Billboard spoke with RIAA chairman and CEO Cary Sherman, RIAA director of communications/director of the certification program Liz Kennedy and executive vp of communications Jonathan Lamy about the change.
Does the RIAA certification program only count U.S. sales?
Since its inception, how many sales awards has the RIAA issued?
Sherman: Currently, there are 8,887 Gold albums [sales of 500,000 units], 4,262 Platinum albums [sales of 1 million units], 1,348 multi-Platinum albums [sales of 2 million or more] and 112 Diamond albums [sales of more than 10 million].
Are those numbers inclusive of each higher sales award threshold?
[Another way to look at the numbers then would be to say: 4,625 albums have only reached Gold; 2,914 have gone past Gold and reached Platinum; 1,236 have gone past Platinum and reached multi-Platinum and 112 have reached Diamond.]
Is this the first time you have changed the formula for a Gold and Platinum albums?
Kennedy: There was a time in 1958 where the requirement was proof of 500,000 units sold or the money equivalent back then -- $1 million in sales.
Were labels giving out awards on their own before the RIAA initiated its program in 1958. I know of one instance where a family member has a Gold album from their artist parent hanging on the wall from an album back in the '50’s that is not in the RIAA database.
Kennedy: I don’t know if anybody was doing something like that before the RIAA, but the RIAA is the one that has maintained the standards. That’s why we introduced the hologram in the early '80’s, in order to differentiate the RIAA awards from the counterfeit plaques.
Why change the formula now?
Sherman: For a while we've recognized that we would need to put streaming in the mix as consumption changed -- but we needed to do it carefully. So we started with the easiest one to change, the singles awards. We watched that and made sure it worked out, and then after about a year, we started on the albums. While looking at how to implement for the album, we went through an elaborate process, getting feedback form the industry, and going through the same data analysis that we did for the single.
What impact will streaming inclusion have on the number of albums that reach the certification status each year?
Sherman: 10 years ago, nearly 90 percent of those albums sold enough in that year to reach Gold status. 10 years later, about 30 percent were eligible. With the new rules, we figure about 40 percent of the top 200 best-sellers for the year will be eligible. We were very cautious in our approach to changing how we calculate what is eligible because the integrity of the process is our foremost consideration. It's difficult to get certified sales awards, and it's a big deal and we didn’t want there to be a huge change in how many would be eligible.
Yet you caught some heat on the Rihanna certification of Platinum for Anti, which got the award based on the Samsung giveaway?
Kennedy: No more than we did when we certified Jay Z. Rihanna was certified before the change to consider streams in certification. There are two key requirements for the certification program. That there is consumer demand and that the artist and label get paid a certain minimum amount. We satisfied both of them with Rihanna. We got the data from the service, we saw the redemption of the download codes. They couldn’t just send the album to consumers, the consumer had to initiate the acquisition. The redemption is the indication of the demand.
But what about the report that Samsung was only going to give away a million copies, which included international customers as well. So how could it have reached a million in the U.S.?
Sherman: We saw more than a million confirmed downloads to U.S. customers. We would not count international customers.
So in Fifth Harmony, we now have their Reflection album with 155,000 units in sales that is now considered Gold. Won’t the bands that obtained Gold status purely from sales feel like Roger Maris' family must feel when they see their father's home run record broken time and again by modern ballplayers, who are benefitting from lower pitcher mounds, a livelier ball, modified bats, smaller distances to the outfield fences, and performance enhancing drugs?
Sherman: We haven’t needed an asterisk yet.
Lamy: Even the most successful album of all time, Michael Jackson’s Thriller, only went up two levels [2 million] under our new rules. You are not seeing people jump five levels. When we looked at the criteria we changed it so that the artists from 20 years ago won’t feel like this is now less of an accomplishment.
When you announce the certifications, will fans be able to see the breakout of the numbers -- how many were sales, streams, TEA?
Sherman: There will be no breakout. When we changed for the single, we never specified what the breakout for sales to streams were.
Will streams and track sales of songs released ahead of an album count toward the certification of that album?
Sherman: These are lifetime awards, so before and after an album’s release all count.
Its my understanding that if there are multiple single versions of a song from the album, only the version of the actual track will count toward the certification? Is that correct? Why that ruling?
Kennedy: There has to be a version on the album that will count. That is a small difference from the single, where all versions, as long as they are not longer than the album version by 90 seconds or less, can count toward the certification.
What services streams are counting?
Sherman: All interactive services.
Will user-generated streams on YouTube count?
Sherman: No, only official video streams.
Why 1,500 streams. Is that because the industry’s standard blended stream rate is about $0.005 cents and that 1,500 streams equals the average album wholesale price of $7.50?
Kennedy: The streams-to-sales ratio is consumption, not valuation, based and over time we will review consumption habits, which is why we raised the single stream count to 150 streams. We will always continue to review consumption to recognize artists and celebrate their work.
Sherman: We do not take into account the value of the stream. We see the number of streams as a measure of consumer demand, not the value. As it is, we think streams are under-monetized, and we are complaining loudly about that. If the value of a stream changes, we won’t alter the count because we don’t want to alter the history of the program because that would impact these milestone achievements.