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Bundling out in US chart rules revamp

Records bundled with physical items such as concert tickets and merchandise will no longer count towards chart placings in the United States, Billboard has announced.

The new rules – which affect all US album and song charts, including the flagship Hot 100 (singles) and Billboard 200 (albums) – are an effort “to rectify how sales are counted with respect to album bundles with merchandise and concert tickets, as well as instant digital sales attached to purchases for physical albums delivered at a later date”, says the magazine.

The practice of ‘bundling’ – or including physical music product, such as CDs and LPs, with purchased merch or tickets, often for little or no extra cost – has long been controversial for its perceived distortion of traditional metrics of success.

As IQ noted last year, Madonna, for example, debuted at No 1 with her Madame X album, released on 14 June 2019, which was bundled with 30,000 tickets for her autumn 2019 US tour – before dropping a whopping 95% in week two, selling just 3,600 (non-bundled) copies.

Music merch sales boom amid bundling controversy

In total, nearly half (18 of the 39) US No 1 albums in 2018 came as part of a merch or ticket bundle.

Billboard said at the time it planned to tighten up rules on bundling. Most other countries’ charts prohibit ‘sales’ from counting towards placement if they are “baked in” to a ticket sale, for example, for a nominal or no extra cost.

Under the new rules, which will be implemented at an unspecified future date, all albums bundled with merch or tickets “must be promoted as an add-on to those purchases in order to be counted on the charts”, the company explains.

“Those included as part of a baked-in, single-price option (along with the merchandise or ticket), with the album cost undisclosed to the consumer, will no longer be counted”

“Those included as part of a baked-in, single-price option (along with the merchandise or ticket), with the album cost undisclosed to the consumer, will no longer be counted. It is Billboard’s belief that the resulting charts will more accurately reflect consumer choice.”

The revised criteria also disqualifies the sale of physical product that has yet to be pressed: “In addition, Billboard will no longer allow sales of physical albums or singles that are bundled with digital downloads to be reported as digital sales, thereby eliminating the practice of ‘spontaneous’ non-manufactured items being used to influence first-week chart rankings.”

Billboard identifies Justin Bieber, Ariana Grande and 6ix9ine as among artists who have used this tactic in recent months to boost their chart positions.

“Under the new rules, only when the physical item – ostensibly what the consumer is buying – is shipped will it be counted in Billboard’s official tallies.”

Album sales dropped 18.7% in the US in 2019, as on-demand streaming continues to gain ground.

 


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Music merch sales boom amid bundling controversy

Sales of music merchandise were worth nearly US$3.5 billion in 2018, IQ can reveal, as controversy continues to rage over bundling and its impact on record and box-office charts.

According to the Global Licensing Survey 2019, produced by trade body Licensing International (formerly LIMA), worldwide retail sales of licensed goods based on music properties were worth $3.48bn in 2018, up from $3.33bn in 2017 and $3.08bn in 2016.

Commenting on the growth in demand for music merch, the report says the move towards streaming (“low-margin digital distribution”) of recorded music has “prompted the industry’s largest companies to generate revenue through a range of artist support services that extend beyond simply generating income from music sales”, such as merchandise.

Overall, the licensing market – of which ‘entertainment/character’ is the largest sector, accounting for $122.7bn worth of revenue – grew 3.2% from 2017 to 2018, to $280.3bn, with royalty income for rightsholders climbing almost 4% to $15bn. (Other sectors include corporate brands, fashion and sports, while the largest product categories are clothing/apparel, toys and fashion accessories.)

“The 2019 Global Licensing Survey drives home the fact that licensing continues to be a vital part of the consumer marketplace,” says Licensing International president Maura Regan, “and a versatile tool for brand owners and licensees to creatively build their businesses.”

Billboard plans to tighten up the rules on bundling

Elsewhere, several artists and music brands place in Licensing Global’s most recent Top 150 Global Licensors report, which further illustrates the value of merchandising to the international music industry.

