Billboard’s New Math: 1,500 Streams = One Album Sale

Billboard refuses to count any album priced below \$3.49, which dramatically affected historical counts for artists like Lady Gaga and Taylor Swift.  Now, Billboard’s charts will make even less sense.

Effective December 3rd, streaming will count in Billboard’s Top 200 album ranking, a former bellwether of sales accomplishment.  “The Billboard 200 albums chart will premiere its biggest upgrade in more than 23 years, transforming from a pure sales-based ranking to one measuring multi-metric consumption,” Billboard just announced.

“The updated Billboard 200 will utilize accepted industry benchmarks for digital and streaming data, equating 10 digital track sales from an album to one equivalent album sale, and 1,500 song streams from an album to one equivalent album sale.”

The move follows an overhaul of the singles charts last year, which now integrates streaming alongside song download sales. According Billboard, plays from a range of streaming services will count, including Spotify, Beats, Google Play, and Xbox Music.

Image by Andrea Allen, licensed under Creative Commons Attribution 2.0 Generic (CC by 2.0).

32 Responses

1. Anonymous

“Billboard’s New Math: 1,500 Streams = One Album Sale”

That’s not only Billboard’s math, it’s also real-life math.

• Anonymous

And here’s what that ‘math’ says on a good day:

1500 x 0.5 cents = 750 cents = \$7.50

but maybe more like

1500 x 0.3 cents = 450 cents = \$4.50

1500 x 0.1 cents = 100 cents = \$1.00

• Anonymous

“oh then there’s YouTube […] 1500 x 0.1 cents = 100 cents = \$1.00”

Fair enough, that should be 15,000 Streams = One Album Sale.

Do you call Billboard, or should I?

• McG

Quick math correction: 1500 x .1 cent = 150 cents = \$1.50, not \$1. Just sayin…

2. David

150 streams = 1 track sale seems reasonable enough. Most albums these days have more than 10 tracks, so arguably 1500 streams = 1 album sale is giving streams too much weight, but then again most albums will have tracks that are usually skipped!

• Peter

10 tracks sold individually = \$12.90, which is a reasonable price for an album. When you buy the whole album you get the album tracks that you wouldn’t buy individually.

3. Paul Resnikoff

Sorry, what albums are we actually talking about here? Isn’t this like saying that going to the water fountain 60 times is like buying a 6-pack of Poland Spring?

• Anonymous

“Sorry, what albums are we actually talking about here?”

Not 1989. 🙂

Which, btw, begs the question if it makes sense to include streaming at all?

• GGG

Why wouldn’t it? Some people sell a ton of vinyl, some don’t even make any. Some sell a tiny amount of CDs, some find a way to sell a ton. Just because Swift isn’t on a platform (which she is, just not Spotify) we should discount it? Sounds a bit stupid. Also, she’ll still win, don’t worry.

4. FWIW

This change is the direct result of pressure put upon Billboard & SoundScan by the major labels – led by Universal. Can’t be mad about it. It’s all in the game.

Why, you might ask? Afterall, the majors already dominate the album charts right? Yes, but who is to say what is enough? Those pesky indies have been making headway over the last few years and this will help stifle that some.

The majors specialize in pop singles (Meghan Trainor, Tove Lo, Ariana Grande). Indies tend not to (with the notable exception of Taylor Swift, think Arcade Fire, Bon Iver, Arctic Monkeys, Vampire Weekend…). Pop singles lead to far more streams than album sales. By pressuring a publication that they have a lot of influence with (ad sales) using a metrics service they are the dominant customer for (SoundScan) they decide that they want the album charts – which are great PR tools – to reflect more of their music.

With Billboard desperate to answer their biggest customers’ demands it’s not surprising that the underpinnings of this new chart don’t necessarily add up. They just needed to come up with a formula that made the old (and still) bosses happy.

5. FarePlay

These are the subtleties that people like Daniel Ek play upon to create legitimacy for streaming and Billboard lamely complies. Am I the only who has noticed a trend with Billboard that often it is anti-music?

No question there needs to be a scorecard for streaming music, but to co-mingle the two makes no sense, unless you believe the ONLY future for music is streaming. Which begs the bigger question, when there is clearly an audience for CDs and value for emerging club bands to sell CDs at shows.

So whose promoting CDs. The labels?

