Billboard

The push-pull relationship of streaming and albums

Wednesday, November 6, 2013 - 12:15pm

Can streaming music help album sales?

Last week’s SoundScan charted the lowest number of single-week album sales since 1991, when that measurement started informing Billboard charts, and there was immediate apocalyptic talk that streaming killed the album.

Pessimism might be justified when it comes to the album’s product legitimacy in 2013 and beyond. Bob Lefsetz applies his characteristically blunt futurism to the topic in a reaction to weak sales performance of Katy Perry’s new Prism collection.

Streaming music is not the cause of declining album sales, although it does reflect and support changing consumer demands and expectations. Consumer choice has been evolving for 15 years. Whether that marketplace shift is blindingly sudden or laboriously slow depends on whether your clock is set to Internet time or normal-world time.

The album suffered its first collision with digital reality when the mp3 format was unleashed, along with corresponding computer apps that enabled recording CD tracks. The term “ripping” resonated with illegality (“ripping off”), but copying tracks to mp3 files was just a legal as copying them to cassette tape.

It was the widespread sharing of mp3 tracks that was legally problematic. Sharing mix tapes on cassette was illegal, too, but so cumbersome and one-to-one that nobody much cared. When the original Napster hit the net in 1999, a one-to-many file-sharing revolution occurred. Horrified record labels complained that they couldn’t compete with free music, an obvious though arguable point, but two other values made Napster popular: a long tail of music unavailable elsewhere, and tracks separated from albums.

The iTunes Music Store rescued labels by wrapping a commerce solution around some Napster attractions. Doing so demystified and sanctioned single-track consumption. Steve Jobs had to talk the labels into breaking apart their albums for sale, and gave them digital rights management (DRM) in exchange, at least temporarily -- mostly solving the copy problem for iTunes-purchased tracks.

Music as e-commerce was off and running, but the album was a seriously broken product by 2003. A CNN Money article in 2010 reported skidding album sales in nine of the decade’s ten years.

Streaming music was operating in various forms before iTunes Music Store launched, including webcasts (AM/FM and pureplay), eMusic (subscription to download) and Rhapsody (subscription to stream). The combination of all these forces -- unauthorized file-sharing, iTunes price-per-download, subscription jukeboxes -- ushered the playlist era, a mix-your-own-album type of music consumption. Music became increasingly granular, smashed from album boulders into playlist gravel.

The mobile computing revolution, which started with laptops and accelerated with smartphones, furthered the trend. As cell phone data speeds increased in rapid technology cycles, the concept of accessing music from anywhere became viable for an enlarging class of well-equipped consumers.

Something else happened: a new streaming business framework based on advertising unlocked the “celestial jukebox” to people unwilling to pay for a music subscription. Spotify, Rdio, and their ilk offered an easy, no-charge on ramp to the so-called access model, where music exists as an always-on cloud of content available anywhere, synchronized across personal technology devices.

More than just granular, music has become atomized. The musicians’ complaint is that atoms of music consumption don’t pay as well as selling the big rocks (albums) or little rocks (price-per-track). The streaming industry’s response is that the liquification of music is still in early days, and when streams become tidal, everyone will prosper.

Recent experiments in iTunes Radio indicate that streaming access can stimulate old-world music purchase habits. iTunes Radio streamed Eminem’s new album for week before its release as a download or disc. The service did something similar with Justin Timberlake’s latest release; we noted then that “album release date” had taken a new, more liquid definition. We also noted that Timberlake’s album was perched atop the iTunes Store album-sales chart, while its individual tracks were far down the singles chart.

Whether streaming is driving album purchases is difficult to determine, but there does appear to be correlation of iTunes Radio pre-release streaming and iTunes Store chart performance. The Eminem experiment seems to be producing the same effect. The album’s pre-sales have propelled it to the #1 chart position. At the same time (either connected to pre-release streaming or not), Billboard reports that the Eminem album will start its Billboard 200 life in the top slot, and notch the second-highest album-sales week of the year.

