This Is How Streaming Became the New Platinum Standard
Change the Game
Music streams are the new platinum standard.
Words: Sowmya Krishnamurthy
Illustration: Adrian Borromeo
Editor’s Note: This story originally appeared in the Spring 2017 issue of of XXL Magazine.
Sept. 11, 2007 lives in hip-hop history. It was the day Kanye West’s Graduation went up against 50 Cent’s Curtis album. At the time, it was the earnest David battling the gangsta Goliath for sales and bragging rights were on the line. 50 Cent said he was betting his future solo career on besting West. The competition was rap’s biggest event, the de facto conversation in barbershops and interviews. Everybody had a prediction. “To me, it’s the greatest thing ever,” Timbaland shared with MTV. “I think people should do it more often.”
“I love what’s happening,” Nas also told MTV. Like election night 2016, everyone watched with baited breath as the numbers came in. In the end, Graduation beat Curtis, with 957,000 units compared to 691,000. A new SoundScan King was crowned, but the kingdom was changing.
Music consumption has evolved from a Walkman to the iPhone; the new paradigm for commercial success is streaming. When Chance The Rapper won Best Rap Album at the 2017 Grammy Awards (his Coloring Book is the first streaming-only project to win a Grammy), he shouted out his mom, dad and...SoundCloud.
“The fact that now you can go platinum for a certain amount of streams, that’s important and very cool,” says indie artist Taylor Bennett (who happens to be Chance’s younger brother).
“I think streaming is the new music business,” says Kevin Liles, Co-founder of 300 Entertainment.
Since 1991, Nielsen SoundScan has been the gatekeeper of sales data, tracking weekly more than 39,000 retail outlets globally, for the Billboard charts. Throughout the 1990s and aughts, flexing SoundScan sales was de rigueur in rap. Platinum plaques, signifying 1 million albums (or songs) sold, symbolized success, no different than bottles of Cristal or bling. Obsession with sales crept into bars: “Def Jam, you pushed over 5 million SoundScan,” Jay Z rapped on 1999’s “Dope Man.” In 2008, Lil Wayne created a self-fulfilling prophecy with his hit “A Milli,” which helped Tha Carter III move over 1 million copies in its first week; a feat last accomplished by 50 Cent’s 2005 The Massacre. In 2014, Eminem hit the milestone for highest-selling rapper of all time, with over 44 million albums sold.
As technology advanced, SoundScan had to keep up. The dial-up modem turned high-speed and ushered in online radio and early streaming sites. Since 2005, Billboard has revamped its charts to reflect the changing landscape. In 2005, the Billboard Hot 100 songs chart added digital streams (to existing sales and radio spins). In 2007, streamed and on-demand music was included from places like Yahoo! Music and AOL Music. In 2012, the Billboard Hot 100 took a significant leap by adding on-demand songs from services like Spotify, Rhapsody, MOG, Slacker and Rdio. In 2014, the Billboard 200 albums chart upgraded from purely sales to include on-demand streaming and digital track sales.
“Long story short, we are in a place where we understand streaming to be the most active form of music consumption,” says Silvio Pietroluongo, Vice President of Charts and Data Development at Billboard. In the case of the Hot 100, which charts the hottest songs in the country, Billboard takes into account streaming, sales and radio. As streaming has become the dominant form of music consumption, Billboard has tweaked its internal algorithm (which he would not disclose) to give streams the most emphasis, followed by radio and sales. Billboard continuously adds new services to its computations. As of January 2017, programmed services include Pandora, Slacker, Google Radio, Napster and AOL Radio, while on-demand subscription services include Spotify, Apple Music, Tidal, Amazon and SoundCloud. Video on-demand platforms include YouTube (including Vevo on YouTube) and VidZone.
The difference between programmed and on-demand is subtle but important. Programmed services are ones in which fans have limited control on what they hear (think online radio) while on-demand streaming allows autonomy to select, skip and repeat songs. The latter is given more weight on the charts to reflect consumer choice, as Billboard shared in a Jan. 30, 2017 press release. In other words, playing Drake’s “Pop Style” on Spotify figures into streaming data more than the track randomly popping up on a Pandora station devoted to Jay Z.
Nielsen, the same company behind SoundScan, aggregates streams from the major streaming providers (Pandora, notably, has its own in-house data collector, Next Big Sound) and reports to Billboard on a daily basis. David Bakula, SVP Analytics at Nielsen Entertainment, explains that any play of at least 30 seconds constitutes one stream and each stream is counted. For instance, listening to Migos’ “Bad and Boujee” 10 times in a row counts as 10 streams. “We have given a specific stipulation to the streaming providers that 30 seconds constitutes a play,” says Bakula. “From a charting perspective, it’s all consistent.”
