Are iTunes sales an elaborate hoax?

Tommy Boy Entertainment CEO Tom Silverman made an interesting claim during an interview posted on July 9:

Silverman: People are telling me that the majors have teams of people who actually buy singles on iTunes to try to drive it up the charts — buying their own songs. It blew my mind. I mean, we’re not learning anything. That is incredible. I wish I could figure out how to prove that — they’re not going to tell me. I guess they would only lose 35 percent of that money.

Silverman: 30 percent. So if they buy 50,000 songs, we’re talking $50,000 less 70 percent, so it would cost about $15,000. For $15,000 in a week, they can buy 50,000 more song downloads, which could drive the record up three or four positions on the chart. And they hype of it all would make people believe it, and then the next week it would be real, which is what always used to happen.

I was hoping that your Chris Anderson’s manifesto was going to show us that we could get music that rose to its natural best level on its own, without being hyped, but with the majors fighting for relevance and trying to figure out ways they can control it by gaming it, instead of just focusing on getting the best stuff and giving artists what they need to make their art better.

I’ve long suspected that record labels use iTunes to hype the charts. It’s incredible when tracks miraculously debut at number one on iTunes’ digital charts during their first week of availability — despite no prior marketing campaign to announce their arrival in the store.

A good example is Eminem’s “Not Afraid.” On May 12, the track debuted at number one on the Billboard Hot 100 with a reported 380,000 downloads — the most one-week sales for a digital song in 2010. It managed this feat despite minor traction on national radio stations, as well as leaks to web sites and blogs. Perhaps the iTunes community is so faithful to the service and to Eminem that they would purchase “Not Afraid” en masse the minute it was available, even if it was widely available for free on the Internet.

In March, Boston rapper Sam Adams faced charges that he gamed the iTunes system to launch his EP, Boston’s Boy, to a top 10 slot on its hip-hop charts. However, Billboard disputed them, citing Nielsen SoundScan data that Boston Boy garnered sales in several markets, with only 22 percent coming from Adams’ hometown. So far, Adams remains the only artist formally accused of buying his own iTunes product. (When I say publicly, I refer to national outlets such as Billboard, not random blogs such as Plug One.)

Most would argue that news of major labels using iTunes to hype its records is just business as usual. However, such a controversy could foment collateral damage for Apple. The company is weathering numerous crises in 2010, from accusations that its app store is riven with hacks and fraudulent accounts to reports that a significant proportion of its iPhone 4 systems suffer from poor reception and may have to be recalled. And let’s not forget that the Justice Department has launched an investigation over complaints that Apple bullies labels into foregoing participation in’s “Daily Deal” program.

As noted in the Silverman interview, these are unproven allegations. However, it seems the rumors are prevalent enough to warrant further inquiry.

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