Japan Biz Is A Little Bit Better
Industry insiders in the world's second-biggest recorded music market are taking a cautious view on seemingly positive first-half figures that show trade shipments up in volume and value.
According to labels body the Recording Industry Assn. of Japan, shipments of recorded music (including music videos and DVDs) in the first six months of 2006 reached 142.7 million units, a 3% increase over the corresponding period in 2005.
The RIAJ represents 42 companies, including all the major label affiliates. It says trade value also increased, rising 2% above the 2005 period to 166.9 billion yen ($1.4 billion).
"We believe the figures will continue to rise [in 2006], but it's difficult to say by how much," a RIAJ spokesman says.
Industry observers agree that the upward trend was a result of a strong domestic release schedule and increased demand for music DVDs. The figures do not take into account digital sales data, which the RIAJ is due to release later this month.
BMG Japan communications and international affairs director Giles Duke calls the increases "quite significant," but cautions against raising expectations for the rest of the year. "I think it will probably even out," he says. "The market will probably stabilize toward the end of the year, but it seems the downward trend is bottoming out."
In calendar 2005, the value of shipments fell 2% to 422.2 billion yen ($3.7 billion), despite a rise in volume of 2% over the prior year to 357.2 million units. That compared with declines of 4% in volume and 5% in value for 2004.
HMV Asia Pacific president Paul Dezelsky says that the new data may be "a sign of the market bottoming out," although he notes that the first half of 2005 was "particularly bad, especially February to March."
This year's strong first half included albums by Def Tech (Ill Chill), Remioromen (Victor Entertainment), Utada Hikaru (Toshiba-EMI) and Kumi Koda (Avex).
RIAJ figures show the volume of domestic repertoire shipments rose 3% to 103.8 million units, with value up 6% to 123.8 billion yen ($1.1 billion). Domestic repertoire accounts for 72% of sales in Japan.
"There were 3 [million] or 4 million-sellers and that helped boost the overall market," Duke says. "Boy bands, for example, were quite strong."
While domestic acts were driving growth, shipments of international repertoire fell 7% in value to 43.1 billion yen ($369.5 million). That came despite a 3% rise in shipments. Duke and others suggest this reflects intensified price competition by labels.
Local manufacturers have been lowering album prices—particularly for new or developing artists—to compete with imports. Prices for catalog material have also been reduced in an attempt to maintain consumer interest.
"The pricing of DVDs is [also] coming down," Duke says, "and that could influence the reduction of value for international repertoire."
Reflecting Duke's comments, RIAJ figures show that shipments of music-related videos and DVDs in January-June rose 47% to 23.3 million units, although wholesale value showed a gentler rise, up 16% to 26.8 billion yen ($230 million).
Despite the positive figures, some industry sources are not convinced that the business has turned around. A spokesman for leading independent Avex Group says, "The situation is still unpredictable and it is too early to be optimistic. In our business plan, we have estimated a year-on-year [sales] decrease of 3%-8% in the next three years. We see no substantial evidence of a positive change in the market."
Another source is even less enthusiastic. "While there have been some success stories, overall, the mood of the industry remains pretty glum," he says. "I would like to think that there will be positive growth, but it is safe to say that few industry people expect big growth, and many would feel relieved if there is no further decline."
By: Varcoe, Fred, Billboard, 00062510, 8/12/2006, Vol. 118, Issue 32
According to labels body the Recording Industry Assn. of Japan, shipments of recorded music (including music videos and DVDs) in the first six months of 2006 reached 142.7 million units, a 3% increase over the corresponding period in 2005.
The RIAJ represents 42 companies, including all the major label affiliates. It says trade value also increased, rising 2% above the 2005 period to 166.9 billion yen ($1.4 billion).
"We believe the figures will continue to rise [in 2006], but it's difficult to say by how much," a RIAJ spokesman says.
Industry observers agree that the upward trend was a result of a strong domestic release schedule and increased demand for music DVDs. The figures do not take into account digital sales data, which the RIAJ is due to release later this month.
BMG Japan communications and international affairs director Giles Duke calls the increases "quite significant," but cautions against raising expectations for the rest of the year. "I think it will probably even out," he says. "The market will probably stabilize toward the end of the year, but it seems the downward trend is bottoming out."
In calendar 2005, the value of shipments fell 2% to 422.2 billion yen ($3.7 billion), despite a rise in volume of 2% over the prior year to 357.2 million units. That compared with declines of 4% in volume and 5% in value for 2004.
HMV Asia Pacific president Paul Dezelsky says that the new data may be "a sign of the market bottoming out," although he notes that the first half of 2005 was "particularly bad, especially February to March."
This year's strong first half included albums by Def Tech (Ill Chill), Remioromen (Victor Entertainment), Utada Hikaru (Toshiba-EMI) and Kumi Koda (Avex).
RIAJ figures show the volume of domestic repertoire shipments rose 3% to 103.8 million units, with value up 6% to 123.8 billion yen ($1.1 billion). Domestic repertoire accounts for 72% of sales in Japan.
"There were 3 [million] or 4 million-sellers and that helped boost the overall market," Duke says. "Boy bands, for example, were quite strong."
While domestic acts were driving growth, shipments of international repertoire fell 7% in value to 43.1 billion yen ($369.5 million). That came despite a 3% rise in shipments. Duke and others suggest this reflects intensified price competition by labels.
Local manufacturers have been lowering album prices—particularly for new or developing artists—to compete with imports. Prices for catalog material have also been reduced in an attempt to maintain consumer interest.
"The pricing of DVDs is [also] coming down," Duke says, "and that could influence the reduction of value for international repertoire."
Reflecting Duke's comments, RIAJ figures show that shipments of music-related videos and DVDs in January-June rose 47% to 23.3 million units, although wholesale value showed a gentler rise, up 16% to 26.8 billion yen ($230 million).
Despite the positive figures, some industry sources are not convinced that the business has turned around. A spokesman for leading independent Avex Group says, "The situation is still unpredictable and it is too early to be optimistic. In our business plan, we have estimated a year-on-year [sales] decrease of 3%-8% in the next three years. We see no substantial evidence of a positive change in the market."
Another source is even less enthusiastic. "While there have been some success stories, overall, the mood of the industry remains pretty glum," he says. "I would like to think that there will be positive growth, but it is safe to say that few industry people expect big growth, and many would feel relieved if there is no further decline."
By: Varcoe, Fred, Billboard, 00062510, 8/12/2006, Vol. 118, Issue 32
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