The major streaming players in hip-hop—Spotify, SoundCloud, Pandora, Tidal and Apple Music—have amassed audiences in the millions. The following are self-reported user figures (Note: Reps for Apple Music and Tidal would not comment for this story):
- 100 million users, 50 million subscribers (Spotify
- 12 million active creators (SoundCloud)
- 78 million monthly unique users, 100 million users quarterly (Pandora)
- 3 million reported to Billboard in March 29, 2016 (Tidal)
- 20 million paid subscribers reported to Billboard in Dec. 6, 2016 (Apple)
“Streaming is part of the economy,” explains Tuma Basa, Global Head of Hip-Hop at Spotify. “It’s all in one place. It’s convenient at the click of a button.” Every provider wants a bigger piece of that economy—and offers their own value proposition to attract ears. For Spotify, discovery is crucial. “Discovery is a high priority because we want to bring opportunities to new artists, new songs, new movements, new genres and subgenres,” says Basa, who curates the popular RapCaviar playlist, which features established and emerging talent. As of March 6, 2017, it has 6 million followers. While Apple Music has invested in celebrity-driven content (e.g. Drake’s OVOSOUND Radio, Travis Scott’s .Wav and Chance The Rapper’s World Wide Chicago), Spotify wants fans in the discovery driver’s seat. “It’s your tool,” says Basa. “You’re doing the discovery like Indiana Jones with his flashlight.”
Although streaming providers are largely tech companies, Tidal is an artist coalition literally owned by artists. Jay Z, Kanye West, J. Cole and Beyoncé are founding members of the service and as such, they usually kick streaming exclusives that way. Jay Z’s 2016 Reasonable Doubt doc was released on Tidal and he’s given the provider the exclusive access to several albums, including The Blueprint. “If Jay is gonna do something, my guess is that he’s gonna do something on Tidal,” says Bakula.
Music discovery isn't just for fans. Record labels are increasingly looking to streaming to spot talent. “Streaming services are the new DJ, street corner and barbershop,” explains Liles. “I look at it as our No. 1 source of finding great creators.”
At 300 Entertainment, home to Fetty Wap and Young Thug, Liles says streaming data is integral in finding and cultivating artists. He uses third-party reporting tools like BuzzAngle Music and Nielsen Music Connect. “As an executive, it’s my job for us to be ‘CEOs of information.’”
SoundCloud, which cites Fetty Wap, Lil Yachty, Lil Uzi Vert and Metro Boomin among artists it has discovered, is the breeding ground for rappers. Vice President Content Relations at SoundCloud, Megan West, says that the provider has a “related tracks” algorithm that can propel a new artist, noting how rapper Rory Fresco’s “Lowkey” got placed behind a Kanye West track by the algorithm. “His plays surged overnight, resulting in him ultimately getting signed to a major label.” The track currently has over 4.8 million plays.
Pandora also offers functions to break an artist. Artist Messaging lets an artist add a voice memo to the beginning or end of a song (like a radio drop). Lars Murray, SVP Music Industry Group at Pandora Media, Inc., says A Boogie Wit Da Hoodie used it to introduce himself in September 2016. Pandora’s Featured Track can also add virility to a song, by bumping it up in the provider’s algorithm. “In eight weeks, if it doesn’t hit a spins benchmark, we retire it.
Basically the listeners have decided. But if it works, it’ll achieve an escape velocity, at which point it doesn’t have to be featured.” Murray says that A Boogie used it for “Bag on Me,” which “hit escape velocity” in four weeks. Since Pandora is a programmed station based on analysis of user data (creating stations, marking a song as thumbs up or thumbs down and skipping), Murray says the song still needs to work within the listener's preferences. “We gotta protect our listeners or else you just get people throwing stuff in there. The curation and algorithm you know, puts it in the right place.”
Taylor Bennett uses pretty much all-streaming providers to get his music out. He debuted Restoration of an American Idol on SoundCloud for free on Feb. 24, 2017, and then uploaded it wide. “I think streaming sites are extremely important,” he tells. “They give the listener the opportunity to listen to music and pay the artist what [they] deserve.” As head of his label, Tay Bennett Entertainment, Inc., Bennett is knee-deep in analytics. Using digital music distribution service TuneCore, which pulls an artist’s analytics into one handy snapshot, he tracks streams to make marketing decisions. His next tour, for instance, has four stops in California based upon data pulled from TuneCore. “It’s how we route our tours. It’s how we know where we’re hot at. It’s how we know where our market is.”
Bennett, who owns his masters, underscores the importance of streaming to an artist’s bottom line. “In the past, I don’t wanna name any names, there [were] platforms where you could illegally download music or people would just upload music and nobody’s getting paid... Next thing you know, everybody has your music for free.” Streaming gives fans content—for no more than the cost of their streaming subscription—while compensating him. He was mum on specific payment details (All the providers were tight- lipped on how artists get paid exactly) but he says SoundCloud, in particular, is good at equitable payment.
