Can Spotify Make It In Japan?

spotifyIt has taken many years of planning, but Spotify has finally launched in Japan. But even after all this time, it looks like Japan still may not receptive.

Japan is the second largest recorded music market in the world—after the United States, of course—but their tastes are and their fandom far more committed, in many respects. Because of this, it is not easy to break into the Japanese [popular] music market—neither as an artist or a distributor.

Spotify CEO Danial Ek is acutely aware of this issue and has noted that the launch in Japan is, indeed, quite a landmark victory. For one, Japanese music fans continue to prefer physical media (compact discs) over digital media: the most recent metric shows Japanese CD sales upwards of $991 million while digital music in that country only posted at a paltry $255 million, by comparison.

Inversely, the US recording industry data says about two-thirds (66 percent) of its industry sales come from digital sources (last year). The equivalent in Japan, last year, was only 18 percent, with less than 5 percent of Japanese recording revenue from streaming sources.

Obviously, then, this is a huge opportunity for a streaming company like Spotify. At the same time, though, it is not going to be easy. Even the popular Apple Inc—and somewhat newcomer Line Corp—introducing paid streaming services, last year, have been slow on the take in Japan. However, this may be more due to limited song availability than media preference.

Accordingly, Mikiro Enomoto, who is a commentator on Japan’s music industry, comments, “Record labels hate to give music away for free, so Spotify’s initial inventory could look even worse than Line Music or Apple Music.” Also a popular culture teacher at Kyoto Seika University, Enomoto goes on to say, “These streaming services probably only have about half of the songs on Oricon’s charts,” referring specifically to the Japanese equivalent of the Billboard charts.

The popularity of Spotify in America is easily explained by America’s consumer ideology: more available music makes it a better value (at $9.99 per month), but nobody listens to every song in the catalog, of course. By contrast 23-year-old music aficionados Shuhei Yamamoto, who was out shopping for more records to add to his 150-plus vinyl collection at Shibuya HMV Group Plc store, explains that Spotify’s 40 million songs does not appeal to him. He puts it this way: “Whether its free or paid, I’d rather spend my time and money on a record I actually want to listen to.”

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