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By Devlin Smith, Contributing Editor
2004.12
With the release of U2's "Vertigo" single and "How to Dismantle an Atomic Bomb" album, fans around the world have kept an eye on sales charts to see exactly how the band was faring. In the United States, Billboard is the authority on album sales and radio plays, charting the performance of works in nearly every genre on its many album and singles charts.
But what exactly does it mean to top the Modern Rock Tracks chart or the Billboard 200, as U2 has done? To get the bottom of how Billboard creates its charts, as well as get insight into the retail end of the record business, Interference.com spoke with Geoff Mayfield, director of charts and senior analyst with Billboard. Not only did we get an inside look at these charts, we also found out that 2004 has definitely shaped up to be a good year for U2.
What do you do as the director of charts and senior analyst?
My primary job is to oversee the charts department, which compiles more than 40 charts for Billboard, most of them sales charts or radio charts. Our department wants to make sure that we're making the best use of the data that’s provided to us to assist readers in determining not only what's most popular but what the trends are and things like that, and to make sure that the charts are a helpful map in determining popularity. My senior analyst cap primarily is borne through the column ["Between the Bullets"] that I write that analyzes album sales as well as assisting the editorial department in identifying trends.
Who are these charts intended for?
They are the absolute report card for recording companies and they are a road map for either people who have to make decisions about buying music or video product, or for people who program either video or radio channels.
How exactly is the album chart put together?
All of our sales charts are based on data provided to us by Nielsen SoundScan, and Nielsen SoundScan has been in business since 1991 and they use the actual point of sale systems that retailers themselves use to track inventory. It's not like a separate system where when you make a purchase the cashier has to remember to scan something twice, it takes the actual information from the cash register and from that we have a universe that represents more than 90 percent of the US retail marketplace. You can be very comfortable about predicting national numbers to not only report what happened within the panel but what the actual overall sales would have been if you had the other remainder of the marketplace reporting.
The only thing I can think of that counts things for a living that might have a larger universe would be the box office for films, which is essentially almost 100 percent of that marketplace is represented in that sample. But when you look at TV ratings, radio ratings, Gallup Polls or other political polls, the sample is usually a fraction of 1 percent. Very few things that count things for a living have the luxury of a sample that counts more than 90 percent.
Sampling retail sales is not a new concept, music was a little bit late to it, it’s already happened in pharmaceuticals and the food industry before music picked it up, and the toy industry also had a pool together before the music industry picked it up. With that said, I don't know of any other field that picks up retail data that has as large a sample as Nielsen SoundScan has in the music market.
What was the system before SoundScan?
Before that people would report to us their best sellers according to rank, so we would get like their 20 best sellers and we would assign points, the highest point value going to the title that was reported the best seller and then a declining scale from there. Then there were a certain amount of titles that retailers could report as “strong” and then another certain amount of titles that retailers could sort as “good,” and we weighted the accounts that reported to us but that data still wasn't as specific, if you had two chains that did about the same volume.
At the time there was a chain called Camelot Music that did most of its business in malls, it was primarily the eastern part of the US and Texas, and they didn’t come much further west than their Texas stores, and they did about the same volume as Wherehouse that had most of its stores in California, with a heavy concentration of stores all west, including Oregon, Washington, Arizona, and they tended to have larger stores, they had some malls stores. They had about equal market share, you could take maybe the same two records and if Camelot’s top record was ahead of the No. 2 record by a small margin and then you went over to that other chain and found that the same two titles were on top of the chart but in an inverse order, and one of those might have a much larger sales tally than the other. In the system we had, as well meaning as it was, those two titles would have come out a wash because the reporting chains had the same weight and those votes would kind of cancel each other out when, in fact, if you had looked at how those two titles sold at those two companies one of them might have had a clear advantage that you couldn't capture without that important piece which was not only was it your top seller but how many did it make to be your top seller.
That’s the other thing that you realize when you get chance to look at more specific data is that some No. 1s are bigger than. The other problem is there's a maximum number of points you can have the way we used to do it, so you could have a big record and now it’s fighting to keep its place at No. 1 because it can only go down from the maximum number of points it earns. Whereas if you have a system that's built on specific data and something truly is dominating the marketplace, it's easier for that title to remain number one as long as it deserves to because if it’s outselling the No. 2 title by 600,000 or 500,000 or a significant margin, its lead is protected as long as it’s outselling all of the others.
For a lot of reasons [SoundScan works better], and speed of chart as well. Some accounts we had to call actually on the Friday prior to publication and then we tried to have as many of the big ones as possible on Monday, but you were missing that weekend business from the people reporting on Friday. The other advantage of having point of sale and the system we have now is it’s much faster if there's an impact from an appearance on “Saturday Night Live” or an appearance on “Oprah Winfrey” or anything like that. It's much more common, there were only six albums that had debuted at No. 1 in our old system and now it’s a pretty common sight to see an album debut at No. 1 in the Billboard 200, and that is more a reflection of how things actually sell in the marketplace.
How often are you getting this sales information?
