How J-pop Could Conquer the Asian Market
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1 How J-pop Could Conquer the Asian Market MAMIYA Fumiko Korean pop (K-pop) music is booming in Asia. Is there a way for the continually shrinking Japanese music business to survive? Kato Kimitaka of major Japanese record label Universal Music speaks about his overseas strategy. The Japanese music market is number one in the world Japan s music market will claim the world s top spot this fiscal year. This reflects the decline of the U.S. market, which long held the lead, giving way to second-ranked Japan. Unfortunately, the Japanese market is also shrinking the CD and music video market, 500 billion yen at its peak, is now around 300 billion yen so this is no great cause for celebration, but we should applaud Japan s achievement in overcoming a population difference close to three times its own to MAMIYA Fumiko claim the top position. The shrinking market scale has much to do with the increase in music downloads via computers and cell phones. Downloads continue to
2 expand, seemingly in inverse proportion to the drop in CD and package sales. Yet while downloads may have high margins, they are priced low, so they have yet to make up for the falling package sales. There is also the issue of illegal downloads. In view of these circumstances, the development of new markets is thought to be essential. Yet while so many industries keenly eye the global market, the Japanese music industry offers little news of active global expansion. The 300 billion yen largely comprises domestic production and imports, with exports from Japan accounting for only a minimal share. Western music has lost its popularity in Japan compared to its high point, and has given way to K-pop. While there are some voices, likely tied to the Internet community, that question the increasing popularity of K-pop, it is evident that, preferences aside, we have more opportunities today than ever to hear music by Korean artists. In Japan and other Asian countries we often hear about Korean television dramas and hear K-pop playing all day long. The spread of Korean entertainment throughout Asia is in vogue. How then, is the Japanese music industry doing in terms of overseas entry? Does Japanese music have what it takes to be accepted abroad? We asked Kato Kimitaka, leader of a project team at Universal Music that was launched this summer to develop overseas sales channels, about the current standing. Universal Music is home to artists such as Fukuyama Masaharu, Lady Gaga and KARA, and is one of the three major record companies in Japan. Kato joined the company after working for an inner-city bank, and his ten-year life in the United Kingdom up to that point landed him a job dealing with western music. He is currently the managing director
3 of the label. J-pop has, in fact, entered the global market in the past, he says. Many artists, including Sakamoto Kyu and Sawada Kenji, have entered western markets and had success. But these were only one-time successes. We ve had single successes, but they never lasted. The project aims to develop enduring success. The two strengths of K-pop One factor in the inability of Japanese music to achieve lasting success overseas was, ironically, that the Japanese market was so large. Selling music abroad requires exposure on TV, radio, and other media, running promotional campaigns and building a reputation. No matter how much the music sells in Japan, it is unknown in other countries and requires promotion and publicity operations from scratch, as a new artist. During that time needed for promotion, the artist obviously needs to leave Japan, which poses the risk of leaving a huge market. An artist once commented in a countdown program on TV that the popularity of a musical work falls when the artist goes abroad. The greater an artist s sales in Japan, the greater that artist s risk becomes of leaving the huge Japanese market. Another factor is the language barrier that every industry faces. As we all know, the Japanese are not good at English. One obviously adapts better in promotion and music production with English skills. K-pop does not have these two negative factors facing Japanese music. As of 2009, when the Japanese music market was number two in the world with a 24% global share, the South Korean market was number
4 15, at 1% (IFPI survey). While the recent boom may have changed things to a certain extent, its market scale is nonetheless much smaller than that of Japan, which means that K-pop artists face a low risk in leaving their domestic market. To them in fact, whether or not they are a hit in an overseas market means life or death. That is why they are essentially developed to target the overseas market, and they put great effort into learning language. TVXQ and KARA spend at least half their year working in Japan, and Girls Generation has members with considerable experience in the United States and Japan. They also match their styles to the market they enter. TVXQ initially targeted adult consumers in meeting the western market. But knowing that this would not suit the Japanese market, where most of the group s purchasers were teenagers, its Japanese staff promoted the group as idols, which led to its huge break. KARA speaks Japanese, sings in Japanese and promotes itself just like other Japanese idols. Girls Generation does not spend a great deal of time in Japan but runs a major promotional campaign whenever it arrives. The band also appears in fashion magazines to target its numerous female fans in the Japanese market. This is K-pop s overseas strategy. Yet Kato notes that J-pop does not have to take the same strategy just because K-pop succeeds with it. We are taking our success model in Japan directly to the overseas market, he says. The Beatles, Lady Gaga they ve spoken English in Japan, sung in English, and they ve been huge hits. So there s no reason why it won t work for the Japanese speaking and singing Japanese abroad. The entire song doesn t have to be in English; there s
5 always the method of singing part of the song in English. And J-pop already does that as common practice, so I don t think we need to change anything for the foreign market. We re not thinking about changing anything to target adults either. There are people around the world who love idols. The market that accepts both Japanese music and idols may not yet be niche, but we can always start as niche. Think about sushi and you ll understand what I mean. Fish on rice, sumeshi (vinegar rice) and raw fish, were initially niche preferences for foreigners. But the Japanese taste was exported as it was, and it gradually spread. Avocado may have replaced the raw fish in some cases, but the original fish-on-rice concept remains unchanged. It shows that the Japanese taste found its own market overseas and has fit in locally. Under Kato s method, Japan would not need to develop J-pop artists for the sake of targeting overseas consumers. Even if they are not immediately accepted, they still have the Japanese market, so they could make up for unprofitable periods. They would still face the risk of leaving the Japanese market, but due probably to the huge yet shrinking market artists are gradually shifting from their tendency of disliking entry into global markets. First we have to find good Japanese music. Kato not only checks conventional demo tapes and auditions, but has also started poring over YouTube, NicoNico Douga and other video sharing sites. Despite the painstaking work, which can be something like finding a single needle in a desert, he is happily motivated toward keeping a sharp eye on the amateur music scene.
