NYT: Album/Merchandise Bundles Controversy
Jun 10, 2019 8:31:29 GMT -5
Post by areyoureadytojump on Jun 10, 2019 8:31:29 GMT -5
www.nytimes.com/2019/06/09/business/media/billboard-charts-bundles.html
A Billboard No. 1 Is at Stake, So Here’s an Album With Your Taylor Swift Hoodie
By Ben Sisario
June 9, 2019
About half the 39 titles that topped the charts last year were sold as part of ticket or merchandise “bundles.” Now even some who benefited from the strategy are complaining.
For decades, the phrase “No. 1 with a bullet” has referred to a song or album that zooms to the top of the Billboard charts. Given current music industry practices, “No. 1 with a T-shirt” may be more accurate.
Lately, many artists — and their record companies — have been trying to game the system of ranking musical hits by including free downloads of new albums with sales of concert tickets, clothing and other merchandise. It’s a widespread practice, and the result is some confusion about what, exactly, the weekly charts are measuring.
Now some of the very people who have taken advantage of this strategy are complaining about it, and Billboard is under pressure to change the rules governing its charts.
The use of so-called album bundles — tacking a download or CD to another purchase — is an age-old sales gimmick in the music industry, but now it’s everywhere. Of the 39 titles that went to No. 1 last year, at least 18 were sold as part of ticket or merchandise deals. One of the most prolific bundlers has been the Houston rapper Travis Scott, who last year claimed the top spot by selling key chains, hats and access to concert tickets.
The next big bundler may be Taylor Swift. While her new album has no announced release date, her website is already accepting advance orders for it as part of deals for a hoodie ($65), a T-shirt ($40) and a smartphone stand (a bargain at $20), in hopes of its hitting No. 1 once it comes out.
A $40 T-shirt on Ms. Swift’s website. Artists who have “bundled” albums with merchandise on their way to No. 1 on the Billboard charts include Travis Scott, the Backstreet Boys and Bon Jovi.
At the same time, behind-the-scenes disputes have broken out between artists and Billboard’s chart referees when the trade publication deems particular deals out of bounds, potentially costing musicians their shot at the top slot.
Last month, there were two such disagreements: first when a Christian rock group, Hillsong United, lost out for No. 1 to Pink after some of its ticket deals were disqualified, and then in a bitterly contested race between DJ Khaled, a social-media star in the orbit of Jay-Z and Beyoncé, and the eclectic rapper Tyler, the Creator. Bubbling under the weekly chart competition is the question of whether the top positions are being determined by the popularity of a new album or the swag sold with it.
Billboard, whose charts are widely accepted as the last word in measuring the popularity of songs and albums, acknowledges the problem. It plans to announce this year that it will tighten the rules on merchandise bundling, said Deanna Brown, the president of the Billboard-Hollywood Reporter Media Group, a division of Valence Media.
Artists and people in the music industry, Ms. Brown added, “tell us week after week, month after month, that they want us to occasionally throw a flag on the field when necessary.”
The rise of album bundles may be a response to the explosive growth of streaming and the rapid decline of album sales. From 2015 to 2018, revenue from album downloads plunged by about 53 percent in the United States and CD sales fell by 52 percent, according to the Recording Industry Association of America. Over the same period, streaming revenue more than tripled.
But the formulas that Billboard and Nielsen, its data partner, have adopted to reconcile the many ways that people consume music today have given artists and their marketers an incentive to push downloads and CDs, despite most fans’ preference for streaming. When it comes to the charts, each album a fan acquires — by itself or when tacked on to the purchase of a ticket or T-shirt — is worth about 1,400 times as much as any individual stream.
That has made bundling more appealing than ever to artists — even superstars like Ms. Swift, who could once reliably count on millions of CD sales. Not that she is new to bundling. In 2012, she had a deal with Papa John’s Pizza to sell her album “Red” with a large one-topping pie for $22.
A Papa John’s in Nashville in 2012, when the chain sold Ms. Swift’s album “Red” with a large, one-topping pizza for $22.CreditDoug DuKane/Invision, via Associated Press
One result is that the top chart position tends to go back and forth between artists with huge streaming numbers — like Drake or Post Malone — and those offering bundles.