• GGG

I agree it’s kind of weird combining them, but at the same time it’s all about money anyway. I mean, if you’ve been in the industry more than 10 minutes you know a fairly big chunk of record sales are bullshit. My first job in the industry was interning at a major label. I saw plenty of giveaways shipped with the UPC fully intact, no punch. Not to mention a slimy producer I worked for a couple years later who gamed the system with his millionaire friend’s shitty band to get a high single charting. So if 1500 is averaging about 8-9 bucks, might as well count it as a sale.

But you also really overestimate CDs’ demand. Which is why people rarely promote them. Out of the last 50 (small) bands I’ve seen, I could probably count the number I’ve seen selling CDs on two hands. And the number of people I’ve seen buying or walking around with a CD on zero hands (which is not to say I think not one person bought a CD, just that it’s very, very rare). More sell vinyl now, or at least have it for sale.

Even when bands I work with go out on tour, the only real solid market for CDs (besides members’ hometowns) is the deep south, in places where I’m not even sure if they know what the internet is and/or the average age of the crowd is about 45. It certainly doesn’t hurt a band to sell CDs, but people just rarely give a shit anymore.

PS-The most any band I’ve worked with made from selling CDs on tour was almost a year and a half ago doing the “pay what you want” gimmick. Which kinda shows that the value in CDs at this point isn’t the CD, it’s supporting the act. But even using that as a vehicle for support has seemed to dry up.

Ari, if you read this, what are you CD sales like on tour?

• FarePlay

If in fact that’s case, it is another bad indicator for the future of music. Why? Because it eliminates the impulse buy and another valuable touch point between the artist and the fan. Unless we’re back to the free death cycle, where the fan goes to Spotify or another free streaming service legitimate orbotherwise to hear the artist.

Touring has always been an expensive undertaking at the club level, but the payoff was record sales. There was a time when labels supported those artists they believed could make it and would invest in 3 or more releases often underwriting tours as well.

With piracy, small airplay payouts and loss of recorded music sales, we’ve deincentivzed the industry and private parties from investing in talent. To me this is a lose, lose situation.

• An Indie

Respecting your desire to see a return to sales for music, I feel compelled to say that it isn’t streaming or streaming companies that are the main culprits in devaluing music. It’s the lazy, uninformed, plain derelict or bought and paid for (owned by major labels) distributors who sign off on these licenses that return discounted per play royalties with the services without so much as half a fight. That’s who everyone should be holding accountable! YouTube puts out a one deal for everyone license but who says these distributors have to sign it. Spotify royalties are for shit…well, who the hell signed the deal? Etc., etc.

The majors set the terms by agreeing to lowered royalty rates in exchange for huge, up front deal fees, minimum revenue guarantees (not tied to performance) and equity positions. They don’t share any of the money that comes via these other avenues but in exchange accept lower per play royalties that do get passed along to the distributors and to the artists they’ve signed. We should all be long past accepting when services say, “we’re paying you the same that we’re paying the majors”. Bullshit and we all know it yet the distributors keep signing the licenses without a peep of resistance.

Take THAT on as your fight, strip that undermining of the per stream royalty and THEN the streaming business could be a very lucrative prospect for all artists and indie labels.

• FarePlay

You’re not going to get an argument from me on any of this. Having said that, my expectation is that we’re on our own and that is far more real than the future of music is streaming.

• Alfie

Digital distribution is not just a pass through situation. Not that it is or isn’t worth the same as physical in terms of dist. fees but you cannot be in contact with all the services, marketing and leveraging your titles on your own. There are direct relationships and an abundance of effort feeding through artist’s official Spotify accounts, Facebook pages, YouTube channels, iTunes front page positioning, AdWords, Promoted posts all with smart links feeding analytics and driving traffic ever more efficiently toward sales, follows, likes, etc. The number of vendors and opportunities to get an “end-cap” require a service of value. As far as their negotiating these deals, I do believe they are built to expire at some point and will be renewed with far stronger negotiating leverage on the next term.

• An Indie

@Alfie, all of what you list is certainly the value proposition that digital distributors have to sell to the labels and artists that they sign up but in truth most of the well known digital distributors have hundreds or thousands of labels and in reality can’t do much more for each individual label or artist than push a button delivering their music into the service. Then, when certain tracks reveal themselves to have an audience due to the hard work of the artist, the manager and the label the distributor hops on to assist and claim credit that all of what you list has worked. For the most part it’s a hustle covering up the dereliction of the single most important thing that these distributors could have done for the labels and artists they represent: negotiate licenses that return value for the music!

