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Japan Still Loves CDs!

September 26, 2014 by

AKB48-Japanese-pop-groupWho knew that a squad of young Japanese girls wearing saucy Brazilian cheerleader outfits could save a dying technology? A recent New York Times article reports that AKB48, a popular Japanese group (pictured – photo by Eugene Hoshiko/AP), has sold CDs containing tickets to its performances, encouraging fans to buy multiple copies. A cunning strategy indeed.

Japan may be the last stronghold of the CD, a battered, bruised and abandoned format in most of the developed world. While CD sales are falling worldwide (including in Japan) they still account for about 85 percent of sales there, according to the article. That compared with 41% in the U.S. and as little as 20 percent in some countries, like Sweden, where online streaming is dominant.

Digital sales are quickly eroding in Japan, going from almost $1 billion in 2009 to just $400 million last year, according to the Recording Industry Association of Japan. The Times reports that this is in part because of a protectionist business climate in Japan that still views the digital business with suspicion. Pricing restrictions on retailers keep CDs expensive at about $20 for new releases, and the most popular Japanese pop music is not included on most digital services. These conditions make CDs a lucrative business in Japan and keep new streaming services from flourishing.

There is also a significant cultural component at work. Japanese fans love collectible goods. The Japanese music business obliges this fetish by offering discs featuring elaborate, artist-focused packaging. In-store promotions and autographed CDs are a big deal in this market, as are marketing gimmicks like AKB48’s ticket giveaway.

It is with trepidation that the music business views this stubborn Japanese CD fetish. As the second largest music market in the world, Japan’s participation in the global digital music economy is vital to the long-term viability of that economy.

Hang in there, boys and girls beneath the rising sun. Fight the Power!

Read the NYT article

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