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THE WEIGHTING IS
THE HARDEST PART

One of the biggest stories of 2017 is playing out right now, as Billboard works on a revamp of its Top 200 album chart that will give greater weight to paid streams, while ad-supported streams will be devalued. Most majors have been lobbying for just such a revenue-based revamp.

Presently, all streams are weighted equally, with 1,500 streams counted as one album. Those in the know believe the formula for paid streams will be adjusted to 1,250:1, while ad-supported streams will be devalued to 5,000:1. In other words, premium streams would have four times the weight of ad-supported. Under the existing metric, 100m streams of any kind would count as 66,667 albums, while under the new proposal, 100m ad-supported streams would count as just 20k albums, and 100m paid streams would count as 80k albums. On the other hand, albums that rely heavily on ad-supported streams for long periods of time could lose thousands of chart units.

YouTube streams will supposedly continue to be excluded from the Top 200, following vehement protests by rights holders over their possible inclusion. For that reason, Billboard prexy John Amato finds himself in the middle of an intensive tug of war, with Jimmy Iovine on one side lobbying for the weighted chart, which favors premium-only Apple Music, and Lyor Cohen on the other pushing for YouTube’s ad-supported streams to be given increased weight and to be included in the Top 200. While it appears the Iovine and the rights holders who are aligned with him in support of excluding YouTube streams from the Top 200 will come out with the victory, Cohen is being backed in his position by at least one major label, which continues to pressure Amato to invite YouTube to the party.

Along with that, there’s another issue that deeply concerns rights holders. YouTube is being accused of changing the algorithm on its recommendations, so much so that one label’s marketshare is grossly disproportionate, undermining what remains of YouTube’s credibility. One insider claims that a certain East Coast major label’s streams are greater than those of either of the other two music groups as a whole.  

Some numbers crunchers assert that if the proposed weighting system had been in effect this year, Spotify would have reported 15m fewer albums—which would be one hell of an unintended consequence of chart-weighting.

Changes to the Hot 100 singles chart have not yet been totally sorted out, but YouTube streams will likely continue to be included, despite those protests. Ad-supported Spotify streams and YouTube streams will apparently be treated equally in the Hot 100, despite the fact that Spotify’s streams throw off far more revenue. Spotify views this equal weighting as devaluing its ad-supported business. What recourse, if any, does Spotify have in terms of pushing back?

Some who have crunched the numbers assert that if the proposed weighting system had been in effect this year, Spotify would have reported 15m fewer albums—and if these calculations are anywhere close to accurate, that would be one hell of an unintended consequence of chart-weighting. Reiterating that the business has experienced dramatic growth during the last two years, these skeptics insist that if it ain’t broke, don’t fix it.

As far as we know, a final decision has not yet been made by Amato and his advisors, but the newly weighted charts are expected to be introduced at the beginning of 2018, little more than a month from now.

 

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