“On Demand” Chart Arrives, Added To Billboard Hot 100 Formula

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Billboard, Nielsen and NARM’s digitalmusic.org announced the creation of the first-ever subscription services “On-Demand Songs” chart, the data from which will also be included in the Billboard Hot 100. On-demand streaming data is now factored into the chart’s ranking, a formula that also incorporates digital download and physical single sales, as well as radio airplay.

In coordination with digitalmusic.org’s Subscription Music Work Group and powered by Nielsen BDS, the On-Demand chart measures every on-demand play request from MOG, Muve Music, Rdio, Rhapsody, Slacker and Spotify. Data from Zune and Sony Music Unlimited is expected to be added in the future. Nielsen began tracking streaming in 2005, and recorded over 4.5 billion streams in the first 70 days of 2012.

“Billboard always recognizes trends in the way fans experience music. With some of these services growing exponentially and integrating into the social web, the time is right to launch a streaming chart and to incorporate this activity into the Hot 100,” said Bill Werde, Billboard’s editorial director.

“The last year has seen an explosion of both subscribers and traffic to music subscription services, and the business is now contributing meaningfully to the music industry’s growing digital music revenues. This chart marks a significant milestone in the evolution of the music subscription business,” said Bill Wilson, VP of Business Development and Digital Strategy, NARM/digitalmusic.org. “The new Billboard chart is the definitive endorsement of the importance of the music subscription market and, as Nielsen continues to track tremendous growth, its influence can only become more important in the future.”

The Hot 100 formula will now account for data from the On-Demand songs chart, as well as non-demand radio streams from Rhapsody and Slacker, video requests on Akoo, and audio on-demand from MySpace and Guvera. Yahoo! radio streams and on-demand videos will continue to contribute to chart rankings.

The first No. 1 on the On-Demand Songs chart goes to fun. and its hit “We Are Young,” featuring Janelle Monae, which had a total of 1.1 million streams. The track also lands atop the updated Billboard Hot 100 for a second consecutive week.

The updated Hot 100 and On-Demand Songs charts will be available on Billboard.com and Billboard.biz tomorrow (March 15), and featured in the March 24 print edition of Billboard, which hits newsstands March 16.

MusicRow Debuts TEA Sales Index

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2011 TEA benchmarks were 25% country; 27.7% all genre.

The Country Music Sales Landscape is evolving rapidly. According to Nielsen SoundScan, Country tracks are up 19.4% (7% for all genre) and digital album sales are up 30.8% (19.4% all genre) YTD 2012. These numbers show a significant increase in the adoption of digital music by country fans, albeit several years behind the all genre crowd.

Digital album sales are included in SoundScan album sales, which has been the coin of the realm in measuring industry health. But track sales are generating large revenues, and frankly becoming too important to ignore. The TEA index is one of several coming metrics designed to fold track sales back into the discussion.

TEA Index Methodology
We will update the TEA index around the middle of each month. Here’s how it works. We take the total YTD track sales and divide the number by 10 to get TEA (track equivalent albums) units. We then add the TEA albums to the digital and physical albums to get a total. Lastly we determine what percentage of the total is contributed by TEA units.

The percentage shows at a glance how the marketplace is changing. For example, the 2011 TEA index for country music was 25.08% (all genre 27.77%). Three months into 2012 the country TEA index has already risen to almost 31%—a 24% increase.

Looked at another way, the index is dependent upon the balance between tracks and albums. For example, if album sales fall and tracks remain constant, the index rises. Conversely, if album sales increase and track sales remain constant or ebb then the index falls.

TEA Talk
The higher TEA index scores at the start of the year can probably be explained by the post holidays gift card phenomenon when people get new gifts and then rush online to redeem them in the form of buying tracks. But we are also seeing track sale spikes generated by award shows like the Grammys, as well as reality shows such as American Idol and The Voice and sitcoms Smash and Glee which encourage “instant gratification” track purchases.

This past week the index dropped, partially because of some special 25¢ digital album offers, first from Google and then echoed by Amazon which successfully stimulated album downloads (more about that below.) Special sales like this highlight another disconnect between SoundScan numbers and actual industry health—pricing. For example, country album sales last year were down a modest 1.8%. No big deal until you start to realize that albums were selling for less last year than in previous years, so revenues were more seriously compromised than the 1.8% would indicate and of course profits also suffered.

Weekly Sales Shout Out
Lady Antebellum’s Own The Night was the largest single happening of the week for country album sales. Its sales increased 437% W/W. The trio benefited from the aforementioned 25¢ sales price on Google Music—an offer that really “clicked” with fans. Sales moved from 20k to 108k with a whopping 90% of the sales in the digital format!

Informed readers will recall that after last year’s Lady Gaga low debut-week pricing, Billboard added a new chart rule saying it would not include album units sold for less than $3.49 during their first four weeks of release in SoundScan. But Own The Night, now in its 26th week, is way past the four week rule.

