MMW-84 -- Japan's New e-Labels

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

Issue No. 84
Wednesday, September 7, 2005


++ FEATURE: Japan's New e-Labels
** Sony Music To Offer Songs on iTunes by Year End
** DoCoMo Announces AM/FM/TV Phone
** Yamaha Opens New Site for MA-7 SMAF Creators
** Vodafone Starts Chaku-uta Search Service
** Nepro Survey: Mobile Phone Music Players Remain Popular

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++ FEATURE: Japan's New e-Labels

Over the last five years, the growing popularity of digital
music has completely shaken up the dynamics of power
in the music industry. Distribution channels - previously
under the tight control of a few major record labels - have
been turned upside down to allow for all kinds of new
players. Who'd have thought back in the eighties that record
companies would one day be negotiating music retail prices
and percentages with wireless phone carriers and computer

One of the most exciting trends to emerge from this
shakeup is the e-Label, a record label or division whose artists
produce music exclusively for digital distribution. Because
an e-label does not have the overhead of manufacturing and
distributing CDs, it has more freedom to experiment with a
wider range of artists and music. There is less pressure to
find (or fabricate) the 'one' big artist who will produce megahits.

Over the past several months, e-Labels have started to pop
up in Japan as well. With a strong mobile music industry
and (thanks to the recent iTunes launch) a newly reinvigorated
PC-based market for music downloads, the time is right here
for new methods of music promotion and distribution.

Here is a brief description of some of the e-Labels to emerge
in Japan this year.

1. asovina (Yamaha)

Launched in May, Yamaha's 'asovina' e-Label records and
releases tracks from new and unknown artists. The tracks
are sold on 26 different online stores and chaku-uta sites.
Artists who sell well on these sites are then provided with
more resources for recording and promotion. Yamaha also
considers offers from other labels wanting to produce a CD
of a particular artist whose tracks debuted through asovina.

2. BabeStar (Victor Entertainment)

Victor Entertainment launched Babestar to promote its new
artists by offering their digital tracks at 99 yen ($0.90), a very
low price by Japanese standards. Victor currently has 7 artists
on the label, and focuses on promoting one of them heavily
each month. Based on sales and audience reaction to the
promotions - which include streaming video of live concerts -
Victor is able to get an idea of which artists are likely to sell
well on CD.

3. mf247 (247 Music)

This service is planned to launch in December and will be run
by Shigeo Maruyama, former president of Sony Music
Entertainment. The name comes from 'Music Forecast 24/7,'
and like asovina and Babestar, it aims to find and promote
unknown artists with high potential. For JPY 10,000 (US$92.00),
amateur bands can register and place one of their songs on
the mf247 site. Initial tracks from new artists are offered for
free. Ranking charts are compiled based on the number of
downloads. Tracks that prove popular could be offered for
sale on the site or on CD.

For all three of these new e-Labels, the emphasis is clearly
on reducing the cost of finding and promoting new artists.
Traditionally, record labels have taken on substantial risk in
the form of manufacturing and promotional overhead for
launching CDs from unknown bands. For an e-Label that
deals only with digital distribution outlets, the cost of
introducing a new artist is estimated at around 30%-40%
of the amount needed for a traditional CD release. Hopefully,
this trend will continue to encourage Japanese labels of all
sizes to take chances on a wider variety of new artists
and music.

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** Sony Music To Offer Songs on iTunes by Year End
In brief: The Yomiuri Shimbun reported on Monday that Sony
Music is planning to offer its music on Apple's iTunes
Music Store in Japan by the end of this year. According to
the article, the move was prompted in large part by the
growing number of Sony artists who have expressed
dissatisfaction at Sony's refusal to sell tracks on Apple's
popular online store.

** DoCoMo Announces AM/FM/TV Phone
In brief: NTT DoCoMo announced last week that it will release
a new mobile phone with a built-in 3-band AM/FM/TV tuner.
Called 'Radiden,' the new phone will be made by Sony
Ericsson and is aimed specifically at Japanese salarymen
in their forties and fifties. While several phones have been
released in Japan with FM radio capability, Radiden is the
first to incorporate an AM radio tuner.

** Yamaha Opens New Site for MA-7 SMAF Creators
In brief: Yamaha recently launched a new website devoted to
MA-7 SMAF creators in Japan. Dubbed 'SMAF Entertainment,'
the new site features tools, slide shows and demos for MA-7
content, including 3D sound. Many of the demos have also been
put on Yamaha's global site.

** Vodafone Starts Chaku-uta Search Service
In brief: On September 1, Vodafone started 'Music Search,'
a new chaku-uta search service that covers songs across all
of the chaku-uta content providers on the Vodafone Live menu.
The service is free of charge.

** Nepro Survey: Mobile Phone Music Players Remain Popular
In brief: On September 2, Nepro Japan released the results
of a recent report on mobile music usage in Japan. In a
survey of 4,200 mobile phone users the report found that 51%
had downloaded music for listening on their phone, and that
26% used their phone as their main digital music player.

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Written by: Steve Myers