The trend has led to some puzzling outcomes. In 2018, a ticket deal helped a year-old Bon Jovi album return to the top spot. And four months ago, the Backstreet Boys, a group that had not stood on the chart’s summit since 2000, opened at No. 1 with its fifth album since then, “DNA,” thanks again to a bundle for tickets to its summer tour. (The next week, “DNA” plunged to No. 24.)
Two weeks ago, the chart was held up by several days while Billboard studied the sales data of two new albums: Tyler, the Creator’s “Igor” and DJ Khaled’s “Father of Asahd.” Each had gotten an almost equal number of streams, so the contest for No. 1 largely came down to the validity of their bundles. Tyler offered clothing and even campaign-style lawn signs (“Vote Igor!”), while DJ Khaled’s album was included with sales of energy drinks through an e-commerce site, Shop.com.
After scrutinizing the two campaigns, Billboard gave the victory to Tyler. The magazine disqualified most of DJ Khaled’s bundled purchases, suspecting that some of the marketing by Shop.com and its corporate parent, Market America, had crossed a line by encouraging unauthorized bulk sales. One blog post from the company, for example, told its members to buy 12 packages to “push DJ Khaled and Market America to No. 1!”
Ms. Brown, the Billboard president, defended the decision. “In this particular instance,” she said, “we saw an organization encouraging purchases among their members by promising them material and organizational benefits.
The ec-commerce site Shop.com included DJ Khaled’s album “Father of Asahd” with sales of energy drinks.
Both Market America and Roc Nation, DJ Khaled’s management company, said the decision had blindsided them. Desiree Perez, Roc Nation’s chief operating officer, also criticized the very practice of bundling, and Billboard’s countenancing of it, as a kind of weekly arms race that should be banned.
“We dispute their decision on behalf of DJ Khaled and, frankly, every artist who is forced to navigate bundling an album download with an inexpensive item that still effectively represents their brand,” Ms. Perez said in a statement. “It’s confusing and demeaning to the art.”
She added: “We’re obviously not fans of bundling, nor should anyone who cares about artists making music. But our hands are being forced by Billboard’s desperate, last-ditch effort to keep streaming from eliminating what’s left of music downloads.”
Market America, a so-called multilevel marketing company, has been criticized for its sales methods, such as requiring members to meet sales quotas. In a lawsuit filed two years ago, disgruntled former affiliates called the company a “pyramid scheme.” In an interview, Marc Ashley, the company’s president, denied that its members had sales quotas and dismissed the legal action as a “troll suit.”
An executive of DJ Khaled’s management company, Roc Nation, said, “We’re obviously not fans of bundling, nor should anyone who cares about artists making music.”CreditJake Michaels for The New York Times.
Epic, DJ Khaled’s label, declined to comment.
To some extent, managing the charts has always been a cat-and-mouse game. In 2004, Prince gave copies of his album “Musicology” to fans who bought tickets to his tour. As a result, Prince earned his first Top 5 position in a decade and Billboard created a new rule, a version of which exists today: For a ticket bundle to count on the charts, the consumer must take a step to receive the music, like redeeming a coupon code. (No such rule exists for merchandise deals, however.)
“This is savvy gamesmanship,” said George Howard, a former record executive who is an associate professor of music business and management at the Berklee College of Music in Boston. “What’s new is that the industry is finding new ways to game a system that has always been gamed.”
Billboard has said it is still deciding how to revise its bundling rules, and has held a series of industry meetings in recent months on the matter. Many of those have involved major-label record executives, who tend to favor bundles as an essential marketing technique as well as a chart strategy.
Until those changes are made, the charts are likely to continue to be affected by bundling deals, like the merchandise offered by Ms. Swift and a ticketing deal for Madonna’s latest tour.
For those artists, a Billboard No. 1 album is a vital trophy. Despite the wide availability of streaming data from sources like YouTube and Spotify, the magazine’s charts remain the most recognized sign of popular success, both inside the industry and among fans.
Yet even that is changing, as new artists look for new strategies to engage with their fans and new indicators of success, said Brian Popowitz, the general manager of Black Box, a music marketing agency in Los Angeles.
“This is a first-class problem that affects the top-tier, 1 percent of artists,” Mr. Popowitz said. “I see a lot more artists saying, ‘I really want to do Instagram,’ versus saying, ‘I want a No. 1 Billboard album.’”
