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Digital media

Billboard will soon include music streams and digital downloads

By
John Kell
John Kell
Contributing Writer and author of CIO Intelligence
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By
John Kell
John Kell
Contributing Writer and author of CIO Intelligence
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November 20, 2014, 8:39 AM ET
Revenue from licensing music for digital streaming has meant big revenue bumps for agencies like BMI and Ascap. Perhaps it’s time for the “B” in BMI to stand for “billion”—as in $1 billion in annual revenue. The music agency, whose full name is Broadcast Music Inc., announced Thursday that it set an industry record by raking in $1.013 billion over the year ending June 30. That’s BMI’s highest yearly revenue ever, and it squeaks by the $1.001 billion reported earlier this year by ASCAP, BMI’s main rival for handling music licensing and artists’ songs for play on radio, television, streaming media, and other platforms. BMI and ASCAP — the latter of which said it was the first performing rights organization to top $1 billion — have increased their revenue in recent years even as the music industry on the whole remains in flux due to evolving distribution models. The increase comes amid higher consumption of digital music, which requires streaming services like Pandora P 0.38% , Spotify, YouTube GOOG 1.15% , and Apple Music AAPL 2.09% to pay BMI and ASCAP royalties to stream songs by their songwriter members. Together, ASCAP and BMI represent a reported 90% of songs released commercially in the U.S. BMI's roster of artists includes Taylor Swift, Lady Gaga, and Lil Wayne.
Revenue from licensing music for digital streaming has meant big revenue bumps for agencies like BMI and Ascap.Photograph by Jamie McCarthy — Getty Images
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Maybe Taylor Swift ditched Spotify a bit prematurely.

Billboard and Nielsen SoundScan, the agency that supplies the charting data, are planning to add streams and downloads of tracks to the mix when compiling the Billboard 200, according to The New York Times. The change is set to begin on Nov. 30 and will be revealed on Billboard’s website on Dec. 4, the Times reported. It will mark the biggest change to the chart since 1991, which is when the magazine began to use hard sales data from SoundScan.

Streaming video and music providers have drastically changed how we consume media, and now they’re changing how firms are charting the success of the biggest albums and television shows.


That presents challenges for musical acts like Swift, who recently pulled her content from music streaming service Spotify saying she “didn’t like the way it felt” having her music so easily available at such a low price point. It can easily be argued that her move was a savvy one, as Swift’s 1989 album has now held the top slot for the third consecutive week on the Billboard 200, making it only the second album to spend three weeks atop the list in 2014 (the Frozen soundtrack is the only other album to have had that much success).

Meanwhile, a Wall Street Journal report from earlier this week signaled that Nielsen will next month begin to measure viewership of TV on subscription online video service for the first time, citing client documents that were reviewed by WSJ. That independent data can be compiled by analyzing the audio components of the program to identify which shows are being streamed, according to the report.

That throws a monkey wrench into the tight-lipped nature of video streaming providers Netflix (NFLX) and Amazon.com (AMZN). Those companies don’t share data about their streaming viewership, so it is difficult to ascertain just how well shows are performing on their services. For example, Netflix earlier this year said the second season of “Orange is the New Black” was the “most watched series in every Netflix territory” in its first month, with “many” members either watching it for the first time or re-watching the first season of the series. But Netflix declined to provide any concrete viewing data.

The Journal reported that because streaming sites won’t share how much a show is viewed, they have more leverage in negotiations for content with TV studios. That could change if Nielsen’s new methods come to fruition.

About the Author
By John KellContributing Writer and author of CIO Intelligence

John Kell is a contributing writer for Fortune and author of Fortune’s CIO Intelligence newsletter.

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