• GGG

Eh..I agree and disagree. If your complaint is the impulse buy, why’s it matter if it’s a CD or other merch? I do understand your stance on the “tshirt argument” and there’s certainly some truth to it, but if you work with developing acts, selling records is not the most important thing. Getting people to give even half a shit about you is by far the hardest and most important problem artists face.

People’s value in product has just changed, and you really can’t fight that effectively too long. It’s one thing to try and get people paying for DLs, it’s another to try and bring back a physical product. We got lucky with vinyl, but as you know, there’s a bit more intrinsic value to a record than a CD. Not to mention, based on some studies, people just seem to find value in experience now more than things, as well, especially regarding music. It’s not really about your record collection anymore, it’s about what shows you’ve seen, or what festivals you’ve gone to.

• FarePlay

GGG, if only there were a way to adequately monetize more artists following your marketing plan. Who can argue that building committed followers is the key, the problem is we’ve stripped these guys of the ability to make money.

It really comes down to where you are in the discussion. You’re on the side of making it work and being resigned to this is what we have to work with. Where I believe it is terminally broken and we need to find a different model. Streaming doesn’t appear to be a viable business for the business owners or the artists. It’s a cash out business, as proven by Tim Westergren, who cashed out as fast as he could.

• GGG

The labels should have plenty of power to tell Spotify to get rid of their free tier, or at least significantly weaken it. I’m 100% for that and find it stupid it wasn’t done from the get-go. But you’re right, I DO think the theoretical idea of streaming is the way to go; i.e. monetizing almost literally every single time someone plays a song. But I am certainly on board with any pro-artist changes to the current model of it.

And while I’d like to know in more specifics exactly what they meant by “pay rates will not increase” it’s a little disconcerting to hear that’s their stance. But as I get some streams here and there that pay at a 1cent or more rate, if that’s the top and we can just get the average closer to that, I think that’d be incredible for recorded music income. But yes, there needs to be a much bigger push for subscriptions. Which is also why I will gladly shift my pro-streaming stance to Deezer if it fares better in the US.

But as for a whole other model? I don’t know what’s left, really. The whole world is becoming 1s and 0s, how could we possibly stop music from following suit? Hell, it already did so on physical product, with CDs. And especially since you can still get to the heart of music in live shows, so it won’t go away. And the day people stop going to live shows is the day the world ends.

• wallow-T

In the one last CD store in this college town: over the last two years there has been a collapse in the numbers of younger people I see shopping in the store. (By younger, I mean: under 40.) The majority of the shoppers now have gray hair. My younger (under 40) co-workers look at my like I’m from Mars when I come back from lunch with a few CDs in my hand.

At the folk shows I go to, CD sales appear to be drying up. There’s no longer a big line at the CD table. And folk shows aren’t exactly a young audience.

My wife’s recent Mac laptop doesn’t even have a CD slot.

I still love CDs: I think they sound better, and I bought about 10 this month, split between new and used, mostly mail-order. But I only know one other person (also a gray-hair) who still buys significant numbers of CDs.

• FarePlay

We’re losing the sale of CDs not because people no longer valued them. We lost CD sales because the message from the industry is that they are value less. We’ve been experience this since Napster. It’s a peer pressure deal. Because how can a young person or anyone without an understanding of the consequences of their decision argue for paying for something they can get for free?

“Your an idiot to pay for music.” If I didn’t understand the consequences of not supporting artists and had idiots running around saying ‘there’s more music than ever’ I probably wouldn’t pay either.

6. Chris H

Interesting to include streams. Streams coming from sources that are fully or partially owned by the labels, with no independent verification possible.

With their history, everything should be on the up and up, right?

7. DNog

So how does that work with singles? It just says 1.500 streams from an album equals one album. So if Maroon 5’s song Animals gets streamed 150 million times that equals to 100,000 album sales? What about those “shock” albums like Weird Al that everyone goes to listen to it but hardly translates to album sales? Now he’s selling hundreds of thousands of records? Streaming as of now is majority ‘free service,” how it can relate and justly equal out to physical sales which is what Billboard is originally based off of?

