TOKYO/SEATTLE: High-tech Japan has puzzled music industry observers in recent years because of its slow adoption of music streaming, but the format may gain momentum after Napster and Rakuten announced a partnership.
Napster, often described as the original music industry disruptor, and internet giant Rakuten released a joint statement last week confirming that more than 20m tracks from Napster's catalogue would be added to Rakuten Music.
"We're seeing the emergence of a new era of on-demand streaming in Japan," said Brian Ringer, Napster Chief Technology Officer.
"We're excited to partner with Rakuten, a world-class brand, to extend the Napster experience into Asia and bring the Japanese music community access to over 20m tracks through our partnership with Rakuten Music."
Naho Kono, Managing Executive Officer of Rakuten, added: "By expanding our offering with music from Napster's diverse catalogue, we aim to give Rakuten Music subscribers the opportunity to find and enjoy new music from around the world."
Rakuten is Japan's largest e-commerce venture with strong brand recognition among Japanese consumers as well as long-standing relationships with the country's music labels and distributors, according to the Financial Times.
However, the two companies may find Japan a difficult market to crack because there are several rivals already competing for music streaming revenues of $204m that still amount to just a fraction of total music sales of about $3bn.
These include Spotify, the Swedish music streaming service which launched in Japan last year, Apple, Amazon and Google, as well as local players, such as KKBox and Line.
Furthermore, Japanese consumers have held back from embracing streamed music, preferring CDs and vinyl, which account for about 80% of the country's music sales.
"It's a paradox because Japan has such a heritage of digital-savvy consumers, and yet in music it's just been really behind the curve," said Mark Mulligan, an analyst at MIDiA Research.
As for the rest of Asia, consulting firm McKinsey reported last year that the number of digital music users in the region is growing at around 15% a year and this is encouraging more brands to explore using music streaming in their marketing.
Data sourced from Napster, Rakuten, Financial Times; additional content by WARC Staff