Strange Boutique (January 2013)

My first Japan Times column of the year is up today, so have a read of that here. It deals with some of the issues raised in Japanese business magazine Diamond about the music industry’s problems. It comes down pretty hard on Sony, and deservedly so because they’ve been wretched, but that doesn’t mean other companies can escape. Avex come out pretty well from Diamond’s piece, but that’s all relative, and they also deserve a share of the blame for their own part in the system.

One place where I think Sony should be singled out for praise is in being relatively early movers in the music streaming service market. I actually really quite like Music Unlimited, and with the subscription due to come down from ¥1480 to ¥980 in March, bringing it into line with forthcoming competitors like Spotify, it’s a pretty good deal. The fact that Sony Music Entertainment aren’t giving it their full support is a problem that I kind of skate over in the article, so I’m going to clarify here. Sony Music artists are featured on the service, including some quite big names like Mika Nakashima and Seiko Matsuda, although the former’s sales have been plummeting since her peak about ten years ago, and Matsuda is an oldie with correspondingly older fans, so it’s hard to see streaming sites siphoning off too many of her disc sales. What SME haven’t yet released onto their sister company’s service are their two biggest chart acts at the moment, Kana Nishino and Nogizaka46. Those are the kinds of artists who should not just be on the service, but they should be on the posters for the service. I find it personally rather annoying that YMO aren’t on there either, although Polysics and Supercar are, so indie types can be satisfied.

There are a lot of issues with streaming services, and Spotify has come in for a lot of criticism in the West for the tiny sums it pays artists per listen. I don’t really see a way around the problem though. $10 a month seems pretty reasonable for me as a consumer, but much more than that and I don’t think the service would be able to attract customers. It’s low enough that it doesn’t feel like paying much, but in a world where people on average buy only 1.5 CDs a year, it actually raises the amount of money people are spending on music to the equivalent of about 6 CDs a year. Also, as Diamond points out Spotify pays labels a higher percentage of royalties than iTunes does, so one might think that the music industry benefits overall. The system is brutally egalitarian in that you get money in exact proportion to how popular you are with the listeners, and companies, especially Japanese companies, don’t like ceding that much control to their idiot customers when they’ve spent decades building up business models designed to ensure people listen to exactly what they’re told to.

It also poses a problem to alternative artists though, because by focusing so much on popularity in terms of number of listens, it doesn’t take so much account of the different ways in which people listen to music, for example experimental works which might be listened to less often or only under certain circumstances by fans, but appreciated more than something that might be put on just as background music while cooking. A person who buys something by Factory Floor to play at parties and a Take That best-of that they listen to every day while doing housework has given equal money to both, but under Music Unlimited’s system, Factory Floor get next to nothing, while Take That do rather better. You might say that this corrects an unfair imbalance towards certain kinds of artists, but it does mean that artists who are already less popular, take a further hit in terms of their opportunities to make money.

It also raises interesting questions about the business model of AKB48 etc., whose chart positions and sales rely so much on fans buying multiple copies, most of which never get listened to. Music Unlimited or Spotify, if it becomes the universally accepted way of doing things, kills their business model (which might explain SME’s reluctance to release Nogizaka46 onto the service). I can see a future where the only music available to buy in physical form will be self-released indie CDs sold in person by bands at live shows and idol group singles bought as disposable commodities and traded for handshakes or voting slips.

In the meantime, Diamond’s article concludes that companies seem to be waking up to the reality of the new technological world they’re now in and suggests that 2013 will be the year a sea change starts to occur in how the music industry does business. There are actually people in the industry though who are less optimistic and believe that the Diamond piece was way too modest in its criticism. My own suggestion is that the slow adaption to change right now may be just as much a result of being paralysed with fear as it is mere conservatism.

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10 Comments

Filed under Features, Strange Boutique

10 responses to “Strange Boutique (January 2013)

  1. miffy

    Hmmm, nothing about the overinflated sales of the singles market? Nothing about the multiple copies purchasing that is no way a reflection of the market health? Sure, the labels are at fault but no vaguely pointing fingers to the Talent Agencies or Advertising agencies? This all can be covered under the Old Boys Club mentality of corporate Japan and how anti competitive it is.

    Looks like the same problem that has befallen the video game industry in Japan. While the rest of the world is exploring and profiting from digital downloads, Japanese companies are unwilling to be a part of the conversation. Sony has been great with their PS Plus on their PS3 though (free games!)

    • The Diamond article does mention about the distorted nature of the singles market, but it was a ten-page feature so I had to boil it down into a few related points that I could string into a coherent piece in my half-page column.

      When I first saw the headline “Who’s Killing Music?” mentioned on Twitter, I immediately tweeted back, “Is the answer ‘Dentsu’?” because that was my first thought as well. I spoke to one of the journalists behind the piece and asked him if he’d thought about tackling their responsibility. He agreed that they almost certainly share responsibility, but pointed out that the purpose of the piece was to gather in one place a summary of stuff that was already out there. I guess getting at Dentsu would be unpicking something slightly more complex and maybe would require a more investigative piece. Also, one wonders if a magazine would publish it anyway, given the stranglehold Dentsu have over the entire ad industry and the reliance on advertising of magazine publishers.

      As for the old boys network thing, a commenter on my Facebook pointed out as well that he’d had problems doing business with record companies in Japan because even if they agreed with him, they couldn’t move without permission from Sony, even if there was no formal affiliation with the company. The keiretsu system in action (inaction?) I guess.

      As you say, talent agencies too. Burning Production, Johnny & Associates. Yuck.

      • miffy

        Did anybody else mention that digital sales have actually decreased in Japan? This could be a realignment from features phone to smartphones but I love to hear from the toothless experts

      • I’m not sure. Did digital sales decrease? If that’s the case, I’d be tempted to put it down to the overall slide in sales. CD sales actually went up last year, but that’s entirely down to idol group multi-copy sales (impossible online) and lots of older people buying veteran artists’ compilations.

  2. miffy

    This deserve a separate reply

    Previous blog posting about criticizing the encroachment idol music to the indie music and the fake authenticity . Today, you are now a prophet.

      • miffy

        I saw you trying to elaborate with the commentators on the worth/value of idol music on previous posting, Maybe I’m reading it wrong, but I think you are trying to point it politely that idols are predominantly not about music

        Today’s head shaving video, seems to validate your opinion

      • Oh, the AKB head-shaving thing! Haha, yeah, I was just talking about that on Twitter with the guys from Make Believe Melodies. Yesterday I was getting flak for criticising the implied values of idol music, especially towards women, as well as the value it places on asking fans to buy into artificial narratives, and today: VINDICATION!

  3. miffy

    http://www.riaj.or.jp/e/data/download/2012.html
    I’m pretty sure Diamond article quotes RIAJ and i posted this before. On track to go down by 25% for 2012! There was another article floating around that stated Itunes is a failure as it did deliver the sales volume needed
    Thoughts?

    • Ah, I remember we talked about this before, right? I don’t know, honestly. iTunes is still a small enough part of the market that its sales can fluctuate based on what the big releases were (idols and oldies are CD-biased and last year was ALL about idols and oldies, whereas K-Pop seems like it might be more popular with downloady types and K-Pop had fewer big releases last year). Also labels were reluctant to support or promote it (Sony only joined at the end of last year), plus the ongoing downward trend in all music sales. I won’t know until there’s some research on it.

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