We only get a pull from SoundScan once a week. With some retailers, they are gathering data more than once a week but the final processing happens on Monday and Tuesday and we only get data from them once it’s been completely processed. On rare occasions we have to rerun the chart on a Wednesday because after it goes up someone will discover that there’s a discrepancy that was not rectified during the processing, but by and large the chart that we receive on Tuesday is the same chart that will stand at the end of the day on Wednesday. Nielsen SoundScan puts its charts up for their subscribers on Wednesday morning.
Now that we have so many additional ways that people purchase than we did in 1991,do things like Amazon.com count?
Absolutely. Nielsen SoundScan has a vested interest in making sure it’s as complete as possible so not only did they go to the Amazon.com world as soon as it could, but it also went to digital sales as soon as it could. Not long after iTunes happened, iTunes happened, I want to say, in March of last year, and by the middle of the year Nielsen SoundScan was collecting data not only from iTunes but any other cyber service that was selling downloads was also represented in that sample and they’ve kept up with it. They added the PC platform for iTunes when it came out, they added Napster when it came out, they added Sony Connect, so they’ve really stayed on top of that, the Walmart.com, because they, as well as Billboard, have a vested interest in continuing to represent as complete a picture as possible. If we had stuck ourselves in the corner where we were only counting physical sales with the knowledge that digital distribution would become an increasingly important sector as we go forward, that would be a mistake.
Do iTunes sales then count on the singles chart?
If someone buys the whole album, it will count, yes. If someone goes in and buys eight out of 12 tracks, that will count toward individual track sales, but if someone actually goes in and purchases the entire bundle, so that everything that is on the physical album is on that bundle, then that will count as an album sale. The same with singles, which is a little confusing. If they have actually packaged a single that has not just the lead song that people are interested in but the same B-tracks that are included on the retail-available single, which is a smaller and small consideration these days because, unfortunately, there's just not a lot of singles that are made for market anymore, but if the bundle has the same content as the retail-available single and is identified by a UPC code, then that will count toward the singles chart. But most of the transactions we’re getting from iTunes and its competitors are individual track sales.
How are singles being counted now since they’re not being sold as often as they once were?
We still count them it’s just that the numbers are really, really small. We added [the digital] chart as soon as Nielsen SoundScan began to count digital tracks and the volume already was ahead of where retail singles are. Not long after the lead was like 10 to 1 and now it’s greater than that. It's a very unfair comparison because there's a wide assortment of hits that are made available in the digital marketplace and there are very few hits that are made available in the singles marketplace, and then on top of that, because there's been such constricted variety of material available, retailers frankly had to abandon making sections of their stores dedicates to singles, there’s just not enough titles, there’s not enough variety for them to have a large singles section in their stores the way they used to. Even if a hit does come to market, its sales potential is limited.
U2’s “Vertigo,” I don’t even think it was released as a sellable single in the US. When that topped the Modern Rock charts, was that strictly iTunes?
The Modern Rock chart, that’s not a sales chart, the Modern Rock chart with Billboard is a radio chart, so that meant that it had the most plays for the modern rock stations that we monitor, but it was a significant seller on iTunes. In fact “Vertigo” had the biggest sales week of any title that we’ve tracked.
Do you think the iTunes commercial had a lot to do with that?
Heck yeah. I have it memorized, I can almost tell you when the different colors are going to flash and when it's going to flip from the dancer to Bono. I think it helped a lot. I cannot recall any album, and I think that U2 has always taken the launch of a new album seriously, but I can't think of any album that they have promoted more vigorously than this one because it's been practically inescapable. If you watch any amount of TV you’ve seen that ad, and it’s been the case since the beginning of October. I happened to notice it because I watched all the baseball playoffs and it had a heavy package in that. Now that the playoffs have been long gone, I continue to see it so they target a lot of the shows that I watch, and I don’t think I’m the guy they were spending all that money to get. I was even kind of surprised, I think it was still in October, although it might have been early November, that song was actually the sound bed for an opening scene in the CBS series “CSI”.
They put songs on "CSI" and they also put a song on “The OC". Do those kinds of things have any kind of influence on the chart?
They do help but it's harder to see that in U2's case because they have so much else that’s building visibility. The difficulty we have is if you have done something ahead of release, or during release week, we don’t have cause and effect because everything that drew attention to the album’s release is reflected in that first week’s sum. It’s not like you can say, “Here’s where the sales were and then they were on TV and this happened.”
“OC” happens to expose a lot of developing acts and in some cases those acts have not only had a track exposed but they’ve actually been written into the script and played a club scene or played a dance or whatever, and in those cases we can see a before and after. With something like the U2 album it's hard to say how much of it was the iTunes and how much of it was because they played “Saturday Night Live” and how much of it was because they got all that attention for the video shoot that they did during release week because all those things, and Thanksgiving week traffic, contributed to that very handsome sales week that they had.
Are you anticipating any kind of sales jump because of the Grammy nominations?
I would say in a lot of cases nominations don't necessarily trigger anything but it’s different with the Grammys. I think with the Grammys, it is the oldest of the music awards shows and I think there’s an absolute awareness. Who it helps depends on who's nominated, frankly, and where they are sales-wise. If someone’s already sold millions of copies of an album and they get a lot of nominations, you’re not as likely to see as much of a bump because a lot of the people who might be motivated by that attention have already bought the album, but if you have someone whose profile is still developing [nominations can help].
