Nielsen Soundscan Stops Making Sense

by George Ziemann -- January 10, 2010

Music purchases are "astronomically high," says Rob Sisco, Nielsen's president of music, "but it's a marketplace in transition from physical to digital."

For like the 4th year in a row, Nielsen Soundscan is trying to convince us all that selling a billion things for $1 is somehow a sales increase over selling a half-billion things for $10-$15 each.

"According to the Nielsen Co.'s year-end figures, music purchases - CD, vinyl, cassette and digital purchases of entire albums (grouped together as total albums), plus digital track downloads, singles and music videos - attained a new high of 1.5 billion, up 10.5% over 2007."
-- Ken Barnes, USA Today

This requires you to believe that selling three songs for $1 each is an improvement over selling a CD for $15. This is about the stupidest fucking way I can think of to measure sales when the price disparity between items is so great and the "gain" is in the cheapest item. But the L.A. Times went with it, using a headline that says "Overall music sales hit an all-time high in 2009; Taylor Swift's Fearless is the year's top-selling album." The truth is that no, they didn't, and no, it wasn't.

Digital Tracks were up again in 2009, having already become the most powerful delivery system for singles in the history of the recording industry.

Nielsen's figures include sales by artists who are not distributed by an RIAA label and not included in RIAA reports.

One nice thing about switching to Nielsen statistics is that there are so few actual numbers available. The RIAA is still tracking CD singles and cassettes. That lets me switch from this:

...to this:

With all the clutter out of the way, it looks like a 72 percent reduction in album sales since 1999 (66 percent if you include digital sales). The problem is that the RIAA's numbers never have reflected sales, just shipments. In 2002, the RIAA shipped out 200 million more albums than were sold. Since they only sold 300 million this year, well, that's a lot of records. Enough to validate 400 different albums as having "shipped gold."

All those "hit" albums that absolutely no one you knew ever bought? Well, the "selling" part doesn't matter as much as the "shipping" part. So you sort out the equipment leasing, load up a few semi trailers with CDs and ship them... to a secluded area in Montana or North Dakota, where it is parked with the other hundreds of containers containing "gold" CDs. Or maybe unload them at the docks, where they get put on an outgoing ship.

I'm going to the Wayback Machine to look for more Nielsen numbers to see how big that reality gap was in 1998-2001.

Nielsen basically gives us four numbers: Total Album Sales, Digital Album Sales, Digital Tracks, and Vinyl. Physical Sales were calculated by subtracting Digital Albums from Total Albums.

We've looked at everything except vinyl, another area in which the level of bullshit far exceeds the amount of ka-ching taking place.

"During 2009, once again more vinyl albums were purchased (2.5 million) than any other year in the history of Nielsen SoundScan (since 1991)." -- Nielsen Press Release (pdf)

 

Never mind that the 1991 number was already the lowest point for vinyl in the previous 80-90 years, and it would take 18 years for Nielsen's tally to rise to that point again. The RIAA's numbers do not match up with Nielsen. Again, shipments vs. sales.

If you remove 98 percent of the data, you can finally see the big resurgence in vinyl that everyone is talking about.

RIAA vinyl shipments bottomed out at less than a million copies in 2006, the same amount that Nielsen would track as being sold the next year and the media would point to as the beginning of the new "boom" in vinyl sales.

Vinyl singles don't appear to be seeing the same "recovery" as albums. Vinyl albums now account for a whopping 0.07% of the albums sold in the U.S.

One More Question...

The Beatles 1 album (or collection of albums) was released in September of 2009 and sold more than 11 million copies. While this made it the top selling album for the decade, it somehow wasn't enough to get into 2009's Top Ten albums.

The Beatles also lost out on Top 10 Artists of 2009. For some reason, 8,282,000 copies of their new release did not count toward top selling artist and more than 11 million were ignored to bump the Fab Four off the top album list.

Ironically, I received a comment on this article before I was finished writing it.

George,

Have you seen the Nielsen Soundscan sales reports lately? Some people at the Pulse Music Board posted the annual sales of the top 10 selling albums:

If you follow the numbers, you'll see that the top 10 albums of 1999 sold an average of nearly 5.469 million, but in 2009, that number was only 2.138 million. That's a drop of 60.9 percent.. If you consider that the top 10 of 2000 sold an average of 6.042 million (the best in the last 2 decades), the sales drop from 2000 to 2009 was 64.6%.

