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In Japan, Music Business Changes Very Slowly

1A recent look at some overseas music industry numbers in Japan has revealed streaming's continued growth, and that physical sales, while still dropping, are slower to decline there. Additionally, and unlike the US, ringtones continue to take up an appreciable share of the market there as well.

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Guest post by Glenn Peoples of Pandora

The CD lives on in Japan. Take a look at RIAJ statistics for physical sales through June for the world’s second-largest recorded music market. CD revenue was down just 6 percent (compared to a 12-percent decline in unit sales in the U.S.) while all audio revenue was down 6 percent. Total physical revenue dropped just 1 percent due to a five-percent increase in video sales.

1 (1)Digital numbers are available only through March but reveal the transition is continuing—to a point. Music subscription revenue gained 85 percent. Download revenue went the other way as single track revenue fell 11 percent and album revenue dropped 2 percent. Sounds familiar, right? In Germany, another CD-heavy market, first-half streaming revenue rose 84 percent while download revenue dropped slightly and CD revenue fell 3 percent.

And yet Japan hasn’t changed as much as many other markets (it’s unique in terms of consumption trends and characteristics of the record business). Total download revenue was 1.6x subscription revenue and accounted for 54 percent of total digital revenue. Moreover, ringtones and ringback tones, all but dead in the U.S. and elsewhere, amounted to 7 percent of digital revenue.

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