Two Double-Edged Swords: Line Music Launches in CD-Loving Japan as Apple Music Looms

Line Corp.
Tomohiro Ohsumi/Bloomberg via Getty Images

Line Corp. character toys sit on display at the Line Friends Store in Tokyo, Japan on Dec. 10, 2014.

Line, the extremely popular messaging app based in Japan, has officially launched its streaming app in its home country, following a rollout last month in Thailand.

The app isn't the first streaming service in Japan, but it is (currently, and not for long -- more on that in a second) the only one. Sony Music Unlimited was in the country until earlier this year. Prior to that, Napster Japan tried for three years in the late aughts, but closed up shop in March, 2010.

Line has launched with a relatively diminutive 1.5 million song catalog, but a perpendicularly high price point: $8 for unlimited listening (after two months of free), and $4 for access to 20 hours of music. Apple's streaming service, announced this past Monday (June 8), will launch in the country later this month and presumably feature a much larger catalog and feature set. However, Line says it has 205 million monthly active users in total -- 205 million more than Apple Music currently has in any country.

Like Germany, the financial bedrock of the recorded music business in Japan is physical sales; those formats represented 78 percent of revenues ($2.6 billion) in the country last year, according to the IFPI. However, the volume of physical sales has dropped noticeably over the past three years, from 167.9 million units in 2012 to 136 million last year. Up until 2012, physical sales had actually grown in the country. So the country may be primed for a dramatic behavioral shift in the coming years. Consider smartphone penetration alone: there are 122.4 million active smartphones in Japan. The country's population? 127.1. It's not a stretch to think those many millions would appreciate a fantastically large selection of music with them wherever they go.

However, that could be a double-edged sword for the industry as a whole. CD prices in the country are famously inflated -- up to $30 -- and songs on iTunes sell for $2.50, or two-and-a-half times that of the U.S. The industry has, all things being relative, more to lose from a dramatic downturn in physical sales in Japan.

A rising tide lifts all boats -- unless they're made of lead.


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