Pitch change: Japanese music fans switch from CDs to streaming services

In this news, we discuss the Pitch change: Japanese music fans switch from CDs to streaming services

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Japanese music fans, loyal to CDs long after the rest of the world went online, have started hitting the eject button and switching to streaming services as artists cancel in-store events and fans are staying at home because of the pandemic.

Despite a slow decline in sales over the past decade, CDs remain the most popular music format in Japan, accounting for around 70% of recorded music sales last year. In the US and European markets, CDs have long been relegated to the dustbin of history in favor of online downloads and, more recently, streaming. Streaming services, which accounted for less than 10% of sales in Japan until a few years ago, jumped to 15% last year and will likely exceed 20% this year, said Jamie MacEwan, who covers the Japanese media activity for Enders Analysis.

This change is closely watched by the global music industry, as Japan is the world’s second largest music market after the United States, valued at nearly $ 3 billion annually. “The intersection point where total digital revenues eclipse physical production is just a matter of time,” MacEwan said.

Beyond hurting CD retailers like Tower Records, which still have a strong presence in Japan, the change could also signal increased growth in streaming services such as Amazon, Spotify, which only entered Japan a year ago. four years, as well as smaller domestic competitors. Tower Records Japan, which operates more than 80 stores nationwide, did not disclose data but said it had suffered a severe crisis since the pandemic, with consumers avoiding going out and artists canceling new releases as well. as events to promote them.

“It will take a long time for things to get back to normal,” said Tatsuro Yagawa, a spokesperson for stores that became independent from the now bankrupt US chain after a management buyout in 2002. Yet he was optimistic about a return. “Music lovers here love to buy CDs to show their support for their favorite artists. I don’t think people will stop buying CDs. “

NO HANDSHAKES One of the main reasons CDs have remained so popular in Japan is that record companies often offer singles CDs and albums with perks for pop idol fans, including ticket vouchers. priority concert and handshake event invitations.

These events and concerts have mostly been canceled or reduced in recent months due to the pandemic, with some being online. Avex, Japan’s largest music label and entertainment group, held its annual online music festival in August for the first time.

Starring such artists as veteran singer Ayumi Hamasaki and K-pop group Red Velvet, the event drew 1.6 million views, including free and pay-per-view spots – a rare bit of joy for one. business by plunging sales. But Avex CEO Katsumi Kuroiwa spoke to investors on Friday after the company reported losses for its first half of fiscal year, described the financial results of its foray into large-scale online events as mixed. .

On the one hand, he said, Avex has learned that it can attract huge audiences online, but tickets have to be sold at a much lower price than physical events – a difficult situation to which it is. would bump as he sought to broadcast more events live. So far, CD sales have been propped up by a lack of new successes on streaming services, with record companies seeking to avoid cannibalizing physical sales.

But that, too, is changing as CD sales decline and record companies recognize the money is shifting to streaming. Recent singles from singer-songwriter Kenshi Yonezu and veteran boy group Arashi are now available on Spotify. “National labels are likely to make more of their catalogs available for streaming closer to physical release, which will accelerate the digital transition in the years to come,” MacEwan said.

But he also said that unlike other markets where Spotify and Apple Music are the main streaming services, local Japanese streaming services such as LINE Music, Avex’s AWA, and RecoChoku may have an edge by offering music. live streaming and other content for J-pop fans. . “This will prevent the emergence of an Apple-Spotify duopoly as seen elsewhere,” MacEwan said.

News Highlights:

  • Japanese music fans, loyal to CDs long after the rest of the world went online, have started hitting the eject button and switching to streaming services as artists cancel in-store events and fans are staying at home because of the pandemic. Despite a slow decline in sales over the past decade, CDs remain the most popular music format in Japan, accounting for around 70% of recorded music sales last year.
  • Pitch change: Japanese music fans switch from CDs to streaming services
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