This week we made it to a major milestone at Family Records, when our artist Wakey!Wakey! made it to the #1 position on the Soundscan Heatseeker chart for new artists. (Grateful and honored!) For those of you unfamiliar with Nielsen Soundscan, it’s a corporation that collects and analyses music sales information from retailers (on and offline), and then sells this information on a subscription basis to magazines, record labels, publishers, and others for a nice little chunk of change annually. It’s regarded as the official method of tracking music sales in the US and has been so since March of 1991. Tracking physical sales happens through the scanning of barcodes at stores, and digital sales essentially track themselves by nature.
That all sounds nice and dandy, so why the title of this article? Because I think the era of Soundscan and it’s relative importance is coming to an end, and for several reasons.
Record Sales Are Only One Piece Of The Pie
First of all, in today’s and tomorrow’s version of the music industry you can’t determine how successful an artist is simply by looking at record sales. Other revenues streams, all growing in importance, are not taken into account by Soundscan. The unfortunate reality is that historically record labels often determine how much support they will put behind a record based on sales in the first few weeks. If a record is slow or dead in the water, it’s not uncommon that a label pulls all support and pushes another record with a better start instead. This is not only a shame and short-sighted, but also increasingly less smart of a business decision as soundscan metrics lose weight on the relevance scale.
Maybe indie sensation Surfer Blood ‘only’ sold 28K records in the past few weeks since their release (congrats to them, that’s awesome!), but they’re tearing up the road with their successful tours, they’ve had a few sweet synch placements that paid, they sell their merch on the road, etc. OK Go‘s album is selling modestly, but they’re killing it in endorsements and synch action. There is no way you can determine whether or not these bands are successful enough to keep supporting their record based on straight up music sales. The same goes for a bunch of other great bands with enormous potential and current overall success like Local Natives, Jukebox The Ghost, Crystal Castles, Morning Benders, and I can keep going.
One great and rare example of a band where it took their label Octone 2 years of working the record before it became truly successful is multi-platinum artist Maroon 5. Thank goodness Octone believed in the album and band enough to stick with it and work single after single. Needless to say, it paid off.
Album Sales Have Been Cannibalized By Single Sales
It shouldn’t be news to anyone reading this that customers have been skewing back to singles, in favor of buying full albums, since the emergence of digital retailers like iTunes. This was the case in the 1950′s, when only a singles chart mattered, and we’re right back there once again. How relevant is an album sales chart if fewer people buy albums?
Catalog Sales Are Not Valued Enough
Watching the Wakey!Wakey! sales analysis we can see that a good percentage of our customers choose to not only buy the current new album, but are also picking up one or several catalog items. On our own web-store we’re selling nearly one catalog item for every two purchases of the new album. Current Soundscan methods don’t appreciate the overall music sales level, since the album chart split an artist’s ranking out per album. If an artist has four records out, and you add the sales of each up to determine their position, the sales chart would look quite different.
Soundscan Is Incomplete And Inaccurate
Soundscan only measures sales for albums that are pre-registered, and sold at certain retailers. Many indie music retailers and mom-and-pop stores aren’t taken into account, and tour sales often go unreported as well. For certain bands of the indie persuasion this is a major blow to their sales figures. When The National came in at #4 on the overall Soundscan chart (congrats!) it’s entirely possible they could’ve been bumped up a spot if certain indie retailers promoting the record would’ve been taken into account as well.
Record Stores Are Disappearing, Shelf Space Is Shrinking
Soundscan figures inform the decision-making process for stores that sell music when it comes to which releases to buy and stock. With shelf space rapidly shrinking in the offline world these decisions are only getting tougher to make, and many bands are missing out on being available offline based on their soundscan numbers, when a more complete metrics picture could perhaps have them stocked after all.
At the same time, physical retail is losing in relevance as sales slowly skew more towards digital or physical sales online through Amazon, Insound and others. And in the digital world, who cares about shelf space? It’s unlimited!
How Can We Improve Metric Analyses For The Future?
Metrics are extremely valuable for an artist and their team. Metrics can determine tour schedules (We’re selling in Florida? Lets go play there!). Metrics can advice which song off the record should be the next single or music video (Track 3 is selling most? let’s base our next promotion around that one!). Metrics can help in nearly every decision an artist and their team have to make. My position is that Soundscan no longer provides us with the right kind of information at the right time to help in this decision making process, and further failing to evolve will turn it into a relic method for chest thumping executives.
The more we move towards digital sales, and let us give CD’s sold through brick-and-mortar stores another 3 years, the easier it will be to track all the relevant sales data. Even with today’s technology it shouldn’t be too hard to make some improvements. A few thoughts:
- Frequency/Timeliness: Why wait a week for the correct sales data? Why not have a “Living Chart” that is updated in real-time, and is always accessible online? We could still have a final count for the day and week for those needing some sort of “finish” number.
- Completeness: Provide bands and music venues with a way to report sales online as they happen. We can even make it an iPhone app with a credit card swiper and secure data transfer to make it even easier. This technology exists! Hook your webstore into reporting as well through a Topspin, Paypal or WordPress plug-in.
- Overall Sales: Lets create an additional chart for overall sales per artist across their entire catalog to show a more complete picture. Maybe James Taylor’s latest release isn’t destroying the chart right now, but you can bet he’s selling a ton of records across his catalog. Wakey!Wakey!’s main competition on the iTunes Singer/Songwriter chart is Tracy Chapman‘ “Fast Car”, which was released in 1988!
- Measuring An Audience: OK Go’s audience and customer base is many times bigger than their record sales can indicate. They can measure this much more clearly through their tour numbers (capacity of venue, tickets sold, income per audience member in venue sales, etc.), their video views (which translates into income through advertising), and more. We should have a chart for Music Videos that aggregates views across the major video destinations, and video sales!
- Internal Metrics: Measure your overall income split out by Tour Income, Record Sales, Advertising/Endorsements (through your deal with YouTube, or mailing list sponsor, tour sponsor, etc.), Merch, and Synch Placements, and use these internal charts to see what is working and what can be improved. Also measure your web traffic in great detail (visitors, mailing list, income per mailing list sign up, social network followers, etc.)
The music industry will become more and more integrated with the social media and technology industries, and through that greatly improve this aspect of their business by learning from these other worlds that are far more advanced in tracking metrics. Perhaps Nielsen Soundscan will evolve and be part of this growth, but if they’re not someone else will knock them out of their very cushy and profitable seat on top of the metric throne.