Tag Archives: industry issues

Japanese music industry troubles in 2013

Last week I had an article up on Nippon.com about the fall in Japanese music industry revenue in 2013. A few places made a big deal last year about how Japan bucked the global trend and posted growth in 2012, but as I said at the time, those figures were a blip largely down to a load of albums and compilations by venerable oldies. In the article I break down the figures a bit more, but the gist of it is that they really have to start figuring out ways to make the Web work for them. Figures for online music sales have been disastrous and the Japanese music industry can’t keep relying on millions of what are essentially dummy sales from AKB48 and its sister groups to keep its numbers up.

It’s not a complete disaster, and as I mention in the article, the dramatic fall of 2013 is really just the fall that the trendline predicted for 2012 (and which was disguised by the confluence of comebacks and re-releases) plus another for last year. I still don’t know if Spotify and other streaming sites are the answer, and I’m kind of resentful of the way so many new platforms keep appearing and jostling to undercut each other by paying labels and artists less and less each time. All the arguments I see in favour of Spotify seem to fall into two main categories:

(1) Look at Scandinavia: labels make more money off Spotify than they ever did off real sales. My question here is, “Who is making that money?” If most of that is just people going back and listening to old artists they already know, or big artists that are promoted a lot, then it’s not working in the long run.

(2) Look at me: I didn’t use to make much money off CDs, but now I’m raking it in off Spotify plays. In this instance I’m instantly suspicious of any anecdotal arguments because there are so many reasons why something can take off and those conditions are not necessarily replicable.

Whatever happens in japan, the majors will find a way of sewing it up for their own benefit, while all the best, most talented, most interesting and imaginative musicians will be left fighting over scraps. In that sense, I don’t see things being that different for the music I actually care about. For pop, I’m sure if there’s a way of making it worse, someone is already busily working on making that happen, but it remains to be seen.

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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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