Up until this year, Japan’s still-massive music industry looked like it would continue to avoid the fate of its overseas counterparts, which have almost all been shaken to the core by declining record sales. Even though the Japanese industry has mostly failed to export its products abroad at rates commensurate with anime and video games or generate any new and innovative models of pop stardom, its bottom line has not taken a haircut on par with the ones taken by its American and European brethren.

Physical record sales have been declining for years, and growth within the digital market finally petered out earlier in 2010. In fact, sales of digital products are down 5% quarter-to-quarter from 2009. There are still viable mass-market stars of the girl-pop, “pretty boys,” and nerd-exploitation-pop varieties, but fewer and fewer of them can actually attain any meaningful level of popularity. And the markets for niche material — classical, jazz, blues, rap, metal, etc. — are steadily collapsing. To be sure, file-sharing — the great disruptor of music revenues worldwide — has played a part in the industry’s contraction. Yet the baseline assumption that music is something free which comes from a digital tap hasn’t taken a strong hold in Japan despite being so prevalent in the West and other parts of Asia.



So digital distribution has arrived through establishment channels, leading to digital products like the Chaku-Uta Full download. ¥350 gets you a single song, packed to the brim with Digital Rights Management (DRM) software. This prevents you from sharing it with your friends, but also prevents you from, say, taking a song you bought on your phone and playing it on your PC.

The issue is the widespread adoption of smartphones. When your phone is a computer and your data plan is unlimited, you move from a closed consumption environment to an open one. And from the perspective of the Japanese music industry, the track record of monetizing music within such environments looks bone-chilling

If that all sounds like a hopeless situation for content owners, observers should take care not to discount the reasons why they’ve been able to avoid catastrophe so far. Big firms remain willing to use powerful strong-arm tactics to protect their interests. For instance, Sony Music Entertainment alone has basically been able to keep iTunes from really reaching critical mass in Japan all by itself by flat-out refusing to allow its music onto the platform. The same sort of thing could keep the smartphone-distribution market from collapse (or rationalization, depending on one’s point of view). The industry could very well figure out a way to create some viable smartphone-enabled Chaku-Uta variant by sheer force of numbers.

It is fair to say that this is not a situation the establishment industry apparatus is prepared for. In all likelihood it will figure out a way to maintain its hold on music in Japan, but 2010 was the last year anybody could say so for sure.

Source: neojaponisme.com/2010/12/13/2010-the-decline-of-optimism-in-the-japanese-music-industry/