6 Japanese music, Korean sound Focusing on the Asian market, we find that Japan in fact holds a 92.3% share in package sales and 89.3% even with downloads combined (fiscal 2010; IFPI survey). Asia does not necessarily lack the custom of enjoying music; it lacks the custom of paying money to listen to it. Copyright laws may be enacted but reality has not caught up to the law. As an example, every year China pays Japan one-tenth the copyright payment that Japan pays China, and Hong Kong and Mongolia pays Japan a fixed amount of copyright payment regardless of increase or decrease in sales. These countries seem to think that paying some or any amount of money is sufficient, since proper application that complies with the law entails complex and tedious procedures. The copyright concept came to Japan in the post-war years. Under the guidance of the General Headquarters (GHQ) of the allied forces, the Japanese used careful procedures to bring in western music, and the country is now considered the world s number one nation in copyright protection. Yet some now claim that this level of compliance hinders J-pop s entry into the Asian market. Copyrights on K-pop, on the other hand, are quite lenient, handing the music to Japanese TV stations and letting any music play over the Internet as well. J-pop comes with complicated copyright procedures, so why not make do with K-pop? This music is perfect for Asian nations where copyright awareness is still underdeveloped. So many people are involved when a piece of music enters a market: singers, composers, lyricists and musicians. We pay the copyright as the value for such work. K-pop has lenient copyright payments for a number of reasons.
7 According to Nikkei Entertainment magazine (May and November 2011 editions): K-pop is 90% visual, 10% music. Music is composed to make the artist s dancing and visual appearance look better, and lyrics are strung-together words that can reach listeners easily. What we hear is not music; it s just sound. Right from the start no copyright action is intended. Behind how Japanese music attracts fans and has become rooted as part of the culture is the presence of the musical instruments business, with such companies as Yamaha and Kawai. In South Korea and China, where there is barely any of this industry, live music isn t needed; sounds will do. The same magazine stated: Japan is the only one doing music these days. The days of paying for music software are over. If Japan continues what it s doing, it will fail to keep up with the times and will eventually have trouble shouldering all the people working for the music industry. This is the alert that some people voice today, but Kato argues against it. Yamaha recently entered China, where those in the wealthy class can now give their children the educational benefits of piano and Electone organ. They are developing a group of people that will listen to music, he says. Asia is undergoing economic growth. If wealthy classes increase in other nations as well, we can easily anticipate an increase in the number of people who listen to music. What do we do with the copyright business?
8 So what is K-pop looking for in terms of income? The answer is concerts. In the music industry, package sales are declining and music downloads and concert attendance figures are rising. This is a global trend, and concert attendance is again actively rising in the United States. In Japan as well, live shows by individual artists and major concerts around the nation are playing roles in heightening appeal within communities. Concerts gain income from ticket sales as well as merchandise sales. CDs and music videos are also sold at the venue. Major costs include paying for the artist and band, labor costs for the crew, advertising/promotion fees and venue rental. Yet holding concerts in Asia poses an obstacle for Japan. The huge difference in commodity prices compared to other nations raises a concern of the income not meeting the costs. K-pop has an advantage with its slightly smaller difference in commodity prices, and, above all, no instrumental bands are used. They focus on visual appearance, so live instrumentalists are rarely present. Most concerts are computer-driven and done in a karaoke style, and it is not rare to see a three-hour, sixty-song concert in front of a 10,000-plus audience without a live band. How can Japan overcome this disadvantage? Concerts are usually done with a sponsor, so the budget should ideally be met, Kato says. Even when you run at a loss, you consider it an advertising cost and you get what you paid for. If the audience is too small, you can do it karaoke-style, and this allows flexibility. But having a live band is an advantage. Music is all about whether or not it excites people. The excitement you get from a live band and a computer is completely different.
9 Releasing music on the Internet under lenient copyright protection, as with K-pop, makes sense when the business is about gaining larger audiences at concerts. If more releases lead to hits with a packaged product, it raises fame, increases audience numbers and will cover a zero copyright fee. Ease the copyright and go with the sound, or manage the artist and do the music these are the two major trends that support the music industry today, but it is not really about forcing a one-or-the-other answer or fighting over which is better. If the two stimulate each other, create a synergistic effect and develop themselves, it will offer large benefits to both the industry and the consumers. The challenge for Japan riding the latter trend is in how it will go about heightening Asian awareness on copyright issues. We would let them know that if they produce a single hit, it will continue yielding income for the next fifty years. Japan has protected copyrights and developed the world s number one market. If Asia learns about this success, things will definitely change. Of course we will need to develop laws, so we expect the Agency for Cultural Affairs and the Ministry of Economy, Trade and Industry to provide support, Kato says. We want to export Japan s finest works, he adds. As to whether there is a possibility of selling enka abroad, he firmly states, That s almost the ideal of what we want to do. Music is culture, and the hope is that J-pop will come to spread Japanese ideas around the world. Translated from J-POP ga ajia wo seisu ho (How J-pop could conquer the
10 Asian market), Voice, December 2011, pp (Courtesy of PHP Kenkyusho) MAMIYA Fumiko Born 1955 in Oita Prefecture. Graduated from Faculty of Law, Kokugakuin University. Became a writer after working for a notary public s office and a law office. Reports and writes primarily on corporate back-office subjects such as legal, personnel and public relations matters.
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