MBW Views is a series of exclusive op/eds from eminent music industry people… with something to say. The following comes from Nabil Ayers (pictured), the President of Beggars Group US, a board member of A2IM, and the author of the memoir My Life in the Sunshine.
Some context to Nabil’s comment piece: Last month, music market monitor Luminate announced that beginning Week 1 of 2024 (Billboard Chart Tracking Week beginning 12/29/23), its physical sales data (vinyl, CDs, cassettes) will reflect sales as reported directly by independent retail stores in the US and Canada. Prior to this change, as explained by Nabil below, Luminate’s data – which powers the Billboard charts – has relied on a ‘weighting’ system methodology to estimate sales of physical music sales in the States.
MBW understands that Luminate has told partners that it’s making this change to improve the accuracy and quality of its data – and, notably, to tackle what it sees as “organized efforts” from some parties to try and manipulate the Billboard charts via its current indie retailer weighting system*. Luminate is also understood to have told partners that, as of November 15, it is already receiving direct sales data from 95% of US independent retail stores that sell over 1,000 units of physical music formats per week, and is working to continually increase the number of indie stores reporting their numbers.
However, as expressed by Nabil, some parties in the business – including A2IM and now Beggars itself – assert that not enough independent retailers across North America are ready or able to report their direct data to Luminate for the start of next year. A recent letter written by A2IM to Luminate last month, which then entered the public domain, claimed that Luminate’s current reach (in terms of the total number of US indie stores selling physical music vs. the total number of US indie stores ready to report their sales data to Luminate) sat somewhere between 5% and 12%.
Two more important things:
- * Obviously there is zero suspicion of Beggars Group itself trying to manipulate the current Luminate weighting system for Billboard chart gains. MBW is happy to go on record to say Beggars – home to XL, Matador, Rough Trade, and 4AD – just ain’t that kind of company;
- We’re guessing here, but: (a) If Luminate is truthfully claiming that 95% of US indie stores selling over 1,000 units of physical music a week are already able to report their sales, but (b) A2IM is truthfully claiming the volume of total US indie record stores reporting to Luminate is as low as 5%-12%… it therefore stands to reason that (c) it’s a significant network of smaller US indie record stores (i.e. those selling fewer than 1,000 units per week – though possibly also selling merch, second-hand vinyl, comic books etc.) that are the most heated topic of debate here.
Okay, with all that laid out, it’s over to Nabil…
On October 16, Luminate, the company that compiles the music consumption data which feeds the weekly Billboard Charts, announced that effective December 29, 2023, it will discontinue its long-standing practice of weighting sales from independent record stores. And while Luminate has identified new stores for onboarding at a promising scale, they have not brought even a fraction of those stores on board. While weighting—a process of bumping up sales numbers from one reporting store to account for sales from other nearby non-reporting stores—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.
Soon after Luminate announced the change, the coalitions that represent hundreds of independent record stores wrote letters demanding that weighting remain until a better reporting solution is put into place. The trade organization A2IM (of which the author is a board member) stated in a letter: 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 results will impact artists, labels and albums of every scale from self-released to superstar.”
According to the Luminate U.S. Year-End Music Report for 2022, 43.5 million vinyl records were sold last year, an increase of 4.2% from 2021. Adding in CD and cassette sales brings the total to 79.9 million physical albums sold. While the majority of these sales occurred at big box stores like Walmart and online retailers like Amazon, Luminate is also set up to receive data from Bandcamp, artist and label direct-to-consumer webstores, and from a subset of independently-owned record stores across the country. In recent years, however, the number of independent record stores reporting their sales has dwindled, already calling into question the integrity of the charts. The end of modeling this data jeopardizes not only the inclusion of non-blockbuster albums on the many genre-based charts that live outside of the Billboard 200, it also kneecaps the earliest data that precedes a new artist entering the charts at all.
Here’s how I’ve been told that weighting works in theory: If there are five independent record stores in one city and only one of them reports to Luminate, that store’s sales are increased. The numbers can fluctuate, factors like an artist performing a live in-store can come into play, and neither the reporting stores nor Luminate subscribers are made aware of the exact weighting multiple, only of the fact that it exists to control for non-reporting stores. Again, it’s not perfect, but much like polling or any data modeling approach, it sells enough of a story and tells it well enough that it serves everyone inside and outside those directly participating.