Lauryn Hill several years ago when she did her first solo album and she had the most nominations, that was an absolute trigger because, yeah, she had some sales already but a lot of people who were intrigued to find out who this person was that got all these nominations, they reacted to that. Norah Jones is another example like, she’s had decent sales and was already building some momentum but when a seemingly unknown artist gets as many nominations as she did the first year that she did, that does create a trigger.
If in February U2 does win a Grammy, would that give them a boost as big as they are?
I think that winning a Grammy can be a trigger but the more meaningful thing is do you get play the Grammys. It’s exposure from the show, and there have been numerous instances where an artist didn’t win anything but had one of the more captivating performances and therefore had one of the biggest sales spikes.
Like Ricky Martin did.
Ricky Martin not only created a sales spike for the albums that he already had in the marketplace and the one that contained that song, the more important thing for him was it absolutely paved the road for a new branch of his career, and that was recording in English. It was absolutely an introduction and a few months later his first English-language album came out, so it not only created a sales spike for him but it really created a whole new career track for him. It did that for Bonnie Raitt, Bonnie Raitt one year was one of those artists who essentially swept the Grammys, she won four or five major Grammys one year, and it was an album that had performed okay but when she had as commanding a night as she did, plus she played on the show, that made it easier for every other album, it was her first album, I believe, to hit the Top 10, it was absolutely her first No. 1 album, and after that it became easier for Bonnie Raitt to hit the Top 10 because it just had opened that many more doors for her and created that much more awareness. Tina Turner with her comeback album “Private Dancer”, it was the same kind of thing for her. It doesn’t happen every year but often times you'll see someone who will not just get a momentary sales spike but actually be lifted to a new level in their career.
When counting sales, if someone comes out with a boxed set or double CD, does that count as one or multiple sales?
There is a lot of confusion about that—a unit is a unit. The reason people get confused about that is that the RIAA, the process that establishes gold and platinum albums is independent of the tracking that comprises our charts. If you have a boxed set, they multiply those shipments by three if there’s three CDs, and with double albums, if it’s over a certain length, they will do the same thing with that as they do with boxed sets. But for us a unit is a unit.
How much of a difference is there between what your numbers say and what the RIAA says?
They usually bare each other out. There can be fluctuations. One of the things we don't track are typical record club sales, and I have to qualify that because it used to be we didn’t do record clubs at all. Now record clubs, especially in Latin music, can be involved with the up front marketing of an album. Before we really didn’t want to track record club because it was all after market, an album would be out for six months, or even a year, before it got added to record club and then you would have this artificial spike that happened only because this after market had picked up that title. But now if there is direct marketing that happens, we do count those kinds of sales. I have to qualify, we no longer exclude record clubs but the only transactions that I’m aware of that are tracked are proactive at the beginning of a release as opposed to the old model where an album came to record clubs a half year or a year after it hit market. In those cases, like if you look at “The Bodyguard,” for instance, which is an older album, its certification level is a few million higher that its SoundScan number and the difference is the record club.
In advance of creating these charts does pre-analysis and hedging of bets go on?
I don't really do a lot of that because it happens so fast. You can speculate and speculate as much as you want but you really don't have a true sense how much something is going to sell until it actually has a chance to start selling. If something ships large that tells you retailers have confidence that it’s going to sell big. It used to be that you had to ship twice as many records as you were going to register in your first week, so if you were going to have a first week of 500,000, you needed to ship 1 million to get that. The shipping model is more efficient now, we’ve actually seen a lot of cases where you don’t have to ship as much product to yield a big number, but there is something about you have to send a certain amount of copies to the wrong stores to have the right amount of copies in the right stores, so I think that’s in play. But really none of it means anything until the consumer gets the chance to say whether they’re going to buy it or not.
A case in point was the last 98 Degrees album, that had come after other boy bands, N Sync and Backstreet Boys, had had really, really large albums and really, really large first weeks and I think that there was a lot of confidence by a lot of retailer that 98 Degrees was going to have similar success so they had a huge ship. Their first week was okay but compared to what they shipped, it didn't look that big. Every once in a while you’ll have something which kind of makes any speculation you do before it comes to market kind of a moot point.
The other thing is you have to remember is not so much what the short game it, it's what the long game is and sometimes people get kind of wrapped up in what the first week number is and really what’s important is how’s it going to sell at the end of the day. Eminem’s a good case, Eminem shipped close to 4 million copies, well you think he’s guaranteed to have a million-plus week but there was a fly in the ointment, they had to rush release that to market, they had to bring it out with an abbreviated sales week. It sold over 700,000 copies in its first week and sold more than 800,000 copies in its second week, and that’s still 1.5 million copies in the space of about 10 or 11 days, and that’s a more important number to me than whether he had a million-plus week.
What days does your chart reflect?
The tracking week ends on Sunday, so it’s a Monday through Sunday. Some of the accounts we report report Sunday through Saturday, but the tracking week officially goes Monday through Sunday.
