Japan Is About to Become the Largest Music Market In the World…

Blisstunes

Monday, June 18, 2013
by digitalmusicdotcom

Last year, Japan startled the industry by almost beating the US in total recording sales.  Now, it appears that Japan may grab the crown as the biggest music market in 2013, with relatively healthy physical sales a big part of the reason.

Updated, 6/18, 8:15 pm PCT: Yesterday, we misread digital sales in Japan as trending up substantially in the first quarter.  The opposite is actually the case: slipping mobile sales are pushing digital downward, though the overall impact on totals (physical+digital) is somewhat modest against far larger, and somewhat stable, physical sales.  The updated version follows.

Here’s what the year-end, 2012 tally looked like, according to industry trade group IFPI (for a more complete breakdown of all countries, check out this unbelievable infographic).

Combined, the US and Japan accounted for more than half the entire global recording industry total in 2012, though the US was only 1.3 percent larger than Japan.  And while the US was struggling and losing money, Japan was one of the few markets that actually gained ground last year (by 4 percent).

That may represent a very humble beginning for the Japanese market.  According to stats just released by Japanese trade group RIAJ, first-quarter digital sales ballooned 70 percent over 2012.  During the same period in the US, however, album sales drop 4.9 percent, while singles slipped 1.3 percent according to Nielsen Soundscan.

Here’s the digital resurgence currently happening in Japan.

But the far bigger story is happening on the physical side, with some potentially massive lessons for the broader industry to ponder.  Last year, CDs and physical formats suddenly started ticking upward in Japan, thanks partly to a reinvestment in physical packaging and sales by J-Pop, K-Pop, and other genres (more on that fascinating trend, here).

Now, it appears this re-emphasis could be going into overdrive.  According to the RIAJ stats, CD sales nearly doubled year-over-year during the first quarter, with CD-based revenues rising 92 percent.  That means a lot more industry revenue, simply because pound-for-pound, physical pays more and supports far greater product bundling.

All of which raises the uncomfortable question:

ARE MARKETS LIKE THE US GUILTY OF OVER-ZEALOUSLY EMBRACING DIGITAL, AT THE EXPENSE OF INVESTING IN CREATIVE PRESENTATIONS OF CDS, VINYL, AND OTHER PHYSICAL FORMATS?


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