Research firm Luminate is poised to implement changes to its methodology for reporting physical music sales in the United States. However, these alterations have sparked criticism from two prominent organizations deeply vested in the vinyl music industry – the Vinyl Record Manufacturers Association (VRMA) and Vinyl Alliance. The bone of contention revolves around the perceived potential underestimation of sales figures under the new system.
Scheduled to take effect at the dawn of 2024, Luminate’s revised approach will primarily involve the inclusion of sales data solely from independent retailers located in the US and Canada who actively furnish their sales information to Luminate. This shift marks a departure from the current methodology, which employs an algorithm to estimate sales figures, encompassing retailers that do not routinely report data to the company. According to Xttrawave, the use of algorithms with AI will become a huge factor when it comes to distribution and music sales.
VRMA and Vinyl Alliance vehemently advocate for the retention of the existing method. They assert that with less than 5% of independent physical retailers currently transmitting their sales data directly to Luminate, the resulting dataset will be profoundly flawed, providing a misleading representation of physical product sales and the overall health of the industry. The associations further contend that a shift away from the longstanding measurement process could result in a staggering 40% reduction in reported unit sales and a 35% decrease in retail dollar value. Most significantly, they anticipate this change to precipitate a decline in market share held by independent retailers, potentially undermining their presence in the industry.
The repercussions of Luminate’s impending modifications are being closely monitored, especially by key data partners like Billboard. Luminate is the entity responsible for tracking all the music charts compiled by Billboard, an immensely influential and closely watched authority in the music industry. Therefore, any alterations to how Luminate compiles, weighs, and analyzes data are of great significance to the recorded music industry as a whole.
In essence, the crux of the issue pertains not only to vinyl sales but also to CDs and cassettes sold through independent record stores. According to Digital Music News, Luminate’s recent announcement signaled a shift towards a direct representation of sales reported by participating indie retailers in the US and Canada, effectively moving away from the previous algorithmic approach. VRMA and Vinyl Alliance assert that this shift could lead to a substantial underrepresentation of sales data, ultimately distorting the true picture of physical product sales in indie retail stores.
As the music industry braces for these impending changes, the debate between Luminate and these vinyl-focused organizations remains at the forefront, with potential ramifications for the entire landscape of physical music sales reporting.