So why then do new records get released in the US on Tuesday when they’re released on Monday in other parts of the world?
The US adopted Tuesday as a street date in the late '80s, I don’t remember the exact year now. Here's the problem with Monday, more and more stores receive new releases not from their warehouse but directly from the manufacturer. In the scenario where it comes from your warehouse, it will go to wherever your depot is and then it will ship out and you’re responsible for making sure it gets to the store on time, that it doesn't get out before it's supposed to get out. But with more and more new releases going directly from the record company to the store, then the store is dependent on the UPS route and you’re at a competitive disadvantage if it’s the day that the U2 album came to market and your competitor gets it an hour before you do or, worse, they get it several hours before you do. They made Tuesday the street date saying, "We’re still going to ship on Monday but you have to hold that product until Tuesday so that no matter what time you open, you have the product available," so that’s why they changed it. Whether you were at the beginning of the UPS route or at the end of the UPS route, you were going to have the same advantage.
Talking again about U2, how well did the album do in accordance with buzz and expectations?
It was huge, they've never had a bigger sales week. The ironic thing was the biggest week they've had prior to this during the SoundScan era, which some of their bigger albums are not in the SoundScan era, “Joshua Tree”, for example, the biggest sales week they’ve had was for an album that was never No. 1, and that was the album that came out in 2000. That sold over 400,000 copies but it happened to come out the same week that a Jay-Z and an Outkast album came out and, as a result, each of those sold half a million or more and that album was never No. 1, it debuted at No. 3, which was its highest chart position. But this one, I think people thought it was going to be big, I don’t know what the betting line was but that's a very handsome start, and especially for a band that’s been around as long as this one has. It was the 17th largest debut week that we've had since we’ve started using SoundScan and the only act that’s been around longer than U2 that ranks ahead of them was The Beatles.
Was that with the “No. 1” compilation?
No, it was with “Anthology”. “Anthology 1” came out right after the miniseries. “1’s” biggest sales week wasn’t its first week, it did have a good first week but it’s biggest sales week was Christmas week. “Anthology” had all that attention from coming out the same week as that miniseries.
The other acts that have had larger sales weeks than U2 are younger acts, N Sync had a couple that were larger, Garth Brooks and the Backstreet Boys had a couple that were larger. When you think about an act that first appeared on our chart in 1981 and here they are in 2004 and selling over 800,000 copies, that's just a very handsome accomplishment.
Can there still be big surprises on the charts?
Yeah, I think so. Once things come to market, you have a flying start. I don't anymore than anyone who's close to the market is surprised by what they see showing up in the Top 10, but when you get passed there you can still be surprised. Sometimes, too, not with an act as mature as U2, because everyone's eyes are on them, and actually if there’s anything, you have to manage expectations, U2 is a name that people know, and yet the bigger seller this month has been Eminem. Eminem is not as appealing to an editor at a newspaper who’s 50 or 45 or whatever, they’ve lived with U2 longer than they’ve lived with Eminem, maybe Eminem bothers them. I noticed that there was an awful lot of attention about the U2 album when I had every expectations the Eminem album was going to sell more. If anything, you have to kind of manage expectations, if you’re in a record company you almost have to say “Slow down,” yes, U2’s going to be big. Then the problem could be, "Gee, Eminem sold a million-and-a-half in this amount of time and these other guys didn’t, what happened?" when in fact we should all be celebrating the fact that U2 could sell 840,000 copies in their first week.
I think sometimes the consumer press or, to a lesser extent, the business press, they'll get kind of caught up in so-and-so’s coming to market and they shipped all these copies, and then when it happens they’ll say, “Oh, is that all.” I actually heard two people say last week, “Oh, I thought they were going to sell 1 million.” Well, let’s not pretend that’s an everyday thing, there have only been two albums this year that had million-plus weeks, we had zero albums that had million-plus weeks last year, and we only had one the year before, so let’s not act like it’s an every day occurrence or that if you sold 841,000 instead of 1 million that that’s somehow a letdown. This is really absolutely a huge, huge deal.
What will U2’s second week look like?
They're liable to have a significant drop. First off, any big rock or rap record that has a number of a half-million or more, or maybe even shy of that, but anything that starts with a really large number, and especially if it’s a rock act or a rap act, is susceptible to a large second week drop because the behavior of the consumer is people who have been chomping at the bit to get that U2 album did not wait until the second week to buy it, they bought it as soon as they could get their hands on it, and in some cases stores even open at midnight when they have a highly-anticipated album so people can buy it Monday night. We had an unusual case where I think Snoop Dogg only had a 10 percent decline in his second week, but normally if you have a big rap record or big rock record that opens with 200-plus to 300-plus, you're going to have a 50 to 60 percent decline in the second week.
Then in the case of U2, not only do you have that normal behavior of a large second-week decline but you're no longer going to have your Thanksgiving week traffic, so even if it was a record that was less susceptible to a large second-week decline, you’re probably going to see a decline anyway just by the math of the fact that not as many people shop the week after Thanksgiving as shop during Thanksgiving week.
Many thanks to Geoff Mayfield!
