The Japanese music market, one of the last bastions of CD sales, appears at last to be conceding to the inevitable and adopting streaming.
The country’s music market, second in size only to the US and worth almost $3 billion, is still made up largely of CD buyers. While the rest of the world switched in ever greater numbers to digital, CD buyers in Japan clung on; last year, 70% of recorded music sales were still accounted for by CDs.
But times are changing, and while CD sales have been slowly declining for a number of years, it seems the pace of change is accelerating, thanks in part to the pandemic.
Music streaming services made up just 10% of sales in the country only a few years ago, but last year that figure grew to 15%, and the expectation is that it will be over 20% in 2020, according to Jamie MacEwan a specialist in the Japanese music market with Enders Analysis.
“The crossover point where total digital revenues eclipse physical production is now just a matter of time,” MacEwan told AsiaOne.
As has happened elsewhere, the change will mean a fundamental shift in the landscape of the market. For example, Tower Records, which is independent of the now-folded US company of the same name, has a large presence in Japan, with more than 80 stores. It has seen a serious hit to sales since the start of the pandemic as music fans avoided shops, AsiaOne reports.
The rise of digital, meanwhile, clearly spells opportunities for the big streaming brands like Spotify, Apple and Amazon, along with a number of smaller domestic platforms.
One reason for the endurance of CDs in the country may perhaps be accounted for by the fact that they are often sold bundled with perks for fans, such as priority ticket purchases for concerts and invitations to star-studded events, all of which have been cancelled or scaled back due to COVID-19, with some turned into online virtual events.
Up to now, sales of CDs have also been buoyed by a lack of new releases on streaming services as record labels looked to avoid damaging CD sales, but this is likely to change as more fans adopt streaming services and labels inevitably follow the money.
“Domestic labels are likely to make more of their catalogues available to stream closer to physical release, which will accelerate the digital transition in the coming years,” MacEwan told AsiaOne.
But the change may not mean that the giants of the streaming world will have things all their own way in the Japanese market he added.
Domestic streaming platforms, like LINE Music, AWA and RecoChoku, may offer strong competition, with content aimed specifically at J-pop fans.
“This will prevent the emergence of an Apple-Spotify duopoly as seen elsewhere,” MacEwan said.
Sourced from AsiaOne