Each week, Billboard puts together a chart of the top 100 most popular songs (as well as several other charts) based on a national sample of top 40 radio airplay, top 40 radio playlists, and music sales. Since the Top 40 comes from the Hot 100 chart, let's look at how the Hot 100 is compiled. As you can imagine, this is quite an undertaking.
First, there is airplay. What is actually being played on the radio and on music video channels on TV? Assuming program directors and disc jockeys have their finger on the pulse of popular music, this could be good measure of what people like. Airplay is tracked through Broadcast Data Systems (BDS), run by Nielsen. BDS uses digital pattern-recognition technology to identify songs that are played on radio stations and music video TV channels across the United States and Canada. This is done 24 hours a day, seven days a week, and captures over 100 million songs annually. BDS also provides "gross impressions," which is simply the number of people listening to a station multiplied by the number of times the record was played. When new songs are recorded, a copy of the recording is sent to BDS so it can be encoded and tracked by its system on the stations it monitors. This data is used not only by Billboard in compiling the weekly charts, but also by record company executives, radio stations, publishing firms, performance rights organizations (to calculate performance royalties), music retailers, independent promoters, film and TV producers, and artist managers.
Another measure of what music is hot is what people are buying. To find out what music is selling in record stores, Billboard goes to SoundScan. Nielsen SoundScan is an information system that tracks the sales of music and music videos throughout the United States and Canada. By scanning the bar codes, they can collect sales information from cash registers each week from over 14,000 retail, mass merchant, and non-traditional sources such as online stores, concert sales, etc. The data is compiled and available for subscribers every Wednesday. Like BDS data, the data from SoundScan is also very valuable for record companies, artists, concert promoters, and retailers.
Billboard's methodologies for compiling the charts have gone through several changes over the years. Since switching to Nielsen's BDS and SoundScan (see below for a little background), Billboard changed the weighting of airplay versus sales. Because tracking a single song through album sales isn't exactly accurate, singles sales have always been used to track the sales side of song popularity. But, since only about 20% of people actually buy singles and over 90% listen to the radio, it made sense to alter the ratio of points. Now, the overall points are weighted to 20% sales and 80% airplay.
But, if Billboard bases its charts on what is already being played on the radio and purchased in music stores, how do radio stations find out about new music?