The RIAA’s New Gold Click Award
Has the RIAA finally learned how to count in the internet age? As of now they are recognizing interactive on-demand streams as “sales” for determining Gold Record status. Will their new system really create a golden stream or more yellow snow?
Last month at the 2013 NARM conference, the RIAA made “a landmark announcement.” Effective immediately they will begin tabulating interactive streams when calculating their historic sales awards. Already awards have been handed out to several artists based on these new metrics.
According to their press release, “on-demand audio and/ or video song streams will now be counted towards the 500,000 gold, 1 million platinum and 2,000,000+ multi platinum thresholds required for the GMP's digital single award certification.”
In short, every 100 interactive streams will now equal 1 traditional “sale.” This will include the on-demand components of services like MOG, Rdio, Rhapsody, Slacker, Spotify, Xbox Music and video streaming services like MTV.com, VEVO, Yahoo! Music, YouTube, etc.
It was no accident that Joshua Friedlander, Vice President of Strategic Data Analysis at the RIAA rather than the RIAA's CEO, Cary Sherman addressed NARM attendees to make this announcement. Friedlander is the one responsible for just about every sales and trending statistic the RIAA publishes and as such is the architect for much of our understanding about modern music consumption. And since these stats are the fundamentals of most journalistic sources, blogs, expert testimonies, court proceedings and analysis done by the government when considering new law, it could be argued that Mr. Friedlander is one of the most important, yet unknown influences in the music trade.
He stated to the 8 AM breakfast meeting, “We feel this program is a huge step forward in bridging the gap between old-school [think] of calculating sales and the modern method of music consumption.”
Of course calling this a “huge step forward” while accurate, only serves as justification for the tech-gilded critics of the RIAA screaming that that the major label trade organization has been living in a cave throughout the internet era. Several other bean-counting entities have already entered the space, not the least of which is Big Champagne, currently owned by Live Nation, who for years has claimed they can count all internet-based activity. They publish their own “Ultimate Chart,” which competes with Billboard who has also been counting digital downloads for several years.
THE SECRET SAUCE
But enough history. How will the RIAA's new golden stream work? Simple.
According to Friedlander, 100 interactive streams will now equal a single NTC (“Normal Trade Chanel”) sale. By way of an absurd example, if an artist had no music-file to download or CD to sell they could still get a gold record award by having 100 times the requisite 500,000 “sales” that one needs to qualify as a gold record in America. In other words, by getting 50,000,000 tractable interactive streams.
I had an opportunity to privately interview Mr. Friedlander for Moses Supposes and ask them how they came up with this formula. Why 100 streams and not 1000 or only 10?
He said, “We found that a lower number would overwhelm the statistics and the higher numbers would not register anything at all.” (In quote checking this piece Friedlander added, “We started by looking at the real-world data for on-demand and traditional purchase consumption trends to see what people were actually doing. Then we looked at the impact on the program.”)
On this conclusion Mr. Friedlander and I pretty much agree. An artist doesn't need 50 million streams if they have traditional sales as well to get the coveted wall placard; a few million is more than enough to state that they are a significant player in the landscape when combined with the physical companion sales of equal magnitude. So, the 100 number (which might change in time) does seem like a good threshold as a start.
However, there was one point that Friedlander and I could not seem to come to terms upon: I asked, “Why not incorporate illegal streams as well: peer-to-peer file-sharing and people who know how to game the non-interactive services, like Pandora?
“We felt the data too unreliable,” Friedlander replied, “Often times people steal entire albums [via illegal P2P] and only listen to one or two songs. When something is purchased on iTunes or through Spotify we can track that data and it's reliable.” But, then he paused and added a more impassioned reason… “In addition, we are not in the business of rewarding thieves.” (In quote checking this piece Friedlander added, “The program is designed to recognize lawful consumption that remunerates artists.”)
Regardless, I was still not clear on how counting a “stolen” track so that the artist can get an award is the same as rewarding thieves, but I get the idea. There was just one flaw in this logic.
“So,” I asked, “In the old method RIAA sales were based on shipping records. If a label shipped half-a-million units and none of them returned to the distributor the artist would've received a gold record award, correct? “
“But, if all half-million of those units were shoplifted by mall-rats you would still give the artist a gold award, right?”
And here, Mr. Friedlander began to look at the ceiling for help. For it seems clear, especially to those who favor the tech industry, that calculating all types of use, both legal and illegal, is what honors the artist and recognizing all acquisitions, legal or otherwise, does not necessarily mean you are rewarding thieves.
To this end there are still many legitimate, legal sales that are not counted by the RIAA: used LPs and CDs, for one. They make up tens of millions of unit sales each year, but are ignored because they do not put revenue into the major label pipeline. When we live with the reality that CDs are bought, ripped and resold many times via places like Amoeba Records, why only count the “first sale” towards their gold and platinum status?
I don't expect the RIAA to embrace my logic considering the gods they serve, but I would like them to consider a future where honoring the artists will get harder and harder as trackable “sales” become more and more elusive. Yes, this is an important step but clearly it is not yet the giant leap for Artist-kind.
For more on this, here is a opinion piece I wrote in May of 2008 called, The Golden Click. It asked some questions that it appears, for the RIAA, served as inspiration.
What do you think? Will adding streams from registered interactive “access model” services move the needle for some artists more than others?