8. RAA

Here’s the new math

2014 first 6 months —-streaming: \$859 mil (up 28%)
2014 first 6 months —- physical: \$898 (down 14%)

source: RIAA

2014 full year prediction —-streaming: \$1.959 billion (up 28%)
2014 full year prediction —-physical \$1.670 billion (down 14%)

2015 prediction: STREAMING WILL BE KING

#1 Streaming: \$2.5 billion (up 28%)
#3 Physical: \$1.5 billion (down 14%)

• DNog

Is there a point to your obvious rambling of the same obvious math over and over again??

• JTVDigital

It’s just a way to measure/translate streams into unit sales for accounting it in charts, nothing to get mad about really.

9. Amplefire

In other words, there is a lack of moral, ethical consciousness among these “under 40s” who refuse to give adequate financial support to their society’s working creative class of copyright owners. A common thread I’ve noticed in these discussions is that the only people who care about not getting paid are those who are not getting paid.

If that’s the case, then it’s clear we have far more serious issues to discuss in these forums — such as how to intervene and heal a massive sociopathic segment of society! Instead, we keep telling each other that these sociopaths can’t be reached and reasoned with. Can’t even get them to buy a CD with superior audio files, artwork, photos, lyrics, opportunity to support and finance the artists they love listening to in the most effective way possible… jeez, talk about a hard sell and hard to please!

That’s what I call spoiled brat syndrome. I can just hear Eric Cartman ranting and raving to his mother about how lame CDs are and how all the cool kids steal it from Youtube. Suffice it to say that delayed gratification is not one of Eric Cartman’s attributes. I’ve even noticed my elderly parents falling into similar patterns since they got sucked into their iphones and ipads.

Why can’t this issue be framed like any other big issue of the day — climate change, renewable energy, economic inequality, the occupy movement, etc? Perhaps musicians should all be banning together under a massive “peace, love and fair wage”movement, 60s style?” Perhaps if the one thing all musicians could agree on is the necessity for fair compensation for their work, maybe audiences then the industry will change around those values and new expectations?

Sound idealistic? Well, aren’t artists and their fans supposed to embody a bit of idealism? If we can’t all get behind an “all you need is love” banner today, there isn’t a chance in hell of society righting any of its wrongs as a collective. All progressive achievements happen when people take charge as individuals in mass numbers.

It’s strange to me that young people are so retrospectively aware in terms of fashion, mimicking the sounds and production of decades past (copy and paste, essentially)… and yet, the consciousness, the sense of responsibility and empowerment to change the world they’ve inherited…well, I fear we are quickly returning to the cave — hunched over primates looking at phones while walking into traffic looks more like de-evolution, you know?

It’s as if society’s main sense of empowerment has become largely a superficial ideology, realized through the materialism of technology and free access to what we love most about the technology. This addiction to the gadget’s “free” nectar comes at the expense of fellow human beings and compensating them fairly. But who cares about the next door neighbors, right? What value are they unless I can use them for my own personal benefit? If I can steal fruit off their trees from the public sidewalk without them noticing, who cares? Why tip the waiter if it goes into the tip jar when his back is turned? (yes, a George Castanza reference! 🙂

It’s no surprise we still find mass support for sweat shop factories with little revolution beyond lip service in support of local cottage industries. Who cares about the treatment, conditions and wages of those people abroad as well as low pay and lost jobs at home?

In this new age of the selfie, narcissistic tendencies run high. As we all know, the full blown narcissist has a near impossible time appreciating the plight of others. That’s a big part of today’s self-aggrandizing movement in music. I heard a song on the radio the other day about wanting to be a billionaire so badly, and I almost threw up! It was the most embarrassingly superficial lyrics I could ever imagine writing. There is no shame in narcissism.

As long as the Great American Illusion is kept alive one way or another, most Americans couldn’t give a rat’s ass about who pays a fair price for anything. As long as there are fancy malls for window shopping with Apple stores in them, free wi fi and Starbucks, the illusion will be long and hard lived. Take away consumer credit, however, and it all falls apart. Only 1/3 of Americans can actually afford their lifestyles with the money they earn. A nation of debtors has to be a nation of thieves somewhere down the line…

“The revolution will not be televised. The revolution will be live.” Gil Scott-Heron