Streaming’s Popularity Is Reweighting The Billboard Charts
In a bow to the growing popularity of music streaming Billboard is about to reweight their Hot 100 and Billboard 200 charts to more accurately reflect how listeners are consuming music today. Traditionally Billboard has used album sales to track popularity because that’s the only metric which used to matter to artists, songwriters, and labels. However since streaming royalties now account for 43% of the global music revenue, Billboard needs to factor streamed plays into the equation too.
Within the music streaming ecosystem there are two distinct consumption models – ad free subscriptions and free ad-supported addressable streaming. In Billboard’s new formula 1,250 subscription streams will count as one album sale, and on the free side 3,750 streams will count as one album sale. The reason the subscription side requires fewer streams to count as an album is because typical label-direct licensing deals pay 2-3x the royalties compared to the compulsory licensing on the ad-supported side. Does anyone need a protractor to help figure this out yet?
Regardless of the math behind the formulas, rest assured that as Billboard throws more weight behind the streamers so too will the artists who’ll look to Pandora, Spotify, Apple, etc. to help break their next hit.