Music on Japan's Net

Back to Contents of Issue: November 1999

The Recording Industry Goes from Vinyl to Liquid

by Bryan Harrell

The problem didn't start with the Internet. The issue of individual copying of recorded music arose with the popularization of stereo cassette recorders beginning in the early 1970s. While large reel-to-reel recorders have been used by audiophiles since the 1950s, they did not permeate the market like cassettes did, nor did they make it particularly easy to tape an LP, and slip the cassette into a pocket to take to a friend.

Fast forward to Tokyo in the early 1980s. Talking over a loud band performing in Shibuya's Crocodile live music joint, musician Casey Rankin admitted to me "If someone gets one of my records, say, from a record rental shop, and makes ten cassette copies to give to his friends, I think that's wrong."

It was a revealing comment from an American musician who'd abandoned the U.S. shortly after Woodstock to take up residence in Japan and go on to form the group Shogun, one of Sony Music's hottest-selling rock groups in the 1970s. For the still long-haired Rankin, the word "free" shouldn't apply to music he was trying to make a living from.

A year or so later, CDs had finally begun to bury the vinyl LP, and there was talk of some sort of digital recording device that could make absolutely perfect copies of the music, with no degradation in sound as with cassette recordings. Naturally, record companies were scared and the issue of music copyright protection went onto the news charts with a bullet.

In 1985, Aiwa took the first step and introduced a consumer-use digital recorder in the DAT (digital audio tape) format, with parent company Sony watching to gauge the reaction. When the coast was clear, Sony and a handful of other companies came out with DAT machines of their own. Record companies were alarmed, but their fears turned out to be largely unjustified.

DAT is a tape format, using a complicated mechanism that's essentially a scaled down VCR deck. Both hardware and blank tapes are expensive, and the format only really caught on with hard-core audiophiles (whose parents no doubt had reel-to-reel decks) and musicians hoping to create a better-sounding demo tape.

The computer boom that began in the late 1980s siphoned off a lot of interest from audio products, and manufacturers turned to producing convenient mini-systems to stay in business. Meanwhile, rumors began to float around about a "recordable CD," though the technology was not quite ready and the media cost was too high to be practical. The market wanted a digital recorder that was cheaper than DAT, and which offered the quick access to multiple tracks, like CD.

By the early 1990s, developments were coming. Sony came out with the MiniDisc, while Philips introduced DCC (digital compact cassette). MiniDisc offered the quick-access convenience of CD, while DCC boasted backward compatibility, since a DCC deck could also play conventional analog cassettes. Although both companies cooperated on the development of the CD, they duked it out over their respective digital formats until the Philips format suffered a knock out, going from being called the "dubious cassette concept" to the "dead cassette concept." Still, the dream of a CD recorder remained, which slowed the demand for MiniDisc initially.

Click forward a few years and the benefits of data compression technology, created to shrink computer files for faster modeming, are being applied to music with spectacular results. A file that represents a three-minute pop song can be shrunk to a fraction of its original size, and a whole new pastime of sending music over the Net has begun.

While a variety of formats, mostly freely downloadable, exist for music compression, the one that's become the standard is MP3, short for "MPEG-1 layer 3" (MPEG is the acronym for the Motion Picture Experts Group -which formulates sound formats widely used in the industry). MP3 shrinks the amount of digital data necessary to represent a song to one-tenth of its original volume, allowing people to bounce files back and forth over the Net in minutes instead of hours.

MP3 is also the most powerful music copying and distribution tool in history. Record companies are afraid, very afraid, and their fears are justified. Several mouse clicks is all it takes to send the entire discography of Ratt or The Artist Formerly Known As Prince screaming across the Internet in minutes.

MP3 is good news, however, to small-time musicians who would otherwise be ignored by record companies, since they use it to get their music out into the world, even if it means that no money will be coming in. Yet even though MP3 is digital, it doesn't mean the sound quality is as good as CD. Compressing and decompressing the music files for encoding and playback takes its toll on fidelity, and on a good stereo the difference between MP3 and CD is like comparing a cup of instant coffee with a steaming cup of Starbuck's cafe latte. But with many people listening through the tiny outboard speakers on their PCs or laptops, the differences are barely audible.

For business in general, the Internet represents the biggest sales bonanza since the invention of the shopping mall. If record companies could find a way to sell their music as purely data, they could cash in on the looming e-commerce revolution.

This was the driving force behind the 1996 establishment of Liquid Audio, an Internet startup business that's making waves in a world of .wav files. Now headquartered in Redwood City, halfway between San Francisco and Silicon Valley, the company claims their technology "makes it possible to distribute, promote, and sell music over the Internet in a way that is both secure and profitable for everyone involved." The Liquid Audio product itself is actually an integrated chain of technologies that provide for the encoding, distribution, sale, and copyright protection of individual song titles. After a song is purchased, the company's server delivers an encrypted version that can only be played by the purchaser. Liquid Audio uses what they call "transactional watermarking" to embed details of the sale into the music data, but which are inaudible during playback.

Liquid Audio Japan was established in July of last year, but kept a low profile until this summer, when talks were held with Sanyo, Sharp, and Toshiba on the production of a portable player that would operate on software developed by the parent Liquid Audio company. This has the potential to turn Japan's portable audio and recorded music markets on their respective ears.

Major record retailers in Japan are not idly standing by. As of September 30, HMV had over 600 downloadable titles on their website, and the sites of Shinseido (Japan's largest music retailing chain), Tower, and Yamano Gakki feature large numbers of downloadable tunes. However, the copyright association serving Japan's artists and composers has still to hammer out a framework for compensation on music distributed over the Internet. Steve McClure, Japan bureau chief for Billboard Magazine, explains, "Because of copyright concerns, it is still too early to proceed. But Sony is going ahead regardless, and in August announced it will become the first Japanese music software company to offer downloadable music, though it is still not on stream. While JASRAC (Japanese Society for Rights of Authors, Composers, and Publishers) is perceived as dragging its heels in developing a framework, Sony is going ahead."

This spring JASRAC announced a project called DAWN 2001, which they say will be an ongoing project to develop a regulatory framework for the online delivery of music. Let's hope its provisions will still be relevant in the face of the fast-developing technology. Naturally, Japan's smaller independent labels are eager to get into the act. Taka Nanri, founder of Sound Design, one of Japan's first independent record labels, back in the early 1970s, is eager to do business globally on the Net. Nanri discovered the artist Kitaro over 25 years ago, and promoted his music heavily in Japan and abroad. Sound Design still owns most of the Kitaro catalog, and while sales in Japan are minimal, the boom in New Age and Healing music in North America and Europe has translated into a flood of inquiries for the music of Kitaro and other artists on the label. Nanri is clearly enthusiastic, "I see the Internet as a way for us to simply and effectively market our music anywhere in the world that people want to hear it."

(For an interesting and thorough analysis of the defects of MP3 sound quality, read Corey Greenberg's excellent article "MP3- What Does It Really Sound Like?" in the June 1999 edition of Audio magazine, contact via

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