Digital, Physical Music Revenue Decline (Again) in Japan

The Recording Industry Association of Japan's annual report of digital music sales shows, yet again, a downward trend over the course of 2013, with overall sales and revenue decreasing from 2012 to 2013.

The RIAJ reports Japanese consumers purchased 216 million digital units of music -- including singles, albums, ringtones and more -- in 2013, to come in at a 20% drop from the previous year's 271 million, at least partly due to the rise of smartphones and the sunset of 'feature' phones. The contraction resulted in a 23% decrease in digital revenue, with 2013 bringing in 41 billion yen (approximately $403.4 million), down from 2012's sales of 54 billion yen (approximately $531.3 million). Categories with the biggest decreases were ringtones (down 51% over 2012), mobile single track sales (down 56%) and mobile music videos (down 62%). It's important to note that, in the RIAJ's case, 'mobile' denotes purchases from 'feature' phones, not smartphones, which are categorized as internet downloads.

Yet again, Japan's physical market dwarfs digital -- similar to Germany's industry -- though the downward trend continued for physical purchases as well. The total value of the physical market in 2013 was 270.4 billion yen (about $2.6 billion), down from 310.8 billion yen (about $3.05 billion).

Despite the overall digital sales decrease, internet download sales of individual singles and albums increased in 2013. After garnering 70 million single downloads and 4 million album downloads in 2012, Japanese consumers purchased 91 million singles and 6 million albums over the internet in 2013 -- respectively, a 31% and 44% increase over last year. The Japanese recording industry brought in 14 billion yen ($145 million) from single-track downloads, and nearly 7 billion yen ($67 million) from album downloads.

The grand total of single and album downloads, including tracks bought on a mobile platform, reaches 120 million and 6 million, respectively. That includes 28 million single downloads from mobile (again, not Apple iPhones or Samsung Galaxys), a drop from 2012's nearly 65 million.

Overall decreases in digital sales in 2013 follow a similar story last year, when overall units and revenue decreased from 2011 to 2012. Digital sales fell 23% in 2012, while the industry made 24% less -- meaning, though the overall percentages are still around the same, the industry actually slowed its decline slightly in 2013.

Streaming service's penetration in the country has barely begun -- Spotify has yet to make itself available in the country, though recent job listings indicate that is well underway, and Rdio is reportedly working on its launch there. How this will affect the country's robust physical sales has yet to be understood, though a recent article from suggests a comfusing equation.