Billboard Magazine Introduces Digital Charts

It's about 5 years too late, but Billboard magazine (once the bible of the music business) has finally introduced new digital download charts ranking the top songs in 21 specific genres, compiled from data gathered by Nielsen SoundScan.

Each week Billboard will include six 15-position charts representing digital sales, with rock, country, R&B/hip-hop and Latin running each week and two other genres rotating. All charts appear on billboard.biz, where Billboard's charts are refreshed each Thursday.

Billboard has had a general chart for digital songs and digital albums, but dividing it into different genres  is something really needed and too long in coming.

While chart position is all well and good, the real information that everyone wants to see are the sales figures. You can get these if you pay the hefty fee and subscribe to SoundScan (but who can afford a 5 figure subscription rate these days), but for physical product at least, you can still go to the Hits Daily Double and see the new sales chart every Tuesday. Be warned, it might not be pretty on some weeks, as sales figures can be really dismal sometimes.

Maybe Hits will also give us digital sales soon as well. We can only hope.

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Dismal Returns For Streaming

You'd think that a song popular enough to get tens of thousands, hundreds of thousands, or even millions of plays would generate some substantial income for the performer. You sell in substantial mass and get compensated accordingly. That's not the case, according to Billboard's annual Money Makers report.

It seems that the income to the artists from all those streams are shockingly low. Of the top 100 musical money makers of 2009, only 10 made more than $2,000 from interactive streams, with Beyonce topping the list with a mere $5,000!

What's more, only 25 artists made more than $1,000 from on-demand streams, with Michael Jackson topping the list with $10,000 (these figures are US only and don't include publishing).

But there's still some real money in digital album download sales. 13 artists generated sales of over $200,000, again led by The King Of Pop with $800,000, and another 26 made more than $100k. And single track sales pulled in the kind of money you'd expect a pop star to generate. 3 acts generated more than $1 million in digital track sales, with Lady Gaga leading the pack, and 33 others made at least $100k from digital single track download sales.

Streams from subscription services like Rhapsody actually paid off a little though, with 26 earning more than $100,000, led by Nickelback, Michael Jackson, and Taylor Swift.


So what does this all mean? Even though we think we've figured out how to monetize music in Music 3.0, it's still a moving target. There are still many holes in the system, with the artists still taking the brunt of any shortfalls that occur. Because even if subscription music takes hold in a big way and the income stream of the industry takes a big leap forward, there's still no guarantee that the money will find it's way into the artist's pocketbook.

Expensive Music Sells Slowly As Predicted

Last year when the the major labels finally got their way with variable pricing on iTunes, industry pundits were pretty unanimous about the idea being a poor one. Why increase the price of hit songs in the middle of the worst economic times since the Great Depression? Why increase the price for the hits to $1.29 when the $.99 was proven to be a workable model?

But that's not how major record labels work, who seem to have knack for doing the exact opposite of what's best for them, their artists, and their customers.

While the first month after the price increase already showed a decrease in downloads, the labels were quick with their spin, saying that revenue actually increased despite the lower sales figure. This is ultimately only a short-term business model in that revenue is not the end-all in Music 3.0. The idea is to expose the music to as many people as possible. A larger audience means more catalog sales, more concert attendance and more merch sales, so anything that lowers the sales numbers is counter-productive.

Now comes a backhanded admission by Warner Music's CEO Edgar Bronfman that the strategy was misguided, suggesting in his comments on the company's recent earnings call that if nothing else, the timing of the increase was poor. This coming on the news that iTunes digital track sales in December grew only 5%, down from the usual double digit growth even in the midst of the Christmas buying season. Bronfman also confirmed that Warner's digital sales growth had slowed to only 8% over the previous year, which was up 20% over the year before that.

Are digital music sales flattening as the market becomes mature? Yes they are and it was bound to happen. But raising the prices have appeared to accelerate the trend. It's all downhill from here until digital music subscription reaches the tipping point.