Have you ever wondered how the music industry knows how many albums an artist has sold? How can we be sure that Joe Smith actually deserves that platinum record hanging on his wall? After all, just because one million copies have been shipped to stores, it doesn’t mean that one million copies have necessarily been purchased.
You can thank Nielson Soundscan.
Nielson Soundscan measures music sales reported by retail establishments through their POS systems. It’s the official industry standard for tracking sales. It’s actually the reporting system that Billboard uses for the charts. In addition, the RIAA uses Soundscan as their source of sales figures in order to dish out silver, gold, platinum, and diamond record awards to artists. Yes, diamond is a real award. You can earn your very own by selling just ten million copies of your next release. See, you learn something new every day.
Soundscan is not a perfect system but it’s reasonably accurate and it’s the best one available. The big music retail chains are very consistent and accurate with their reports. However, some of the smaller independently owned stores, maybe not so much. For some of the independent stores, sales figures may show up a little lower than they are in reality.
This might push the music industry even further into the digital market because the small music stores are the only ones selling CD’s anymore. The big chains are reducing their music inventory to make up for lost sales by making room for other products like DVDs, posters, black lights, washing machines, etc. This might make you feel uneasy at first but don’t worry too much. Online sales are growing and they are much easier to track than physical sales. Not to mention, they are far more profitable if your label is running their business intelligently.
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