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RIAA Execs Explain New Formula for Gold & Platinum Albums

3rd February 2016 No comments

In a rather controversial and much debated move, RIAA announced Tuesday that 1,500 streams on Apple Music, Google, YouTube, Spotify, etc. will now count as one album sale. Some think the new formula takes into consideration how many consumers stream music rather than purchase it in traditional retail or digital retail outlets, while others believe it further devalues the importance of albums.
In today’s Music Business Worldwide, editor Tim Ingham shared a guest blog by RIAA EVP of Communications and Marketing, Jonathan Lamy, and its Director, Communications and Gold & Platinum Program, Liz Kennedy. The pair detail what went into the decision and how they believe it will ultimately help artists.

Read the post by Lamy and Kennedy below:

Why Now? Why This Formula?

Like all fans, we cherish the concept of the album. We all rightly celebrate the albums that reach the pinnacle of marketplace success. The modern reality is that the way fans consume those albums has changed – drastically! That’s why, when we started to develop a new formulation to better integrate streaming into the Gold & Platinum Album Awards last year, we identified a handful of overriding imperatives to guide our work.

First, we must adapt and be flexible. Sitting on our laurels and gazing warmly at the status quo is not tenable. Look no further than the past 15 years and the tumult exacted upon the music business to appreciate that point. Second, our 58-year program must continue to recognize the very best of the best, the cream of the crop.

Rewarding only quality and rare commercial success is essential.

Third, our analysis and the determination of a formula must be based on comparative consumption patterns, not their marketplace value. It is well known by the readers of MBW that music industry revenues have declined or remained flat even though consumption has increased dramatically.

Inadequate monetization by music services is a serious challenge, but the program should reflect the demand and listening habits of music fans rather than today’s commercial revenues. Lastly, we must preserve the integrity of the program. We must ensure that our updates to the program do not dilute the significance of previous awards.

Album certifications are down precipitously during the last 10 years. In 2005, the RIAA certified 479 albums. In 2015, that number was 122 even while album listening and consumption through streaming is way up.

None of the decisions that went into creating the new 1500 streams / 10 tracks equivalency proportions were made lightly. Along with our label members, we sifted through reams of data on digital track and album downloads and all kinds of streams.

We also looked at certification levels for the past decade. We found, for example, in 2005, 90% of the Top 200 Albums were eligible for an RIAA Album Award. In 2014, that number was only around 30%. Even with the new rules just announced, only about 40% would be eligible for a possible certification! The threshold for a certification is still very high.

Let’s also not overlook some key criteria of any certification: external auditing company Gelfand, Rennert & Feldman reviews every submission to confirm that each award recipient has qualified based on a number of mandatory requirements, like requisite sales and streaming figures, demonstrated consumer demand, and much more.

Additionally, only on-demand streams requested by a user in the United States count. And for videos, only official releases count – no user-generated content.

We hope everyone would agree that the 17 artists receiving inaugural awards are considered very successful. Yet two-thirds of them had not yet been eligible for their first Gold or Platinum Album Award. That surely can’t be right.

Change is hard. We understand that. Music has become a highly diversified business, with multiple revenue streams and multiple ways for fans to listen to their favorite songs and albums. We have to find ways to recognize that collective activity, even if it may not always be perfectly elegant. A Gold or Platinum album award is the result of demand for that artist’s work, just demonstrated in a different way than 25 or even 10 years ago.

We welcome the conversation and questions and feedback about the rule change. It is gratifying that people care so deeply about the program and what it means. As its custodians, and as guardians of its integrity, we do too.

Since the new criteria for certification went into effect, the following new certifications have been awarded:

Alt-J “An Awesome Wave” (Atlantic Records) – Gold
Big Sean “Dark Sky Paradise” (Def Jam Recordings) – Platinum
Brett Eldredge “Bring You Back” (Atlantic Nashville) Gold
Coldplay “Ghost Stories” (Atlantic/Parlophone) – Platinum
Elle King “Love Stuff” (RCA) – Gold
Fifth Harmony “Reflection” (Epic) – Gold
Halsey “Badlands” (Astralwerks) – Gold
Hozier “Hozier” (Columbia) – Platinum
Kendrick Lamar “To Pimp a Butterfly” (Top Dawg Entertainment/Interscope) – Platinum
Michael Jackson “Thriller” (Epic/Legacy) – 32X Multi-Platinum
Miranda Lambert “Platinum” (RCA Nashville) – Platinum
Romeo Santos “Fórmula Vol. 2” (Sony Latin) – 11X Diamante/RIAA Latin G&P Program
Sam Hunt “Montevallo” (MCA Nashville) – 2X Multi-Platinum
Shawn Mendes “Handwritten” (Island Records) – Platinum
The Weeknd “Beauty Behind the Madness” (XO/Republic Records) – 2X Multi-Platinum
Vance Joy “Dream Your life Away” (Atlantic Records) – Gold
Wale “Ambition” (Atlantic Urban) – Gold

You can subscribe to the MBW newsletter to keep up with this ongoing story. Find them at musicbusinessworldwide.com



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