By Devlin Smith, Contributing Editor
2004.12
With the release of U2's "Vertigo" single and "How to Dismantle an Atomic Bomb" album, fans around the world have kept an eye on sales charts to see exactly how the band was faring. In the United States, Billboard is the authority on album sales and radio plays, charting the performance of works in nearly every genre on its many album and singles charts.
But what exactly does it mean to top the Modern Rock Tracks chart or the Billboard 200, as U2 has done? To get the bottom of how Billboard creates its charts, as well as get insight into the retail end of the record business, Interference.com spoke with Geoff Mayfield, director of charts and senior analyst with Billboard. Not only did we get an inside look at these charts, we also found out that 2004 has definitely shaped up to be a good year for U2.
What do you do as the director of charts and senior analyst?
My primary job is to oversee the charts department, which compiles more than 40 charts for Billboard, most of them sales charts or radio charts. Our department wants to make sure that we're making the best use of the data that’s provided to us to assist readers in determining not only what's most popular but what the trends are and things like that, and to make sure that the charts are a helpful map in determining popularity. My senior analyst cap primarily is borne through the column ["Between the Bullets"] that I write that analyzes album sales as well as assisting the editorial department in identifying trends.
Who are these charts intended for?
They are the absolute report card for recording companies and they are a road map for either people who have to make decisions about buying music or video product, or for people who program either video or radio channels.
How exactly is the album chart put together?
All of our sales charts are based on data provided to us by Nielsen SoundScan, and Nielsen SoundScan has been in business since 1991 and they use the actual point of sale systems that retailers themselves use to track inventory. It's not like a separate system where when you make a purchase the cashier has to remember to scan something twice, it takes the actual information from the cash register and from that we have a universe that represents more than 90 percent of the US retail marketplace. You can be very comfortable about predicting national numbers to not only report what happened within the panel but what the actual overall sales would have been if you had the other remainder of the marketplace reporting.
The only thing I can think of that counts things for a living that might have a larger universe would be the box office for films, which is essentially almost 100 percent of that marketplace is represented in that sample. But when you look at TV ratings, radio ratings, Gallup Polls or other political polls, the sample is usually a fraction of 1 percent. Very few things that count things for a living have the luxury of a sample that counts more than 90 percent.
Sampling retail sales is not a new concept, music was a little bit late to it, it’s already happened in pharmaceuticals and the food industry before music picked it up, and the toy industry also had a pool together before the music industry picked it up. With that said, I don't know of any other field that picks up retail data that has as large a sample as Nielsen SoundScan has in the music market.
What was the system before SoundScan?
Before that people would report to us their best sellers according to rank, so we would get like their 20 best sellers and we would assign points, the highest point value going to the title that was reported the best seller and then a declining scale from there. Then there were a certain amount of titles that retailers could report as “strong” and then another certain amount of titles that retailers could sort as “good,” and we weighted the accounts that reported to us but that data still wasn't as specific, if you had two chains that did about the same volume.
At the time there was a chain called Camelot Music that did most of its business in malls, it was primarily the eastern part of the US and Texas, and they didn’t come much further west than their Texas stores, and they did about the same volume as Wherehouse that had most of its stores in California, with a heavy concentration of stores all west, including Oregon, Washington, Arizona, and they tended to have larger stores, they had some malls stores. They had about equal market share, you could take maybe the same two records and if Camelot’s top record was ahead of the No. 2 record by a small margin and then you went over to that other chain and found that the same two titles were on top of the chart but in an inverse order, and one of those might have a much larger sales tally than the other. In the system we had, as well meaning as it was, those two titles would have come out a wash because the reporting chains had the same weight and those votes would kind of cancel each other out when, in fact, if you had looked at how those two titles sold at those two companies one of them might have had a clear advantage that you couldn't capture without that important piece which was not only was it your top seller but how many did it make to be your top seller.
That’s the other thing that you realize when you get chance to look at more specific data is that some No. 1s are bigger than. The other problem is there's a maximum number of points you can have the way we used to do it, so you could have a big record and now it’s fighting to keep its place at No. 1 because it can only go down from the maximum number of points it earns. Whereas if you have a system that's built on specific data and something truly is dominating the marketplace, it's easier for that title to remain number one as long as it deserves to because if it’s outselling the No. 2 title by 600,000 or 500,000 or a significant margin, its lead is protected as long as it’s outselling all of the others.
For a lot of reasons [SoundScan works better], and speed of chart as well. Some accounts we had to call actually on the Friday prior to publication and then we tried to have as many of the big ones as possible on Monday, but you were missing that weekend business from the people reporting on Friday. The other advantage of having point of sale and the system we have now is it’s much faster if there's an impact from an appearance on “Saturday Night Live” or an appearance on “Oprah Winfrey” or anything like that. It's much more common, there were only six albums that had debuted at No. 1 in our old system and now it’s a pretty common sight to see an album debut at No. 1 in the Billboard 200, and that is more a reflection of how things actually sell in the marketplace.
How often are you getting this sales information?
