According to the most IFPI's 2017 Global Music Report, Japan last year had the largest music market share in the Asia-Australasia region and globally was second only to the U.S. While a longtime stalwart of physical sales, the Japanese market would seem to be undergoing a more gradual transition towards streaming than the rest of the globe. Last year Japan's music market grew by 1.1% and saw double-digit digital growth of 12.6% which offset a 1.3% decline in physical sales.
Naho Kono, Rakuten's managing executive officer and head of the company’s e-commerce business, told Billboard that, "Since the launch of Rakuten Music last year, we have aimed to be a one-stop music platform that combines both the convenience of streaming with physical media purchases, which currently remains the mainstream way music is consumed in Japan"
Rakuten was founded in Tokyo in 1997 as an online marketplace but now also offers e-commerce, fintech, digital content and communications to more than 1 billion members around the world. It has over 14,000 employees and operates in 29 countries and regions. The company has a market capitalization of just under $18 billion (2 trillion yen), according to Nikkei Asia Review.
Napster, which was originally founded in 1999 as something of a rogue peer-to-peer file sharing service trading in unlicensed music, has come a long way. It is now fully-licensed and available in 34 countries with a catalog of over 50 million songs. The service was purchased by Rhapsody from Best Buy in 2011 and brought in Mike Davis as CEO in April 2016. Last summer a combined Rhapsody and Napster rebranded itself as Napster.
Since then the company has been in something of an expansion mode: In November the company announced a partnership with Sprint with direct access to the telecom's 60 million customers as well as deals with headphone maker Even, and two German companies: Lufthansa which will add Napster to its BoardConnect airline platform and another with mass-market retailer Aldi to power the brand's Aldi Life Musik service wth Medion. In March launched an initiative with GIPHY as part of the company's enhanced Playlist Maker feature.
The company has yet to update its user numbers which were last reported early last year at 3.5 million paying subscribers. The music service's other existing global partners include Telefonica's Movistar (Latin America), SFR (France), ePlus (Germany) and Vodafone (Greece and Netherlands).
Napster's famed origin story as a notorious file sharing platform that turned the music industry on its head while incurring lawsuits from record labels and Metallica has, in many regards, come full-circle: This past November the company announced the fully-licensed return of Metallica's catalog.