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Rivals to Launch New Record Ratings Systems : Entertainment: They will use computers to track store sales. The method may change the way music is marketed and promoted.

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TIMES STAFF WRITER

In a campaign that recalls the war several companies waged in 1987 to supply more accurate TV ratings, two research groups are battling to sign up record stores to help them launch competing computerized systems that would provide more accurate music sales data than today’s charts.

Hartsdale, N.Y.-based SoundScan Inc. and BPI Communications, the publisher of Billboard magazine, are asking retailers to provide point-of-sale information about album purchases that will be fed into a computer data bank. Experts doubt that the music industry is large enough to support both services. But each promises to provide to record companies the kind of detailed sales information that most other packaged goods manufacturers have relied on for years to sell their products.

Like the battle over TV’s “people meters,” which drew howls of protests from the networks when A. C. Nielsen Co.’s system showed a big drop in national viewing audiences, the music sales tracking systems are expected to have a huge effect. They could change the way music is marketed and promoted because record companies will be able to identify which records are selling best, and in what parts of the country. Currently, record sales data come from store estimates that aren’t broken out by local markets.

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“Point-of-sale information will enable us to be more strategic and directed with our marketing dollars,” said Al Cafaro, senior vice president and general manager of A&M; Records. “It will be an important tool in helping us effectively gauge” the effect of music promotions.

The record industry now spends hundreds of millions of dollars annually on promotion and marketing, without much guidance about how effective the expenditures are. The industry has mostly relied on trade publications that have purported to rate the country’s most popular records, according to either radio airplay or estimates of retail sales.

Billboard magazine’s current ranking of the top 100 pop music albums is based on weekly estimates from about 200 retailers around the nation. Among the most influential of the tip sheets, it is consulted by thousands of radio stations and music retailers.

Billboard’s charts can affect an album’s retail sales and radio airplay by showing whether an album is gaining or losing sales momentum. But the charts have drawn criticism in recent months, both for their inaccuracy and because they were allegedly subject to manipulation.

In July, a former manager for Capitol Records maintained in a lawsuit that he was wrongfully fired by the label for refusing to go along with a scheme that required him to bribe record retailers to submit false data for Billboard’s album sales chart. Billboard officials have acknowledged that record companies have tried to influence their charts in the past but say they made changes in May to discourage the practice.

The new music data systems promise to be even less susceptible to influence or inaccuracy.

SoundScan, which will begin operating Jan. 1, will track weekly music sales supplied by at least six national chains, as well as independent stores that control roughly 25% of the national music retail market, said Mike Shalett, who co-founded SoundScan with research consultant Mike Fine. Shalett is also president of Soundata, a market research firm in Milford, Conn.

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The sales data will be gathered directly--using product bar code scanners--when albums are sold. It will then be transmitted to SoundScan and grouped in a variety of charts that can be viewed on a personal computer. Groupings will include music sales by geographic location, type of store and income level of the surrounding neighborhood.

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