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85 Percent of Music Sales in Japan are CD’s
It’s a well known fact that CD sales have been going down, and fast, for some time now. Ever since people got the internet in their homes and learned what it could do, the downfall of the physical disc has been on it’s way, whether it be by piracy or iTunes. However, it appears that in an increasingly digital business, there is one place in the world where the physical still reigns supreme.
Japan, the world’s second largest music market, is completely obsessed with CDs. In fact, of all music sales in the country, 85% are CDs, whereas in other countries, digital is the leader, or in progressive spots where streaming has now taken over, such as Sweden. If that wasn’t enough of a surprise, digital sales in the country have actually been receding for years now, which is the opposite for much of the world (though not for the US, where digital sales dropped for the first time ever this past year). In fact, while online sales reached $1 billion in 2009, just four years later they raked in only $400 million—a massive fall in such a short time frame.
While it’s odd seeing almost anyone buying a compact disc these days, it is particularly strange that Japan would be leading the world in CD sales, as they are typically an early adopter when it comes to new technology. The country is often years ahead of other markets when it comes to new phones, computers, and the like.
The New York Times reports that there are perhaps two main reasons why this phenomenon is happening: a “protectionist business climate” in the music industry and a cultural love of collecting things.
The Japanese public seems to be wary of digital sales when it comes to music, and it’s hard to say completely why. It may stem from a lack of options in the sphere, which are being held back by big businesses. Not only is rights management very confusing in the country, making licensing deals difficult, but companies also aren’t too worried about venturing into the digital space at the moment. Spotify and Rdio, two of the biggest streaming options in the world, don’t have a presence in the country yet.
In countries like the US, the move to selling music digitally happened out of necessity. That’s where people had gone to find their music for free, and it was seen as the only hope for an industry bleeding profits. In Japan however, while CD sales are declining, they aren’t going down anywhere near as fast as they did elsewhere, and they still bring in big bucks.
On top of that, the Japanese have a true love of collecting things, and this can help spur sales. Many stores and artists run promotions that encourage fans to buy more than one copy of an album, such as including tickets or special artwork. Deluxe editions and greatest hits do especially well in Japan, compared to the US where they usually only convince a few die hards to spend the extra money.
Tower Records, one of many mighty CD store chains that disappeared as digital grew, is still alive and well in Japan, with all locations bringing in a combined $500 million in sales a year. In fact, when the brand filed for bankruptcy and went out of business in the US in 2006, there were 89 locations. In Japan, there are still 85 in business, and no end in sight.
CDs may be on their way out, but they aren’t dead yet. The discs still account for 41% of recorded music sales around the world, which total around $15 billion. Like vinyl, there may always be a subset of the market that wants what only CDs can offer: a plastic case, a disc, and a booklet to go with their music.