The sheer size streaming is massive. According to Nielsen, there were over 435 billion on-demand streams in 2016. R&B/hip-hop made up 26 percent (the most dominant genre) with over 112 billion streams. “We’ve become a high volume, low margin business versus the low volume, high margin business we used to be with the CD,” Liles admits. It’s easy to get lost in all the noise but in 2016, three rappers emerged at the front of the pack:
Drake’s Views (released in late April), Chance The Rapper’s Coloring Book (released in May) and J. Cole’s 4 Your Eyez Only (released in December) have garnered tremendous streaming success. Nielsen’s data breaks down total streams for the albums’ release week, in addition to streaming totals from release week through Feb. 23, 2017, respectively:
Drake: 248 million streams and 3.6 billion streams
Chance The Rapper: 50 million streams and 949 million streams
J. Cole: 177 million streams and 497 million streams
Drake’s release week broke streaming records. Billboard reports that Views was initially released exclusively to stream via Apple Music (Drake inked a partnership with Apple in 2015) and later available wide. This ushered him as Spotify’s most-streamed artist of the year (for two years in a row). Bakula thinks Drake’s success was based on hits (e.g. “One Dance,” “Controlla”) as well as the fact that his fan base is streaming-centric; they like consuming music through streaming. “Drake has really big hits but other people have had really big hits too,” he says. “[Streaming] is where his consumer is and that’s where his consumer is conditioned to be.”
Drake is hip-hop’s most visible proponent of streaming success. “He’s been kind of a spokesperson—directly or indirectly for that type of platform,” says Bakula. Basa describes Drake embracing streaming as similar to what Michael Jackson did to normalize music videos in the 1980s. “Certain artists...they shift the culture,” he says. “I think with Views...it was a music moment milestone.”
Apple Music has invested in Drake heavily. The tech giant prominently featured the rapper in commercials and per Recode, footed the bill for his “Hotline Bling” video, which was also released via the platform. But it hasn’t all been sweet. The same exclusivity deal with Apple reportedly cost Drake’s “Hotline Bling” from debuting at the top of the Billboard Hot 100. As XXL shared in October 2015, Apple Music video streams weren’t reported to Nielsen so those views weren’t counted.
Kanye West also faced hiccups releasing The Life of Pablo exclusively with Tidal in February 2016. Bakula says that Tidal didn’t release early streaming numbers and the former SoundScan King didn’t show up on the charts, but in Tidal’s defense, ’Ye was still finalizing the album. In the meantime, Billboard reported over 500,00 illegal downloads by voracious fans. But by April, the completed TLOP was widely released and hit No. 1 on the Billboard 200 chart.
For platforms artists and fans, streaming is a work in progress. Like any new technology, kinks are being worked out and there are growing pains. Still, the benefits of streaming can’t be denied. In February 2017, Future took back-to-back top albums with FUTURE and HNDRXX. The latter also notched eight places on the Billboard Hot 100 in a single week (which is possible because albums are streamed and charted as separate, individual tracks); a feat unheard of during hip-hop’s SoundScan apex.
Drake is already flipping what could be the next phase of streaming. On March 18, he released More Life as a literal playlist. Created with streaming in mind, the project debuted on OVOSOUND Radio (on Apple Music) and was released nearly simultaneously on Spotify. Like a live listening event, fans heard each track together for the first time. Many joined the interactive “event” and went on social media to share their thoughts, causing the project to trend for hours on Twitter. “It’s just going to continue,” predicts Bakula. “This thing has no signs of slowing down. Apart from big first-weeks, streaming offers the opportunity for artists to rack up streams in the future. “As titles are aging, as things are progressing, streaming is becoming a bigger piece.” He points to Prince’s back catalog—initially available on Tidal and now wide—as a new way for old music to reach new fans. “It’s creating incremental listening. Much like we talk about binge-watching on Netflix, we talk about binge-listening on streaming services.”
Exclusives look to be numbered. For charting purposes, it makes sense for music to be heard on as many streaming providers as possible. Plus, exclusives unnecessarily create frustration for fans subscribed to one provider over another. “We don’t believe in exclusives here,” says Liles. “We believe that if it’s available, everyone should be able to get it; no matter how they consume.” Even Drake, an Apple Music artist for all intents and purposes, moved away from that for More Life. The exception here, of course, may be Tidal due to artist ownership.
If subscribers ultimately get identical content, the power truly falls with fans. Streaming platforms will vie for your clicks and subscription dollars. Expect more emphasis on discovery, curated playlists, along with bells and whistles to keep you clicking and listening. “Everybody’s got the same content so how do we make it special?” asks Bakula. “Everybody is trying to create value that differentiates them from the competition. You’re gonna see more and more innovation.” As a new artist and entrepreneur, Taylor Bennett is already benefitting from the streaming wars. His “Grown Up Fairy Tales” (featuring Chance The Rapper and Jeremih) has over 1 million streams on SoundCloud. Now, that’s worth its weight in platinum. “I think it’s one of the best win-win situations the industry has come up with in a while.”
Correction: July 12, 2017
Because of an editing error, an earlier version of this article misstated Spotify's RapCaviar playlist had a subscribers count of 30,000 as of March 2017. The correct number of subscribers to the RapCaviar playlist was 6 million as of March 2017.
Check out more from XXL’s Spring 2017 issue including the cover story with DJ Khaled, Joey Bada$$ discussing his ALL-AMERIKKKAN BADA$$ album, Freddie Gibbs and the trial that almost cost him his freedom and 6lack's R&B rise to fame.
See Exclusive Photos From DJ Khaled's XXL Magazine Spring 2017 Cover Shoot