So, while general music streaming might not support album sales, targeted promotional streaming on a major platform might funnel users who still enjoy outright ownership into traditional music stores. Especially when, as with Apple, the streaming service sits side-by-side with the music store.

Music download sales decrease as streaming music gains

Friday, October 4, 2013 - 10:30am

Digital single-track sales are down over the first nine months of this year, compared to the same period in 2012. The decline has accelerated quarter-over-quarter, with the July-Aug-Sep period showing a 6-percent skid, according to Billboard. Digital album sales have fared better this year, gaining 2.6% over 2012, although the third quarter showed a similar summertime dip as single-track sales.

Download doldrums match the consumer trend toward Internet radio as an important venue for music discovery and the “access model” of ownership. Recent audience metrics reports from Triton and Pandora indicate that webcasting and Internet radio adoption is gradually and steadily climbing upward. As mobile listening crosses multiple devices, environments, and dayparts, access to cloud-based music jukeboxes takes the place of unit purchases and local storage. 

Apple and Google hedge their bets by operating on both sides of the fence, offering digital albums and tracks for sale, as well as customized listening to enormous catalogs of music. As a third leg of the stool, both services also provide cloud storage of owned music files -- a hybrid of the ownership and access models.

Billboard creates chart to include Net radio song plays

Monday, January 21, 2013 - 1:45pm

Billboard has added the brand new "Streaming Songs" chart to include song play data from top web radio streams.

Using data from BDS (Broadcast Data Systems), it ranks the top web radio streams and on-demand audio titles from services like Spotify, Muve, Slacker, Rhapsody, Rdio, MySpace, Xbox Music, and Guvera.

Billboard explains it like this: "Where On-Demand Songs, which launched in March 2012, measures consumer-activated audio plays on the above streaming services with on-demand functionality, Streaming Songs includes that data, as well as on-demand streams." [We're guessing that last phrase is supposed to be "as well as Internet radio streams." -- Ed.]

The data from this chart is the streaming segment of several other Billboard charts: the Hot 100's data pool, plus Billboard's other hybrid genre charts for Country, R&B/Hip-Hop, R&B, Rap, Latin, Rock, and the just-announced Dance/Electronic Songs.

That "Dance/Electronic Songs" chart compiles the top dance songs in the country based on digital download sales (tracked by Nielsen SoundScan), radio airplay and streaming data (both monitored by Nielsen BDS), and reported club play from a select national panel of 140 club DJs.

Last March Billboard created the "On-Demand Songs" chart, based on song plays on subscription online music services, and announced that data from the chart would be included in Billboard's Hot 100 (see RAIN here). In October, Billboard began factoring streaming data and digital download sales into its rankings for major music charts. See RAIN here.

Read more in Billboard here.

Set the Radio Time Machine and go back in musical time

Thursday, April 26, 2012 - 12:15pm

When I was a kid, I dreamt of digging through an old attic and finding an antique radio that, when I fired it up, tuned in broadcasts from long ago (Did I come up with this, or was this a an episode of "The Outer Limits" or "The Twilight Zone?").

There are no glowing tubes, no antique woodwork to refinish, and no on-air hosts from the past, but Radio Time Machine is a cool, radio-like, "lean-back" online music experience that reminds me of that fantasy. It's a web app built on the on-demand Rdio music service. Simply choose a year from 1940 to 2012 (using a smooth and fast slider bar) and enjoy a non-stop stream of Billboard Top 100 hits from that year.

(To fully experience Radio Time Machine, you'll need an Rdio account, even a free one. But without one, you can still hear samples of each song, though this may limit the range of songs available for listening.)

In our limited testing, the music options seemed pretty limited (our guess is that basically, you're starting with a maximum of 100 songs per year, which then goes down from there based on what Rdio has licensed), and we got a lot of repeats of just a small handful of songs. It might be neat to be able to listen to a span of years (1964-1972), or "all music from 1983 and before" (as a station in 1983 would in fact have all of this music at its disposal). There are lots of ways the service could be enhanced, which makes Radio Time Machine a great first iteration of what could be a fun and useful app. And I enjoyed it for reminding me of finding that old radio!

