Inside Japan's Unwavering Devotion to Physical Music in the Streaming Era

Exploring the music business and consumption behaviours in different markets is something I find fascinating. Yesterday, we went over the CEO of HYBE’s perspective on what differentiates the Korean and US music industries. It felt great to see someone with extensive experience validate my thoughts on the artist-label relationships in K-pop.

I believe that acquiring this knowledge is invaluable, considering how the world has become interconnected and music becoming a universal language with boundless possibilities. So, I take serious pleasure in studying music markets, not only to understand how their industries were built but also to see what factors contribute to their success.

Now, let’s go to Japan 🇯🇵, which currently is the world’s second-largest music market, following the US. Colour me surprised upon realizing that in 2022, subscription music streaming in Japan reached $575 million. However, unlike other mature music markets globally, Japan still predominantly embraces physical music formats, with CDs thriving as the leading music medium.

According to the Recording Industry Association of Japan (RIAJ), CD sales revenue reached $987 million in 2022, representing a 5% year-on-year growth. Industry insiders in Japan have attested to the affinity Japanese fans have for physical music products and merchandise. Japanese fans are said to exhibit high levels of loyalty towards their favourite artists, fostering a collector’s mindset that sees them queue for hours to get certain items before they sell out.

The cultural preference for physical consumption is more evident in how the music industry tailors its strategies to meet this demand. An example would be Universal Music Group (UMG) launching a concept retail store in Tokyo, the capital city of Japan.

Spanning four thoughtfully curated floors, the store offers dedicated fan experiences, exclusive product launches, and various retail pop-up shops, catering specifically to the preferences of music fans in Japan.

According to Naoshi Fujikura, President and CEO of Universal Music Japan, “This store represents an exciting new venture for UMG, and celebrates the incredible impact and role, that fans play in supporting their favorite artists. In the coming months, the store will offer unique fan experiences for our artists, both domestic and international, creating new commercial opportunities for our artists and business.”

The fascinating dynamics of different music markets will never cease to amaze me 🤗.