Jay-Z's Magna Carta Forces Music Industry To Set 'New Rules'

'It is a novel and creative marketing move,' says RIAA director Liz Kennedy about the change in certification rules spurred by Jigga.

Jay-Z promised to force some #newrules on the music industry when he announced his ground-breaking deal with Samsung electronics last month. And now, just weeks after springing the news about his 12th solo album on the world in a series of high-profile commercials, he's already changed the game.

On Monday (July 1), the Director of the Communications and Gold & Platinum Program of the Recording Industry Association of America, Liz Kennedy, announced that the music industry's trade organization would change its long-standing rules to meet the challenge of Jay's roll-out.

"We think it's time for the RIAA ... to align our digital song and album certification requirements. That's why today we are officially updating this rule in our G&P Program requirements," Kennedy said of the organization's gold and platinum certification program, which typically requires a 30-day wait from release day to tally sales certifications. "Going forward, sales of albums in digital format will become eligible on the release date, while sales of albums in physical format will still become eligible for certification 30 days after the release date."

The rule switch was inspired by Jay's deal, which includes a pact with Samsung to buy 1 million copies of the album and offer it early to consumers who download a special app.

"It is a novel and creative marketing move and it has rightly stimulated a healthy conversation about the sale's meaning and implications for the modern music business," Kennedy wrote about the scheme. "For us, the move prompted a re-examination of our historic Gold & Platinum (G&P) Program award rules. As we dug through the records of audits, re-reviewed rules and consulted with our auditing firm of more than thirty years, Gelfand, Rennert & Feldman, we discovered one rule disparity that no longer makes sense."

The old rule was in place, Kennedy explained in her blog post, to take into account the potential return of physical product on store shelves, which are then not counted in total sales. But, considering that digital returns are few to nonexistent, the RIAA decided that a new paradigm had to exist for album sales stunts like Magna Carta.

When MTV News reached out to the RIAA last month, a spokesperson said it was still considering how to handle Magna Carta. And while they've clearly had a change of heart, it does not appear that Billboard magazine, which tallies music sales, has.

While Jay's deal appeared to secure a platinum sales peak before the album was even officially on sale at retail, the magazine's long-standing edict rejecting the counting of bulk sales appeared to stand in Jay's history-making bid.

On June 21, Billboard Editorial Director Bill Werde explained why his magazine was standing its ground in an editor's letter.

"[But] our role as the chart of record is to set the rules, and hopefully even raise the level of play," Werde wrote; a spokesperson for Billboard was not available for comment at press time.

"It is in this spirit that I say it wasn't as simple as you might think to turn down Jay-Z when he requested that we count the million albums that Samsung 'bought' as part of a much larger brand partnership, to give away to Samsung customers," Werde wrote. "True, nothing was actually for sale — Samsung users will download a Jay-branded app for free and get the album for free a few days later after engaging with some Jay-Z content. The passionate and articulate argument by Jay's team that something was for sale and Samsung bought it also doesn't mesh with precedent.

"Had Jay-Z and Samsung charged $3.49 — our minimum pricing threshold for a new release to count on our charts — for either the app or the album, the U.S. sales would have registered," he said.

Werde continued, "And ultimately, that's the rub: The ever-visionary Jay-Z pulled the nifty coup of getting paid as if he had a platinum album before one fan bought a single copy. (He may have done even better than that — artists generally get paid a royalty percentage of wholesale. If Jay keeps every penny of Samsung's $5 purchase price, he'd be more than doubling the typical superstar rate.) But in the context of this promotion, nothing is actually for sale."

Once the general public can buy Magna Carta, those sales will count, and Werde expects Jigga to notch his 13th #1 album. And, he also left the door open to possibly changing the rule in the future.