Number One With an Asterisk: Billboard to Exclude Deep Discounts from Sales Charts

Billboard is instituting a minimum pricing threshold on its long-running sales charts, casting a frown upon music retailers’ most aggressive promotion tactics as record labels seek to stabilize the value of CDs and digital tracks.

Under the new policy, albums that sell for less than $3.49 during the first four weeks of their release “will not be eligible for inclusion on the Billboard album charts and will not count towards sales data presented by Nielsen SoundScan.” Nor will singles that sell for less than 39 cents during their first three months of release, Billboard states.

The policy goes into effect the week of November 21, enabling the magazine to exclude from its reporting any rock-bottom Black Friday music promotions that may be in the offing.

The changes are chiefly in reaction to Amazon’s 99-cent sale of Lady Gaga’s “Born This Way” in May, which attracted hundreds of thousands of customers to the online retailer in its relentless fight for market share against Apple’s iTunes. At the time, Billboard allowed “Born This Way” onto its sales charts, noting that neither Lady Gaga’s management nor Interscope, the album’s distributor, played any part in the promotion. (Indeed, Amazon reportedly paid full wholesale price for each copy of “Born This Way” that it nearly gave away, taking a loss in the neighborhood of $7.40 per unit.)

Bill Werde, Billboard’s editorial director, defended the policy change in a note this week, stating that the magazine’s decision followed “much thought and consultation with the industry.”

Werde said that the magazine settled upon $3.50 as its threshold price because it represents half the average wholesale price of an album. The new policy, Werde added, “would not interfere with any regular or semi-regular pricing currently in effect at any of the five biggest retailers — Walmart, Amazon, iTunes, Best Buy and Target.

“Billboard doesn’t want to control the marketplace. We just want to count it,” Werde said. “But free or almost-free albums don’t represent a marketplace.”

However, retailer discounts remain an undeniable music market driver. The current top selling album at Amazon’s MP3 store, Coldplay’s “Mylo Xyloto” (released Oct. 24 by Capitol/EMI), fetches just $4.99, roughly half the album’s price on iTunes.

Meanwhile, only two titles on Amazon’s top 10 chart on Friday sold for prices higher than $7.99: Drake’s “Take Care” (released Nov. 15 by Cash Money/Universal) and Adele’s “21” (released in February by XL Recordings/Columbia).

U.S. Album Sales Top 326 Million Units in 2010; Digital Accounts for 26% of Market

Eminem may have staged a “Recovery” in 2010, but the year held a more nuanced sales story for the music industry overall.

The rapper’s comeback album was the best-selling of the year, with “Recovery” moving 3.42 million units during the 52 weeks ending Jan. 2, according to Nielsen SoundScan (via Billboard). That figure is fewer than half the number of copies sold of “The Eminem Show” in 2002 (an album that also was the year’s best-seller). But Billboard points out that “Recovery” is the biggest-selling album of a year since 2007, when Josh Groban’s holiday-themed “Noel” sold 3.7 million copies.

Total album sales in the U.S. for 2010 were 326.2 million, down 12.8% from 373.9 million in 2009. The 10 best-selling albums of 2010 together accounted for 20.1 million units, or 6% of the total album sales for the year.

Overall sales of individual digital tracks were up by 10 million units from 2009, or 1%, to 1.17 billion. Digital album sales posted double-digit growth, however, rising 13% to 86.3 million. Digital albums represent more than one quarter of all U.S. album sales (26.5%).

Beatles Catalog Tops 450,000 Units in First Week on iTunes

The Beatles sold some 450,000 albums and 2 million individual tracks on iTunes between the band’s Nov. 16 debut and Nov. 22, according to Apple (via Billboard).

Industry sources tell Billboard that the Beatles’ first week on iTunes equated to 119,000 albums sold in the U.S. — including 13,000 digital box sets — while Stateside track downloads topped 1.4 million. Apple reportedly counted box sets as multiple sales units for its worldwide sales total, though it is unclear how many units each set represents (as well as whether the two-volume “Past Masters” represents one sales unit or two).

In any event, Beatles album sales continue to rank high on iTunes as the titles enter their second week of availability. As of this morning, 16 of the 17 Beatles releases on iTunes are among the store’s top 200 best-sellers. “Abbey Road” continues to rank highest, at No. 14; the band’s $149 digital “Box Set” itself ranks at No. 43.

The group also still claims eight singles on iTunes’ 200 best-selling tracks today, led by “Here Comes the Sun” at No. 76.

Concert Industry Grapples With Summer Slump

Summer tour cancellations from the likes of Christina Aguilera, the Eagles, and U2 have many in the live music business fearing a downturn. A Rolling Stone story (subscription required) says high ticket prices and maladroit marketing from promoters such as Live Nation Entertainment are primary culprits behind “the worst summer touring season in a decade.” Meanwhile, Billboard quotes concert industry insiders who blame “ill-advised touring by artists who either don’t have a new album or single out, or have made the rounds too many years in a row.” But as both magazines point out, there are plenty of successful tours this season, from Lady Gaga to James Taylor and Carole King.

Billboard Analysis: Streaming’s Impact On Music Downloads

Streaming’s impact on consumer behavior has been discussed — and doubted by some — since NPD Group’s Russ Crupnick gave a presentation at last weeks’ Digital Music Forum in New York. As has been reported, Crupnick said free, on-demand music services result in 13% fewer digital download purchases, while non-interactive webcasts and other services result in 41% more digital download purchases. By Billboard

Billboard: Five Reasons Why 2010 Will Be Revolutionary For The Music Biz

Among the trends and events that will bring further change to the business: The Ticketmaster-Live Nation merger, and the emergence of Internet Service Providers as anti-piracy partners. By Billboard

Billboard Champions The CD, Continued Decline Notwithstanding

“Regardless of the strategies chosen by artists and labels to best serve those fans who still desire physical product, they should continue to supply CDs and LPs to the market,” writes Billboard’s Glenn Peoples. CD sales were down 18% in 2009, a decline comparable with the previous two years, according to Nielsen SoundScan. But Billboard says that in spite of retail closures and other woes, the CD — and physical product in general — is not dead. By Billboard

North America Concert Business Down, But Only Slightly

The $2.8 billion in box office is down 2% and the 50 million in paid attendance is down 1.7%, but these numbers were generated from a 9% decrease in the number of shows reported. A more positive indicator is a show-by-show analysis of the year. In North America, average per-show gross and attendance are up 7.6% and 8%, respectively. By Billboard

Vinyl, Digital Music Sales Hit New High Marks

Billboard reports that as of Nov. 8, four artists have broken Rihanna’s single-year sales record of 9.9 million digital tracks in 2009: Michael Jackson (11.3 million tracks year-to-date), Lady Gaga (11.1 million), Black Eyed Peas (10.3 million), and Taylor Swift (9.98 million). Next week, sales of digital albums should surpass last year’s total of 65 million and sales of digital tracks should top the 1 billion mark. On the other end of the music sales spectrum, year-to-date vinyl record sales topped two million units last week, surpassing the 1.9 million units sold last year. By Billboard

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