Here's the countdown: On Sunday night or Monday morning, retailers transmit to SoundScan a computer file of the exact number of units they sold of each title at each of their locations for the previous week. From the files of those approximately 15,000 stores (including some 600 independent retailers), SoundScan then compiles its reports. Those reports include everything from how many units of a particular title were sold in a particular city to what type of store the title was sold in (chain, independent, mass merchant, nontraditional) to the top 50 albums for the past week, broken down by label. (The depth of detail a label gets depends on the level of service it pays for.) On Wednesday morning, SoundScan releases those reports (they're now available on-line, with the use of passwords, at aud.soundscan.com) to its subscriber base and sends retailers a list of the top-100 sellers in their DMA. "So if we had, say, on a street date [when new records are released] of the previous Tuesday done very well with an obscure record, the following Wednesday everybody would know about it," says Dreese.
The hipper music stores don't care so much about the numbers; they're busy pushing their own unconventional inventory. But a Kmart or a Circuit City--now, that's another matter. Such mass-market retailers have to look no further than SoundScan's top-100 in the Boston DMA and their own inventory records to know that a certain title they don't have yet is flying fast off the shelves of another local retailer. "The new releases are where [Mike's] concerned--where his people step out and believe and embrace a new release," says CIMS's VanCleave. "And then chain guys don't pay anybody to do that. All they do is sit there and wait for the numbers to come in, and then they decide to order it. The way Mike's got it now, by not reporting, it may take his local chain competitors weeks to get the information."
"If Newbury Comics' information shows the trends and what's breaking out there, not just to the record labels, but to...Musicland or Trans World or whomever, they can make their buying decisions based on information that is funneled into SoundScan for that market," adds Mark Cope. "You have to remember, those larger accounts are dealing with very tight open-to-buy budgets--which means that they have a specific budget that they can spend each month on buying product. So they have to be right more times than they're wrong. And so they're taking every bit of information they can in order to ensure that they're putting the right records in the right stores at the right time."
Mike Dreese has experienced the power of SoundScan to get the "right" records in the "right" stores. In 1997 Newbury Comics' own label, Wicked Disc, released a charity CD called the "WBCN Naked Disc," which featured previously unreleased performances by alternative bands like the Verve Pipe, Beck, Bush, and Tori Amos. Dreese and his colleagues tried their mightiest to get the record into retail outlets other than Newbury Comics, but some national chains, like Strawberries (which is owned by Trans World), wouldn't bite. And then the top-100 list for the Boston DMA came out for the week ending November 24, 1997: "Naked Disc" ranked number 63, with some 800 copies sold. Within one week of the release of the first SoundScan numbers, the ranking had jumped to number 28--a clear sign that additional retailers had picked up on the title. And by the week ending December 21, 1997, it had soared to number 13, with a whopping 5,800-plus copies sold. "When you see a number pop the way that one did in the Boston market," says Dreese, the chains "are forced to respond because all their store managers are saying that people want this. They look then at SoundScan and see that it's sold thousands of units and realize they really do need to bring it in."
Dreese was aware that his window of opportunity had shrunk to a crack when he headed to the New Hampshire convention in September 1997. But when he heard the Handleman rep "making these grandiose statements about the prowess of Handleman based on SoundScan as a tool," he feared that the window could slam shut. "It's very clear that now versus five years ago, retailers of every ilk have become a lot more sophisticated about using market-specific data to program the shelves of their stores," says Dreese. "So as the potential users of this [data] increasingly used it to good effect, we had to ask ourselves, 'Are we a beneficiary or a net loser in this information-transfer scheme?"
SoundScan chief operating officer Mike Shalett is not an easy man to reach. Just ask any independent retailer who's tried to establish a dialogue with him--John Kunz of Waterloo Records, for instance. But once you get Shalett on the telephone, he can't say enough about how Mike Dreese has no edge over other retailers, even very large ones, when it comes to picking up early on a new act and putting it on his shelves. If Dreese knows about it, Shalett says, so does everyone else--because they've heard it on local radio or read about it in local reviews. "I want to be clear about the breaking-the-act part," says Shalett over his car phone en route from Hartsdale to New York City. "The Boston Phoenix hasn't reviewed the record? [Boston radio stations] WBCN or 'AAF or none of these people are playing this record? You know, it's amazing, using this logic, that the record company even signed the act."
