At many of the more than 1,500 independent record stores in the United States, vinyl sales have been growing at a healthy clip for almost a decade — up 14.2% across all retailers in 2023 alone, according to Billboard’s data provider, Luminate. So why did Luminate track 47.3% fewer vinyl sales in January and February than it did for the same months in 2023?
On its face, such a precipitous drop might appear troubling — and puzzling — given the surge of vinyl sales since the pandemic. In actuality, the decline is mostly a result of Luminate changing the decades-old methodology it had used since Billboard adopted SoundScan’s measurement system in 1991 to count sales at indie retail outlets — a change that Luminate had warned last year would make 2024’s vinyl sales numbers appear significantly lower. But some of the drop reflects a protest by independent retailers against that adjustment, which one indie community executive worries “may put a damper on one of the industry’s high-profile, feel-good stories.”
Frustrated by the methodology change, some of these indie stores have stopped reporting sales to Luminate, and the Coalition of Independent Music Stores (CIMS), the Record Store Day board, the Music Business Association and other organizations have launched an alternative chart to measure physical and vinyl sales.
“There are consequences to every decision,” Music Business Association president Portia Sabin said in a statement.
Until the end of last year, Luminate extrapolated indie retailers’ physical album sales using a methodology that weighted actual sales by a small sample of independent stores — approximately 70 accounts totaling 140 storefronts, Billboard estimates — that represented 1,500 to 2,000 retailers of their ilk that are operating in the United States, according to label and distribution sources.
Last year, physical purchases such as vinyl and CDs at these independent retailers — even with weighting — accounted for less than 3% of total music consumption units in the United States.
Indie retailers say they don’t oppose more accurate measurement of their sales. Rather, they are incensed that Luminate stopped weighting sales just months before it plans to begin the beta phase of its upgraded Connect measurement platform, which it had designed to only count actual indie physical sales. (The final version of the enhanced platform is expected to launch in 2025.) They had wanted Luminate to delay the methodology change until it onboarded hundreds more indie music retailers to report their sales.
Until the Connect beta is launched, Luminate is basing indie physical sales solely on the actual sales retailers report, which due to the protest has been cut in half to about 33 accounts with 70 storefronts, Billboard estimates.
Indie stores say they are protesting because of concerns that they — as well as the indie labels and artists who rely on them for marketing — will lose influence if their sales suddenly appear significantly lower across the board.
Indie-label executives and their distributors say they, too, are worried about the methodology change because it might affect the marketing of developing artists. “We are extremely disappointed that Luminate chose to stop weighting indie retail sales without launching a serious program to enlist store reporting and to count the physical market,” Matador Records president Patrick Amory wrote in an email. “Independent labels and independent artists over index in physical, and especially at indie retail, and we need a level playing field with the majors to measure success. Luminate is penalizing serious, career-building, album-oriented artists on the charts. Their sales are not being counted. Their market share is being allotted to the majors. That is a disaster for independent musicians, labels and retailers.”
An additional concern is that smaller sales numbers and less weight on the Billboard charts, which are based on Luminate data, will “diminish the importance of the physical market to the music business ecosystem,” as four independent record store coalitions and indie retailing giant Amoeba Music put it in a statement issued in October.
The worry is that less music will be released in physical formats, which would financially hurt indie retailers. But a record label executive says given the booming demand for vinyl — a high-margin product for labels — those fears are unwarranted. “Right now,” says one major-label executive, “with the high prices that the growing vinyl format commands, labels are printing dollars with healthy profit margin.”
Indie retailers, many of them iconic local businesses that have served their communities for decades, have panicked ahead of big changes in the past. When the major record companies decided to change the official day for new music releases from Tuesday in the U.S. to a worldwide Friday street date in 2014, “indie stores told labels, ‘You are killing us,’” recalls the major-label executive. “And yet no stores disappeared in the aftermath of that change.”
Some chart mavens say the boycott could be a risky move. By intentionally shrinking their influence on Billboard’s charts, indie stores could drive fans — who, thanks to social media, are much more attuned to the metrics that determine chart positions — to start shopping at sites or stores where they know their purchases will benefit their favorite artist.
Artists and record labels hoping to climb Billboard’s charts, meanwhile, might opt to stage meet-and-greets and other in-store promotions at businesses that report their data, though plenty of acts and record companies still host such events in stores that don’t report to Luminate.
In response to the protest, Luminate says it’s working to lure back stores that stopped reporting and onboard a critical mass of indie merchants that have not reported their data before. Stores that have stopped reporting are now permitted to bypass Luminate’s standard four-week onboarding process if they commit to reporting data for at least a year. For the latter, Luminate offers an instructional video and a written guide to the process, although indie merchants say they have pressed for personalized assistance and simplified reporting requirements.
