The Wrong Side of History: Billboard's New Chart Policy

01/27/2012 08:10 am ET | Updated Mar 27, 2012

When is a sale not really a sale? When a third party decides you've paid too little for something. That's the perplexing situation that the music community is in thanks to Billboard's new policy on counting album sales. In brief, Billboard has arbitrarily decided that any album sold for less than $3.49 will not count as a sale -- during the album's first 4 weeks of release -- for the purpose of creating Billboard's Top 200 Albums sales chart.

You can read all the details about it in this L.A. Times article. This ill advised decision has far reaching impact because, for much of the industry up till now, what has charted on Billboard has been the most accurate gauge of how a song or album is doing. This reliance may very well change now, as Billboard finds itself on the wrong side of history, trying to cling to the remnants of a traditional business that relied on a middleman to dictate what is a hit.


Photo Credit: Hans Dinkelberg

Only since the 90s have we had accurate piece counts. Before the '90s, all of these numbers were hyped and manipulated. People in the industry used to joke about albums shipping platinum (over 1 million orders) and returning gold (meaning half the original orders were returned as unsold product).

With the introduction of SoundScan, the industry finally was able to measure what actually was selling. This was a move forward, but that was another era, another way of doing business. The sea of change that has swept through the industry has rendered trade magazines like Billboard much less relevant as success is now being measured in countless other ways. So this curious decision to disregard actual sales counts will result in Billboard becoming even less of a factor in determining the success of a record.

Billboard's Bill Werde defended it's move in an editorial that was quoted in the Times article as follows "Billboard doesn't want to control the marketplace. We just want to count it. But free or almost-free albums don't represent a marketplace."

But a book publisher can sell a book on special for $2.00 and it counts. Movie ticket pricing can vary widely, but it all counts when the weekly grosses are added up. But if a band sells an album for $1.99, that's not a sale? If Billboard really wants to address the problem of hype, why don't they instead base the chart on total revenue generated, rather than piece counts, like the film and touring business? That would level the playing field for independent artists who do a lot of business but aren't counted now.

Gaga was perfectly within her rights to price her album for 99 cents to launch her record. Loss leaders to help launch products similar to Amazon's offer occur everywhere in the marketplace. More than anything else, as Martens pointed out, Billboard's new policy really hurts smaller labels and independent platforms which need to price their albums according to their specific needs and now won't be counted.


Photo Credit: Natalia Castaneda

Let's consider a hypothetical situation with an artist who uses a traditional sales price of $9.99 for their album and sells 200,000 copies in its first week, good for #1 on the Billboard 200 chart. Another artist who opted to sell their album for a discounted price of $2.00 would need to sell a million copies of their album to even financially compete with the first artist. According to the new rules, not only would the second artist not have the number one spot on Billboard's chart, they would not even be mentioned for at least 4 weeks.

Everyone knows how difficult it is for a new artist to make it break out and get attention from the gatekeepers. That's why the viral nature of the Internet has been such a blessing...why Gotye is tearing it up without traditional airplay as of yet. So when Billboard decided to impose this "correction" on the market, it just results in hurting young artists, small labels and even established bands which are trying to keep their audience engaged by giving more value to their fans.

Werde also said that offering music for deep discounts "doesn't diminish the artistic merits of the music, but the music becomes a marketing tool. That's fine, but let's not call that an album sale."

Sorry, I'm confused ... I don't think that anyone is saying that a free album should count as an album sale but what's wrong with a low-priced album? It should be up to the label and artist how to price their music without regard as to whether it fits an arbitrary criterion. Trying to maintain a fixed price amidst the chaotic marketplace is not realistic and will ultimately fail. Products in every category are available at different prices...some smartphones are heavily discounted. Right now the Apple site shows three models of iPhone. You pay: $0 for an iPhone 3GS (8GB), $99 for an iPhone 4 (8GB), and $199 for an iPhone 4S (16GB). Each of them counts as sale.

One could argue that the music space, especially in the past 15 years, has become a very different place than the standard consumer market for products and services, even other forms of entertainment. However, the environment that artists are competing in today only compounds Billboard's misstep. With all the free and subscription based services out there - not to mention illegal file sharing - artists deserve more credit now than ever for selling an album, regardless of the price.


Photo Credit: Damien Basile

This underscores the need for new ways to gauge success, measures that take into account all the ways that an artist can connect with fans. Fortunately, there are already sites and apps measuring real impact in social media and correlating it with other, more traditional metrics: Views on YouTube, Big Champagne's "Ultimate Chart" and Next Big Sound contain valuable information far beyond pure sales data.

Billboard is on a slippery slope with its $3.49 price point and its "only the first 4 weeks" policy. Where does the qualifying end? Billboard should admit its mistake and retract this policy, or it will continue down the road toward being merely a repository for photos and press releases, and not be what we really need, an in-depth look at the changing business and a real barometer of what's happening.