Chapter2:The Maturation of the “AKB48 Business Law” and the progressing erosion of the Oricon Ranking

For a long time, the Oricon Rankings have been responsible for indicating hit songs in Japan. They are comparable to America’s billboard, and merely represent the sales of CDs, but not the actual popularity of a song.

As can be seen in table-3, also in 2011, the remarkable oligopoly in the CD Single market is still advancing. In the 2011 Oricon Single Ranking AKB48[1] monopolized rank 1 to rank 5 and since 2010 further advances the “One Person Win”. The so called “General Election” which is a fan voting event that determines the ranking within the group, has promptly been reported by breaking news sites and became a social phenomenon.

Sales promotion is conducted by creating a system where the user supports the favorite member by purchasing CDs to obtain ballot papers that are also tickets to a handshaking event (Akushukai) [2]. Even though this is an example for successful package sales, there are also concerns about this being too excessive.

The purchase of a large amount of CDs by an individual for purposes other than listening to them is not an ideal situation for the music industry, and therefore more sophisticated business models are awaited.

In addition, the “Oricon Charts”, as pointed out in the 2011 White Paper, veer away from being an indicator for user-song support, and are continuously eroding since no improvement could be seen in 2011 either.

Youtube, NicoNico Video and other video sharing sites are having an influence, and with regard to these speeding up music streaming services (discussed later) new indicators for hit music are needed.

【table-3:Oricon Single CD ranking in 2011】


〜from “WHITE PAPER of DIGITAL CONTENTS in JAPAN” (supervised by METI)
 (translation:Benjamin Tag)


[1] Idol Group based on a concept called “You can meet your Idol”, started in 2005.

[2] Event where Fans can actually meet their Idols in person.

Posted in Uncategorized | 1 Comment

Chapter1:The Tremendous Perseverance of the Package Music Business becoming the World’s Largest Market

In 2011 the CD market had a size of 95% compared to the year before, namely 289,6 Billion Yen (about 3,6 Billion USD), the package music market including DVDs reached a size of 97% compared to the year before with 361,8 Billion Yen (4,5 Billion USD).  <table -1>

sales of packaged music in japan

sales of packaged music in japan

Considering the impact of the Great East Japan Earthquake with stores in some areas of the Tohoku Region closing down and postponed product launches, these few percent decrease indicate the miraculous sustainability of the market.

Since Japan got ahead of America in 2008 to become the worlds number one, it keeps the by far best share in the package market despite a small decrease while other foreign markets are continuously shrinking.

In the first place, in countries other than Japan national chain stores that specialize in selling CDs have almost disappeared. On the other hand, although the total number of stores has decreased, CD shops in Japan do not easily disappear. In 2010, convenience store giant Lawson has acquired the CD seller HMV Japan. In May 2012 the opening of a new type of store, an integrated CD/DVD shop-in-shop called “Lawson HMV Omotesandou” attracted public attention. In June 2012 Japan’s largest telecommunication company NTT Docomo increased the ratio of investment in Tower Records and changed it into a subsidiary company. NTT announced to strengthen its commerce business by operating the store sales and e-commerce together.

Tsutaya, the biggest CD seller that also runs rental CD businesses, owned by the Culture Convenience Club, performed a Management Buyout in February 2011 (management acquired company) and was delisted from the stock market. The reason for the non-listing was said to be a “need for significant transformation of the maturing business”. With the “Daikanyama Tsutaya Book Store” a new type of business aiming at the elder stratum was opened in December. Since then, a total area of 1000 Tsubo (about 3,306 sqm) was opened and has been attracting a great deal of attention.

The CD Rental business is a type of business that almost exclusively exists in Japan. It has started to spread in the era of analog recording, and is doing so even in the age of the CD. Through the “Right to Rent” it was recognized as a legal business by the industry. Despite a small decrease in 2011 compared to the previous year the CD rental market reached a size of¥544 Billion Yen (6,8 Billion USD) and showed a significant presence in the market and amongst users. has been established to users

Rental CD market proceeds decreased only slightly.  <table -2>

sales and number of rental CD biz.

sales and number of rental CD biz.

Although the Japanese package market is developing a “Galapagos Syndrom”[1] as a result of keeping itself away from competition by a “Fixed Price Law ” resale system (resale price maintenance system)[2] and the direct relationship between the labels and shops,[3] it is a rarely seen case in the world that various chain stores specialized in CDs preserve their existences and influential power.

With regard to the reformation of the music industry’s business scheme, the nationwide existing specialized sales-network has a big significance as a point of contact with the user.

O2O (Online to Offline)[4] is becoming a keyword in Internet marketing. Shouldn’t we also positively shift the attention to the new potentials of the package business now without being fixed upon traditional models?

