Japan Finally Taking Over?

For years, Japan has been the second-biggest recorded music market in the world, but recent sales figures indicate that it may soon overtake the U.S.

In 2012 the two countries accounted for more than half of global recording industry revenues, according to the International Federation of the Phonographic Industry, with the U.S. beating out Japan by only 1.3 percent. Year-on-year, U.S. sales in 2012 declined by 0.5 percent with Japan gaining by 4 percent.

According to figures from the Recording Industry Association of Japan, digital sales have decreased by 30 percent over the same period in 2012, while sales in America during that period shrank by 4.9 percent, according to Nielsen SoundScan.

Obviously, digital still isn’t a huge factor in Japan. The real story is physical product, which still accounts for 80 percent of Japanese recording sales. In 2012, sales of CDs and other physical formats turned around and increased, mainly thanks to “reinvestment in physical packaging and sales by J-pop, K-pop and other genres,” according to Digital Music News.

In a word, the resurgence in CDs was fueled by the AKB48 model, which packaged CDs with promotional materials coveted by fans of the girl idol group. Other J-pop and K-pop management teams soon followed suit.

For instance, the K-pop band KARA released its last album in multiple versions featuring a different member on each cover. K-pop groups also release versions of CDs in separate languages, usually Korean, Japanese and Chinese.

Of course, American record companies don’t have the cultural impetus to make these kinds of schemes work, at least not in the exact same way, but they could learn a lesson from them. The RIAJ reports that CD sales during the first quarter of 2013 doubled from the same period in 2012, with CD-based revenues on the increase. Maybe the U.S. and Europe should rethink their total embrace of digital, says DMN.