A version of this article appears in print on June 10, 2019, on Page B1 of the New York edition with the headline: No. 1 With a T-Shirt?.
A Billboard No. 1 Is at Stake, So Here’s an Album With Your Taylor Swift Hoodie
By Ben Sisario
June 9, 2019
About half the 39 titles that topped the charts last year were sold as part of ticket or merchandise “bundles.” Now even some who benefited from the strategy are complaining.
For decades, the phrase “No. 1 with a bullet” has referred to a song or album that zooms to the top of the Billboard charts. Given current music industry practices, “No. 1 with a T-shirt” may be more accurate.
Lately, many artists — and their record companies — have been trying to game the system of ranking musical hits by including free downloads of new albums with sales of concert tickets, clothing and other merchandise. It’s a widespread practice, and the result is some confusion about what, exactly, the weekly charts are measuring.
Now some of the very people who have taken advantage of this strategy are complaining about it, and Billboard is under pressure to change the rules governing its charts.
The use of so-called album bundles — tacking a download or CD to another purchase — is an age-old sales gimmick in the music industry, but now it’s everywhere. Of the 39 titles that went to No. 1 last year, at least 18 were sold as part of ticket or merchandise deals. One of the most prolific bundlers has been the Houston rapper Travis Scott, who last year claimed the top spot by selling key chains, hats and access to concert tickets.
The next big bundler may be Taylor Swift. While her new album has no announced release date, her website is already accepting advance orders for it as part of deals for a hoodie ($65), a T-shirt ($40) and a smartphone stand (a bargain at $20), in hopes of its hitting No. 1 once it comes out.
A $40 T-shirt on Ms. Swift’s website. Artists who have “bundled” albums with merchandise on their way to No. 1 on the Billboard charts include Travis Scott, the Backstreet Boys and Bon Jovi.
At the same time, behind-the-scenes disputes have broken out between artists and Billboard’s chart referees when the trade publication deems particular deals out of bounds, potentially costing musicians their shot at the top slot.
Last month, there were two such disagreements: first when a Christian rock group, Hillsong United, lost out for No. 1 to Pink after some of its ticket deals were disqualified, and then in a bitterly contested race between DJ Khaled, a social-media star in the orbit of Jay-Z and Beyoncé, and the eclectic rapper Tyler, the Creator. Bubbling under the weekly chart competition is the question of whether the top positions are being determined by the popularity of a new album or the swag sold with it.
Billboard, whose charts are widely accepted as the last word in measuring the popularity of songs and albums, acknowledges the problem. It plans to announce this year that it will tighten the rules on merchandise bundling, said Deanna Brown, the president of the Billboard-Hollywood Reporter Media Group, a division of Valence Media.
Artists and people in the music industry, Ms. Brown added, “tell us week after week, month after month, that they want us to occasionally throw a flag on the field when necessary.”
The rise of album bundles may be a response to the explosive growth of streaming and the rapid decline of album sales. From 2015 to 2018, revenue from album downloads plunged by about 53 percent in the United States and CD sales fell by 52 percent, according to the Recording Industry Association of America. Over the same period, streaming revenue more than tripled.
But the formulas that Billboard and Nielsen, its data partner, have adopted to reconcile the many ways that people consume music today have given artists and their marketers an incentive to push downloads and CDs, despite most fans’ preference for streaming. When it comes to the charts, each album a fan acquires — by itself or when tacked on to the purchase of a ticket or T-shirt — is worth about 1,400 times as much as any individual stream.
That has made bundling more appealing than ever to artists — even superstars like Ms. Swift, who could once reliably count on millions of CD sales. Not that she is new to bundling. In 2012, she had a deal with Papa John’s Pizza to sell her album “Red” with a large one-topping pie for $22.
A Papa John’s in Nashville in 2012, when the chain sold Ms. Swift’s album “Red” with a large, one-topping pizza for $22.CreditDoug DuKane/Invision, via Associated Press
One result is that the top chart position tends to go back and forth between artists with huge streaming numbers — like Drake or Post Malone — and those offering bundles.
The trend has led to some puzzling outcomes. In 2018, a ticket deal helped a year-old Bon Jovi album return to the top spot. And four months ago, the Backstreet Boys, a group that had not stood on the chart’s summit since 2000, opened at No. 1 with its fifth album since then, “DNA,” thanks again to a bundle for tickets to its summer tour. (The next week, “DNA” plunged to No. 24.)
