Should Radio Still Care About Song Sales?

Last November, The Chainsmokers’ “Closer,” topped Billboard’s Digital Song Sales chart for the 12^th week in a row. While “Closer” got a lot of press for how long it stayed #1, less noted was how few people actually bought it. A scant 84,000 paid to download “Closer” through iTunes and similar digital media providers during that week. It was the fourth time in 2016 when fewer than 100,000 people paid to download the #1 bestselling song—something that never happened during the period from 2007 to 2015.

You have to go back to Hinder’s “Lips of an Angel” in 2006—a year before Apple gave us the iPhone—to find fewer people spending 99-cents to download the #1 bestselling song.

In contrast, U.S. Spotify users alone played “Closer” over 8.2 million times that same week—that’s 98 plays for every 1 purchased download.

Back before callout existed, sales of 45’s at local record stores was the primary way in which radio measured what songs listeners most wanted to hear. Today, even with advanced new music research, Mscore, streaming data, and Shazam, radio still closely monitors which songs people buy. However according to a study done by MusicWatch, when compared with last year, Americans who purchased digital downloads now spend 14% less time listening to the library that they already own. The same study indicates that 9% of Americans stopped listening to their digital purchase library altogether. Meanwhile, Nielsen reports audio streaming grew 83% from 2014 to 2015, while video streams of songs soared by 102%.

As iTunes sales fade and Spotify and YouTube plays soar, should radio still use song sales data to help pick the right new music?

We believe the short answer is yes—for now at least.

It’s true that Spotify’s U.S. paid subscribers alone doubled from 20 million in June 2015 to 40 million in September 2016. Ignoring the tastes of those 40 million Americans using Spotify and other on-demand music services would be a mistake.

On the other hand, 77 million Americans still regularly listen to the songs they paid to download and 30 million Americans still routinely buy songs on iTunes and similar services, according to MusicWatch. Furthermore, only about 1 in 3 of those music consumers who routinely buy digital music also pay for a subscription to Spotify, Apple Music, or another on-demand streaming service.

In other words, there’s a Spotify camp and an iTunes camp and not a lot of overlap between those two groups. Ignoring either on-demand streaming users or digital download purchasers ignores a large swath of music consumers.

While 40 million Spotify users and 30 million download purchasers are significant groups of music fans, they both pale in comparison to the 265 million Americans who listen to radio each week, according to Nielsen. Focusing on the tastes of radio listeners, particularly your most relevant listeners, remains the most reliable metric for gauging new music. Despite the song’s anemic sales last November, our Integr8 New Music Research CHR clients knew that The Chainsmokers’ “Closer” was still firmly a #1 hit with their audiences.

In our next post, we’ll take a closer look at who is using Spotify and who still buys songs on iTunes, what it means for your station, and whether or not you should pay closer attention to streaming or songs.