Billboard, like Neilsen, is finally understanding how people consume entertainment. We reported that Neilsen is going to start tracking people watching Netflix in order to assess those numbers from a ratings perspective. Which makes sense in today’s world. Now Billboard is going to adjust how it weighs and calculates streaming music starting in 2018. More weight will be given for paid music services like Apple Music, and less for ad-supported services – which is extremely interesting. Streaming music accounts for 60% of music revenue, and revenue is up 17%. With these trends, it only makes sense that Billboard recognized the need to revisit how it weighs music.
Billboard took a few things into account, including how to weigh paid services against ad-supported, free streams, YouTube plays and more. Right now the Billboard 200 chart “uses a single tier of only on-demand audio streams from subscription services”. But the Billboard Hot 100 chart defines two types of streaming: on-demand paid services like Apple Music and programmed services like Pandora. They weigh on-demand services more heavily. In 2018, one of the big changes will be to paid services receiving a greater weight than fully ad-supported ones.
Beginning in 2018, plays occurring on paid subscription-based services (such as Amazon Music and Apple Music) or on the paid subscription tiers of hybrid paid/ad-supported platforms (such as SoundCloud and Spotify) will be given more weight in chart calculations than those plays on pure ad-supported services (such as YouTube) or on the non-paid tiers of hybrid paid/ad-supported services.
This is a big shift for the music industry. It’s not the first one at least not recently. But it’s shifting because the way that we consume media is changing. Just like how Apple changed how we listen to and purchase music. Instead of downloading music, many people are moving towards streaming based music services like Apple Music or Spotify. Spotify boasts more than 60 million paying subscribers and more than 140 million overall users. Apple Music continues to grow as well, boasting 30 million subscribers. But that doesn’t include other streaming services like Google or Tidal. So this kind of shift certainly makes sense.
Billboard had this to say about the changes:
The shift to a multi-level streaming approach to Billboard’s chart methodology is a reflection of how music is now being consumed on streaming services, migrating from a pure on-demand experience to a more diverse selection of listening preferences (including playlists and radio), and the various options in which a consumer can access music based on their subscription commitment.”
This could give music companies further incentive to pressure Spotify and other services that use this kind of tier system to convert more of their subscribers from ad-supported to paid. Spotify though has shown reluctance to resist content from its unpaid users, even though they have pressure from music labels. Which has forced them to take action on that front. With this shift in the service, though, their next round of negotiations might be even harder for them to make their case. We all want the same thing though – which is to listen to music, so hopefully, this won’t change that too much. Or at least not for a little while.
I also wonder if people are actually listening to the Billboard charts anymore? Or even using it as a tool to determine what music to listen to? If you open the streaming app you use, you can see what’s trending, or what people are listening to so I wonder if the idea of Billboard is antiquated at this point? Sometimes I look at the old charts to remember what was popular during certain times of my life, but I don’t use it on a regular basis. Does that factor into this as well? It will be interesting to see how the charts change because of the additional streaming sources.