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The “Zero Effect”: Do New Consumption Charts Penalize Artists Windowing Streaming and Compilation Records?

26 Mar
(Posted on Hypebot, March 19, 2013)

Although we can’t tell how consumption charts are weighted (as far as I know that information hasn’t been released publicly), it’s pretty clear that if you are not on streaming services–meaning you have zero streams–you will be penalized in the chart.

I picked the consumption chart for the first week of Taylor Swift’s October 27 release of the 1989 juggernaut to try to measure how the consumption chart reacted.  The choice was admittedly cherry picking, but with a purpose:  Taylor’s sales were historically significant and her reported streaming should have been somewhat muted given Spotify’s well-publicized decision to reject the record on the artist’s terms.  This would potentially yield good benchmarks for testing the consumption chart at the margins as well as the more bread and butter titles below the top 10.

Based on data for the week ending November 2, 2014, Taylor Swift’s first week sales were so strong it probably doesn’t matter that her streams were somewhat lower for the consumption chart.  At #1, she outsold the #2 NOW 52 title by 10:1, and NOW 52 outsold the #3 Sam Hunt album by 10:8–but Sam Hunt had 4 million streams that punched up the chart position.  NOW 52 had zero streams because it is a compilation record.

Compilation records and soundtracks do not get credit for streams because they have no streaming rights.  This is true even if the music services allow playlists–or possibly create playlists themselves–using the compilation or soundtrack brand in the metadata with the track listing of the underlying tracks.  These playlists work because the individual tracks are already available on the service under direct license from the label or artist licensing the tracks to the compilation or soundtrack. (This is the kind of free riding that was the heart of Ministry of Sound’s recent lawsuit against Spotify and probably why Spotify settled.)

The “zero effect” is much greater further down the chart, however.  In the same week of November 2, Frozen: The Songs, a compilation record, got credit for zero streams and 10,723 albums sales for a chart position of 49.  Blake Shelton sold 8,735 albums but got credit for 930,928 audio streams and a chart position of 44.  The same week Iggy Azalea sold 4,947 albums but got credit for 5,060,617 streams for a chart position of 25.  In other words, Frozenwill never have any streams because compilation records typically do not get streaming rights, and got a much lower chart position in spite of selling over twice as many albums.

If you compared based on album sales alone, the Guardians of the Galaxy zero effect soundtrack would have entered the chart at #25, not #40, Sam Smith would have been #15 instead of #6, Bob Segar would have been #23 instead of #34.  Another zero effect soundtrack is Now Disney 3 that would have been #40 instead of #59, and U2’s Songs of Innocence would have been #64 instead of #94.

Seasonal records such as Christmas albums are also penalized.  The Nov 2 chart showed that based on album sales alone, Home Free’s Full of Cheer would have entered the chart that week at #66 instead of #104.  While the title had 26 streams, that was a sufficient penalty to cost the record 38 chart positions.

Conclusions?  Charts are relative beasts to begin with, and the consumption chart won’t keep a phenom like Taylor Swift from dominating the top position.  Measuring streams probably isn’t enough to affect the top 10 or the top 5.  But for records that are compilations, soundtracks, seasonal or other specialty titles that either aren’t allowed a streaming audience based on contract, are windowed, or haven’t found that audience yet for another reason, the consumption chart penalizes high sellers that are not present or are not credited with streams on streaming services.

If chart position matters to your record, then this should be of concern to you as the zero effect creates an incentive to stimulate streams for chart position–assuming you can get credit for streams.  Some would say that the more streaming, the lower the sales.  Without getting into cause and effect on that issue, it certainly can be said that the lower the streams, the lower the chart position even if sales of a given title are higher than another given title.

From a profitability perspective, artists whose records sell but don’t stream may well be thankful.  If that trend continues, then it would also stand to reason to question the benefit of chart position as a selling tool.  But then we hear about services like YouTube routinely deleting billions of fake plays in its video playlists during December.  If this same phenomenon is repeated in streaming services used to measure chart position….not to imply that anyone in the music business would ever try to rig the charts.  Perish the thought.

So what is it all about?  Is there a “zero effect” or is there zero affect?  Sales or stream?

Google’s Muscle-Based Defacto Compulsory License: What About We Don’t Like You Don’t They Understand?

