helping a small, very specific kind of music (largely middle of the road “indie rock”), and more specifically, business class individuals who have set themselves up to live off the profits of middle of the road indie rock.

YOU MUST BE THIS TALL TO RIDE

FACTOR has a policy that prevents applications from record labels without a minimum of 5000 albums sold through a FACTOR approved distributor, a minumum number FACTOR uses to differentiate upper and lower tier music. While smaller, regional labels were left to live or die on their own merit, the bigger labels who managed to break past that initial hump of 5000 were allowed to keep coming back to the well. Take Paper Bag Records, who were able to obtain $1.5 million dollars in grant money in this system through the various artists on their roster.

Selling records in Canada is a tricky business, and one of the main reasons why FACTOR is so crucial to the health of Canadian music. If you sell directly to your fanbase, you face huge fees at Canada Post that eventually will ruin most start-up labels. If you are shipping a single vinyl LP from Toronto to Vancouver, the cost to ship is often more than the record itself. Many small labels wonder: how do Arts & Crafts or Paper Bag sell their records so cheap? We wonder no more.

To get to a Paper Bag level, all you need is a single record to do well so that you’ve crossed the magical “top tier.” Once you are there, you can keep coming back to the funding well indefinitely until the funding completely dries up. This is problematic.

Certain funding programs are aimed at “top tier” artists who have the greatest shot at breaking through to more mainstream success, and that is what FACTOR does. It makes a certain kind of sense to bet the house on METRIC, because they are a Canadian band with a wide range of appeal. The problem comes when Metric were able to sell out Air Canada Centre in Fall of 2012, and then come back and get another $20K for a music video in March of 2013. At a certain point, the FACTOR program did its job well to take a small band and play a role in bringing them to arena-rock level. Once that band hits arena rock level, government music funding programs should be looking at the next group of up-and-comers.

When you talk about FACTOR with Canadian musicians, METRIC get the most heat because they are the most visible, but The Trews have done a far better job at living on arts funding. The Trews.

THE FACTOR BOARD

The desire to change this system will not come from within FACTOR itself. Right now on the board, representing Canadian Independent music:

1)      Grant Dexter from Maplecore Music ($819,452.00 in FACTOR funding)

2)      Mark Jowett from Nettwerk Music Group ($416,942.00 in FACTOR funding)

3)      Robert Lanni from Coalition Music ($721,401.00 in FACTOR funding)

4)      Jeffrey Remedios from Arts & Crafts ($1,608,705.00 in FACTOR funding)

5)      Lloyd Nishimura from Outside Music ($608,541.00 in FACTOR funding)

6)      Stephen Carroll* of The Weakerthans ($40,887.00 in FACTOR funding)

As well as five representatives from Canadian Radio –

1)      Susan Wheeler – Rogers Broadcasting

2)      Lenore Gibson – Bell Media

3)      Chris Pandoff – Chorus Radio

4)      Rick Arnish – Jim Pattison Radio Group

5)      Steve Parsons – Astral Media

KEY ISSUES:

As it exists, Factor favours a pre-existing network of like-minding music industry insiders, some of whom sit on the board of directors of Factor itself. This is hugely problematic. FACTOR is funding a huge number of musical endeavours from across Canada, but the lions share is going to a very small percentage of them.  This is problematic.

For Canadian music funding, most of the money goes out to labels, production companies and bands who live within 20KM of the FACTOR offices in Toronto.  This is problematic. Indeed, anyone in Canada can apply for Factor funding, but why are the winners so disproportionately Toronto-centric?

If the one thing that has been thrown at this blog over the last few weeks “taste is subjective,” which is totally true! So then how was the merit-based system gamed so that the middle-of-the-road output THE TREWS and METRIC was chosen to represent Canadian music? The only way forward is expanding FACTOR’s reach and removing control from such a small group of people who have already bilked the system in the name of a comfortable livelihood.

SOLUTIONS:

1)      FACTOR Money needs to be spread out more. This means funding limits to labels and musicians. At a certain point, labels and musicians should have to stand on their own.

2)      LOWERED Minimum requirements for bands labels and production companies would allow a greater representation of Canadian musicians.

3)      Increased representation of genres. How can the only hip-hop artist in the FACTOR top 10 be a white Christian rapper?

4)      Increasing representation on the board to escape the pre-existing network that already benefits from FACTOR funding.

5)      Increasing accountability. In a response to this blog, Chuck Teed points out that “Any money received from FACTOR needs to be matched, which means the band is investing its own money into expanding their market (that $20,000 video grant produced a minimum $40,000 video).” In theory this SHOULD be the case, but fraud (such as generating false invoices) is a common-place tactic. http://chuckteed.com/. Grant applicants routinely exaggerate funding requirements, and misrepresent how funds were spent. Anecdotal, I know of at least two music-video related grants that didn’t even result in a music video.

6)      Better outreach. I spent most of my time as a musician on the Canadian Prairies, and FACTOR is misunderstood by almost everyone out there.

7)      Clearer granting application requirements – This is usually the number one barrier for people not applying for grant money. They see one item that doesn’t make sense and they say “oh well, I guess not for me.”  If Paper Bag has helped itself to 1.5 million dollars in funding, they should have to post their successful applications. What are they writing that the rest of us are missing? Success at granting comes largely from experience – knowing what can “count” as an expense, knowing what FACTOR wants to see in marketing materials and do on. If FACTOR is really interested in making funding merit-based, they would strip down their process even further so that the winners don’t keep their success alive by following their own hidden formulas and leaving everyone else to apply and win out of chance.

8)     No conflict of interest – I’m not suggesting that anyone on the FACTOR board is using their status to help get their respective labels FACTOR funding, but it looks really bad from an outsider perspective.

 WHAT NOW?
 
Three years ago, Greg Ipp from Unfamiliar Records stirred this particular “FACTOR is CORRUPT” pot (see here). If Unfamiliar could have put out a years worth of records for $60,000, including press, videos, tour support – imagine what he could have done with $1.5 million dollars?

In three years since Greg Ipp put his neck out there, nothing has changed. Bands line up for their turn in the exploitation line. The generic music this country produces is almost EXACTLY THE SAME as it was three years ago. It is as if we’ve lived the last decade in a time capsule. 

*Stephen Carroll was in Winnipeg’s great PAINTED THIN as has a pass for life. None of this list is meant to disparage the actual musicians involved – everyone is working within a system. The point here is that this system is open to corruption.
 

 

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