Sound Decision
iTunes Japan hits 1,000,000

by Jonathan Mays, Aug 10th 2005
Four days after Apple launched its iTunes Music Store in Japan, one thing has become absolutely clear: the demand for Japanese music downloads is enormous. Now we see who is ready to fulfill that demand, and who is unwilling to take the plunge.

In just 96 hours, iTunes Japan recorded over one million song downloads. "We're extremely happy with the results," Apple VP of Applications Eddy Cue told the Associated Press. Well, yeah, no kidding. Japan's music market may be second in the world to America's, but it took a full week for iTunes USA to reach that mark.

iTunes Japan features the libraries of 15 record labels, including industry heavyweights Toshiba EMI, Universal, and Avex. But what's most notable is who they do not have: Sony. The country's biggest music label has been in a long battle over compression technologies (supporting their own ATRAC over the far more popular WMA and MP3), and now that Apple's download service has already doubled Sony's monthly average, it's starting to look like Beta vs. VHS all over again.

How did Apple come to dominate Sony's home turf so quickly? One word: price. With 90% of its songs available for ¥150, iTunes has instantly undercut the competition. Mora, with whom Sony is affiliated, charges ¥210 per song, while MSN Japan's prices creep up to ¥370.

The drastic price cuts are important not only for Japanese consumers, but also for J-Pop fans in America. One of the major reasons you can count the number of current J-Pop stars with US albums on one hand (and why it takes months, if not years, for those releases to get over here) is the threat of reverse importing.

T.M. Revolution's "Vertical Infinity," which Tofu Records issued two weeks ago, is $13.98 in America. In Japan, the same disc (without the US-exclusive bonus DVD) retails for $26.14. Buy enough for free shipping, and it's a better deal for Japanese music fans to import American releases of their favorite artists.

But iTunes Japan changes everything. Ayumi Hamasaki's "Inspire" single retails for ¥1000, but on iTunes, it's ¥300. Hikaru Utada's ¥2900 "Single Collection Vol. 1", which sold 1.4 million copies in one week last April, is ¥2000 online.

So when will massive quantities of J-Pop be available in America on the day they're released in Japan? If you have a friend overseas who will buy you iTunes gift cards, that day has already arrived. The rest of us have to wait for the Japanese labels to admit defeat on the price control front. In the meantime, they taunt us with tens of thousands of free 30-sec samples, each one only a couple of iTunes clicks away.

Back in Japan, there are more unanswered questions. How soon will Sony relent and cut a digital deal with Apple? How will retailers adapt as they lose their stranglehold on music sales? And what about Napster's plans to launch in Japan by the end of next year? Keep an eye out for the answers; they will likely reveal the future of J-Pop in America.

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