RIAA Rule Change - The "Jay-Z Rule"

[🅳🅸🆂🅲🅾]

Counting Digital Singles and Digital Albums for G&P: A Common Sense Update
July 01, 2013

By now, many of us in the music business, as well as Jay-Z fans, know that Samsung has purchased one million “Magna Carta Holy Grail” digital albums to be given away to the phone maker’s customers. It is a novel and creative marketing move and it has rightly stimulated a healthy conversation about the sale’s meaning and implications for the modern music business.

For us, the move prompted a re-examination of our historic Gold & Platinum (G&P) Program award rules. As we dug through the records of audits, re-reviewed rules and consulted with our auditing firm of more than thirty years, Gelfand, Rennert & Feldman, we discovered one rule disparity that no longer makes sense.

One of our program’s requirements is that an album can become eligible for certification 30 days after release date. (There are other rules, of course – such as requiring that the price of the album meet certain requirements.) The 30-day rule exists to take into account potential returns of physical product – CDs, cassettes, vinyl, etc. that could be shipped to brick and mortar retailers and returned, in which case our auditors do not count the sales.

When we first created the Digital Single Award in 2004, we elected not to impose any 30-day rule because there are very few digital returns. According to our auditing firm, digital returns on average account for less than two percent of sales included in reports provided by the labels for certification – most digital retailer Terms of Use/Service allow users to return products only under limited circumstances.
Also at the time in 2004, sales of digital albums were virtually non-existent and accounted for a small fraction of overall digital sales. Fast forward a decade and that’s obviously no longer the case.

We think it’s time for the RIAA – and Gelfand, Rennert & Feldman – to align our digital song and album certification requirements. That’s why today we are officially updating this rule in our G&P Program requirements. Going forward, sales of albums in digital format will become eligible on the release date, while sales of albums in physical format will still become eligible for certification 30 days after the release date.

Not only do we believe it’s sensible and logical to align digital album rules with those we have maintained for digital singles since the program’s inception, we also consider today’s move in line with our larger efforts to modernize the G&P Program to reflect the new music marketplace. In May we announced the integration of on-demand streams to the program to more broadly recognize online demand for songs.

The reality is that how fans consume music is changing, the music business is changing as labels and artists partner with a breathtaking array of new technology services, and the industry’s premier award recognizing artists’ commercial achievement should similarly keep pace. In short, we’re continuing to move the 55-year-old program forward and it’s a good day when music sales diversification and innovative strategies meet the RIAA’s time-tested, gold standard requisites for certification.

Liz Kennedy
Director, Communications and Gold & Platinum Program, RIAA
Source

[Caviar]

Cute.

[Adonis the DemiGod!]

How about doing this stuff every chart ear rather than on a whim.

[KeepDeanWeird]

But aren't complete my album tracks (or preview singles - Gaga, Taylor and Katy come to mind) then converted from singles to credits towards the album? Or are they always treated as part of the initial album? (That doesn't make sense though because the buyer is under no obligation to buy the album.) Just curious.

[areyoureadytojump]

Certified 1xp with the RIAA:

@riaa
It’s official, see photo. #magnacartaholygrail is @s_C_’s 12th @riaa Platinum album award.

/photo/1

[Push The Button]

I wonder how many were actually redeemed?

[Glove Slap]

Jul 9, 2013 15:06:20 GMT -5 Push The Button said:

I wonder how many were actually redeemed?

That's kind of a moot point though. Certifications are done based on albums sold to retailers, not directly to customers. This follows in line with that.

I think this change is a good idea, it isn't too dissimilar to the music clubs from the 1990s. As the number of mediums to legally acquire music increases, it is in the best interest of the RIAA to modify themselves as well.

[josh]

So was the deal US only? I thought it was worldwide.

[rosemoor]

Hmm, idk, this doesn't feel like actually selling music, it's more like an endorsement deal. Theoretically anybody can do a deal like this with some company and "sell" 1 mil in a week even if 0 ppl actually download the album.

[Deleted]

Jul 1, 2013 16:02:41 GMT -5 🅳🅸🆂🅲🅾 said:

The reality is that how fans consume music is changing

Yup. I totally support this.

[Agent Yoncé]

[Adonis the DemiGod!]

Jul 9, 2013 17:47:47 GMT -5 @jazzysoul47 said:

Jul 1, 2013 16:02:41 GMT -5 🅳🅸🆂🅲🅾 said:

The reality is that how fans consume music is changing

Yup. I totally support this.

