Shipments of physical product in Japan -- the world's No. 2 recorded music market -- fell in the first three quarters of 2007, according to data released by labels body the Recording Industry Assn. of Japan (RIAJ).

Audio software shipments by the RIAJ's 45 member companies in the first nine months of 2007 totaled 194.9 million units, down 10% from the corresponding period of 2006, the RIAJ said, for a wholesale value of ¥235.9 billion ($2 billion), down 6%.

Shipments of domestic product fell 6% to 148.1 million units, for a value of ¥178.9 billion ($1.5 billion), down 6%. Production of foreign product declined 21% in volume terms to 46.9 million units, and fell 15% in value terms to ¥47 billion ($401.8 million).

Shipments of music videos and DVDs, meanwhile, rose 7% in volume terms to 35.5 million units, for a value of ¥38.2 billion ($327.4 million), up 1%.

In the July-September quarter only, audio software shipments by the RIAJ's member companies totaled 65.3 million units in volume terms, down 12% from the corresponding period of 2006, for a value of ¥79.3 billion ($682.9 million), down 7%.

Third-quarter shipments of music videos and DVDs, meanwhile, rose 5% in volume terms to 10.3 million units, for a value of ¥12.4 billion ($107 million), up 13%.