Try Radio Time Machine here.

Billboard suggests ways for Net radio services to be competitive and get noticed

Friday, April 6, 2012 - 1:05pm

Internet radio is a "low-barrier-to-entry" industry. No FCC license is necessary, no huge tower in a cornfield. Get your content together, make a few phone calls, and you can be up and streaming.

The abundance of choice on this "infinite dial" is, more cynically, the result of that low barrier. How does your compelling and enjoyable Internet radio service find welcoming ears that have already been repeatedly disappointed by about a thousand of your well-intentioned by under-achieving competitors?

Billboard.biz offers some ideas for services "to separate themselves from the crowd." We love reading (and writing) about Internet radio, and we especially appreciate what it says about our industry that it's not at all unusual to see content like this in a music industry publication.

The article is concerned mostly with Pandora and its progeny: algorithm-driven recommendation/personalized playlist services. Billboard writes, "Already there is very little noticeable difference between the music most services play. Of course, these companies would certainly argue that differences exist between the ways services create personalized listening experiences. But from a listener's perspective they're all pretty similar. Over time, recommendation algorithm that generate playlists will advance to the point where one service's radio feature will be, more or less, indistinguishable from another."

The first recommendation is "create the best product." Duh. Actually, Billboard here is referring simply to the ease-of-use of services like Pandora and iHeartRadio, and it makes sense. People enjoy using a product the can easily manipulate, and that responds to them as they think it should. 

"Additional or exclusive content" can also set you apart (e.g. SiriusXM and Howard Stern; iHeartRadio and its AM/FM streams). Again, "gee, thanks!" Certainly the cost to enter the field starts to sharply rise with big-ticket contracts with personalities, artists, and pro sports leagues.

Likely more valuable is Billboard's advice to "find a hook... try being something great to a smaller number of people... some Internet radio services will need to cede the mainstream users to the larger players and find other ways to get a firm toehold in the market." This is the magic right here, where the genius shows through. The most interesting developments in Internet radio will probably happen right here: brilliant thinking leading to unique ways for listeners to enjoy the content they love.

Finally, if you "add features," you can increase the depth of your offering to listeners who might get bored with "default" settings, and be willing to put in the time and effort to take advantage of more powerful customization (Billboard mentions Slacker and Raditaz).

The "infinite dial" truly offers a space for everyone. Only a few will have the means to offer hundreds of genres of music, or the most cutting-edge technology, or top-name exclusive content -- but any webcaster can have a great idea, a unique angle, and superb execution and focus. And that draws a crowd.

Read "Business Matters: Internet Radio Services Need To Separate Themselves from the Crowd" in Billboard.biz here.

Data driving new Billboard "On-Demand" chart will be included in Hot 100

Wednesday, March 14, 2012 - 12:30pm

Billboard has created the "On-Demand Songs" chart, based on song plays on subscription online music services. Data from the chart is now included in Billboard's Hot 100.

The weekly chart will rank songs based on "every on-demand play request and plays from unlimited listener-controlled radio channels" available from MOG, Muve Music, Rdio, Rhapsody, Slacker and Spotify (data from Zune and Sony Music Unlimited is planned to be included in the coming weeks). This includes streams as well as tethered downloads, as heard by paying subscribers and free users alike.

Billboards' Hot 100 will now include the streaming data from the new On-Demand Songs chart, plus non-interactive plays from Rhapsody and Slacker. (This is in addition to terrestrial radio plays, digital track sales, plays on video request service Akoo, and audio from on-demand streams from MySpace and Guvera, Yahoo! radio streams and Yahoo! on-demand video plays.)

Nielsen BDS, which collects and processes the streaming data for the chart, says it's tallied more than 4.5. billion audio streams so far this year, including an all-time weekly high of more than 625 million in the past week. The updated Hot 100 and the new On-Demand Songs chart debut tomorrow on Billboard.com and Billboard.biz, and in the next issue of Billboard magazine, available Friday. The On-Demand Songs chart will also be featured each week on www.digitalmusic.org.

Read more from Billboard.biz here.

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