This doesnt change how fans consume music. People have been consuming free music for ages. If anything needs to be changed its the way the Top Album is calculated. I think Spotify like streams should be included in the album popularity not sales manipulations where one person or company can affect the charts simply by buying a ton of product.

[Deleted]

Jul 9, 2013 18:23:16 GMT -5 Adonis the DemiGod! said:

Jul 9, 2013 17:47:47 GMT -5 @jazzysoul47 said:

Yup. I totally support this.

This doesnt change how fans consume music. 

How fans consume music has already changed. They're finally making changes to their formulas to reflect that.

[slicknickshady]

This is a joke. Asterisk! Dude will never get a Diamond album, unless he sells 10 million to samsung next time. haha.

so i guess ill let him have this. lol.

[Glove Slap]

Jul 9, 2013 17:42:12 GMT -5 rosemoor said:

Hmm, idk, this doesn't feel like actually selling music, it's more like an endorsement deal. Theoretically anybody can do a deal like this with some company and "sell" 1 mil in a week even if 0 ppl actually download the album.

The same way a record company can sell a million physical units to retailers and 0 people might actually go in and purchase them. This isn't about chart placements, it's about certifications and that has always been based on records shipped to retailers, whether they were stores or music clubs. This is just an extension of that to suit the modern industry,

[Push The Button]

Jul 9, 2013 15:21:12 GMT -5 Glove Slap said:

Jul 9, 2013 15:06:20 GMT -5 Push The Button said:

I wonder how many were actually redeemed?

That's kind of a moot point though. Certifications are done based on albums sold to retailers, not directly to customers. This follows in line with that.

I think this change is a good idea, it isn't too dissimilar to the music clubs from the 1990s. As the number of mediums to legally acquire music increases, it is in the best interest of the RIAA to modify themselves as well.

I don't care either way, I was just wondering how many people actually redeemed the download. If those million purchases never get redeemed, that kind of promotion might not happen again.

[rosemoor]

Jul 9, 2013 19:37:34 GMT -5 Glove Slap said:

Jul 9, 2013 17:42:12 GMT -5 rosemoor said:

Hmm, idk, this doesn't feel like actually selling music, it's more like an endorsement deal. Theoretically anybody can do a deal like this with some company and "sell" 1 mil in a week even if 0 ppl actually download the album.

The same way a record company can sell a million physical units to retailers and 0 people might actually go in and purchase them. This isn't about chart placements, it's about certifications and that has always been based on records shipped to retailers, whether they were stores or music clubs. This is just an extension of that to suit the modern industry,

Nah, retailers actually care about how much demand is there when they make the order, unless they intentionally try to manipulate the chart (which is against the rule), making big or small order of certain album has no promotional benefit to their business. besides, they can always return the unsold albums. so the sales actually reflect the actual music demand there from the record buyers. but in this Jay Z case, phone company alone basically decides how much sales is gonna be for its phone users. the actual buyers don't count. basically, phone company can pick any artist, like I said, as an endorsement, it doesn't even have to be music, it could be anything, a pair of free shoes, a bottle of beer. The key is that basically some big shot of some company who has nothing to do with music can decide on record sales before anybody even have a chance of listening to it or even before the record actually gets made. The individual consumer doesn't count anymore. if this trend continues, this will be more and more like radio chart, it all decided in some headquarter office by big shot guys.

[Adonis the DemiGod!]

Jul 9, 2013 19:37:34 GMT -5 Glove Slap said:

Jul 9, 2013 17:42:12 GMT -5 rosemoor said:

Hmm, idk, this doesn't feel like actually selling music, it's more like an endorsement deal. Theoretically anybody can do a deal like this with some company and "sell" 1 mil in a week even if 0 ppl actually download the album.

The same way a record company can sell a million physical units to retailers and 0 people might actually go in and purchase them. This isn't about chart placements, it's about certifications and that has always been based on records shipped to retailers, whether they were stores or music clubs. This is just an extension of that to suit the modern industry,

Problem is we are dealing in digital where you can actually track the sales.

