The Hodgepodge: RIAA Certification, Streaming, and the Changing Face of Music Consumption

On Monday February 1, the Recording Industry Association of America (RIAA) changed how the organization will certify albums and singles. The change reflects digital streams of songs and albums for an artist in addition to sales. Prior to the change, an album or song was certified Gold when 500,000 copies were sold, Platinum at 1,000,000, and Diamond at 10,000,000. With the change, the RIAA will take into account both video and audio streaming, and have decided that 1,500 streams is equal to 10 song sales or one album sale. Simple math then tells us that 750 million streams alone will earn an artist a Gold certification.

With the adjusted certification process, 17 albums achieved Gold or Platinum status on February 1. Three of the 17 albums were country albums: Brett Eldredge’s Bring You Back (Gold), Miranda Lambert’s Platinum (Platinum), and Sam Hunt’s Montevallo (2x Multi-Platinum).

From a business standpoint for the RIAA, this is a good move to keep with the changing tide of how consumers are listening to their music. Streaming is only growing and it’s important for music groups like the RIAA and Billboard to stay relevant with their reporting. However, reactions to the change have been mixed. Country artists are loving the news. One big challenger of the new rules is Top Dawg Entertainment’s, CEO Anthony Tiffith. TDE is the label for Kendrick Lamar, whose critically acclaimed album To Pimp a Butterfly has now been certified Platinum due to the inclusion of streaming. Tiffith tweeted that he won’t acknowledge the certification until old school album sales earn the album its Platinum rating.

One theory I have for the push back could be due to the low streaming payouts to artists/labels vs physical/digital album sales. Last April, The Guardian published an article with an infographic breaking down artist payouts among various streaming services in comparison to standard album sales. The infographic is organized to show how many units must be sold or streamed in order to achieve a monthly minimum wage income.

For instance (based on the numbers on the linked infographic), for an artist signed to a label to earn a monthly minimum wage from Spotify with a $0.0011/stream payout, there would need to be 1,117,021 streams for a monthly wage. At that rate, $1,228.72 is earned each month. And looking at RIAA’s rule of 1,500 streams per album sale, a streaming total of 1,117,021 is equal to about 744 albums sold (rounding down). By comparison, 744 albums sold per month via iTunes will earn a signed artist $1,711.20. And 744 albums per month sold physically in a retail store will be $2,053.44 for a signed artist.

Now these aren’t concrete numbers as to how streaming services directly compare to actual sales. Keep in mind that the numbers on the graphic are 10 months old, and the math I applied based on RIAA criteria may not be direct snapshots of how a company like Spotify may pay out an artist. Some of the numbers gathered from the article were assumed or generalized numbers based on typical business practices between labels and artists.

What this does give us, however, is a small baseline in which to judge a service like Spotify, arguably the most popular streaming service, in regards to actual album sales. I can understand a label CEO being against the inclusion of streaming in regards to albums sales when payouts from streaming are lower than album sales.

With the RIAA accepting streaming, it further solidifies the consumption mode of music, giving more importance to the notion of fair payouts. Streaming services are not going away, and as more and more music associations and organizations restructure themselves to include streaming, streaming needs to continue to fine tune itself to be accepted across the board. Streaming has a lot of push back from the music industry because they see the technology as a threat. But even cassettes scared the music industry back in the day.

For those against streaming, one bright spot is the resurgence of vinyl records. The growth of vinyl is nearly double than the growth in streaming subscriptions. Vinyl’s growth, aside from the novelty aspect, shows that consumers want physical copies of their music along with digital files. Never before have there been this many outlets to consume music. CDs, vinyl, digital downloads, radio, and streaming. Streaming’s skyrocketing popularity cannot be overlooked.

Like it or not, on-demand streaming has immersed itself into our musical culture. The impact streaming can have for an independent or budding artist is crucial. However manufactured his rise was, Kane Brown’s internet popularity earned him a deal with Sony. Maren Morris’ EP was an online only release, now she’s also signed with Sony and is getting the iHeartMedia On The Verge treatment.

Slowly we are seeing the industry adapt to streaming’s popularity. RIAA’s move to include streaming in album and single certifications is just another step in the long road ahead. I don’t think RIAA’s current rules are an absolution (nor do I think they’re perfect), and we may see them further adjusted to improve how the organization looks at streaming. Labels and radio are slowly looking into streaming and internet trends to capitalize on what’s popular with consumers. This is only the beginning of the music industry’s adaptation to streaming, and we may in fact be on the brink of a year in which we see major shifts in response to streaming’s popularity. There’s quite a bit to still work out on both ends of the spectrum, but I think major changes are on the horizon.

Upcoming/Recent Country Music Releases

  • The following albums are all being released tomorrow:
    • Dori Freeman‘s self-titled album
    • Lucinda Williams’ The Ghosts of Highway 20
    • Charles Kelley’s The Driver
    • Freakwater’s Scheherazade
    • The Infamous Stringdusters’ Ladies and Gentlemen
  • Addison Johnson‘s I’m Just a Song EP will be released on February 9th.
  • Cole Swindell announced his second album, You Should Be Here, will be released on May 6th.
  • Dreamer: A Tribute to Kent Finlay will be released on March 2nd, exactly one year after Finlay’s death. Finlay was a songwriter in Texas and owner of the Cheatham Street Warehouse in San Marcos. He is credited with jump-starting the careers of George Strait, Stevie Ray Vaughn, and Randy Rogers. Rogers will duet with Sunny Sweeney on the album, along with James McMurtry, William Clark Green, and many others covering Finlay-written songs in his honor.

Throwback Thursday Song

“Luckenbach, Texas” Waylon Jennings. Is there a better opening lyric than “The only two things in life that make it worth livin’ is guitars that tune good and firm feelin’ women”?

