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The International Federation of the Phonographic Industry, which represents record companies from around the world, recently reported that legitimate music downloads in the U.S. and Europe rose from 20 million tracks in 2003 to more than 200 million in 2004.
That's pretty impressive. But doesn't it seem odd that Japan – which besides being a very tech-savvy country, is the world's second-biggest music market – wasn't included in that total? The fact is that relatively few people (exact figures are hard to come by) download music in Japan. Why?
One reason is pricing. Japan's homegrown online music services charge significantly more than their counterparts in other major music markets, because of the higher wholesale prices set by Japanese record companies. For example, Mora, Japan's main legitimate download service, offers Japanese repertoire for 270 yen ($2.50) per track and 2,400 yen ($22) per album; international material goes for 240 yen ($2.20) per track or 2,025 yen ($19) per album. That compares with iTunes' 99-cent tracks in the United States.
And Japanese labels' reluctance to allow third-party sales of their music has also held back the growth of the download market.
Yet another factor is that until recently, Japanese labels have strongly backed copy control. That meant users couldn't burn multiple copies of downloaded songs or transfer them to portable playback devices like the iPod.
As of December 2004, 100,000 tracks were available through Mora. Most of those tracks were supplied by major labels and represented far narrower a range of choice compared to international download services such as Apple's iTunes.
Also, Japanese labels do not allow streaming, except at their own sites, limiting users' ability to sample material before they buy.
However, the huge popularity in Japan of ringtones (sound effects and/or melodies that alert a phone owner of an incoming call) suggests mobile phones may eventually prove more popular than personal computers for downloading music. Mobile phone-based downloads are expected to catch on in a big way as new-generation 3G mobile phones become more popular.
The first mobile-based music services to become popular in Japan offered "chakumero" ringtones. Introduced four years ago, ringtones have rapidly become a sizable business and a welcome revenue source for songwriters and music publishers.
Ringtones have also proven to be a promising new promotional medium for record companies. It's now common for labels to offer a ringtone version of a new single weeks before it's released on CD.
Total sales of ringtones in Japan for 2003 were 95 billion yen ($900 million), according to estimates from Tokyo-based ringtone provider Label Mobile. Data for 2004 isn't available yet, but it's safe to say that sales both ringtones and master ringtones (known in Japan as "chaku-uta"), which are actual song clips, grew strongly in 2004.
According to Label Gate, a master ringtone provider owned by Japan's major record companies, the top three master ringtone downloads in the week ending Jan. 16 were as follows:
1. “Ishin Denshin” [以心電信] – Orange Range
2. “Koibumi” [恋文] – Every Little Thing
3. “Shiawase Narate wo Tatakou” [シアワセナラテヲタタコ] – Nobody Knows
Telecommunications company KDDI launched a mobile-based full-song download service last November. The service, called "Chaku-Uta Full," wasn’t Japan’s first mobile-based song download service; NTT DoCoMo and electronics firm Sanyo both introduced such services in 2001. But they weren't successful, basically because third-generation cell phones capable of handling large amounts of data weren't yet available.
Chaku-uta Full offers some 10,000 MP3-encoded songs. Users can listen to downloaded songs through headphones or via stereo speakers included in KDDI's CDMA 1X WIN 3rd-generation mobile phones.
By Jan. 5 a total of 1 million tracks had been downloaded via Chaku-Uta Full.
One of the most interesting mobile-based music applications recently introduced in Japan is "song recognition". London-based audio technology firm Shazam launched its MTV Music Finder service in Japan last July in partnership with MTV Japan.
Users of the MTV Music Finder – the first such service in Japan - can identify individual songs from Shazam's database of some 2.2 million tracks by dialing a four-digit code on their handset and holding it up to the speaker of their music source. An e-mail is then sent to the phone identifying the artist and song.
Taking the idea one step further, telecom giant NTT plans to launch a service aimed at consumers who might remember a snatch of melody but can't name the tune.
Billed as the world's first such service, SoundCompass System will allow users to find the names of songs by humming part of the melody into a mobile phone. NTT plans to launch SoundCompass this spring through one or more of NTT's six subsidiaries.
On Feb. 1 KDDI is launching a “ringbacktone” called “Machi-uta (wait song),” to compete with NTT DoCoMo's similar Melody Call service. Ringbacktones are music clips that are heard by a caller as they wait for their call to be answered.
And ringtone provider XING recently introduced a new service that allows users to download ringtone versions of all the songs from a given album.
Looking ahead, some analysts believe that in the next few years we’ll see mobile phones with the capacity to store thousands of songs just like the iPod and other portable music players.
All of this is very good news for the Japanese music industry, which in the past few years has been struggling to reverse the trend of falling sales. Mobile phones look to be the industry's best hope of ringing up – ahem – more sales.
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