Japanese Music Market Slow to Adopt Digital

As reported by the New York Times, although much of the world has adopted digital files as a preferred way to listen to music, in Japan, it is likely you’ll encounter fans leaving CD stores with physical albums and accompanying merchandise in their bags.

According to Lucian Grainge, the chairman of Universal Music Group, “Japan is utterly, totally unique.” The country remains staunchly invested in the physical market, evidenced by the drop of digital sales from almost $1 billion in 2009 to a mere $400 million last year. And to compound the issue of the sinking market , physical sales have been on a downward slope for a decade. The loss of around half of Japan’s overall music market’s value since 2000 has resulted in major concerns.

Some music business executives feel change is difficult for two reasons. First, the Japanese consumers’ love for collectible goods and artist merchandise that accompany CD sales will prove to be a hard obstacle to overcome. Second, the rights holders to the majority of popular music in Japan seem to be resistant to change and have been slow to license new services.
However, Spotify’s chief content officer, Ken Parks, is hopeful about the adoption of streaming services in Japan, which are commonly perceived as the music industry’s best hope for new revenue. “When the decision makers finally feel that the heat is intense enough that they have to do something different, they will,” Mr. Parks said. “I think we are approaching that moment in Japan.”

Despite the variety of opinions, it is the collective hope of the global music business that Japan manages to sustain its physical market, while expanding its digital market to increase revenue.

Read the article on the NYTimes.com http://www.nytimes.com/2014/09/17/business/media/cd-loving-japan-resists-move-to-digital-music-.html?ref=business&_r=0