June 24, 2021
Japan is the world’s second biggest recorded music market – worth some $2.9 billion to record labels last year, according to IFPI data.
It’s also a market that’s out of step with its fellow blockbuster commercial regions.
Although sales of physical music formats in Japan fell in 2020, CDs and vinyl still made up over two-thirds of the country’s annual recorded music trade revenues. Streaming, meanwhile, contributed less than a fifth of the market’s wholesale industry turnover.
Slowly but surely, though, Japan is changing: The country’s streaming trade revenues in 2020 were up by a third to over $480m, according to IFPI’s Global Music Report, making Japan the world’s fifth biggest music market in streaming-only terms.
One of the platforms most responsible for this growth is Line Music, Japan’s biggest domestic streaming service.
Line Music is a subsidiary of Line, a social media giant that owns the biggest messaging app in Japan, Thailand and Taiwan. So much so, that messaging app is actually used by the majority of
Here, Misaki Iki, Head of Business Development at Line Music, tells MBW his thoughts on the future of Japan’s streaming market, and the role Line will play in the growth of the sector…
It is very important for music subscription services to strike a balance between these two, so Line Music having control over both in the one company could be seen as our biggest advantage.
Also, with a large portion of the Japanese population using the Line messaging service, we are able to directly tap into this user base at any time. This is something other subscription services are definitely not able to do, so this could also be considered another of our strengths.
Our first goal is to become the most beloved service among domestic users. We may see a different landscape after that but we are focusing on the Japanese market for now.
As of March 2021, we have had up to 13 million MAUs.
We first formed a distribution partnership for international music with Tuned Global around five years ago.
At the time, we were looking both domestically and abroad for a partner. Ultimately, we went with Tuned Global since we wanted to work with a company that was both technically strong and had solid relationships with music labels.
Tuned Global’s Con [Raso, Tuned Global’s MD] and Spiro [Arkoudis, Tuned Global’s CRO] are extremely knowledgable and were able to handle development and everything else we needed to get us up and running very quickly.
We have already worked together for five years now, and hope to continue our great partnership.
The market is undergoing significant changes because of COVID-19, and we think that the shift to digital—particularly streaming—appears to be gaining traction.
So while CDs are still dominant in Japan, we believe market trends will change.
“THE MARKET IS UNDERGOING SIGNIFICANT CHANGES BECAUSE OF COVID-19, AND WE THINK THAT THE SHIFT TO DIGITAL — PARTICULARLY STREAMING — APPEARS TO BE GAINING TRACTION.”
The full transition to digital will still likely take several years however.
Additionally, since physical formats also have their own special charm, we would like to explore what a uniquely Japanese music market that embraces both physical and digital might look like.
We think that the most important thing is to have a wide variety of services emerge, with each leveraging their strengths while aiming to lift up the market. For this reason, we do not see other services as competition—rather, we would like to work together to energize the industry itself.
As we mentioned, COVID-19 is changing the Japanese market in major ways.
Concerts have been suspended and CD sales have temporarily seen a significant decrease in sales.
On the other hand, streaming services have been doing very well, and Line Music is no exception. The time spent listening and music consumption have also undergone changes that have made this year a very interesting one.
“AS A MUSIC SUBSCRIPTION SERVICE, WE ARE PLEASED THAT SO MANY ONLINE ARTISTS ARE EMERGING.”
COVID-19 has also been one of the reasons behind social media’s greater prominence this year, leading to major movements that have seen online artists emerging in Japan as well. For example, a song goes viral on social media, is then played by many people on streaming services, with the artist then being invited on to TV programs.
As a music subscription service, we are also pleased that so many online artists are emerging. Also, with us enabling some of these memorable moments, we can really feel that Line Music has grown globally.
With the advent of the streaming age, it could be said for any country that even more music is now within easy reach. We also believe that to be true for Japan.
At the same time though, J-pop—or domestic music—is the most played genre on Line Music. This would also be attributable to our user demographics. While users of other services could be called core users who really love music, much of Line Music’s user base tends to enjoy music more casually.
“INTERNATIONAL MUSIC DOES CHART AT TIMES, BUT THESE SONGS ARE USUALLY ONES THAT HAVE APPEARED IN JAPANESE TV COMMERCIALS OR ONES THAT HAVE GONE VIRAL ON TIKTOK.”
Line Music users also mainly listen to “popular songs,” with most of these being by Japanese artists.
International music does chart at times, but these songs are usually ones that have appeared in Japanese TV commercials or ones that have gone viral on TikTok.
We think that this is very significant.
The Line messaging service has 84 million users in Japan, meaning that almost the entire Japanese population uses it.
We are able to provide a wide array of music features that is made possible by integrating with the Line app.
For example, Line users can add background music to their profile. This has proved very popular with young people, with a record number using the feature to express their mood and the types of music they like.
‘WE HOPE TO CREATE A BRAND-NEW MUSIC DISTRIBUTION AND CONSUMPTION STYLE FOR THE JAPANESE MARKET.’
Background music has also led to new opportunities for conversation and caused songs to go viral. So you could say that this has become a new way to distribute music.
In addition to this, Line Music also lets users set their favorite songs as a ringtone for Line app calls or music videos as their profile backgrounds.
Only Line Music is able to combine communication and music in this way. With this in mind, we hope to create a brand-new music distribution and consumption style for the Japanese market.
Moving forward, we want to offer a uniquely LINE MUSIC way to enjoy music, as well as provide localized value that only a domestic service could.
Additionally, we want to leverage AI and other new technologies to provide our users with more and more diverse ways to enjoy their music.
Music Business Worldwide