Japan is the second largest music selling market in the world
Japan is the second largest music selling market in the world after the U.S. However, no music streaming service has been used in Japan on a big scale like Spotify did in Europe or Pandora in the U.S. over the past few years. Indeed, 85% of music is still bought on CDs. How can that be possible in super digital Japan in 2015? The fact is that Japanese people love collecting things; they don’t mind paying for beautiful things and even if streaming music is cheaper, they would rather buy a pricey deluxe edition CD with exclusive content and beautiful photos inside. But this might be about to change. Between May and June this year, the first two Japan-based music streaming services were launched: AWA and Line Music. These launches may finally change the digital music landscape in Japan and the topic has even been discussed during a talk led by the biggest Japanese music publishing companies as part of leading international music business conference Midem in June. However, this doesn’t mean that Japan is discovering subscription type music streaming services just now. Over the past few years, following the success of Spotify abroad, they have been some attempts to make streaming services popular in Japan, like Napster, Sony Music Unlimited and Taiwan based KKBOX. Some mobile only download and streaming services like Recochoku Best also got popularity among young people. But the only service that is still widely used today is KKBOX; with a catalogue of over 10 million tracks, the Taiwanese company expanded very fast to Hong Kong, Japan, Macau, Malaysia, Singapore and Thailand since its launch in 2004. Yet, KKBOX is strong in Asian content but not in international music. So what about Western streaming services? As there is a distrust of digital sales from the music companies, launching a big streaming service in Japan has always been risky, the reason why Spotify and Rdio were never able to get a license in Japan. Some very popular Japanese artists like Perfume have got a license on Spotify, but this can work only because they are already big in Japan via CD sales, concerts and merchandising. If Japan wants to use Spotify for all artists, it will need to find a strong strategy to develop artists in Japan. Moreover, as management companies own the master rights and control most of the publishing, Western streaming services would need the approval of each management company and label to be able to launch in Japan. These complex negotiations have been a real obstacle to the expansion of Western services in Japan. Then, how are AWA and Line Music going to make a difference within this context? Let’s have a look at their specifics first. The former is owned by Avex, Japan’s biggest music management company, and Cyber Agent, Japan’s leading venture company. With a participation of 23 labels, AWA is offering both Japanese and international music. Line Music is owned by Sony Music Entertainment, Universal Music and Avex, with a focus on Japanese music rather than international. Both have a similar price range, the same streaming quality, offer playlists and aim to have a catalogue of 5 million tracks by the end of this year, AWA saying 10 million by the end of 2016.
But Line Music’s strength relies on its social network power; as a matter of fact, Line is the most popular chat service in Japan (the Japanese equivalent of Whatsapp) with 205 million monthly active users. By launching its music streaming services, it allows Line users to share tracks and playlists with Line friends directly through the chat service and to play shared music on the talk screen. In a culture where saying one’s feeling straight with words isn’t so common, sending a song that says “Thank you” or “I love you” can be an easiest way to share feelings with our loved ones. Line Music’s playlists are also shaped specifically on the needs and habits of Japanese people. “Improve your English with English songs!” or “Sleep well and improve your school results!” is the type of playlists that are recommended in the “Become smarter” category; you can also select tracks by scene like “Housework” or “Power songs for working mums (Western music)”. Further playlists include “Anime (animation films) music”, “Midyear gift”, which is a Japanese gift-giving tradition, “Thank you to my girlfriend/boyfriend”, or “Karaoke songs” that you can send to your friends to invite them to practice songs before going to karaoke together. In turn, AWA offer independent recommendations and its playlists are more aligned on the Spotify model; made by popular DJs, music producers and general public, they are categorised by genre, mood, trend and have a radio service selecting similar tracks automatically through the Gracenote database.
Another feature that both AWA and Line Music offer is lyrics playing. When a song is being played, one can make lyrics appear by clicking on the cover image. This is a very important feature in a country where karaoke is enjoyed as often as having a drink and allow people to relieve stress after long hours of work. This feature is not new though, as KKBOX has been already using it for a while.
To add complexity to this landscape, Apple Music launched in Japan in June as well. Apple Music’s advantage on AWA and Line Music lies in its 30 million tracks catalogue and its strong international content. In return, the fact that it is weak on Japanese music and the lack of lyrics feature may not convince J-pop lovers. Furthermore, news was just released that following [riding] the wave, Google Play Music launched today (3 September) in Japan. Commenting about this very fresh launch would be premature, but a user who had the chance to test the service before the launch noticed that Google Play Music, with its 35 million tracks, seem to offer more Japanese music content than Apple Music. Then which of those services has more chance to lead the transition towards digital music consumption in Japan? If we take a look at their differences, we can see that while having very similar features, each of those streaming services is actually serving different needs. Line Music target Line chat users who mainly listen to Japanese music, AWA target listeners who like following trends of both Japanese and Western music, whereas Apple Music target mainly Western music lovers. With regards to Google Play Music, we will have to wait a few weeks to see if it can offer a strong intermediate solution between Japanese and Western music. While competing with each other, all those services may also cohabit in the digital landscape as complementary elements. However, big music companies in Japan themselves still remain on their guards – before seeing a radical change in Japanese music listeners habits, meaning dropping the CDs for digital, it might take a while.