That pretty much corroborates reports I've been reading, on the Web, that over the last decade the music industry has bled itself by 2/3! Digital sales have not picked up the slack.

Since most of the top albums of every year belong to the major recording companies, the massive sales avalanche applies mostly to them. I imagine the independents have largely been unaffected, which is to say that the average independent album that sold 50,000 albums in 1999 sold just as many in 2009.

Needless to say, the corporate fat cats, and the major labels (and their affiliates) they belong to, have no one to blame but themselves. I don't remember buying anything from a major label since 2002, and if I did, they were USED, from eBay! The industry has largely abandoned quality for quantity; and for them these days, quantity means more money, no matter how shitty the material they put on the record racks, no matter how quickly some of the artists will be forgotten in 20 years.

If the decline continues on the same pace throughout this decade, 2019 could be a year when the average of the top 10 selling albums is only 836,000, with the top album selling just under 1.4 million, and only 10 albums going gold (500,000). With any luck, the RIAA will have already been out of business.

The average fat cat has twisted the average new artist into believing that, without a major label, he or she is nothing. On top of that, the average artists who has been on a major label for a long time (maybe too long) has become so comfortable with his or her existence on such a label that they could not possibly imagine either leaving such a label or getting dropped, and going to an independent label.

What the fat cats still don't want to understand is that their comfortable lifestyle depends on both their artists and the fans. At the same token, the artist who is afraid to go to an indie label when he or she gets dropped depends on us as well.

Speaking of which, when I entered "artists dropped" in the search bar, I saw an extraordinarily large number of familiar names, many of whom were once platinum and multi-platinum: Jessica Simpson, Brandy, Bow Wow, Annie Lennox, Ashanti, Solange (Beyoncé's little sister).

Annie Lennox leaving or getting dropped by Sony is surprising (I didn't know about it until I did the search), but Jessica's exile is not, because she was in danger of getting dropped after her last pop album in 2006 flopped (300,000); then in an effort to save her singing career she went country, and that album flopped as well.

There are some artists who have no problem going to an indie label after their efforts on a major label fall flat or their careers on a major label wind down. But there are the others who are so full of pride, full of conceit or just full of themselves, or are simply so embarrassed for their failure, that they will sit out rather than sign to an indie label. For these artists, it's either a major label or nothing.

The problem is, the major labels are dying a slow death. Undaunted or unwilling to believe the obvious, some artists pass the time by going on reality shows or hosting other shows, get into acting, or disappear from the scene completely.

The biggest name in danger of getting dropped, and never being acquired by another major label again, is Janet Jackson. Her last album of original material, Discipline, failed to go gold despite debuting at #1 (or was it #2?); and her greatest hits album, Number Ones, isn't doing that well, either. She will be 44 this spring, and today's pop market is not very kind to 40-something females.

Just an example of how bad things will become for artists who would otherwise be multi-platinum in the 1990s. On the average, an artist who would otherwise have gone diamond in the 1990s are lucky enough to sell 3.5 million this year, and an artists capable of double-platinum in the 1990s are lucky if they can crack gold today.
But do they deserve multi-platinum, especially those who are very much in league with their corporate masters? In 2019, the indies will be a lot closer to being on equal footing with what remains of the majors; and if there are far more indie labels than what we have now, the majors can forget it.

Then again, I wouldn't be surprised if the majors in 2019 abandon the music industry entirely, because they've come to the conclusion that they can no longer count on making a profit by having a music department. By then, with any luck, artists will have enough knowledge to use the Web to promote themselves and, if necessary, distribute their music themselves.

Sincerely,
Sean B.


Although the Beatles did re-release their entire catalogue in 2009, the Beatles 1 CD listed as the best seller of the decade was actually released in 2000. It stands to reason that it wouldn't be included in the top 10 of 2009 since it likely sold steadily throughout the decade to accumulate over 11 million in sales. That is also why it wouldn't be the top selling artist of 2009.

I did appreciate all your other information, especially the comments by Sean B. Figures can always be massaged to present whatever message you want. That is not to say you are doing the same thing as the record labels. Your graph on Full Album sales is an eye opener to me. It shows the reality of the situation. No massaging needed.

Tony M. in Mich.