Japanese Digital Music Revenues Up 5 Percent

October 30: Kitty Purry aka Katy Perry is seen upon arrival at Narita International Airport in Narita, Japan.

Jun Sato/WireImage

Japan's digital music market grew 5 percent in the first half of the year, according to figures released Monday by the Recording Industry Association of Japan. In spite of the modest gain, the overall Japanese recorded music market, the world's second largest, fell 2.9 percent from the prior-year period.

Digital revenue rose 5 percent, to ¥22.9 billion ($191.8 million). The largest single gain came from a 43 percent increase in subscription revenue to ¥5 billion ($42.2 million). Internet track and album sales grew 7.6 percent to ¥13.7 billion ($114.6 million)

But growth was nearly canceled out by losses in aging digital formats. Mobile track sales dropped 55 percent to ¥878 million ($7.4 million) and ringback tone revenue fell 23 percent to ¥1.6 billion ($13 million). Total mobile revenues fell ¥1.8 billion ($14.8 million).

The physical market was ¥129.4 billion ($1.1 billion) through June, down 3.8 percent from the same period in 2014. Although physical product still dominates the Japanese market, the mix of formats is slowly shifting. Digital's share of total revenue increased to 11.6 percent from 10.7 percent last year. Long popular mobile formats like downloads and ringtones accounted for 12.6 percent of revenue while Internet downloads were 59.8 percent and subscriptions were 22 percent. 

Japan has been slow to adopt the kind of subscription services that are increasingly popular in the West. Sony Music Unlimited was available from June 2012 until the entire service was shut down in March. But KKBox, an established Taiwanese subscription service, launched there in 2011 and popular messaging app Line launched a music subscription service in June. Microsoft's new Groove Music Pass, a reworking of Xbox Music, is also available there.