[Glove Slap]

Jul 10, 2013 9:52:35 GMT -5 rosemoor said:

Jul 9, 2013 19:37:34 GMT -5 Glove Slap said:

The same way a record company can sell a million physical units to retailers and 0 people might actually go in and purchase them. This isn't about chart placements, it's about certifications and that has always been based on records shipped to retailers, whether they were stores or music clubs. This is just an extension of that to suit the modern industry,

Nah, retailers actually care about how much demand is there when they make the order, unless they intentionally try to manipulate the chart (which is against the rule), making big or small order of certain album has no promotional benefit to their business. besides, they can always return the unsold albums. so the sales actually reflect the actual music demand there from the record buyers. but in this Jay Z case, phone company alone basically decides how much sales is gonna be for its phone users. the actual buyers don't count. basically, phone company can pick any artist, like I said, as an endorsement, it doesn't even have to be music, it could be anything, a pair of free shoes, a bottle of beer. The key is that basically some big shot of some company who has nothing to do with music can decide on record sales before anybody even have a chance of listening to it or even before the record actually gets made. The individual consumer doesn't count anymore. if this trend continues, this will be more and more like radio chart, it all decided in some headquarter office by big shot guys.

This sounds more like a personal qualm than a business one. Corporate involvement in the music industry goes back decades. You can dislike it of course, but it's nothing new. A lot of stuff is decided by "big shot guys". Also, companies choose the artists to tie to their product very carefully. If they do not think an artist cannon generate enough interest for their deal to look good, they're not going to do it. Similarly, if a retailer thinks a certain artist cannot move a certain number of units, they're going to order less. Bottom line is, the music industry has never been about "just the music", just like most industries don't solely revolve around the product being put out strictly from that end.

Jul 10, 2013 11:41:50 GMT -5 Adonis the DemiGod! said:

Jul 9, 2013 19:37:34 GMT -5 Glove Slap said:

The same way a record company can sell a million physical units to retailers and 0 people might actually go in and purchase them. This isn't about chart placements, it's about certifications and that has always been based on records shipped to retailers, whether they were stores or music clubs. This is just an extension of that to suit the modern industry,

Problem is we are dealing in digital where you can actually track the sales.

So? Record companies have had accountants keeping track of what they ship out since the industry started. There's no new information here, just a new channel.

[Adonis the DemiGod!]

Digital is not the same as physical. A sale should count as a sale. What are the requirements for a digital certification for a single? Why is it not the same for digital albums? Digital singles require the sale of a single not a shipment. This is not clever marketing. This is riaa and record company politics at play here folks.

[areyoureadytojump]

^It is the same for digital singles now. The rule change was for digital albums and singles.

[Adonis the DemiGod!]

Like I said I don't agree with the change. Its just one person buying all of the product and its an excuse for trying to rig the sales numbers. Its not a new marketing strategy for selling your music to consumers for the purpose of determining how popular an album or a single is. In theory one person could buy their own record to inflate their own popularity. The riaa certs really can be bought by corporate interests and not based on he popularity of the record.

[Mic Technique]

Yeah, platinum plaques have always been purchasable; there's just a transparency underscoring the transaction here. But that isn't to say I think this is clever marketing, nor do I believe this deal portends to the future of music consumption. It doesn't. Jay-Z is just an exorbitantly rich dude who can afford his own accolades.

[rosemoor]

Jul 10, 2013 12:01:05 GMT -5 Glove Slap said:

This sounds more like a personal qualm than a business one. Corporate involvement in the music industry goes back decades. You can dislike it of course, but it's nothing new. A lot of stuff is decided by "big shot guys". Also, companies choose the artists to tie to their product very carefully. If they do not think an artist cannon generate enough interest for their deal to look good, they're not going to do it. Similarly, if a retailer thinks a certain artist cannot move a certain number of units, they're going to order less. Bottom line is, the music industry has never been about "just the music", just like most industries don't solely revolve around the product being put out strictly from that end.

personal against Jay Z? no, why should I? if anything, I am personally against any measure to give more power to the faceless corporation. Especially considering the advancement of the technology actually make it easier nowadays to track the individual's preference and decision. Why would we want to be boxed in a few formats, like top40, HAC, Country, now are Samsung phone user, next Iphone user? and let the big huncho decide what should be for each box? In this particular case, at least they should just give each user a free pass for any album he/she chooses, and then tally the # for albums.

[livelikedying111]

I suddenly realized that this is certified platinum in the States, but why? is the free album available in the US only? if not why certify worldwide sales?

[areyoureadytojump]

^I guess the 1 million albums were purchased here in the USA. 1 million albums were "shipped" to Samsung's USA offices?