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FROM THIS EPISODE

This is Celia Hirschman with On the Beat for KCRW.

For generations, success in the record business has been defined by record sales. And for the last two decades, those record sales have been monitored by a system called SoundScan. The Nielson SoundScan system is the exclusive source for the Billboard Top 200 Album Sales Chart, which is the primary gauge of success or failure in North America. Unfortunately, SoundScan, which is primarily financed by major record labels, is becoming less relevant in the digital age.

SoundScan was first implemented as a way to accurately track retail sales of music. Before the SoundScan system, the method of collecting sales information was much more primitive. Billboard Magazine would ask record retailers to list, in order, their biggest selling album titles every week. Billboard would use the information to generate the Top 200 sales chart. You can just imagine how subjective and manipulated those lists were. By the time SoundScan was implemented in 1991, it was a welcome relief from the inaccurate and inconsistent write in system.

Today, SoundScan collects data from their network of participating retailers and creates a myriad of sales reports for their clients. With SoundScan, labels are able to see which albums are selling best in what regions, artists are able to focus their tours in areas which have the greatest sales, and record stores can prioritize their album purchasing. Everyone can see just how well an artists' record is doing. This system works very well within the closed system of the old record business. But the digital age has brought a more disruptive philosophy in the music business. Many do-it-yourself musicians couldn't care less about SoundScan, and that's where the point of sales system falls apart.

Today, artists big and small release their music through digital retailers like iTunes, CD Baby and eMusic. And while these online retailers report all sales to SoundScan, SoundScan only recognizes those titles registered in their system. While the cost to register an album with SoundScan is free, it's that one extra step that many indie bands miss or ignore. And the result is a skewed landscape that doesn't accurately reflect true sales.

While this is disheartening, the SoundScan problem just underscores a much bigger issue in the record business. That is the issue of metadata management. Metadata is the bits of information that surround a song – for instance the publishers, the writers, the label, the musicians, the bar code and the owners. That metadata, while seemingly trivial, is actually the bread and butter of the new business. While protecting intellectual copyright is most definitely the overarching concern of the record industry, it's the good management of information behind the songs that will ultimately seed a strong and fair business environment. According to SoundScan, in 2009, over a billion tracks were sold. That's a lot of data to manage.

While many well-meaning organizations lay claim to managing pieces of the metadata pie, there's not one organization in the US that handles the complete scope. Not one. For musicians, accurately protecting the current landscape is one of the most important issues of the new year.

This is Celia Hirschman with On the Beat for KCRW.

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