Playback and Payback; (part 12) charting the course (continued)

Continuing from last week’s article; author Hank Bordowitz further recounts:

The era of compromise and deliberation over the chart numbers all changed on May 25, 1991. On that day, Billboard publisher Howard Lander wrote:

For more than 30 years, our sales charts have relied on rankings of best-selling records obtained from stores, over the telephone or by messenger service. Until now, the only technological changes have been the introduction of computers to tally the data more quickly and the recent usage of fax machines – but the basic methodology has remained the same.

In the last few years, the introduction of point-of-sale systems that scan bar codes at retail checkout counters has made possible a whole new degree of accuracy for measuring record sales: the ability to count precisely the number of units sold, rather than just ranking the titles. Billboard has worked diligently over the last two years to take advantage of this new technology to produce more accurate charts. With this issue, we are proud to begin using actual piece counts for two of our leading charts: Top Pop Albums and Top Country Albums.

The source of this information was a year-old company called SoundScan. The charts, however, were ancillary to the company’s mission. “We wanted to create a management information system,” said company cofounder Michael Shallet, “a tool that would allow industry people – be they record executives, concert promoters, artists, managers, booking agents – to measure the cause and effect of the various marketing things that they did.”

To do this, SoundScan hooked up its computers to the point-of-sale computers, at retailers across the country, mostly the big chains that already had the point-of-sale computers to scan the bar codes of the recordings they sold. As the system rolled out, the company also started equipping independent stores with point-of-sale systems so it could monitor their sales as well. As far as the charts were concerned, this replaced preconceived notions of how records sold with solid, statistically significant sales figures. Said Shallet:

Before, you had a mentality as far as the chart was concerned that said sales should look like a bell curve – that the curve should start slowly, it should rise and the time frame would be different, how long it took to rise to its apex. Then, as gently as it rose, that’s how gently it would fall off again. But that really was never the sales pattern of a record. They keep stores open until after midnight so they can sell after the street date, and you see people dying to get a hold of the product. That is the real sales pattern.

Chaos erupted in the record business. Not only had the gentle bell curve disappeared, but suddenly every assumption in the business disappeared as well. Hardly a month went by without one or another blockbuster album entering the charts at #1. Genres that the industry regarded as “marginal,” like country, proved every bit as popular as pop. The mainstream record business seemed surprised by this, as if Nashville was another planet and the tastes in New York and Los Angeles totally reflected the tastes of the rest of the nation. (While they’ve gotten over the shock, they still don’t seem to have let go of that notion).

One executive at Time Warner described another upshot of SoundScan as “the multiplier effect,” or, as in A&R, nothing succeeding like success. When a record hits the charts, many retailers routinely discount the price. Some put the top albums in a preferential display, which makes sense; when an album makes the Top 10, that means people want it.

Therefore, until it reaches a saturation point, an album that reaches the top of the charts sells even more, and the charts are dominated by the same records week after week – i.e., the discounted ones. “Records slipped to the lowest common denominator,” the executive noted. “The resulting market lock-ins led to mediocrity.”

A Columbia University study backs up this observation with empirical evidence. A group of 14,000 people were given access to a website where they could download music and rate its “quality.” The ratings, however, were rigged; for example, one band was ranked 26 out of 48 in terms of quality. But the study showed that when a lot of people downloaded a song, more people continued to download it, whereas when there were few initial downloads, the song became one of the least downloaded in the study. The study suggests, the sociology professors at Columbia concluded, that people make their musical choices based on popularity rather than “quality.” “It turns out that when you let people know what other people think, the popular things become more popular,” said Columbia sociology professor Duncan Watts.

SoundScan brought other changes. At a very basic level, it changed the “reporting day” from Wednesday and Tuesday, with all reports compiled on computer (we didn’t have one back in the Record World days) and available Tuesday evening.

Other digital-age companies changed the process for compiling singles and tracks charts, which rely on information from the program or music director of the radio station, and they trusted it (although there was a lot on the line that would make one question its veracity). However, a company called Broadcast Data Systems (conveniently owned by the same parent company as Billboard) found a way to offer a far more accurate picture of the songs on the air.

In a similar manner to the way SoundScan tracks the digital barcode of albums sold, BDS’s computers monitor the songs played on radio stations and compare them to digital “thumbprints” of the second 30 seconds of every song release (stored in an enormous database). They check the second 30 second to avoid the chance of on-the-air talent talking over the record and fouling the sample. Similarly, a computer program called Selector, which most professional stations use to create their programming, can directly upload the playlist for the week to anyone authorised to view it. Radio and Records used this method to track spins until Billboard bought it and switched it to BDS. The songs that get the most spins chart higher.

Terri Rossi, Billboard’s director of operations, R&B music division, said, “The singles chart must be both an accurate measure of actual airplay and units sold, and also charted to the R&B music marketplace in such a way that a single can go to No. 1 on the R&B singles chart without necessarily crossing over to the general market.”

These new methods led to trepidation over the removal of the “human element” of the charts, and further fear of homogeneity, since reporting might become more of a science which will uniform the whole industry and take away from the individuality of markets.”

Of course, as we will see when we explore radio, this worry might have more to do with “phantom spins” – radio stations reporting songs they didn’t actually play – than any individuality, save how much certain individuals got to line their pockets. Nor was there any need to worry about radio becoming homogenous. That would happen, but it would come from a source far removed from the charts.

What SoundScan did do was exactly what Shallet and his partner, Michael Fine, set out to accomplish. “We still get calls,” said Shallet. “‘Hey, what can I do to get my records up the charts?’ The answer, of course, is sell records.”

To which the Time Warner executive responded, “The SoundScan experience show that businesspeople often settle for the least creative interpretation and manipulation of data.” This, of course, is a bind. Doubtless, SoundScan is a far more accurate measure of how records sell. It brings to mind something Churchill said about democracy: it’s the worst system in the world, except for all the others.