Non-Country Suggestion of the Week

“Bullet with Butterfly Wings” Smashing Pumpkins. The Smashing Pumpkins just announced a new tour this week. A friend in high school made me a mix CD of her favorite Smashing Pumpkins songs and still listen to that mix quite a bit. I love this song.

Tweet of the Week

Stout’s record, Dust & Wind, was self recorded and released last September. You can listen and purchase to the album on Bandcamp.

YouTube Comment of the Week

Screen Shot 2016-02-03 at 10.57.21 AM

This was commented on the video of Jason Isbell’s performance of “Flagship” at the Grand Ole Opry. I completely agree with this! Isbell performed the song with his wife, Amanda Shires, playing her violin and providing great harmonies. Click on the link for the video of the performance.

10 thoughts on “The Hodgepodge: RIAA Certification, Streaming, and the Changing Face of Music Consumption

  1. southtexaspistolero February 4, 2016 / 2:08 pm

    1500 streams of a song equals one album sale? I have a huge problem with this, and it’s best illustrated like so.

    I bought Willie Nelson’s Greatest Hits and Some That Will Be back in 1999. That album has 20 songs on it. Divide 1500 by 20 and you get 75. Seems like a lot, right?

    Well, not so much. I am absolutely certain I have listened to that album in its entirety more than 75 times since I got it. So by this new formula I alone am responsible for that album’s platinum status. And I have quite a few more albums in my collection that I am sure I made platinum all by my lonesome self with as much as I have listened to them.

    Just another milestone in the devaluing of music, I guess, but it’s still depressing as shit.

    Liked by 1 person

    • Derek Hudgin February 4, 2016 / 3:47 pm

      See, this isn’t what’s clear to me about their definition of 1,500 streams. It’s stated as “1,500 streams”. So on Spotify for instance, would all 20 tracks on the Greatest Hits have to reach 1,500 streams for that album to be considered “sold” or does the album just need a combined 1,500 streams from all 20 tracks? It’s not explicitly stated, which is why I say it’s not perfect.

      RIAA got 1,500 streams because that’s how Billboard judges a song’s “sale” or whatever for their charts when they started looking at digital streaming in conjunction with downloads, airplay, etc. But that begs the question of where did 1,500 originally come from and why does that dictate a sale vs just 100?

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      • southtexaspistolero February 8, 2016 / 9:25 am

        would all 20 tracks on the Greatest Hits have to reach 1,500 streams for that album to be considered “sold” or does the album just need a combined 1,500 streams from all 20 tracks?

        I would guess it’s the former, but even then that’s still an unquestionable devaluing of a platinum certification. Let’s just assume that I listened to the album 200 times. Doing the math, that works out to me buying 133,334 copies. Surely you see the issue with this, yes?

        I too would like to know where the 1500 number came from, and why the number was not instead based on revenue for streaming versus downloads/physical copies. I am guessing because if it was, it would paint a crystal-clear picture of just how bad streaming is for music.

        The question is, though, would enough people care?

        Liked by 1 person

        • Josh Schott February 8, 2016 / 11:52 am

          The question is, though, would enough people care?

          And here lies the real problem in all of music right now. Not enough people care. Whether it’s gatekeepers in country music or rap music ignoring genre jumpers, pop artists putting out garbage or music blogs doing away with reviews, there’s not enough people who care about the music. That’s why nobody is making a big fuss over streaming. The top artists are raking in so much dough that they don’t care. The little people who make up the majority of musicians don’t have a big enough voice to show their displeasure. It’s a mess. The hope I see though is in vinyl sales. How is an old and abandoned format still growing and thriving in sales in 2016? It’s growing beyond a hipster niche into something more. Otherwise big retailers like Walmart and Target wouldn’t be selling it online. People are buying albums in a world where most artists are worrying about singles. It could be what ultimately brings streaming down, but it will take time.

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  2. Cobra February 4, 2016 / 8:46 pm

    Interesting HodgePodge, Derek.

    Mary Chapin Carpenter also just announced her new album, “The Things That We Are Made Of” will also be released May 6th, produced by…wait for it…Dave Cobb. I’m very excited for this.

    Like

  3. Amanda February 5, 2016 / 11:42 am

    Hi guys! Hope ya’ll are having a great day. I was just wondering if ya’ll are planning on reviewing Dan + Shay’s new single, “From the Ground Up”. I heard it for the first time this morning, and it’s surprisingly very good. Somewhat reminiscent of Frankie Ballard’s “It All Started With a Beer”.

    Like

    • Josh Schott February 5, 2016 / 12:53 pm

      Yes, it’s on our review list.

      Like

  4. Raymond February 5, 2016 / 12:34 pm

    This is an interesting Hodgepodge. I think that adding streaming to sales does keep with what is truly popular as streaming has gained and has been very prominent now. I do wonder though is it like exclusively Spotify or like does YouTube iTunes do those play in a factor. I do think for an album it has to be 1,500 added up totally, that’s the only way Bring You Back could be Platinum as the album wasn’t totally popular but the singles did sell very well. I do wonder though how many other songs and albums could be certified (Girl Crush, Bartender, Take Your Time, etc).

    Now for new releases Dan + Shay new song that Amanda mentioned is actually pretty good. Now on the flipside we have Chase Rice releasing a song called Whisper that unshockingly sucks.

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    • Amanda February 5, 2016 / 1:27 pm

      I haven’t heard the new Chase Rice song, I just assumed it sucks, just like everything else he does.

      Like

  5. Ron February 9, 2016 / 12:05 pm

    Oddly Thomas Rhett was in NY on z100 this morning talking about his album and Die A Happy Man. I also noticed there’s a Nelly version on itunes so either a remix of some sort is coming or just a straight push to top 40 radio

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