Hot 100 Formula Discussion

[Deleted]

2007 Addition Of Streaming & Chart Recalibration

The Mediums

Music industry bible Billboard is changing the formula it uses to define hit songs to include tunes listened to and videos watched online at Yahoo! and AOL.

A revamped version of the magazine's Hot 100 singles chart now will reflect plays, or streams, of audio and music videos from the two online giants.

The addition of online music streaming into the mix of factors that Billboard uses to define the most popular songs in the country each week signals the entrenched popularity of Web music portals. These services offer ad-supported music programming, a la radio or MTV, allowing users to listen to songs and watch videos without payment required.

AOL and Yahoo! rank as two of the most popular such online music destinations. But data from additional online services, including Real Network's Rhapsody, is expected to be added by Billboard later.

The Numbers

Starting with this week's issue, the Billboard Hot 100 takes another step into the 21st century, as, for the first time, streamed and on-demand music becomes part of the chart's formula.

Initially, Billboard expects those plays to account for about 5% of the chart's total points.

Meanwhile, this first recalibration since digital sales moved into the chart two years ago makes an adjustment to account for the vigorous growth that digital distribution has experienced in that span.

SoundScan placed the number of digital tracks sold in 2005 at 352.6 million, almost triple the prior year's volume. Track sales grew by 65%, to 582 million, in 2006. Year to date in 2007, digital song downloads stand at 462.1 million through the year's first 29 weeks, up 48% over the same period last year.

Streaming will account for 5 percent of Billboard's hit calculation at the outset.

The bulk of the Hot 100's weighting is still radio airplay (55 percent) and music downloads purchased through the likes of Apple's iTunes (40 percent).

Billboard associate director of charts Silvio Pietroluongo said 50 streams of a song from AOL and Yahoo! is the equivalent of one download or 1,000 audience impressions.

2012 On-Demand Information & Chart Recalibration

Sales vs. Airplay

Additionally, the Hot 100's sales/airplay ratio has been adjusted to both accommodate the influx of additional streaming services to the chart's data pool and to slightly lessen the influence of sales, as the volume of digital downloads had increased exponentially since the chart's last formula modification in 2007.

The chart's new methodology continues to place the greatest weight on sales, with radio the next most influential component.

Streaming Components

This new Billboard chart, in coordination with digitalmusic.org's Subscription Music Work Group, and powered by Nielsen BDS, which began tracking streaming activity in 2005, measures every on-demand play request and plays from unlimited listener-controlled radio channels on MOG, Muve Music, Rdio, Rhapsody, Slacker and Spotify; data from Zune and Sony Music Unlimited is expected to be added in the coming weeks. The plays tracked for the On-Demand Songs chart include streams and tethered downloads by both paying and free/trial tier users.

On-Demand Songs measures every on-demand play request and plays from unlimited listener-controlled radio channels on subscription services MOG, Muve Music, Rdio, Rhapsody, Slacker and Spotify. The plays tracked for On-Demand Songs include streams and tethered downloads by both paying and free/trial tier users.

The Hot 100 will also include non-demand radio streams from Rhapsody and Slacke, audio on-demand streams from MySpace and Guvera and plays on video request service Akoo. Yahoo! radio streams and Yahoo! on-demand video plays, which were previously part of the Hot 100 formula, will continue to contribute to the chart's rankings.

(Under the chart's new recipe, on-demand streams will be weighted twice as much as passive/online radio streaming).

The Hot 100 formula, in addition to tracking terrestrial radio and digital track sales, will now account for the streaming data that makes up the On-Demand Songs chart, as well as non-demand radio streams from Rhapsody and Slacker. The chart rankings will also measure plays on video request service Akoo and audio on-demand streams from MySpace and Guvera. Yahoo! radio streams and Yahoo! on-demand video plays, which were previously part of the Hot 100 formula, will continue to contribute to the chart's ranking. The streaming data is provided to and processed by Nielsen BDS, which provides music research and monitoring services for the entertainment industry.

