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COUNTRY PROFILE MARKET PROFILE 18.06.19 Japan

JAPAN

STATS f There has been a big and constant Population 126.2m demand among Japanese d consumers for physical music video products... and GDP (purchasing power parity) such video sales boosted $5.443 trillion single-track downloads” GDP real growth rate 1.7% – Yoichiro Hata, RIAJ GDP per capita $42,900 h spirit, with the video released in multiple Internet users 116.6m editions, mirroring the tactics used by Almost 20m people in Japan subscribed to a music streaming service at % of population 92% Japanese labels to boost sales of pop CDs. the end of 2018 – with both free and paid subscriber numbers set to rise c “Namie Amuro’s farewell concert video was released in several forms, with variation Broadband households 40.4m further over the next few years as streaming revenues remain healthy of additional live video content, where video i shooting dates and venues are different 018 proved a landmark year for the than double that at ¥82.7bn ($763.2m). Smartphone subscriptions 170.1m and the unit price of this video is relatively music business in Japan, a country Or consider the fact that physical music high,” says Hata. “But many of her fans Sources: CIA World Factbook that once again laid a claim to being still makes up 79% of sales in Japan. bought all of those types of videos.” the most singular music market Japan, truly, is out on its own. Hata claims that strong music video 2in the world. The total production This phenomenal Japan (after its release in the second half of sales generated synergy with digital value of recorded music rose in Japan performance in music video the year). However, RIAJ executive director music, helping the market to its first last year, the first time it has done so – a category soundly ignored Yoichiro Hata says last year’s success was increase in three years, hitting ¥300bn in three years according to industry in most Western music not necessarily a freak phenomenon. “The ($2.8bn) – the same level as in 2015. association the RIAJ. Meanwhile markets – was thanks to success of Namie Amuro’s farewell concert “Namie Amuro’s farewell concert video streaming revenue overtook that from the success of Namie video particularly contributed to this big achieved a tremendous hit record in downloads for the first time, making Namie Amuro Amuro’s farewell increase; however, there has been a big 2018 in the area of physical music video up 54% of total digital income. concert video, and constant demand among Japanese sales. This achievement motivated people So far, so normal. But how which became consumers for physical music video to buy her old catalogue and boosted about this? While streaming the first music products,” he says. audio download sales,” he explains.

report revenue in Japan last year was video to sell The success of Amuro’s video also tells us “In fact, after the release of her farewell ¥34.9bn ($322.1m), up 33%, more than a lot about the sometimes obsessive nature concert video, several old single tracks music video revenue was more 1m copies in of Japanese music fans and their collector – which she released from 2002 to 2016 the 2

COUNTRY PROFILE MARKET PROFILE 18.06.19 Japan continued...

YouTube Music arrived in Japan.” Source: RIAJ RECORDED AND DIGITAL MUSIC Music streaming in the country should (Millions of units/billions of yen) also get a boost from the imminent launch Audio of 5G mobile network services, with Sony 500 Music video Music Japan recently announcing plans to add a high-res music streaming service, Digital music mora qualitas, to its existing mora platform 400 in collaboration with Rhapsody. In a press TOTAL TOTAL TOTAL TOTAL TOTAL statement, Sony Music Japan SVP Shigeki ¥301.5bn ¥304.8bn ¥297.9bn ¥298.5bn ¥289.3bn Tanaka said there was “a lot of momentum 300 happening in streaming and it’s going to keep getting better for consumers and artists with the introduction of mora qualitas”. 200 When questioned on the matter by Billboard, however, Tanaka was more reticent, explaining, ”I’m not sure this service will be successful. It’s our challenge.” 100 Whatever the case, digital music continues to make progress in Japan. Hata says that the Japanese music market in the 0 first quarter of 2019 “was almost stable, a Units Value Units Value Units Value Units Value Units Value bit of decline in physical production and 2014 2015 2016 2017 2018 continuing growth of digital music”. More importantly, Q1 2019 saw streaming revenue increase to 60% of total digital income and – returned to good download sales and sell downloads. Kenshi Yonezu’s hit track Music, according to ICT, followed by Apple Hata says he expects to see digital music those were certified as gold awards after ‘Lemons’, for example, sold 2m downloads in Music, Line Music and Spotify. make further gains. that. There are some similar stories of other Japan last year. Hata says that Spotify’s mobile lyric This will not, however, come at the popular artists who released strong music Research company ICT Research & feature, which one might imagine would expense of the physical music market, he video products in 2019 – and such video Consulting claimed that an estimated 19.8m prove popular in the home of karaoke, has believes. “We think the physical market will sales boosted single-track downloads.” people in Japan subscribed to a music yet to make a significant impact in Japan. survive and co-exist with digital music for As Hata’s comments suggest, another streaming service at the end of 2018, with “Spotify gets the a relatively long number of rather surprising aspect of the modern 10.1m paying for the privilege and 9.7m on support of the user by years,” Hata concludes. “That’s Japanese music market is the continued free trials. ICT says this is set to rise to its free-tier service,” because in Japan, the share of strength of downloads, which accounted 11.4m paid subscribers and 10.2m trial users he adds. “And many physical products still made for 40% of the total digital music market. by the end of 2019, with total subscribers streaming services, up 80% [of the market] and One explanation for this, according to (free and paid) set to rise to 23.7m at the including Spotify, offer we never believe that the

report Hata, is that some popular artists still end of 2021. discount pricing, such as consumers’ enthusiasm for hesitate to license their repertoire to The most popular music streaming family plans and student physical products would go streaming services and these artists still service in the country is Amazon Prime discounts. And last year, away so fast.” :) the