German Chart Revamp Abandons Unit Sales For Value Rating
June 27, 2007 -
By Wolfgang Spahr, Hamburg
Germany is set to become the first major world music market to rank its music charts based on revenues generated, rather than unit sales.From July 23, the singles and albums sales chart systems are to be replaced by a revenue-based model, to accommodate objections raised by the German anti-trust authorities. Berlin-based German Phonographic Associations (BPW), the IFPI's local affiliate, consulted with the anti-trust authorities to develop the new system. BPW managing director Peter Zombik says: "The purpose of the German music charts is to provide consumers, the media and market partners with a guide to current trends in the music market. The adoption of a revenue-based system for calculating chart rankings ensures that this trend-tracking element is not distorted by cheap products containing old repertoire." Baden-Baden-based market research company Media Control has been collating the weekly sales data on behalf of the phonographic associations since 1997, using figures obtained from computer-based point-of-sale systems in over 2,000 retail outlets. But retailers have their doubts about the new revenue-based chart system. "How is the new revenue-based system supposed to work if, for example, [retailer] Karstadt sells an album for 16.99 euros ($23) while [retailer] Saturn sells it for 9.99 euros ($13.45)?" says Frank Adler, a purchaser at chain store WOM in Cologne.Another purchaser, Beate Buchholz, of the Mega Company in Uelzen, thinks that volume sales are a much more precise measure. She fears that the charts will no longer be as accurate as price differences will distort the rankings. Garbor Gemeinhardt, her counterpart at Munich-based Media Markt, also argues that charts are more accurate when based on sales by unit volumes.But Heinz Canibol, CEO of Hamburg-based label 105 music, is pleased with the new revenue-based system. "You have to think more about how you want to sell your product," he says, "Because dumping [lowering] prices will no longer guarantee a good chart position."Meanwhile, tracks only available as digital downloads will become eligible for the official German singles charts for the first time. Until now, only downloads simultaneously available on physical formats have been included in the chart. However, the German digital album market is considered too small to receive the same treatment at the moment.From July 13, sales of digital-only singles will be traced and counted. Qualifying tracks will be included in the newly combined official singles chart distributed to labels on July 23. "The music industry is responding to the growing importance of the electronic distribution of music. Increasingly, labels, artists and bands are using the Internet as a gateway for selling music," Zombik explains. Labels must register digital-only releases with both Media Control and PhonoNet, the trade body responsible for digital distribution, to be included in the ranking.
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