The Sources
www.billboard.com/news/hot-100-impacted-by-new-on-demand-songs-1006453952.story#/news/hot-100-impacted-by-new-on-demand-songs-1006453952.story
www.billboard.com/news/billboard-hot-100-to-include-digital-streams-1003619084.story#/news/billboard-hot-100-to-include-digital-streams-1003619084.story
www.billboard.com/news/fun-s-we-are-young-remains-atop-revised-1006455972.story#/news/fun-s-we-are-young-remains-atop-revised-1006455972.story
digitalmusic.org/wp-content/uploads/2012/MusicSubscriptionFactSheet.pdf
www.musicrow.com/2012/03/on-demand-chart-arrives-added-to-billboard-hot-100-formula/
www.nypost.com/p/news/business/item_23DFYLtBifVd2pPI3Lj3SJ

What To Take From This

2005 Formula
1 Hot 100 point for 500 digital sales.
1 Hot 100 point for 1M AI.

2007 Formula
1 Hot 100 point for 1k digital sales.
1 Hot 100 point for 1M AI.
1 Hot 100 point for 50k passive streams.

2012 Formula
Passive streaming mediums have been expanded to incorporate more.
On-Demand streaming mediums account for twice the chart points as passive streaming mediums.
During 2007, the ratio was said to be a 55% airplay, 40% digital, 5% passive streaming ratio.
However by 2012, digital sales were said to be the most influential opponent before the 2012 change.
The 2012 change notes that the order of influence as sales, airplay, on-demand streaming and lastly passive streaming.

Assumed Formula
1 Hot 100 point for 1k digital sales.
1.5 Hot 100 points for 1M AI.
1 Hot 100 point for 50k passive streams.
1 Hot 100 point for 25k on-demand streams.

This would mean a change from: 1,000 AI = 1 digital sale = 50 passive streams
To a new equivalence of: 2,000 AI = 3 digital sales = 150 passive streams = 75 on-demand streams [1,000 AI/1.5 digital sales/75 passive streams/37.5 on-demand streams]

We don't know how many passive streams song register on average per week; but if we assume that the ratio of passive to on-demand streams is about the same for all songs, then you can make the logical leap of:
1.5 Hot 100 points for 25k on-demand streams; or about 1 Hot 100 point for every 17k streams.

The formula that is commonly used now is "Sales*1; Airplay*1.5; Streaming*.1". This short-cut uses assumes 1 Hot 100 point for every 10k streams; which weights streaming heavier than what is likely. The total amount streaming (passive and on-demand) likely accounts for the Hot 100 is 1 Hot 100 point for every 15-20k streams total. Thus I'd recommend lowering the streaming multiplier to a smaller number to adjust.

[hitseeker.]

I'll read this when I'm not so tired, but Thank you for your hard work making this Xiivi, this is great :)

[Adonis the DemiGod!]

Can we bookmark this somewhere?

[Lozzy]

I'd love for this to be stickied, but there are already like 300 stickies in the General Music News section.

[Quixotic Music Lover]

Your formulas are correct for 2005 and 2007, but the ratios are a bit off.

2005:

1 HOT 100 point = 5 singles (digital & physical) sold (from the Feb. 12th, 2005 edition)

1 HOT 100 point = 10,000 audience impressions (I don't think this has ever been changed since BDS data was introduced Nov. 30th, 1991);

2007
1 HOT 100 point = 10 singles sold (August 11th, 2007 edition)

1 HOT 100 point = 10,000 audience impressions

1 HOT 100 point = 500 streams

2012:

1 HOT 100 point = probably 15 or close to 15 singles sold

1 HOT 100 point = 10,000 audience impressions

1 HOT 100 point = ? on-demand and passive streaming. Billboard says that on-demand is twice the weight of passive streaming, which would make it 250 if the 500:1 ratio was maintained, but based on my calculations it seems to be 200 or less.

[RadioKaKa]

Sept 30, 2012 17:19:59 GMT -5 Quixotic Music Lover said:

Your formulas are correct for 2005 and 2007, but the ratios are a bit off.

2012:

1 HOT 100 point = probably 15 or close to 15 singles sold

1 HOT 100 point = 10,000 audience impressions

1 HOT 100 point = ? on-demand and passive streaming. Billboard says that on-demand is twice the weight of passive streaming, which would make it 250 if the 500:1 ratio was maintained, but based on my calculations it seems to be 200 or less.

Mostly, I agree with you, in my opinion
1 Hot 100 point = 16 Sales = 10,000 Aud = 200,000 On-Demand streams

AND if 1 Hot 100 point = 1,000 Aud, equaling to as high as 37.5 On-Demand streams, then the number-one for the 15 Sep 2012 issue wouldn't be 'Whistle' but 'We Are Never Ever Getting Back Together', I think.

[Au$tin]

I remember when the 2007 one was added in. It was during this miraculous song's run.

77-48-23-17-36-36... Made me cry that day.

[Quixotic Music Lover]

If the oct. 13 results are any indication a 1:16 ratio for sales is accurate. I am surprised that billboard would make such a radical change. Digital sales have not increased that much.