New Data Reporting Practices Will Transform Music Industry

Anyone following the news in the past few years has learned more than they wanted to know about the woes of the music industry. While some artists are making buku bucks live, most have failed to monetize recorded music in a meaningful way, especially compared to the halcyon days of the 80’s and 90’s. An indignant Taylor Swift pulled her music from Spotify, the world’s largest streaming service, condemning the corporation’s payout structure. And, while Spotify’s Daniel Ek has been more than forthcoming about their royalty payment system, the process has seemed anything but transparent, as rumors of different rates to different institutions abound.

Today’s announcement that streaming services like Spotify will now report user data to Billboard, to demonstrate the most popular artists of the day, is a major alteration of the music industry landscape. This is information that, until now, you won’t have seen outside of a top finance blog. For years now, those that sell records and those artists who are truly popular have been two different categories. Now, hopefully, the two will merge, and artists will begin to have compensation in keeping with their popularity. Here are three changes we anticipate. Seeing artists prosper lending credence to digital compensation advocates will surely foster a better financial climate for music.


  • Present Artists Will Be Placed Much Differently. . Ariana Grande’s album has been out for weeks and, in the traditional Billboard chart gauging physical album sales, she hasn’t broken the top 30 in days. According to the new algorithm, where 1500 streams equals one album sale, she is the 9th most consumed artist in the United States.


  • Older Artists Will Pop Up on the Chart. Because music streaming favors older artists as well as new, we also believe that old music will be cracking the charts. Old songs get attention “bumps” for lots of reasons: nostalgia, commercial/movie placement, band reunions. With interest in forgotten artists renewing all the time, expect to see them popping up on Billboard, in a way that a chart based on physical album sales would not represent.


  • Careers Will Be Built Faster. Having a hit song on the internet and being a household name rarely occur at the same time. Expect this to change. If a band has one hit single that is streamed ten million times in a week (as often happens), this will be sufficient to break into Billboard’s upper reaches. Topping the Billboard chart translates into television appearances, news headlines, and mainstream attention. It is a much more organic way to establish careers, but also a much faster one. One hit wonders could very really top the charts in a bigger way than ever before, before disappearing. What if Rebecca Black had a number 1 album on Billboard? If this algorithm had been in place when “Friday” came out, she very well might have.


Technology and industry standards continue to lag behind the needs to musical artists. The rough days of the past decade are not yet in the rearview, but Billboard’s announcement that it will now be accepting streaming data to make its chart is a hint that the industry is accepting more nuanced standards to elevate (and hopefully compensate) its artists. At the very least, we expect Ms. Swift will be bringing her music back on Spotify. Perhaps this will bring other longterm holdouts like The Beatles on board. Whatever the case, sophisticated data use is a boon of our times, and music will only benefit from it.