Compared to other markets, the world’s second largest recorded music market is very different – at least in respect to digitization. Whereas the digital music segment is booming in other large markets, it is shrinking in Japan according to the latest report of the Recording Industry Association of Japan (RIAJ). In 2013, the total digital music sales were ¥ 41bn (EUR 290m) compared to ¥ 54bn (EUR 383m) a year before – a drop of 23 percent. The main reason for this surprising decrease is a shrinking mobile music market that lost 56.7 percent of its volume from 2012 to 2013. The drop was even more dramatic if we look back to 2008, when mobile music sales accounted for ¥ 79.9bn (EUR 566.0m) – fivefold in value than in 2013. The main driver for the sales drop was not – as might be supposed – the shrinking market for mastertones and ringback tunes, but tremendously falling single track download sales on mobile phones. Whereas mastertones and ringback tunes sales decreased by 75.9 percent and ¥ -21.8bn (EUR -154.4m) respectively from 2008 to 2013, the decline of mobile single tracks download sales was even more severe with 83.7 percent and ¥ -39.9bn (EUR -282.6m) respectively in the same period. We have to take into consideration, however, that RIAJ does not count downloads from smartphones and tablets as mobile music downloads, but as desktop downloads from the Internet, which strongly increased in the past few years. The value of single track downloads on the Internet was ¥ 14.8bn (EUR 104.8m) in 2013and Internet album download sales were at ¥ 14.8bn (EUR 104.8m) resulting in a growth of both segments of about 150 percent compared to 2008. Since the current value of Internet music downloads is much lower than the former volume of the mobile music segment, the total digital music sales have decreased in the past five years. In addition, the Japanese music streaming market is still underdeveloped. Spotify is expected to launch its service this year and other streaming services still evaluate the market potential in Japan.
Since the physical recorded music market in Japan also declines, the total music sales has been falling for more than a decade. RIAJ, however, does not report sales figures for physical music formats, but production values. Thus, we cannot assess the total music sales for Japan, but only the overall production value of CDs, vinyl discs and other physical formats such as music cassettes, SACDs and music DVDs. Thus, we can observe that the production value of physical music carriers has nearly halved since 2000.
The Japanese recorded music market, thus, is characterised by particularities which will be highlighted in the following analysis.