Two weeks ago, the chart was held up by several days while Billboard studied the sales data of two new albums: Tyler, the Creator’s “Igor” and DJ Khaled’s “Father of Asahd.” Each had gotten an almost equal number of streams, so the contest for No. 1 largely came down to the validity of their bundles. Tyler offered clothing and even campaign-style lawn signs (“Vote Igor!”), while DJ Khaled’s album was included with sales of energy drinks through an e-commerce site, Shop.com.
After scrutinizing the two campaigns, Billboard gave the victory to Tyler. The magazine disqualified most of DJ Khaled’s bundled purchases, suspecting that some of the marketing by Shop.com and its corporate parent, Market America, had crossed a line by encouraging unauthorized bulk sales. One blog post from the company, for example, told its members to buy 12 packages to “push DJ Khaled and Market America to No. 1!”
Ms. Brown, the Billboard president, defended the decision. “In this particular instance,” she said, “we saw an organization encouraging purchases among their members by promising them material and organizational benefits.
The ec-commerce site Shop.com included DJ Khaled’s album “Father of Asahd” with sales of energy drinks.
Both Market America and Roc Nation, DJ Khaled’s management company, said the decision had blindsided them. Desiree Perez, Roc Nation’s chief operating officer, also criticized the very practice of bundling, and Billboard’s countenancing of it, as a kind of weekly arms race that should be banned.
“We dispute their decision on behalf of DJ Khaled and, frankly, every artist who is forced to navigate bundling an album download with an inexpensive item that still effectively represents their brand,” Ms. Perez said in a statement. “It’s confusing and demeaning to the art.”
She added: “We’re obviously not fans of bundling, nor should anyone who cares about artists making music. But our hands are being forced by Billboard’s desperate, last-ditch effort to keep streaming from eliminating what’s left of music downloads.”
Market America, a so-called multilevel marketing company, has been criticized for its sales methods, such as requiring members to meet sales quotas. In a lawsuit filed two years ago, disgruntled former affiliates called the company a “pyramid scheme.” In an interview, Marc Ashley, the company’s president, denied that its members had sales quotas and dismissed the legal action as a “troll suit.”
An executive of DJ Khaled’s management company, Roc Nation, said, “We’re obviously not fans of bundling, nor should anyone who cares about artists making music.”CreditJake Michaels for The New York Times.
Epic, DJ Khaled’s label, declined to comment.
To some extent, managing the charts has always been a cat-and-mouse game. In 2004, Prince gave copies of his album “Musicology” to fans who bought tickets to his tour. As a result, Prince earned his first Top 5 position in a decade and Billboard created a new rule, a version of which exists today: For a ticket bundle to count on the charts, the consumer must take a step to receive the music, like redeeming a coupon code. (No such rule exists for merchandise deals, however.)
“This is savvy gamesmanship,” said George Howard, a former record executive who is an associate professor of music business and management at the Berklee College of Music in Boston. “What’s new is that the industry is finding new ways to game a system that has always been gamed.”
Billboard has said it is still deciding how to revise its bundling rules, and has held a series of industry meetings in recent months on the matter. Many of those have involved major-label record executives, who tend to favor bundles as an essential marketing technique as well as a chart strategy.
Until those changes are made, the charts are likely to continue to be affected by bundling deals, like the merchandise offered by Ms. Swift and a ticketing deal for Madonna’s latest tour.
For those artists, a Billboard No. 1 album is a vital trophy. Despite the wide availability of streaming data from sources like YouTube and Spotify, the magazine’s charts remain the most recognized sign of popular success, both inside the industry and among fans.
Yet even that is changing, as new artists look for new strategies to engage with their fans and new indicators of success, said Brian Popowitz, the general manager of Black Box, a music marketing agency in Los Angeles.
“This is a first-class problem that affects the top-tier, 1 percent of artists,” Mr. Popowitz said. “I see a lot more artists saying, ‘I really want to do Instagram,’ versus saying, ‘I want a No. 1 Billboard album.’”
A version of this article appears in print on June 10, 2019, on Page B1 of the New York edition with the headline: No. 1 With a T-Shirt?.
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