iTMS Japan?

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Japan’s Mainichi Shinbun (English edition here) is today reporting that Apple hopes to launch its incredibly successful iTunes Music Store in Japan this year, according to statements made by Apple Japan President Yoshiaki Sakito on Tuesday 12th.

The article, a partial English translation of which is available here, notes that although iTMS has been operating in America since 2003 and later in Europe and that now over 300 million tracks have been downloaded, it has not yet come to Japan because of the Japanese recording industry’s rigid copyright controls. An article in The Register repeats suggestions that surfaced last year that the labels are worried that Apple’s DRM is not strict enough. This is not implausible. Traditionally, Japanese enterprises have been extremely protective of intellectual property – web sites devoted to celebrities and the like always seem to be lacking content like downloadable photos, wallpapers and suchlike. It is not really hyperbole to suggest that the every-use-charged-for scenario so feared in the West is more like current reality in Japan.

But things may be changing. Seeing the fast growth of the digital music market, Avex, the company responsible for many of Japan’s teen idol pop sensations, is entering the music download scene with a service of its own. And the big record companies have formed a joint venture called LabelGate (Japanese only) which, in conjunction with Microsoft, operates two music download services – Mora, selling tracks for OpenMG-compatible devices; and MusicDrop, which has music encoded in Microsoft’s WMA10 DRM format. Of course, neither of these work with Apple’s iPod, so Japanese iPodders have no choice but to buy songs on CD and import them like that. Enter the copy protected CD and calls from users for Apple to do as they are doing in Europe and the States and launch iTMS are getting stronger. The iPod is the most popular music player in Japan, and in this battle, these users are a big asset.

Mr Sakito believes that if Apple enters the online music distribution market in Japan, it will give more momentum to the market for portable music players, observing that as soon as Apple introduced iTMS in the West, the number of iPod users shot up, and that it also helps to convince those hesitating over an iPod purchase. And if they can get enough users, they might be able to bring prices down or start offering additional services.

The price issue is an interesting one. The article voices hopes that a real competitor in this arena will bring per-track prices down, which with existing services stand at between ¥160 ($1.49) and ¥370 ($3.45) per track. (For comparison, iTMS in the UK charges 79p a song, which works out at $1.49 at the current exchange rate; continental European iTMS charge €0.99 per song, or $1.28.) But that is not Apple Japan’s priority. Says Mr Sakito, “We are not after low prices, rather we’re looking to offer the best experience.” That said, in the future, there is the possibility that they may be able to bring prices down to American levels, which would be a massive boost to the market.

Last year saw a Japan-wide boom in digital music player sales, sparked off by the release of the iPod mini, with shipments totalling 1 million units. This year, shipments are expected to rise to 1.9 million units, all of which means that there are an enormous number of potential users of these new download services, although public knowledge of the current offerings is limited. To that end, the aforementioned LabelGate considers that an Apple entry into the music download market “would have a good impact”, while old friend and lover-of-competition Microsoft says that “there are great merits to a widening of the market”.

Of course, whether any of this translates into an actual iTMS for Japan is a different matter, but faced with the staggering success of the service in other countries, it seems strange for the labels to be so bent on rejecting something which ultimately brings them greater profits by all but eliminating distribution costs. One can only observe that if record labels in the West seemed reluctant to jump on this bandwagon, their counterparts in Japan are many times more so. Only time will tell if they can overcome their fears.

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