Luminate, the company that compiles the data used to build Billboard music charts, says it’s sticking by a controversial plan to change how it measures US physical music sales that some in the industry fear will mean underreporting of sales from indie music stores.
In a statement sent to indie retailers and music groups last Wednesday (December 13), the company said that after consulting with “all facets of the music industry… the consensus is that the current weighted modeling should be retired.”
Luminate currently uses a weighted modeling approach to determining physical music sales (vinyl, CDs and cassettes), under which it adjusts sales numbers from stores that report their sales to account for non-reporting stores.
The company announced in October that it would be retiring this system, in favor of a system in which it reports the numbers sent to it directly by record stores. Luminate says this will improve the accuracy and quality of its data, and has reportedly told partners that it will help tackle the problem of “organized efforts” to manipulate the data.
However, because not all record stores report their sales, some in the indie music field have raised concerns that this could lead to the underreporting of physical music sales.
In a letter to Luminate, Richard James Burgess, President and CEO of the American Association of Independent Music (A2IM), said that only a “small fraction” of physical music retailers, amounting to between 5% and 12% of all stores, have been onboarded and are reporting their sales numbers.
“Unless/until at least 75% of Luminate’s 642 identified shops are onboarded and reporting – repeatedly, durably, and with troubleshooting behind them – the weighted data modeling must continue,” the letter stated.
“Anything less undermines Luminate’s stated commitment to objective and trustworthy information. It compromises their product and disenfranchises independent labels and shops alike.”
Luminate’s own assessment of its sales coverage varies greatly from this estimate. In its statement Wednesday, the company said it has “93% coverage of the total US physical music market, including independent retail stores and all other strata, based on direct data reporting.” It also said that it is “already receiving direct data from 95% of US independent retail stores that see over 1,000 sales per week” and “anticipates that number to increase by the end of 2023.”
The music and entertainment data firm also plans to incentivize indie retailers to start reporting their numbers by sharing weekly physical sales data with all indie retailers in the US and Canada who are actively reporting their numbers.
The data-sharing will begin in the first chart week of 2024 (which begins on December 29, 2023), the same week the company says it will implement its new, direct measuring system for physical music sales.
“We are also working with retailers and the electronic point of sales systems in their stores to implement more streamlined reporting processes,” Luminate said in its statement.
“The consensus is that the current weighted modeling should be retired.”
It’s unclear, at present, whether Luminate’s new incentives to indie retailers to report their numbers, and its estimates of physical sales coverage, will assuage the concerns of the indie music industry.
In an opinion piece for MBW last month, Beggars Group US President and A2IM board member Nabil Ayers warned that “without accurate chart information, our artists will continue to sell thousands of albums at independent record stores, but the evidence of those sales will be unreliable and anecdotal and the inroads to growth will be narrower…
“While weighting… has never been perfect, the removal of weighting without sufficient stores to replace it creates a chart system that less accurately reflects the marketplace. The results will impact artists, labels and albums of every scale from self-released to superstar.”
However, Luminate says the switchover to direct reporting of numbers will result in more accurate sales data.
“The goal of this change is for us to present the most accurate data possible to the industry, which is always our primary goal. However, we also are here to work with the entire music industry and find solutions that make the most sense collectively for all parties.”Music Business Worldwide