Luke Bryan also deserves mention with the No. 2 and No. 3 positions on this week’s country album chart. His Spring Break 4 debut hit almost 30k downloads (it was digital-only) and Tailgates and Tanlines scanned over 17k.

Turntable.fm Signs Licenses With Majors

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Social music site Turntable.fm now has licensing agreements in place with all four major entertainment companies, according to Billboard. The news was revealed at SXSW by Turntable.fm founders Billy Chasen and Seth Goldstein.

Last week, CNET reported that the service had inked EMI and was close to signing Universal and Sony, in addition to being in talks with Warner Music Group. With all four on board, it gives Turntable.fm a competitive edge in the digital discovery race. Adweek notes that Chasen’s future plans for Turntable.fm include bringing artists to the site and letting them serve as digital DJs, which could attract new users.

Turntable.fm debuted in June 2011, allowing friends to act as virtual DJs and play songs for one another. In July 2011, it finalized agreements with ASCAP and BMI. Its user base is reportedly small (176k unique visitors in February) compared to the million-plus users of Spotify and/or Pandora, but the site’s inherently social nature could mean numerous promotional opportunities for artists and labels.

Artist Growth and BMI Partner to Aid Performing Artists

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Music management app Artist Growth and BMI have announced a partnership to help musicians simplify the process of collecting performance royalties. BMI affiliates will now be able to register for royalties using any Artist Growth-equipped mobile device as soon as they finish playing a show.

BMI writers are being offered a free six-month trial of Artist Growth, which launched in Nashville in January 2012 with the goal of providing an entire toolkit for managing a music career. In coming months, BMI Live participants will be able to submit performances and set lists through Artist Growth as well.

“Artist Growth is an innovative new digital platform that presents exciting possibilities for BMI performing songwriters to manage and organize their schedules and tour support,” said Jody Williams, BMI VP Writer/Publisher Relations. “We look forward to offering access to Artist Growth to all BMI-affiliated writers, and working closely with their team to offer greater digital integration with BMI’s groundbreaking BMI Live program.”

During SXSW, Artist Growth also announced partnerships with CD Baby, Americana Music Association, PledgeMusic, Folk Alliance, NYU Steinhardt’s Music Business Program, Belmont University and more.

Latocki Team Creative Launches Team Design Labs

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Latocki Team Creative has launched its new service, Team Design Labs. The service offers one-on-one consultations with graphic designers to create affordable solutions for logos, invitations, flyers, CD packages, posters and websites.

Team Design Labs was created specifically with small business owners and recording artists in mind. Half-day or full-day appointments are available.

“Being an entrepreneur myself, it’s important to me to find ways to help other entrepreneurs see their dreams come true,” says Luellyn Latocki Hensley, Owner. “So far I’ve witnessed new company logos be developed in a day, which is very cost effective & efficient for a start-up company.”

For rates and more information, check the Team Design Labs website.

Lazy Sales For Week Ended 3/4/12

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Albums
Not a lot to report during this lazy-sales past week ended 3/4/12. Just 20k units was enough to put Lady Antebellum atop the Country album chart for the third consecutive time. In fact, the entire top 75 current country album list couldn’t reach a total of 301k units for the week!

Craig Morgan’s This Ole Boy debuted at No. 5 with sales just over 12k and Lyle Lovett debuted at No. 9 with sales of 10k.

Country album sales YTD are up a narrow 1.9%. The percentage of country album sales in digital format continues to circle near the 25% level (24.2% this week) compared with last year at this time when it was 20%.

Upcoming March releases include a second Luke Bryan offering, plus projects from Casey James and Lionel Richie. (See the complete list here.)

All genre album sales are up 2.9% just a little more than country. 37% of all albums purchased are in the digital format.

Tracks
“Good Girl” from Carrie Underwood rides in at No. 1 for the second consecutive week on Digital Genre Country tracks chart. Fans downloaded another 119k units of the song this week, up from 107k. The second big seller on the Tracks list was Miranda’s “Over You,” downloaded over 51k times. Total country tracks sold YTD equals 28.798 million.

NPD Cites Music Upswing; Less Piracy And Online Radio Growth

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NPD Group’s most recent report indicates the “number of U.S. music buyers is on the upswing.” Based on the research company’s “Annual Music Study,” growth can be attributed to the increased total amount consumers are spending on music and a growing number of CD and digital download buyers. In what is good news for the music industry, NPD states, “There are still nearly twice as many CD buyers in the U.S. as there are paid digital-music downloaders.”

Recent years have seen sharp declines in music sales—falling prices and a digital marketplace that had stopped growing—but 2011 saw track sales grow 4% while CD sales showed less declines than in past years.

