Home » 03 Sepetember 2019 » Digital sales stealthily gaining grounds in Japan, while physical sales remain strong

Digital sales stealthily gaining grounds in Japan, while physical sales remain strong

Image

 

Japan is the second-largest music market in the world currently. However, for the country with the third GDP worldwide, this does not come as a surprise. Japan is a culture focused country which is uninhibited in expressing it globally. So much so that, the country’s uniqueness lies by just defying bandwagon or simply by not impersonating the West even though the United States is the forerunner in the music market race.

Japan’s music industry is estimated to stand at USD 7 billion as of 2019. The industry’s revenue sources are mainly from live, recording, and publishing. Live acts are often domestic which source up to 90% of the revenue. 20-25% of revenues are generated by international artists through publishing.

The recording industry through music sales in Japan was estimated to be USD 2.6 billion in the year 2017. While most of the recording revenues in Japan is still generated through the sale of physical formats, streaming services generated less than 10% of the music sales.

Also, according to the Music Publisher’s Association of Japan, the publishing industry, the most stable part, generated USD 975 million in 2017. Broadcasting, karaoke performance rights, advertising and sync, contribute as biggest factors for the revenues coming in through publishing. That said, over the years, the recording industry in Japan has been undergoing a challenging period. The sale in physical formats has been fluctuating for the last 8 years due to the exponential growth of digital formats.

In spite of local platforms like RecoChoku, LINE Music and AWA being available, streaming has not been able to penetrate Japan as much as it has globally. Japan is still in the discovering phase.

 

ghazal singer

Japan’s revenue in H1/2019

The Recording Industry Association of Japan (RIJA) released the second-quarter digital music sales, with revenue of ¥34006 million in the first half of 2019. Subscription audio streaming generated ¥18540 million, a 124% year-over-year increase, while ad-supported audio streams achieved  421% on-year growth, reaching ¥625 million.

The subscription-based music videos collected ¥554 million in revenue, with 200% growth year-on-year.
The ad-supported music video also grew by 122% to ¥166o million. The RIAJ report disclosed a ¥54.2 billion in 2018 revenue from CD sales alone. Under current exchange rates, 1 dollar is about 106 yen.

 

Why is Japan’s market so different than the rest?

While the statistics allow visualising a general picture of the market, understanding why the Japanese industry is different from the western ones comes from cultural patterns embedded in the market.

Japan exceeds in fandom which is why their sales in physical formats. The fan engagement is found in  Japanese collectivistic, but highly competitive culture. Japanese fans compete to the biggest fan there could exist. They whine over not availing limited edition release of their favourite idols’, waiting for hours at the meet & greet sessions, spending Friday evenings Karaoke Bars with the friends from the fan-club and attaching great value to their relationships with the artist.
It is a common phenomenon for Japenese artists to receive donations with fan mails.

Also, the reason why streaming in Japan is going through a challenge is because it does not provide specific artists that fans would rather want than all that the platforms can provide.  The remaining Japanese industry is also orchestrated by this predominant cult.

As per IFPI’s report, the country saw an increase of 3.4% for 2018, after recording a loss of 2.9% in 2017. In 2018, digital growth marked a strong growth of 26.8% which was driven by paid audio streaming (29.5%), this growth has now suddenly caused the market offset. Also with a 7.1% decline in downloads, the offset has continued. Japan has been witnessing a 32.6% growth in streaming coupled with a return to growth of 2.3% in physical revenues.

This follows reports from the Recording Industry Association of Japan that streaming has surpassed digital downloads in the market. Also, just during the first half of 2019,  the sale of physical copies were 70182, 544, and 200 units for CDs, vinyl, and cassettes respectively.

There might be a huge room to fill for growth in this aspect, there are companies who are catering to a larger audience, such as Spotify Japan introducing original Japanese language podcasts. Also, the numbers in the Japanese music market may be vacillating currently, only time will tell how stable which sector becomes for the country.

527total visits

Aakanksha Sharma

Author: Aakanksha Sharma

Leave a Reply

Your email address will not be published. Required fields are marked *

Top

Get Music Plus’s top stories, interviews
and gig updates delivered to your inbox.

We won’t spam you. Promise!