Ah, remember the old days? Back when the Billboard 200 albums chart was as simple as adding up the receipts for thousands of different record stores? Well, to quote Ice-T's under-appreciated hardcore band Body Count, "Sh*t ain't like that." Take this week, for instance: I've gotten more than a few questions about Billboard's decision to count the Lady Gaga albums that Amazon.com is selling for $.99 in the tally for the Billboard 200 albums chart next week.
As I told the Associated Press earlier this week, Gaga's campaign represents a watershed moment in the marketing and release of a superstar album. There have never been so many potential marketing and distribution partners for an album release by an artist of Gaga's magnitude. She is choosing -- I would say wisely -- to embrace many of them. Her music is being marketed in-game through a relationship with Zynga. It's being given away en masse to fans buying mobile phones with two-year contracts at Best Buy. And of course Amazon is using the album as a loss-leader to drive awareness of its music and cloud-related services.
Every week it seems Billboard has new market realities to consider as they relate to our charting policies. In the hope of clearing up misinformation I've seen around the web -- Britney fans, I'm looking at you, or at least at the evil ones who keep cursing me on Twitter without asking questions -- I'll share a few guiding dynamics, as well as some specifics for this week.
Most importantly, I don't believe in changing or adding a rule in order to affect that week's charts. Now I know right away some of you -- again, Britney fans, we're communicating here -- will ask about what happened three-and-a-half years ago during the week of Britney's "Blackout" album release. In that case, Billboard had a standing policy against including releases that were only sold through one retailer in our chart.
The Eagles released their "Long Road Out of Eden" album exclusively at Wal-Mart, a retailer that had not previously reported its exclusive titles to Billboard and Nielsen SoundScan. At the last minute, Wal-Mart, under pressure from the Eagles camp, reported sales figures, and it became clear that the Eagles had sold nearly twice as many copies of their album as had Britney. The powers-that-be (of which I was not one at the time) decided to make a policy switch because they felt the best decision was to allow for the most accurate chart. I'm not going to go back and second-guess that, but I will repeat: I don't believe in making a policy change that will affect the same week's charts.
Of course, that is not the same thing as saying I don't believe in making a policy change. We consider them and make them all the time, and this week may prompt us to do just that. But it won't be any simple decision.
Billboard looks for consumer intent when it comes to counting albums. So, for example, if an artist bundles an album in with the purchase of a concert ticket, we insist that there be a voucher for a physical album or a download code for a digital album, both redeemable by a third party. In the case of non-music items -- T-shirts, phones, vitamins -- that are bundled with CDs, there is a requirement that that non-music item be made available both with and without the CD, with the CD option costing reasonably more than the option without the CD. In these instances, the fan has not simply been spammed with music they may or may not want, but has made an active choice to acquire the music. This has been our stated policy. And this is why, for example, we will not count the albums that Best Buy has given away this week, as there was no clear indication that the people receiving the album actually want it, as opposed to simply wanting to buy a phone. As for that phrase "reasonably more," I'll be spending some time thinking about defining that more clearly.
We have never had a policy as it relates to pricing threshold of an album apart from a promotion. Therefore,
I am predisposed against making a rule change to affect this week, even if I thought that ultimately we should have a pricing threshold. That said, I'm pretty far from certain it makes sense to consider pricing in such a way (although I encourage your comments below -- I will read them all closely and respond to new ideas).
For starters, market dynamics are shifting so quickly. Who's to say that in three years or three months or even three weeks that the accepted value of an album won't be .99 cents? I realize that's an alarming (and unlikely, at least in weeks or months) thought for many of you, dear readers. But the decline in the perceived value of recorded music is not exactly a secret in 2011.
Further, just looking at current market conditions, should an album that sells for $9.99 count twice as much as an album that sells for $4.99? How about on iTunes: Should a $1.29 track count twice as much as a $.69 track?
I'm inclined to say no. As I said, my mind isn't made up about this as it relates to considering this policy in future weeks. I'm certain I'll have many conversations with Silvio Pietroluongo, our Director of Charts, about this topic. But
I generally regard Billboard's role as being a market archivist and not a market activist. If we set an arbitrary pricing threshold, we are affecting business and not simply reporting it.
Now, I keep hearing from a small handful of folks that if Billboard doesn't make a policy change, other labels will convince retailers to sell big-release albums for $.99 as well. To that I say: Good luck. As we reported today, Amazon.com has spent literally millions of dollars buying the Gaga album from the Universal Music Group and Interscope at the standard wholesale cost of $8.40, and then selling it to fans for $.99. I can't think of another time a retailer took a loss like this, and I wouldn't expect it to become any sort of a norm. But if a label can convince a retailer to do that, more power to them. From a pure market perspective, it's a win for everyone: The label and publishers get paid in full, the artist gets his or her full royalty, the retailer presumably gets the marketing boost they wanted, and -- most importantly -- the fan gets the deal of a lifetime.
I know some of you, especially those in retail, will bristle. But I just don't believe it's Billboard's role to place arbitrary speed bumps in the way of music's falling price. Do I personally believe a fan should want to pay more than $.99 or even $9.99 for an album from a favorite artist? Yes, absolutely. But that's a challenge that is presented to you by the market, and not by our charts.
Keep in mind, for an artist like Gaga, album sales ultimately represent a small slice of her revenue pie. What's most important to Gaga is that fans are familiar with and excited by her new material. That way she can make money leveraging those fans, be it through a partnership with a brand that wants to reach said fans, or concert ticket sales. It isn't inconceivable to think of a day soon when Gaga and other superstar acts will use radio and social networks and giveaways to create massive international hits -- not defined by sales, but by the number of fans that are familiar with and excited by the music.
Here at Billlboard, we welcome the challenges, and enjoy thinking through these policies and this crazy business we all have the bug for. Billboard has long innovated its policies and its charts, and we're doing it more now than ever. In the past months, we've added new data streams to be included in our signature Hot 100 singles chart; launched the Uncharted ranking to track the top artists who haven't previously cracked a major Billboard chart; and launched the Social 50 to track artist trends on Facebook, Twitter and elsewhere in the social web. That's just to name a few.
I expect in the next year or so our charts may be radically different than they are today. Perhaps the Billboard 200 albums chart will include streaming music and other abstractions from the cloud. Perhaps it will include a suite of apps, or a hologram beamed into your consciousness or a pill that makes the album play in your esophagus for a week. Whatever the case, Billboard remains, as ever, wholly and enthusiastically committed to being the book of record when it comes to fan activity in and around music.
Bill Werde is Billboard's editorial director. He knows that most Britney fans have only goodness and love in their hearts.
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The constant shade at Britney fans