We only get a pull from SoundScan once a week. With some retailers, they are gathering data more than once a week but the final processing happens on Monday and Tuesday and we only get data from them once it’s been completely processed. On rare occasions we have to rerun the chart on a Wednesday because after it goes up someone will discover that there’s a discrepancy that was not rectified during the processing, but by and large the chart that we receive on Tuesday is the same chart that will stand at the end of the day on Wednesday. Nielsen SoundScan puts its charts up for their subscribers on Wednesday morning.
Now that we have so many additional ways that people purchase than we did in 1991,do things like Amazon.com count?
Absolutely. Nielsen SoundScan has a vested interest in making sure it’s as complete as possible so not only did they go to the Amazon.com world as soon as it could, but it also went to digital sales as soon as it could. Not long after iTunes happened, iTunes happened, I want to say, in March of last year, and by the middle of the year Nielsen SoundScan was collecting data not only from iTunes but any other cyber service that was selling downloads was also represented in that sample and they’ve kept up with it. They added the PC platform for iTunes when it came out, they added Napster when it came out, they added Sony Connect, so they’ve really stayed on top of that, the Walmart.com, because they, as well as Billboard, have a vested interest in continuing to represent as complete a picture as possible. If we had stuck ourselves in the corner where we were only counting physical sales with the knowledge that digital distribution would become an increasingly important sector as we go forward, that would be a mistake.
Do iTunes sales then count on the singles chart?
If someone buys the whole album, it will count, yes. If someone goes in and buys eight out of 12 tracks, that will count toward individual track sales, but if someone actually goes in and purchases the entire bundle, so that everything that is on the physical album is on that bundle, then that will count as an album sale. The same with singles, which is a little confusing. If they have actually packaged a single that has not just the lead song that people are interested in but the same B-tracks that are included on the retail-available single, which is a smaller and small consideration these days because, unfortunately, there's just not a lot of singles that are made for market anymore, but if the bundle has the same content as the retail-available single and is identified by a UPC code, then that will count toward the singles chart. But most of the transactions we’re getting from iTunes and its competitors are individual track sales.
How are singles being counted now since they’re not being sold as often as they once were?
We still count them it’s just that the numbers are really, really small. We added [the digital] chart as soon as Nielsen SoundScan began to count digital tracks and the volume already was ahead of where retail singles are. Not long after the lead was like 10 to 1 and now it’s greater than that. It's a very unfair comparison because there's a wide assortment of hits that are made available in the digital marketplace and there are very few hits that are made available in the singles marketplace, and then on top of that, because there's been such constricted variety of material available, retailers frankly had to abandon making sections of their stores dedicates to singles, there’s just not enough titles, there’s not enough variety for them to have a large singles section in their stores the way they used to. Even if a hit does come to market, its sales potential is limited.
U2’s “Vertigo,” I don’t even think it was released as a sellable single in the US. When that topped the Modern Rock charts, was that strictly iTunes?
The Modern Rock chart, that’s not a sales chart, the Modern Rock chart with Billboard is a radio chart, so that meant that it had the most plays for the modern rock stations that we monitor, but it was a significant seller on iTunes. In fact “Vertigo” had the biggest sales week of any title that we’ve tracked.
Do you think the iTunes commercial had a lot to do with that?
Heck yeah. I have it memorized, I can almost tell you when the different colors are going to flash and when it's going to flip from the dancer to Bono. I think it helped a lot. I cannot recall any album, and I think that U2 has always taken the launch of a new album seriously, but I can't think of any album that they have promoted more vigorously than this one because it's been practically inescapable. If you watch any amount of TV you’ve seen that ad, and it’s been the case since the beginning of October. I happened to notice it because I watched all the baseball playoffs and it had a heavy package in that. Now that the playoffs have been long gone, I continue to see it so they target a lot of the shows that I watch, and I don’t think I’m the guy they were spending all that money to get. I was even kind of surprised, I think it was still in October, although it might have been early November, that song was actually the sound bed for an opening scene in the CBS series “CSI”.
They put songs on "CSI" and they also put a song on “The OC". Do those kinds of things have any kind of influence on the chart?
They do help but it's harder to see that in U2's case because they have so much else that’s building visibility. The difficulty we have is if you have done something ahead of release, or during release week, we don’t have cause and effect because everything that drew attention to the album’s release is reflected in that first week’s sum. It’s not like you can say, “Here’s where the sales were and then they were on TV and this happened.”
“OC” happens to expose a lot of developing acts and in some cases those acts have not only had a track exposed but they’ve actually been written into the script and played a club scene or played a dance or whatever, and in those cases we can see a before and after. With something like the U2 album it's hard to say how much of it was the iTunes and how much of it was because they played “Saturday Night Live” and how much of it was because they got all that attention for the video shoot that they did during release week because all those things, and Thanksgiving week traffic, contributed to that very handsome sales week that they had.
Are you anticipating any kind of sales jump because of the Grammy nominations?
I would say in a lot of cases nominations don't necessarily trigger anything but it’s different with the Grammys. I think with the Grammys, it is the oldest of the music awards shows and I think there’s an absolute awareness. Who it helps depends on who's nominated, frankly, and where they are sales-wise. If someone’s already sold millions of copies of an album and they get a lot of nominations, you’re not as likely to see as much of a bump because a lot of the people who might be motivated by that attention have already bought the album, but if you have someone whose profile is still developing [nominations can help].
