Japan is a pretty small country compared to the United States, but when it comes to the music business in has a big lead in at least one category – retail music stores. In what may be a startling revelation to some, Japan currently has around 6,000 music stores while the US only has 1900, with that number falling every week.
The fact of the matter is that Japan has a CD based economy, as 78% of sales come from the round shiny discs. The US, on the other hand, is down to around 39% of its total music revenue coming from the CD, which is still larger than most of us think, but it’s a figure that continues to fall fast.
So why does Japan still love the CD so much? For one thing, even though Japan has a big digital economy in general, record labels and consumers have resisted digital music to this point (it’s only 8% of total revenue). This has more to do with the culture of Japan than anything else, as most Japanese prefer the tangible aspect of the CD and view it more as a piece of artist merchandise than a music delivery system. It’s more about helping the artists they love than listening to the music.
Another thing is that in Japan, CDs sell for between $23 and $28 and aren’t discounted, thanks to a long-standing law that sets the minimum retail price. The country also has a thriving CD rental business, something that never caught on in the US and was fought vigorously by the major labels. Japanese labels look at rentals as an opportunity to get consumers into the buying mindset, which has proved to be a strategy that has worked. That said, the rental business, why still large, is decreasing.
All this has lead to Japan becoming the second largest music economy in the world behind the US. This does seem rather artificial however, and one has to wonder what will happen should streaming actually catch on there.
One thing’s for sure, for everyone who longs for the way it was in the old days of music, Japan’s the one place on earth where it’s still like that.