News is out about a study by "“Does Chatter Matter,” a study on blogs' impact on music sales by NYU/Stern professor Vasant Dhar and a former student. (Download PDF of paper here, read press release here).

The researchers looked at blog posts, changes in an artist's MySpace friend count and album reviews (online only) for an eight-week period around an album's release date -- four weeks before release and four weeks after. They removed the effects of marketing budget size and used regression analysis to find significant predictive value in the variables. The survey looked at 108 albums and tracked blog chatter using Technorati.

Unfortunately, the researchers looked only at CD sales ("information on digital music is difficult to obtain," they wrote). That's unfortunate because indies have a higher digital share than major label releases, and that will skew the numbers down for indies. Had the researchers obtained Soundscan data (it's not impossible) the study would have been better. Instead, they used Amazon.com sales ranks as a proxy for sales data (and used a technique employed in previous research to convert the ordinal sales rank into a sales quantity).

Here's a summary of the results:

• Blog chatter had the greatest correlation with sales two weeks after observation date
• The findings "strongly suggest" that blog posts and MySpace friends correspond to increase in future sales. Blog posts have a greater impact on sales than do MySpace friends
• Mainstream reviews (Rolling Stone, Entertainment Weekly, et al) were negatively related to future sales
• MySpace friends do not have as great a predictive value as blog chatter
• "Very high" sales came from major label albums with 40 or more blog posts in the period
• An indie album with 240 blog posts in the observation period could overcome the disadvantage of being on an indie label

Of course, a predictor may not be a cause for future sales. The researchers talked about this a bit and theorized that an unobserved variable (such as the quality of the artist) could cause both blog chatter and sales increases. Do blog posts create sales or reflect the attention an artist is getting at that point in time? I'd say both. Blogs certainly spur sales, but most of them -- especially the ones that pick up on the topics of the more popular blogs -- are merely a reflection of the online buzz and of the potential of the album.

The conclusions for labels and marketers is pretty clear: Bloggers carry a lot of weight. Blog buzz is a reflection of the anticipation for an album's release, and increases in blog chatter lead to higher sales. Mainstream album reviews are almost as strong a predictor but not quite, and MySpace friends are far less a predictor of future sales.