Much like any poll, it’s difficult to extract accurate information without including every single data point—a near-impossible task in the ever-changing music industry. Luminate claims to measure 23 trillion data points from thousands of artists, with core data from more than 500 authorized partners across digital, retail and airplay. But as the number of independent record stores increases—one estimate claims that there are 1,600 across the United States—the number of stores reporting to Luminate – only 72, assuming 100% participation in any given week – represents a smaller and smaller fraction of the actual marketplace. This begs the question: Why are so few stores reporting?
Many stores complain of expensive software, labor-intensive data entry, and an ever-changing set of rules.
“We’re not reporting at all right now because our POS [point-of-sale] system kind of aged out,” says Sandy Bitman, owner of Park Avenue CDs in Orlando. “We’re switching to a system that does have a function to report to Luminate, but we’re being told that we still have to manually send the report. There are some stores who use Shopify, who have to fill out an Excel grid themselves and then send it to Luminate. The rule changes that they’ve [Luminate] talked about are to protect the integrity of the data, but if stores can manipulate the data, that defeats the purpose.”
“Having a top 10 album on the Rock Albums or Alternative Albums chart won’t alone secure a late-night TV booking, but along with press, radio, streaming, concert ticket sales and other information, that chart number is part of a bigger picture.”
In the UK, the Official Charts Company (OCC) claims to capture 98% of album sales from sources that include hundreds of independent record shops, and that they aim to recruit any store in the UK which sells significant numbers of audio or video products per week. Granted, the U.S. is significantly larger than the UK, but if OCC has figured out a way to make it easy to report, so should Luminate. Perhaps that means a more universal software model with phone support, or Luminate flowing through a portion of its subscription income to outfit independent stores with the systems that allow them to report more easily, and offering them access to the marketplace data—the very data that drives the charts.
“If you’re selling my information,” says Sandy Bitman, “then you should be helping facilitate my ability to give you that information. And so far, they’re not.”
I’m viewing the current situation from two different angles. In the spring of 2000, my business partner and I relocated our tiny Seattle record store, Sonic Boom Records, to a larger, more central space, and we purchased a new point of sale computer that allowed us to report our sales to SoundScan for the first time. Elliott Smith’s album Figure 8 wasn’t a commercial hit at the time, but once our sales counted, the album immediately entered the Seattle top 10. As we went on to sell hundreds of copies of other albums, we began to understand the impact that our small, specialized shop had on the greater market—and in some cases, on an album’s ability to grow beyond Seattle.
Now, as the president of a group of independent record labels, my company pays a significant sum each year to access Luminate’s data, which we provide not only to our artists, but also to our staff to help them make strategic decisions and communicate success stories. Having a top 10 album on the Rock Albums or Alternative Albums chart won’t alone secure a late-night TV booking, but along with press, radio, streaming, concert ticket sales and other information, that chart number is part of a bigger picture—it’s a way for us to demonstrate to the outside world that our artists matter. It also helps build a sales story to get artists stocked in the Targets and Barnes & Nobles of the world. 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, much like it would have been before SoundScan started in 1991.
“For the Billboard consumption charts to be as accurate as possible, it’s essential to include independent record stores: the outlets at which consumers are investing the greatest amount of effort and spending the most money to demonstrate their listening habits.”
As vinyl sales increase, the growth leans towards superstars and catalog: Taylor Swift occupies an impressive 6 spots of the 20 vinyl best sellers in 2023 so far, and between her albums sit perennial sellers by Fleetwood Mac, Pink Floyd, and Michael Jackson. The newer, independent, and/or developing artists that do break through do so with the support of independent retail. For the week ending October 19, 2023, Sufjan Stevens held the #5 position on the Current Rock Album chart. Boygenius was #3 on the Vinyl Album chart. And Laufey had two albums on the Current Traditional Jazz Albums chart. Lana Del Rey currently has the #7 vinyl album so far this year with almost 190,000 copies sold in total. In fact for the week ending October 26, Blink 182’s One More Time debuted at #1 with over 75% of its total consumption on the album sales side, and approximately 13% of that share coming from indie retail; that may not sound like much, but it’s almost four times the reported sales from big box stores on the same release. It’s also the difference between a #1 and #2 record.
For the Billboard consumption charts to be as accurate as possible, it’s essential to include independent record stores: the outlets at which consumers are investing the greatest amount of effort and spending the most money to demonstrate their listening habits. Weighting is not the ultimate answer, but neither is its removal. The end of weighting cannot happen arbitrarily, it must only be because the sales from a majority of record stores are reliably reported and counted equally, signaling the obsolescence of an antiquated, less-reliable system.Music Business Worldwide