'Billboard' Will No Longer Include Deep-Discounted Releases on Charts

Albums sold for less than $3.49 and singles sold for less than 39 cents now disqualified

November 17, 2011 11:50 AM ET
lady gaga
Lady Gaga performs at the MTV Europe Music Awards.
Kevin Mazur/WireImage

Billboard has changed its policy so that any album sold for less than $3.49 during its first four weeks of release will not be counted for their chart.  Also, tracks sold for less than 39 cents in its first three months of release will not be counted on their singles charts.

"We ultimately chose $3.49 for two reasons," Billboard editorial director Bill Werde wrote in an editor's note explaining the change. "One, it's roughly half of wholesale in the digital world, where albums cost retailers about $7.50 on average. And two, this price point wouldn't interfere with any regular or semi-regular pricing currently in effect at any of the five biggest retailers – Walmart, Amazon, iTunes, Best Buy and Target." He further explained that Billboard does not seek to control the marketplace, but that the publication believes that "free or almost-free albums don't represent a marketplace."

Billboard's policy change is a response to several albums debuting on the charts in the past year with sales inflated partly by deep-discount sales through online retailers such as Amazon. Most notably, Lady Gaga got a significant boost when her record Born This Way was sold as full album download for 99 cents on the day of its release and another day later in its release week. Werde addressed the Gaga situation in his editorial, noting that it was a key factor influencing the publication's review of its policies.

Photos: Random Notes
This decision to not count discounted items on sales charts may lead to friction between record companies and digital retailers. In most cases, a digital retailer such as Amazon does not consult with labels when choosing to place a digital album at a low sale price, selling the item at loss while paying out the full wholesale price to labels. Gaga's album, for example, was used as a loss leader by Amazon as a way of promoting their Cloud Drive digital locker service and to cut into sales at the iTunes store, their chief competition in the digital music market. Though artists, labels and publishers do not lose money with these promotions, the potential loss of clout on sales charts – and the impediment toward reaching gold and platinum sales certifications – may create a scenario in which artists and companies push back on this practice.

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