NPD finds that, “The total number of CD music buyers increased for the second consecutive year, growing 2 percent to 78 million.” They speculate this happened due to several reasons—

1.) Consumer perception that music is now a better value;

2.) They are better informed about what is available, and/or;

3.) Consumers now have “a wider variety of sources to discover new music” such as Pandora and Spotify.

“CDs are the gift that keep giving, which proves that even in an increasingly digital age, consumers will respond to quality content and strong perceived value, even if it comes in a physical package,” said Russ Crupnick, Sr. VP of Industry Analysis at NPD. “The CD still has a powerful attraction for both older, mainstream consumers who listen in their cars, as well as to super fans who enjoy owning the package and assortment of songs from their favorite artists.”

Additional Factoids

  • Paid digital download buyers increased 14% in 2011 to 45 million customers.
  • Unpaid music acquisition i.e. P2P file sharing or trading music on hard drive declined. “NPD estimates that 13 percent of Internet users downloaded music from a P2P site, which is down from a peak of 19 percent in 2006.”
  • Fastest growing form of music listening was online radio. Online radio grew from 29% of the internet population in 2010 to 43% in 2011.

NPD’s “Annual Music Study” is based on 5,799 completed online surveys of U.S. consumers age 13 and older conducted between Dec. 14, 2011 and Jan. 

The Band Perry’s “If I Die Young” Lives On

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The Band Perry’s mega-hit “If I Die Young” has maintained a long life after its No. 1 chart ascent, and now the RIAA has certified the song Quadruple Platinum for sales exceeding four million. The news comes on the heels of TBP’s recent No. 1 “All Your Life” and Platinum certification of their debut album.

“We are honored by this acknowledgement and thankful that so many of you have connected with this song,” said Kimberly Perry, who won the 2011 CMA Award for Song of the Year for writing “If I Die Young.”

“Each time the bar is set, it seems that The Band Perry surpasses it! Selling over 4 million downloads on just one song is a huge accomplishment,” said Republic Nashville President Jimmy Harnen. “This extremely talented group is remarkable and we’re thrilled to have them as part of the Republic Nashville family.”

The Band Perry is currently touring with Brad Paisley’s Virtual Reality Tour and headlining their own dates. The group’s next single “Postcard From Paris” is going for adds immediately.

The Orchard and IODA Announce Merger

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The Orchard and IODA have announced an agreement to combine their global digital distribution businesses. The new company will operate under the name of The Orchard and aims to create a new market leader for digital distribution of music and video.

Brad Navin, CEO of The Orchard, will serve as CEO of the new company, and IODA founder/CEO Kevin Arnold will take on an advisory role to the Orchard’s Board of Directors. Arnold will also work on strategic projects for Sony.

“The Orchard and IODA were both founded to maximize opportunities for independent labels and artists. This deal opens doors for everyone by creating the preeminent platform for distribution, sales and marketing,” said Navin. “We’re combining two talented teams supported by a scalable infrastructure, which will give us more flexibility than ever to stay focused on our clients while continuing to work with the independent label community to improve the future of the industry.”

Billboard reports that Sony, which owns 51% of IODA, will own at least 50% of the merged company.

The deal is expected to close in the second quarter of 2012. Financial terms of the agreement have not been disclosed. IODA clients include Allegro, Arts & Crafts, Ghostly International, London Symphony Orchestra and more. The Orchard’s clients include Barsuk Records, Daptone Records, Frenchkiss Records, and more.

The news follows the recent announcement that Universal Music’s Fontana Distribution has been acquired by digital leader INgrooves, and Universal will own a minority share in the new business.

INgrooves Acquires Fontana Distribution

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Big news for the independent music community today (3/2), as leading digital distribution/marketing/technology provider INgrooves has acquired Fontana Distribution from Universal Music Group. The new company, INgrooves Fontana, aims to provide a complete solution to independent labels by combining INgrooves’ asset management and distribution platform with Fontana’s physical distribution capabilities. Financial terms of the deal have not been disclosed, but UMG will hold a minority interest in INgrooves.

“Through this acquisition, we are now able to offer the independent music community a fully integrated physical and digital distribution marketing solution in North America,” said INgrooves founder Robb McDaniels. “We believe that a successful relationship between distributor and label is, at its root, a flexible structure with a transparent flow of information. By combining INgrooves and Fontana, we will be able to extend this philosophy into a comprehensive distribution operation that provides our collective client base with a larger sales force, more marketing resources and a one-stop global retail network that maximizes opportunities in this dynamic, challenging environment.”

INgrooves Fontana will be run by INgrooves President Dave Zierler and Fontana President Ron Spaulding. The new company will continue to work with UMG’s sales forces to support physical releases.

The combined forces represent a host of popular indie labels including Fat Possum, Nettwerk, Dualtone, Rostrum Records, ESL Music, Metropolis, OM Records, Vagrant Records, Strange Music, Watertower Music, Downtown Records and Music World among others.