The Asian music industry's Music Matters conference is being held in Hong Kong June 2- 4 and Kei Ishizaka, chairman and CEO of the Recording Industry Association of Japan (RIAJ) as well as chairman and CEO of Universal Music Japan, gave a keynote address on June 3 that included a call for the biz to develop a new music format.

Ishizaka laid out three tasks for the Japanese music industry in the future: to create a new music format; to create a new music genre; and to create new superstars.

"Especially, the key to the success of the industry in the future relies on a creation of a strong repertoire and superstars," Ishizaka concluded. "We cannot expect to have charismatic leaders like Beatles... but we can still find a number of excellent artists with superb music talent."

Ishizaka started by referring to the importance of the Japanese market, the second largest music market in the world, and the fact that it has suffered a downtown recently. He noted that physical sales were down 3% in 2008, according to the RIAJ, compared to the previous year.

Ishizaka then suggested that the way to combat this problem was with a "coexistence marketing strategy and a segmented marketing strategy." By this he means a coexistence of the digital and physical markets and a segmented, or subdivided, approach to marketing music products in which the digital realm is emphasized for those under 30 and physical sales are pushed for those over 40.

"We focus [on] young people in digital music to create a hit single track and promote a new artist; at the same time we focus [on] mature age people who are over 40 in providing physical albums," Ishizaka explained.

Ishizaka then noted that Japanese companies have employed the strategy of releasing master ringtones and then mobile-based full-track downloads, before the release of the physical single and then the physical album as a marketing strategy to generate both sales and buzz about the release. He pointed to the success Universal has had with Thelma Aoyama's track "Soba ni Iru Ne" last year and GReeeeN's "Kiseki" spanning last year and this year, by taking this approach.

In regard to digital music, Ishizaka also mentioned that piracy is a major problem in Japan, as elsewhere in the world. He reported that the RIAJ estimates 407 million tracks were illegally downloaded by mobile phone in 2008, which outweighs the 329 million legitimate mobile downloads. To combat this the RIAJ introduced an "L Mark" to Web sites that offer legally licensed content; 181 content providers, who operate a total of 1,154 Web sites, have adopted this digital marking system.

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