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Jay Z RIAA

Photo via Roc Nation Instagram

It appears that #newrules are quickly becoming a reality. The Recording Industry Association of America (RIAA) has taken notice of Jay Z’s controversial deal with Samsung to distribute his Magna Carta Holy Grail album to mobile customers.  On Monday the organization updated the recognition time windows of its Gold & Platinum Awards Program to reflect digital album releases which achieve either status on or before their release date.

The RIAA labeled the change a “common sense update.”

For the past 55 years, the program had restricted the recognition of album certifications to 30 days after a release. The logic behind this protocol lies in the method of accounting: through an independent firm the RIAA calculates the amount of physical product the record label has shipped for sale minus the amount that was returned. Since most music distributors take physical product solely on consignment basis, the 30-day waiting period is necessary to avoid rescinding certifications once returns are subtracted. This rule had been in place for both physical and digital sales. But there are limited returns on digital album sales.

With digital revenue representing nearly 60% of the US music market in 2012, the RIAA labeled the change a “common sense update.” And it is, according to the way that they track quantities of albums. But their method contrasts with the way Nielsen SoundScan, the data source Billboard uses, tracks music sales. SoundScan collects point-of-sale (POS) data from retailers. In other words, they recognize a sale once it is transmitted to the customers hands. The RIAA is not concerned with how many units actually reach the customer, but how many are shipped and not returned. This technicality sheds light on why Billboard chose not to make a similar concession in response to Samsung’s purchase of MCHG units.

The Recording Industry Association of America (RIAA) is the trade organization that supports and promotes the creative and financial vitality of the major music companies. Its members are the music labels that comprise the most vibrant record industry in the world. RIAA® members create, manufacture and/or distribute approximately 85% of all legitimate recorded music produced and sold in the United States.
Company Description Credit: RIAA
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