Luminate also recently hired respected veteran music data executive Chris Muratore as its director for partnerships. Muratore worked for 18 years in various positions at Luminate’s previous iteration, Nielsen SoundScan, and more recently founded Border City Media, the startup behind music consumption data tool BuzzAngle Music (now Alpha Data, and, like Luminate, a subsidiary of Billboard’s parent company, Penske Media Corporation). He will focus on building and maintaining relationships with the independent music retail sector “to ensure physical music sale data collection is as accurate and representative as possible,” according to the release announcing his appointment.
When Billboard began tabulating charts using SoundScan data in May 1991, mass merchant sales, such as those by chain stores and, later, internet or other mail-order operations — were based on actual sales. But the data company used weighted samples of independent store sales because not all stores back then had the point-of-sale (POS) technology, nor the capability to transmit store reports. So, to compensate, stores were assigned weighting depending on how many other non-reporting stores were in their DMA, or designated market area. But over the years, that process became more difficult, and less scientific, as thousands of stores closed, sources say.
Using data from a confidential Luminate report shown to labels, Billboard estimates that last year, the data platform counted each album scanned by 140 indie retailers as 8.54 physical albums. Based on that extrapolation, Luminate reported that an average of close to 72,000 physical album copies — vinyl and CDs — sold each week, totaling 31.9 million copies sold in indie stores for the year.
Overall, in 2023, U.S. physical sales totaled nearly 87 million copies, of which 49.6 million was vinyl while 36.8 million was CDs. Of that total, indie stores, when they were still weighted, accounted for 36.7% of sales; non-traditional, which includes internet, mail order, Christian retailers and stores like Urban Outfitters, comprised 41.5% of physical sales; mass merchants like Target and Walmart, 16.5%; and chains like Barnes & Noble, 5%. As a result of the methodology change and boycott, Luminate reported a 40.2% drop in total physical sales (including vinyl and CDs at indie shops, chains and big-box stores) for the first eight weeks of 2024 compared with the same period in 2023 — from 13.6 million albums to 8.1 million. Within that, indie store sales fell 95.4%, from 5.71 million albums when weighted last year, to 262,000 copies.
Meanwhile, the aforementioned unweighted average weekly physical sales of nearly 72,000 averaged reported by indie retailers from January to November 2023 are now averaging 27,000 per week for the first eight weeks of 2024 because of the stores that have stopped reporting to Luminate.
As part of its plans to calculate actual sales instead of extrapolating them from a weighted sample, Luminate revealed in October that it had identified 570 indie accounts — with, industry sources say, the aid of labels, distributors and store coalitions — that it wanted to add as reporters. But as of Dec. 19, with the change in methodology looming, Luminate’s Music Connect website indicated that only six more indie sales reporters had been added, with the indie account total growing from 72 to 78. After the apparent boycott began, that fell to 36 reporters, and as of Feb. 22, to 33 indie store reporters.
Some of the retailers that have stopped reporting to Luminate are now sending their numbers to music data analysis platform StreetPulse, which is tabulating the Indie Retail Top 50 published by Hits Daily Double. Sources familiar with the chart say approximately 82 accounts operating about 185 indie stores are providing sales data, and another 50 stores are reporting online sales only.
Indie stores that have switched to StreetPulse claim it is more user-friendly because “Luminate expects the store reporters to do all the work to prepare the data for ingestion,” says one source familiar with the situation. “That takes time and [requires] a system able to make the reports. Luminate expects an indie store owner, who may be a one-man operation, to have the technical capabilities and manpower of a chain like Target.”
The source says the StreetPulse system “is cloud-based and has already integrated all the preeminent POS systems like Square for Retail Free, Shopify Clover and even some of the legacy systems like Lightspeed and Fieldstack, so it’s much easier to report.”
CIMS and ThinkIndie Distribution executive director Andrea Paschal says she supports the alternative chart because she felt her organization was “brushed aside” by Luminate.
As this conflict continues, it’s worth noting that vinyl sales keep growing. Even if indie store vinyl counts were eliminated for the first eight weeks of this year and last, Luminate’s Connect system indicates that year-to-date vinyl sales for the other nonweighted store sectors — chain, mass merchants, internet/mail order/venues and nontraditional retail — are still up nearly 7%. And the vinyl sales bonanza Record Store Day that was launched by independent record stores in 2007 is slated for April 20, less than six weeks away.
A version of this story originally appeared in the March 9, 2024, issue of Billboard.
