While recent years have seen the rise of independent record labels as a viable and sustainable source of financial success in the music industry, indies still find their business getting the shaft when it comes to reported sales data. From unfair groupings to lost tracking codes, the system seems rigged for the little guy to bow down to the majors, which is why many independent acts are looking to alternative sources of analytics to measure their rates of return.
Courtesy of Nielsen
Though of course it’s all a matter of debate, the central argument says that because Nielsen SoundScan tracks sales based on distribution rather than master ownership, sales of independent releases often get lumped in with the larger labels that distribute them, so their actual figures are skewed negatively. Despite the fact that a smaller label owns the actual recording, for instance, it still might not get credit for the sale.
In a letter from March 2011 addressed to Nielsen and Billboard magazine, Rich Bengloff, President of the American Association of Independent Music, asked both companies for a reevaluation of their methodology, claiming, “If you use ownership of master recordings to calculate label market share of both U.S. album sales and digital track sales in 2010, independent labels accounted for approximately 30% of each, while they accounted for approximately 37% of digital album sales. This puts the indies ahead of all the individual majors in market share.”
Courtesy of AAIM
“But Billboard reports market share based on distributor and as a result, sales from such independently owned music labels as Curb, Concord/Rounder, Razor & Tie, VP and Wind-up are embedded within the major-label market share totals,” he continues.
Of course, this is not the first complaint from the independent community about music sales tracking. In fact, it’s quite an outstanding and multi-faceted argument. In an article titled, “How people use Nielsen to hurt musicians” for TuneCore, Jeff Core, a representative of the digital distribution platform, breaks down figures proving how other parts of the system have been set up to screw over indie acts as well. From packaging codes to database terminology, a giant chunk of artists’ sales are seeping through the cracks.
Core refutes claims made by Tommy Boy CEO Tom Silverman that breaking artists contribute little to the market share of record sales, listing how the scene is both lucrative and thriving if only examined more thoroughly.
“The truth is more artists and bands are breaking now in America, and around the world, than at any other time in history. Technology has absolutely helped more great artists and bands rise to the top,” he writes. “According to Nielsen and Tommy there were ‘…106,000 new (music) releases in 2008.’ In 2008, TuneCore released approximately 90,000 newly recorded releases. This means, according to Nielsen and Tommy, that almost every single new music release in 2008 was distributed via TuneCore. I know this simply not to be true.”
Courtesy of TuneCore
Furthermore, Core adds, “Nielsen tracks sales by UPCs for albums, which must be pre-registered in their database, and if it’s not, the sale goes unreported. The majority of the 90,000 releases via TuneCore in 2009 were not registered with SoundScan, therefore making it impossible for them to track or report on the sales.”
Because of these and related issues, up-and-coming musicians are being forced to find other means to track and analyze figures pertaining to the merits of their work. As SoundScan only measures sales for albums that are pre-registered and sold at certain retailers, merchandise sales from tours and one-off record shops often fall off the radar. For many acts, the majority of their sales happen on the road, so looking at chart figures makes little sense when assessing overall results.
Plus, there’s the whole issue of limited availability. Writes music entrepreneur Wesley VerHoeve in his column, “The Post-SoundScan Era,” “SoundScan figures inform the decision-making process for stores that sell music when it comes to which releases to buy and stock. With shelf space rapidly shrinking in the offline world these decisions are only getting tougher to make, and many bands are missing out on being available offline based on their SoundScan numbers, when a more complete metrics picture could perhaps have them stocked after all. At the same time, physical retail is losing in relevance as sales slowly skew more towards digital or physical sales online through Amazon, Insound and others.”
As they say in politics, ignore the polls – it’s only half the story.