SoundScan Expands Tracking System Into Japan

SoundScan Inc., the New York firm whose sales data revolutionized the U.S. pop charts five years ago, is about to transform the $36-billion global record business.

This week, SoundScan expanded its sales tracking system into Japan and delivered record executives their first accurate glimpse of how music is selling in 53% of the world. The results are surprising.

Nanase Aikawa, the top-selling pop artist in Japan, sold 415,000 copies of his “Red” album--about 146,000 more units than rapper Nas, whose “It Was Written” album dominated the U.S. pop charts this week. In fact, artists in Japan--where CDs cost twice as much in the U.S.--had four of the top 10 albums in the world last week.

“Having this kind of data at their fingertips will open a window on the world for record companies and allow executives to reevaluate their global marketing strategies,” SoundScan Chief Executive Mike Fine said. “It will provide up-to-the-minute information about what kind of indigenous repertoire is hot and exactly how strong American artists compete week to week overseas.”

Record companies used to be able to influence which albums topped the charts by manipulating verbal reports made by record store employees. The SoundScan system--which measures sales every time a clerk runs a record through a bar code scanner at a register--tracks nearly 90% of the estimated 10 million units sold each week in U.S. record stores.

The SoundScan system resulted in some remarkable changes in the music industry--and produced some eye-opening data for record executives, radio programmers and concert promoters, all of whom now rely on the firm’s local and national data to help them determine which acts to push.

In addition, SoundScan drastically altered the complexion of the pop charts, proving that rap, country, alternative rock and heavy metal music frequently outsell music made by the biggest pop superstars. The system also allowed tiny independent labels to compete fairly with the large conglomerates because SoundScan’s sales data is accurate and now accessible to firms with small staffs.

In Japan, SoundScan data is likely to teach the industry new lessons about what really sells in the global music market.

The Japan system will monitor an additional 4.5 million album sales a week for the industry. SoundScan will also begin reporting sales for Canada by October and is in discussions to move into Europe and Asia, possibly as early as next year.