Lauryn Hill several years ago when she did her first solo album and she had the most nominations, that was an absolute trigger because, yeah, she had some sales already but a lot of people who were intrigued to find out who this person was that got all these nominations, they reacted to that. Norah Jones is another example like, she’s had decent sales and was already building some momentum but when a seemingly unknown artist gets as many nominations as she did the first year that she did, that does create a trigger.
If in February U2 does win a Grammy, would that give them a boost as big as they are?
I think that winning a Grammy can be a trigger but the more meaningful thing is do you get play the Grammys. It’s exposure from the show, and there have been numerous instances where an artist didn’t win anything but had one of the more captivating performances and therefore had one of the biggest sales spikes.
Like Ricky Martin did.
Ricky Martin not only created a sales spike for the albums that he already had in the marketplace and the one that contained that song, the more important thing for him was it absolutely paved the road for a new branch of his career, and that was recording in English. It was absolutely an introduction and a few months later his first English-language album came out, so it not only created a sales spike for him but it really created a whole new career track for him. It did that for Bonnie Raitt, Bonnie Raitt one year was one of those artists who essentially swept the Grammys, she won four or five major Grammys one year, and it was an album that had performed okay but when she had as commanding a night as she did, plus she played on the show, that made it easier for every other album, it was her first album, I believe, to hit the Top 10, it was absolutely her first No. 1 album, and after that it became easier for Bonnie Raitt to hit the Top 10 because it just had opened that many more doors for her and created that much more awareness. Tina Turner with her comeback album “Private Dancer”, it was the same kind of thing for her. It doesn’t happen every year but often times you'll see someone who will not just get a momentary sales spike but actually be lifted to a new level in their career.
When counting sales, if someone comes out with a boxed set or double CD, does that count as one or multiple sales?
There is a lot of confusion about that—a unit is a unit. The reason people get confused about that is that the RIAA, the process that establishes gold and platinum albums is independent of the tracking that comprises our charts. If you have a boxed set, they multiply those shipments by three if there’s three CDs, and with double albums, if it’s over a certain length, they will do the same thing with that as they do with boxed sets. But for us a unit is a unit.
How much of a difference is there between what your numbers say and what the RIAA says?
They usually bare each other out. There can be fluctuations. One of the things we don't track are typical record club sales, and I have to qualify that because it used to be we didn’t do record clubs at all. Now record clubs, especially in Latin music, can be involved with the up front marketing of an album. Before we really didn’t want to track record club because it was all after market, an album would be out for six months, or even a year, before it got added to record club and then you would have this artificial spike that happened only because this after market had picked up that title. But now if there is direct marketing that happens, we do count those kinds of sales. I have to qualify, we no longer exclude record clubs but the only transactions that I’m aware of that are tracked are proactive at the beginning of a release as opposed to the old model where an album came to record clubs a half year or a year after it hit market. In those cases, like if you look at “The Bodyguard,” for instance, which is an older album, its certification level is a few million higher that its SoundScan number and the difference is the record club.
In advance of creating these charts does pre-analysis and hedging of bets go on?
I don't really do a lot of that because it happens so fast. You can speculate and speculate as much as you want but you really don't have a true sense how much something is going to sell until it actually has a chance to start selling. If something ships large that tells you retailers have confidence that it’s going to sell big. It used to be that you had to ship twice as many records as you were going to register in your first week, so if you were going to have a first week of 500,000, you needed to ship 1 million to get that. The shipping model is more efficient now, we’ve actually seen a lot of cases where you don’t have to ship as much product to yield a big number, but there is something about you have to send a certain amount of copies to the wrong stores to have the right amount of copies in the right stores, so I think that’s in play. But really none of it means anything until the consumer gets the chance to say whether they’re going to buy it or not.
A case in point was the last 98 Degrees album, that had come after other boy bands, N Sync and Backstreet Boys, had had really, really large albums and really, really large first weeks and I think that there was a lot of confidence by a lot of retailer that 98 Degrees was going to have similar success so they had a huge ship. Their first week was okay but compared to what they shipped, it didn't look that big. Every once in a while you’ll have something which kind of makes any speculation you do before it comes to market kind of a moot point.
The other thing is you have to remember is not so much what the short game it, it's what the long game is and sometimes people get kind of wrapped up in what the first week number is and really what’s important is how’s it going to sell at the end of the day. Eminem’s a good case, Eminem shipped close to 4 million copies, well you think he’s guaranteed to have a million-plus week but there was a fly in the ointment, they had to rush release that to market, they had to bring it out with an abbreviated sales week. It sold over 700,000 copies in its first week and sold more than 800,000 copies in its second week, and that’s still 1.5 million copies in the space of about 10 or 11 days, and that’s a more important number to me than whether he had a million-plus week.
What days does your chart reflect?
The tracking week ends on Sunday, so it’s a Monday through Sunday. Some of the accounts we report report Sunday through Saturday, but the tracking week officially goes Monday through Sunday.
So why then do new records get released in the US on Tuesday when they’re released on Monday in other parts of the world?
