MMW-87 -- New Promotions For Digital Music

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

Issue No. 87
Wednesday, October 26, 2005


++ FEATURE: New Promotions For Digital Music
** New Panasonic Phone Features Cordless Headphones
** Excite Launches New Chaku-uta Site for Reggae Music
** Vodafone's New Music Player Phone Released in Japan
** Mobile Music Boosts KDDI Profits
** GIGA Starts Full Song Distribution Service on i-mode

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++ FEATURE: New Promotions For Digital Music

The year 2005 will likely be remembered as the 'breakout year' for
digital music in Japan, as large numbers of average consumers are
now starting to download and play music on portable devices.
While Japan has been at the forefront of mobile music download
services, the general public has until recently been largely
uninterested or unaware of the various PC-based online music
services, including P2P file-sharing sites. In fact, the six-year
decline in Japanese CD sales has been blamed less on illegal
file-sharing and more on the popular CD rental shops that are so
prevalent throughout Japan.

However, overall awareness of online music has increased
dramatically here this year with the launches of several big name
online music stores, including iTunes. At the same time, full-song
downloads to wireless phones have also been a huge hit in 2005,
with over 20 million songs downloaded since the service started on
KDDI late last year. And let's not forget the masterful Apple
marketing campaign that has made iPods almost as ubiquitous
in Tokyo as they are in New York.

This new widespread public awareness has caused record
companies to look at digital distribution not only as a sales outlet,
but also as a strong promotional tool for new artists and releases.

Here are some of the digital music promotional techniques we're
seeing for the first time on Japanese digital music stores:

1. Using Online Store to take Advance Orders for Upcoming Albums
iTunes recently took advance orders from customers for 'Listen To
The Music 2', a highly anticipated album from popular
singer-songwriter Noriyuki Makihara, offering the album for 2,000 yen
(US$17.54), while the CD sold for 3,059 yen (US$26.83).

2. 'Net Only' Releases
An increasing number of artists are releasing 'bonus songs' and
other tracks only in digital form, leaving these tracks off of their CDs.
One example of this is the hit song 'Smile Again' from Yumi
Matsutoya, which was written for the 2005 World Expo in Aichi,
and made available only by download at a price of 200 yen. Likewise,
the digital version of the Noriyuki Makihara album mentioned above
contained a bonus track that was not included on the CD.

3. Chaku-uta Pre-release
Several popular J-Pop artists have started releasing chaku-uta
and/or chaku-uta full versions of new songs a week before the CD
or digital tracks go on sale. Examples of this include recent releases
from bands such as Road of Major, m-flo and Undergraph.

Of the three techniques listed above, the chaku-uta pre-release has
been by far the most common. While online services have received
a boost with the launch of iTunes in Japan, an estimated 99% of
digital music downloads in Japan are still to mobile phones rather
than PCs. Given that mobile music is likely to remain in a dominant
position here for the foreseeable future, we should also see much
more in the way of new promotions aimed specifically at mobile
customers in the coming months.

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** New Panasonic Phone Features Cordless Headphones
In brief: Panasonic Mobile Communications has released a new FOMA
handset with Bluetooth-enabled cordless headphones for listening to
music. The P902i is the first FOMA handset to allow audio playback via

** Excite Launches New Chaku-uta Site for Reggae Music
In brief: On October 17, Excite started a new i-mode chaku-uta site
specializing in reggae music. The same site for Vodafone opened on
October 12 and the Vodafone chaku-uta full service will start on
November 1. In addition to the chaku-uta files, the site also offers lyrics,
translations of the lyrics, interviews, and articles. The site will be
launched for EZweb in early December.

** Vodafone's New Music Player Phone Released in Japan
In brief: Vodafone's latest 3G handset, the 803T (featured in MMW #85),
went on sale in certain regions in Japan on October 22, and was
released in the remaining regions on October 26. The 803T features
a 'fold-up' music player interface and screen, so that users can navigate
songs and playback when the phone is closed.

** Mobile Music Boosts KDDI Profits
In brief: KDDI reported on Oct. 21 that its net income for the first half
(March to September) grew to JPY 101.4 billion (US$ 880 million),
a 30% increase over last year's figure. The increased profit is largely due
to the strength of the carrier's full-song wireless download service, which
has recorded 20 million downloads since its start in November 2004.

** GIGA Starts Full Song Distribution Service on i-mode
In brief: On October 24, GIGA Networks started a new service to deliver
full songs to NTT DoCoMo i-mode phones. Unlike the Chaku-uta Full
services offered by KDDI and Vodafone, GIGA's new service requires
the user to download and save the song first, then use a Java appli in
order to play the song. The service started with 250 songs, and GIGA
says the catalog will increase to 500 by the end of this year. The service
is supported on FOMA 901, 902 and 70x series handsets.

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Written by: Steve Myers