2 Jan

MUSIC • TECHNOLOGY • POLICY

The wisest among you learn to read your portents well
You know there’s no need to hurry, it’s all downhill to hell…

Don’t Stand Still, written by The Original Snakeboy, performed by Guy Forsyth on Unrepentant Schizophrenic Americana.

GMR Formed Out of Pandora Lawsuits Against Songwriters Affiliated with ASCAP and BMI

Yes, the portents are in the water–there will eventually be a showdown with Google (and probably Pandora, too) over the songs they routinely infringe in the name of “permissionless innovation.”  Whether it is today or tomorrow, that day is coming, and by the looks of it the first collision will be between Google’s bully boys and songwriters represented by Global Music Rights, the new PRO backed by Irving Azoff.

The why of all of this is pretty simple:  The unelected ASCAP and BMI rate court judges have decided that the government’s consent decree says that the only way…

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Bit Torrent Logic: How Spotify Brought on Their Own @TaylorSwift13 Problems

10 Nov

MUSIC • TECHNOLOGY • POLICY

Is he mad? Anyway, there’s something on his mind, as sure as there must be something on a deck when it cracks.

Moby Dick, by Herman Melville

When you look at all the sanctimony that Spotify has ginned up about Taylor Swift’s withdrawal from the service, only the erudite Ben Sisario has put his finger on the real reason:

In the past, Ms. Swift has employed a “windowing” strategy for streaming services, withholding new material for a while to spur CD and download sales; Adele, Coldplay and Beyoncé have done the same. With “1989,” however, Ms. Swift and her label, Big Machine, went further, removing her entire catalog from Spotify and putting the streaming service on the defensive.

The dispute with Spotify — whose pitch to subscribers is largely based on its ability to deliver the music people want to hear — appeared to have arisen from a disagreement…

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A Useful Database from @musically

7 Jul

MUSIC • TECHNOLOGY • POLICY

Another example of a private industry solution to information on the digital music market.  MusicAlly demonstrates their directory of online music services.

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Can Songwriters Demand Answers from CPAs signing statutory royalty certifications?

27 Jun

MUSIC • TECHNOLOGY • POLICY

As we’ve discussed several times on MTP, songwriters and publishers who are compelled to accept a compulsory license under Section 115 have no way to know whether any of their statements are correct because the government denies songwriters and publishers the right to audit any royalty statement under the compulsory license.

Instead, songwriters are put in the same position they would be in if the IRS audited their tax return and refused to let them have their own representative defend them.  The government mandates moral hazard:  The only accountant who verifies the legitimacy of the royalty statement is the digital service’s own accountant.  (See the applicable section of the Federal government’s Code of Federal Regulations 37 CFR Section 201.19.)

This Kafka-esque rule may have a solution.  It’s hard to believe that the government somehow has it in for songwriters and wants to create distrust.  While the government refused to…

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YouTube’s DMCA Abuse and Indie Labels: How Google is Blowing it for the Honest People

26 Jun

MUSIC • TECHNOLOGY • POLICY

In a speech at Canadian Music Week, Beggars Group Chairman Martin Mills was not only right, he was prescient:

Google, the parent of YouTube, [is] one of the companies that have made billions on the back of [the DMCA notice and takedown,] a statutory provision intended to protect ordinary people acting innocently.

Google has now refined the DMCA to a tool to leverage its anticompetitive activities.  Here’s how it works.

1.  Google opens the YouTube platform to unauthorized “user generated content” and says to artists (literally in this case) “Does yuse wants to play whack a mole or make some dough?”  This is called the notice and shakedown.

2.  Google then jams a settlement down the throats of major labels and sticks it to everyone else.  Publishers are next.

3.  Google pays the lowest royalty online with a big advance to majors and spaghetti statements to everyone else that probably…

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Best Practices for Unmatched Royalties

25 Jun

MUSIC • TECHNOLOGY • POLICY

The Copyright Office Music Licensing Study Roundtables have brought up a couple of nagging issues regarding connecting royalty payments with the songwriters or artists who are entitled to payment.

The first comes up with services that rely on the Section 115 compulsory license for songs.  The statute requires the digital service that uses the song to send a notice in advance of using the song.  The notice informs the songwriter that the service intends to rely on the compulsory license.  There are some procedural safeguards built into this notice process, but common sense will tell you that if you’re going to send the notice, the service has to know who the songwriter is and probably how to reach them.

This means that there should be a very limited category of unknown songwriters whose music is used without being notified.  It also assumes that the service does not use the music without…

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