The US adopted Tuesday as a street date in the late '80s, I don’t remember the exact year now. Here's the problem with Monday, more and more stores receive new releases not from their warehouse but directly from the manufacturer. In the scenario where it comes from your warehouse, it will go to wherever your depot is and then it will ship out and you’re responsible for making sure it gets to the store on time, that it doesn't get out before it's supposed to get out. But with more and more new releases going directly from the record company to the store, then the store is dependent on the UPS route and you’re at a competitive disadvantage if it’s the day that the U2 album came to market and your competitor gets it an hour before you do or, worse, they get it several hours before you do. They made Tuesday the street date saying, "We’re still going to ship on Monday but you have to hold that product until Tuesday so that no matter what time you open, you have the product available," so that’s why they changed it. Whether you were at the beginning of the UPS route or at the end of the UPS route, you were going to have the same advantage.
Talking again about U2, how well did the album do in accordance with buzz and expectations?
It was huge, they've never had a bigger sales week. The ironic thing was the biggest week they've had prior to this during the SoundScan era, which some of their bigger albums are not in the SoundScan era, “Joshua Tree”, for example, the biggest sales week they’ve had was for an album that was never No. 1, and that was the album that came out in 2000. That sold over 400,000 copies but it happened to come out the same week that a Jay-Z and an Outkast album came out and, as a result, each of those sold half a million or more and that album was never No. 1, it debuted at No. 3, which was its highest chart position. But this one, I think people thought it was going to be big, I don’t know what the betting line was but that's a very handsome start, and especially for a band that’s been around as long as this one has. It was the 17th largest debut week that we've had since we’ve started using SoundScan and the only act that’s been around longer than U2 that ranks ahead of them was The Beatles.
Was that with the “No. 1” compilation?
No, it was with “Anthology”. “Anthology 1” came out right after the miniseries. “1’s” biggest sales week wasn’t its first week, it did have a good first week but it’s biggest sales week was Christmas week. “Anthology” had all that attention from coming out the same week as that miniseries.
The other acts that have had larger sales weeks than U2 are younger acts, N Sync had a couple that were larger, Garth Brooks and the Backstreet Boys had a couple that were larger. When you think about an act that first appeared on our chart in 1981 and here they are in 2004 and selling over 800,000 copies, that's just a very handsome accomplishment.
Can there still be big surprises on the charts?
Yeah, I think so. Once things come to market, you have a flying start. I don't anymore than anyone who's close to the market is surprised by what they see showing up in the Top 10, but when you get passed there you can still be surprised. Sometimes, too, not with an act as mature as U2, because everyone's eyes are on them, and actually if there’s anything, you have to manage expectations, U2 is a name that people know, and yet the bigger seller this month has been Eminem. Eminem is not as appealing to an editor at a newspaper who’s 50 or 45 or whatever, they’ve lived with U2 longer than they’ve lived with Eminem, maybe Eminem bothers them. I noticed that there was an awful lot of attention about the U2 album when I had every expectations the Eminem album was going to sell more. If anything, you have to kind of manage expectations, if you’re in a record company you almost have to say “Slow down,” yes, U2’s going to be big. Then the problem could be, "Gee, Eminem sold a million-and-a-half in this amount of time and these other guys didn’t, what happened?" when in fact we should all be celebrating the fact that U2 could sell 840,000 copies in their first week.
I think sometimes the consumer press or, to a lesser extent, the business press, they'll get kind of caught up in so-and-so’s coming to market and they shipped all these copies, and then when it happens they’ll say, “Oh, is that all.” I actually heard two people say last week, “Oh, I thought they were going to sell 1 million.” Well, let’s not pretend that’s an everyday thing, there have only been two albums this year that had million-plus weeks, we had zero albums that had million-plus weeks last year, and we only had one the year before, so let’s not act like it’s an every day occurrence or that if you sold 841,000 instead of 1 million that that’s somehow a letdown. This is really absolutely a huge, huge deal.
What will U2’s second week look like?
They're liable to have a significant drop. First off, any big rock or rap record that has a number of a half-million or more, or maybe even shy of that, but anything that starts with a really large number, and especially if it’s a rock act or a rap act, is susceptible to a large second week drop because the behavior of the consumer is people who have been chomping at the bit to get that U2 album did not wait until the second week to buy it, they bought it as soon as they could get their hands on it, and in some cases stores even open at midnight when they have a highly-anticipated album so people can buy it Monday night. We had an unusual case where I think Snoop Dogg only had a 10 percent decline in his second week, but normally if you have a big rap record or big rock record that opens with 200-plus to 300-plus, you're going to have a 50 to 60 percent decline in the second week.
Then in the case of U2, not only do you have that normal behavior of a large second-week decline but you're no longer going to have your Thanksgiving week traffic, so even if it was a record that was less susceptible to a large second-week decline, you’re probably going to see a decline anyway just by the math of the fact that not as many people shop the week after Thanksgiving as shop during Thanksgiving week.
Many thanks to Geoff Mayfield!
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Great interview with Billboards biggest chart stud! This is a must read for anyone new to the charts.