In this connection, the CD standard was created in 1982, and celebrates its 30th anniversary this year. Even though various evolutionary steps were accomplished and different standards such as VHS, Laser Disk, DVD, Blu-ray, 3D etc. were developed, video product standards still do not reach the scale of spread comparable to that of the CD.

A new user-appealing package should seriously be proposed.

〜from “WHITE PAPER of DIGITAL CONTENTS in JAPAN” (supervised by METI)
 (translation:Benjamin Tag)
Posted in Uncategorized | Tagged | Leave a comment

Analysis of Japanese Music Market from “White Book of Digital Contents 2012” 〜digest〜

This is a digest of music part from “White Book of Digital Contents 2012”.

“White Book of Digital Contents” is supervised by Ministry of Economy, Trade and Industry.


Can persistent package music markets, suddenly dropping music distribution intended for feature-phones, and streaming services become a trigger for the music market? The reconstruction of business schemes coping with the environmental change caused by cloud computing, the enhancement of always-online connections and the magnificent spread of smartphones became an urgent challenge.

The potential of Japanese musical power is big as can be seen in the increase of artists successfully touring foreign countries and the rise of artists originating in “Dojin Music” (non-official self-published works).

We can expect that 2012 will be the starting point for structural change. 

Posted in Uncategorized | Tagged | Leave a comment

Music Biz. in Japan (2) 〜 digital distribution 〜

In Japan, Package (CD+musicDVD) market is 300 billion yen (about 3.9 billion US$)
Digital distribution market is 180 billion yen(about 2.3 billion US$)

A Character of Japanese digital market is much rate of mobile market.
About 89% of digital market is in mobile.
And mainly it is the ringtone, not the ring back tone. ” chaku uta”, ringtone music, is popular in Japan.

I guess the iTunes Store is the king of pratform on digital music distribution all over the world.
In Japan iTunes Store is a looser.
There are 2 reasons why iTunes can’t come through in Japan.
First, some record companies don’t provide songs for iTunes.
Sony Music Entertainment, the leading company in the Japanese music industry, supply no songs. It’s an in convenience to customers.

Secondly, Rental CD shops exit.
Copyright law in Japan has an exception to this rule.
It’s available to lend CDs for customers.
There are over 3000 shops that “distribute” lend CD’s in Japan..
This law established before CDs occur.
Then it succeed in these day.
It goes without saying that users can copy those songs by PC.
It is purpose that iTunes don’t become common though many users get ipods and iphones in Japan.

Recently it begins to change.
The reason of change is smart phone.
Japanese ringtone system is close and secure.
“rekochoku” Inc. is founded from most record companied in Japan.
Recochoku wins a commanding share in the market.
The effect of smart phones’ growth iTunes is becoming popular bit by bit.

Posted in musicbiz | Leave a comment

Music Biz in Japan (1) 〜 CD business 〜

I try to explain about situation and system of music biz. in Japan.

Japanese CD’s market have become the biggest in the world since 2008.
It has shrink but more slowly than the other countries.

There are three reasons of slowness.
1) fixed price policy
2) closed system of authorized stores
3) character of Japanese customers

1)fixed price policy
it’ s called “resell system” in Japanese. but the correct word is  fixed price system in law.
all stores must sell at fixed prices about CDs.
So record companies can keep their profits.

2)closed system of authorized stores
In principle Japanese record companies sell CDs only for authorized stores or wholesale dealers.
The contacts that companies sign with stores presupposes to deal with regularly and constantly.
The companies can communicate with stores ongoing relationship.
Users can’t buy CDs except at specialized stores.

3)character of Japanese customers
This reason is not clear. Generally speaking, Japanese music users loves packages.
In certainly Japanese CDs’ Jackets are very gorgeous. There are various special specification of CDs.
I guess that it may be Japanese style.

Otherwise Japanese market of CDs is no.1 in the world.
Record companies are a struggling business. same as in other countries.

I would like to tell the situation and history for people overseas.
Next theme on this column will be “online music distribution” in Japan now.

Thank you!

Posted in musicbiz | Tagged , | Leave a comment

my profile

CEO of BUG corporation
director at Federation of Music Producers Japan
member of editorial board at “White Paper of digital contents in Japan”(supervised by METI)
committee of Sync Music Japan.



I am a music producer and a consultant of contents business in Japan
I was born in Tokyo and graduated from International Christian University High School.
I dropped out from Waseda University and founded BUG corporation in 1989.
I was an agent for Shuuichi “ponta” Murakami, SION etc.
I started producing J-pop artists in 2002.

Continue reading

Posted in myworks | Leave a comment

1st post


I’ve made up my mind. I would like to start writing blogs regularly. It’s difficult to have time to just learn English. So I will try to write about my favorite genre and my business field.

I want to explain Japanese cultures and Japanese music biz for foreigners.
What do you think about my idea?
Please give me advice!

Posted in Uncategorized | 2 Comments