MMW-76 -- The Rise and Fall of the Copy-Control CD

J@pan Inc Magazine Presents:
Commentary on Japan's music technology news

Issue No. 76Tuesday, April 26, 2005



++ FEATURE: The Rise and Fall of the Copy-Control CD

** Apple President Pledges Japanese iTunes Launch by Year-end
** Sanyo to Enter Market for Mobile Phone Sound Chips
** Toyota Unveils New Car Audio System
** Karaoke Shop to Start New Mobile Service
** PC Stores Report Strong iPod Sales
** Sapporo Company Sells Ringtones in Israel

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++ FEATURE: The Rise and Fall of the Copy-Control CD

At the time, it must have seemed like a good idea. After
watching CD sales in Japan fall from JPY608 billion in 1998
to JPY444 billion in 2002, record companies here analyzed
the situation and came up with a cause: too many people
were using their PCs to make CD-R copies of their music.
The answer to this problem, they reasoned, was to make
CDs that could not be copied.

In March 2002, the first copy-control CDs (CCCD) began
appearing in Japanese record stores. Similar in appearance
to an ordinary CD, the CCCD could not be played from a
personal computer, nor could the tracks be copied or
converted to formats such as MP3. In 2003, over 10% of all
CDs sold in Japan were CCCDs, including many of the new
releases from Sony Music, Toshiba EMI and Avex.

However, word quickly spread among consumers and serious
music fans that the sound quality of the CCCD was inferior to
that of ordinary CDs. On popular Japanese music web sites,
fans began posting harshly critical messages about the poor
quality of CCCDs and expressing resentment at being treated
as potential music pirates. As portable digital music players
such as the iPod came onto the scene, it became increasingly
obvious that the era of the CCCD was pretty much over before
it had started.

The final nail in the coffin came at the end of last summer,
when a dispute over the CCCD issue led to a top-level
management shakeup at Avex. The new CEO, Katsuhito Matsuura,
declared that Avex would begin phasing out CCCD production and
start focusing on finding new outlets for digital music
distribution. Sony Music followed suit last November, announcing
it would completely stop manufacturing CCCDs. Only Toshiba EMI
is still producing a significant number of CCCDs, but few in
the industry expect this policy to continue much longer.

Besides, the Japanese record industry has a new foe these
days: illegal file swappers. Taking a page from its overseas
counterparts, the Japanese Record Industry Association began
in January petitioning Internet service providers to release
personal information about individual users suspected of heavy
file swapping. The association is currently "negotiating" with
five of these individuals, and is expected to add to the number
of this group over the coming weeks.

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** Apple President Pledges Japanese iTunes Launch by Year-end
In brief: Yoshiaki Sakitou, the president of Apple Japan, said
officially on April 12 that there would be an iTunes launch in
Japan by the end of this year.

** PC Stores Report Strong iPod Sales
In brief: A recent newspaper article reported that digital music
player sales have jumped dramatically this month, due in part to
the "back to school" shopping season (the Japanese school
year starts in April). According to one store manager, 60% of
shoppers looking for a portable player ask for iPods. The 4GB
iPod Mini, which retails for JPY 21,800, is proving especially
popular overall, while the flash-memory iPod shuffle is selling
well among high school students.
Nikkei Sangyou Shimbun, April 13

** Karaoke Shop to Start New Mobile Service
In brief: Tetsujinka Keikaku, which operates a large chain of
karaoke shops in Japan, announced last week that it plans to
start a new service whereby customers can receive video of
their karaoke performances sent to their mobile phones. The
company plans to start the service by the end of this month
and will charge around 500 yen for each video.
Nikkei Sangyou Shimbun, April 15

** Sapporo Company Sells Ringtones in Israel
In brief: Sapporo-based Clipton Future Media announced last
week that it has begun selling ringtones through Eurocom
Cellular Communications in Israel.
Nikkei Sangyou Shimbun, April 20

** Toyota Unveils New Car Audio System
In brief: Toyota's new wireless system for cars features an audio
system called G-Sound, which offers a catalog of 10,000 songs
for in-car listening. 40-second trial listening clips of each song
can be heard for free. Songs can be purchased for 100 yen or
"rented" for a day at a cost of 30 to 80 yen. A separate service
allows customers to download karaoke songs for 700 yen a

** Sanyo to Enter Market for Mobile Phone Sound Chips
In brief: Sanyo announced last week that it plans to manufacture
sound chips for mobile phones. The Japanese market for sound
chips is currently led by Yamaha, followed by Rohm and Okinawa
Denki. Sanyo said it plans to develop a chip that will allow
mobile phone users to play 24 hours of continuous music.

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Written by: Steve Myers (
Steve Myers is president and chief enthusiast of Theta
Music Technologies, which specializes in the development
of music-related software applications.

Edited by J@pan Inc editor: (


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