Billboard 200 Chart to Include On-Demand Streaming in Rankings -- Update

By Hannah Karp 

Starting next week there will be new ways for artists to climb the Billboard 200 album chart: selling singles and racking up streams on Spotify, changes that could complicate the ways record labels time the release of big new albums with chart-topping potential.

Instead of simply tabulating album sales, Billboard, the music trade magazine, and its data provider, Nielsen SoundScan, will use a new formula to rank the country's most popular albums, counting 1,500 song streams as the equivalent of one album sale. To qualify, the streams must occur on on-demand, subscription services such as Spotify AB, Apple Inc.'s Beats Music, and Google Inc.'s All Access, which charge about $10 a month. The streams also must be requested by the user, not served up by custom radio features that some of the services offer. Streams on ad-supported radio services such as Pandora Media Inc. won't count, nor will YouTube views, according to Nielsen.

The 1,500-streams-per-album-sale formula is one that is already used by many record labels to make other business calculations.

The new ranking system will also count the sales of 10 separate songs from an album as equivalent to one album sale, also a long-standing equivalent in the music business.

The album-chart moves follow Billboard's makeover of its Hot 100 songs chart in 2012. Last year Billboard added YouTube views to the Hot 100 calculation as well.

The new formula poses a conundrum for artists and record labels when it comes to the timing of new releases. It typically takes several weeks for songs to peak on streaming services, some label executives and managers say. But sales are usually highest in an album's first week, so getting both metrics to peak at the same time to optimize chart position requires making the music available on streaming services several weeks ahead of Apple iTunes Store.

At the same time, though, many artists and labels are reluctant to release to streaming services first, at the risk of souring relations with Apple, a valuable marketing partner. Withholding music from streaming services may also drive sales for the biggest artists. Most notably, Taylor Swift sold nearly 1.3 million copies of her new album "1989" in its first week--the biggest sales week for any album since 2002--without making it available for streaming.

Nielsen Entertainment analyst Dave Bakula said the changes could give pop acts and mainstream R&B artists a boost on the album chart, given that these genres tend to sell and stream more singles. But he didn't expect that big-selling artists with older fan bases would suffer much on the charts for lack of streaming,

YouTube views won't count, he said, because the industry was concerned that too much of YouTube's content was user-generated and therefore not "official."

Billboard will still tally pure album sales on a separate chart, according to a company release, while genre-specific album charts will remain album-based for now.

The changes to the album chart were reported earlier Wednesday afternoon by the New York Times.

Write to Hannah Karp at [e-mail]

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