Digital Music Sales Decline in Japan, Industry Looks to Exports

Digital Music Sales Decline in Japan, Industry Looks to Exports

Digital Music Sales Decline in Japan, Industry Looks to Exports

The Recording Industry Association of Japan (RIAJ) has released the finals sales data for digital music in 2010 and the results are more than disappointing for an industry that previously looked to this revenue stream as a bright spot. Mobile music sales continued their slide and Internet downloads, previously growing, slipped, according to the RIAJ's results for all of 2010.

In general, the mobile market still dominates digital sales in Japan, with revenues more than seven times the size of Internet downloads.

Overall, however, the digital music market fell 6% in volume and 5% in value compared with 2009. The total number of digital units delivered was 441.4 million, for a value of 86 billion yen ($1 billion).

Total revenue from Internet downloads slumped 1% in 2010 as compared to 2009, coming in at 10.1 billion yen ($123.4 million). This represents a major blow to the theory digital sales could lift the industry. In 2009 overall Internet download revenue was up 13% as compared with 2008, and many expected the sector to rise unabated.

One of RIAJ's responses to the fall in digital, and physical, sales in Japan has been to look to raise revenue from increased exports of Japanese music. RIAJ has set up an Overseas Market Expansion Committee with this aim. The committee coordinates with RIAJ's member bodies to capitalize on promotional opportunities for Japanese music internationally as well as combat piracy.

On the artist side of digital consumption, J-pop vocalist Kana Nishino led the way in both ringtone and full track mobile unit total sales according Rekochoku, a mobile music store that accounts for an estimated 65% of all digital music sales in Japan and more than 70% of mobile music sales. Her track "Aitakute Aitakute" led full track mobile unit sales.

Kana Nishino - if + Aitakute Aitakute (Live MTV ZF 2010)

For international artists' digital music sales, Ke$ha's "Tic Toc" led both ringtone and full track mobile unit sales, according to Rekochoku.

The reasons for the stagnation are varied. RIAJ has previously estimated that in Japan the amount of tracks obtained on mobile phones via illegal file sharing is approximately equal to that of legal purchases and is growing. Efforts to prosecute administrators of bulletin boards with illegal files have not stemmed the tide.

User generated content, a sluggish economy and a rising popularity of gaming have also had a part in the decline of digital music sales.

Tellingly, mobile music unit sales were down 7% compared to 2009 to 391.8 million units and this sector's revenue fell 6% to 74.7 billion yen ($912.7 million).

The sector's number one earner, full track mobile units, accounted for 47.6 billion yen ($581.5 million) but this was down 4% compared to 2009. Full track mobile units were thought to be future of digital sales, rising 4% in value to 49.4 billion yen (then $538.7 million) in 2009 as compared to 2008. Thus their drop in 2010 is another serious blow to the idea digital revenue would buoy the market.