Notable music licensors include film/entertainment conglomerate Entertainment One, which sold $1.5bn in licensed products in 2017 (eOne’s artists include the Lumineers, Snoop Dogg and Crystal Castles, though its real rock star is kiddie phenom Peppa Pig); Margaritaville Enterprises, Jimmy Buffett’s clothing, restaurant and casino business, whose sales reached an estimated $1bn; and US rock legends Kiss, whose merch deal with Dell Furano’s Epic Rights was reportedly worth $150m.

While the merchandising sector is in rude health, its growth comes amid a growing backlash against the practice of bundling merch with tickets or physical music product, such as CDs or LPs, for its perceived distortion of traditional metrics of success. Recent examples include Jack White, whose third solo album, Boarding House Reach, became a US No 1 after selling 121,000 copies bundled with concert tickets, and Metallica, whose 2016 LP Hardwired… to Self Destructshot up from No 42 to No 2 in the space of a week on the back of ticket sales, falling back to No 43 the following week.

Madonna, meanwhile, debuted at No 1 with her new Madame X album, released on 14 June, which was bundled with 30,000 tickets for her autumn US tour – before dropping a whopping 95% in week two, selling just 3,600 copies.

Deanna Brown of Billboard, whose charts are widely regarded as the music industry standard in the US, tells the New York Times it plans to tighten up the rules on bundling, noting that artists and others in the business tell the company “they want us to occasionally throw a flag on the field [ie challenge the status quo] when necessary.”

In the UK bundles are only eligible if they have a “higher sale price than the price of the ticket alone”

In total, nearly half (18 of the 39) US No 1 albums in 2018 came with as part of a merch or ticket bundle.

While the outcome of Billboard’s chart overhaul remains to be seen – just last month, Jonas Brothers’ new album, Happiness Begins, debuted at No 1 after selling 414,000 ‘equivalent album units’, the majority of them part of a bundle – the company could look at its overseas sister charts, many of which have stricter criteria for which purchases count towards an act’s chart placing, for inspiration.

In the UK, for example, bundles are only chart-eligible if they have a “higher sale price than the price of the ticket alone”, per Official Charts Company rules, which exclude “album sales that are ‘baked in’ to a ticket sale” for a nominal, or no, additional cost; the same is true in the Republic of Ireland, while France’s SNEP has done away with album ‘equivalents’ altogether.

In the meantime, brace for more Billboard controversy, as arguably the world’s biggest artist bundles digital copies of her upcoming album with tween-friendly T-shirts, hoodies and baseball caps

 


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Sales, ticket bundling propel Jack White to US no1

Jack White’s third solo album, Boarding House Reach, has become the singer’s third US number one as a solo artist, driven by strong sales – and the chance to see his upcoming North American tour.

Bucking the growing trend for singles and album charts to be shaped by streaming numbers, Boarding House Reach sold a massive 121,000 copies (added to 4.2m streams) in the US, where the album was bundled with concert tickets.

As noted by ABC Radio, “[s]ales for Boarding House Reach are in part driven by the concert ticket and album bundle for White’s upcoming tour, kicking off 19 April in Detroit. Redeeming the album included in your ticket purchase counts as one sale.”

White’s success with bundling follows similar successful album campaigns by artists including Metallica – whose 2016 LP Hardwired… to Self Destruct, shot up from no42 to no2 in the space of a week, coinciding with a on-sale for dates in North America – and Bon Jovi, whose 2016 album This House is Not for Sale, again bundled with tickets, opened at no1 and then fell to no43 in its second week.

“This is the way that people are getting albums in their hands”

Not everyone is a fan of the practice: while record labels make money for every bundle sold – whether or not buyers redeem the code for the album – promoter Seth Hurwitz believes bundling is a “flat-out scam”.

Hurwitz told Billboard last October that bundling forces people to buy music so acts “can jack up first-week album sales,” but in doing so “people are putting tours on sale way before they ought to.”

David Bakula, a senior analyst at Nielsen, disagrees, saying even if the buyer decides not to redeem the album, the ticket will still cost the same amount.

“This is the way that people are getting albums in their hands,” says Bakula. “If I’m going to a Bon Jovi show, I may or may not go out and buy a copy. But if you offer one to me wrapped in the price of my ticket, then yes – absolutely, I want it.”

 


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