General Overview ofJapanese Market-10 things you don’t know about
Japanese Music Market-

Jan, 26th , 2013
Japan Stand ／ MIDEM2013
Riviera HallCANNES , France

General Overview of Japanese Market

H ⇒ Haji Taniguchi（Chairman, Music Publishers Association of Japan ）J ⇒ Jonny Thompson （General Manager, Nichion International, Nichion, Inc.）

J： Ladies and gentlemen, we’re going start in a few minutes but before we do, I actually need somevolunteers. The presentation that we’re going to do is a little bit different than the usual kind of market
overview presentation. I’m not a big fan of lots of numbers, lots of data, things like that. But what
we’re going to try to give you is a kind of general picture of what goes on in the Japanese market. But
as we do that, just to make it a little more entertaining, a little more exciting and a little more fun,
we’ve actually done it in a multiple choice type of question, where you can actually choose the correct
answer.
Japan is very big on game shows and I know they have these crazy game shows, whether it’s A orwhether it’s B or whether it’s C, if you get the correct answer. Imported, exclusively for your use fromJapan, these very handy, multiple choice answerable flags are here, so we can do this in one of two
ways. If you’d like to raise your hand and say “Gee, I kind of like to participate”, here we go. I can use
some help to pick some volunteers from the audience.
There are multiple choice. There are actually several questions within the multiple choice series
where we have some very nice looking refreshments from Japan sitting over there. I’m not exactly
sure what those are. I think they are Wasabi - what are those, actually? Wasabi Japanese ricecrackers.

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-10 things you don’t know about Japanese Music Market-

I can’t do it for every questions. I can do it for some of the questions. I will let you know inadvance what the questions are. If it was nicer, you know, somebody who got all ten answers, we
could fly you off to Japan. Maybe next year we’ll do that. So if everybody is ready, I guess we canbegin in maybe just a couple of minutes? We can begin?
Ladies and gentlemen, I’d like to introduce you to Mr. Haji Taniguchi, of Avex Music Publishing.
H: Thank you very much. I am also, the chairman of Music Publishers Association of Japan.
J:

We thank MPAJ for giving us this opportunity, to kind of give you, as I said earlier, the general

overview of the Japanese market. I’m very nervous right at the moment because one of the major
publishers that we represents is standing right to my right here, so if I don’t do - (Laughter), who mayquestion me on some of these answers later on.
Just a word of caution before we begin. Japan is very unique in one way and that it’s not acountry that has one set of data that we can all point to and say “This is accurate” or “This isn’t
accurate”. There are multiple sources for data in Japan. For example, there is the RIAJ which is the
Recording Industry Association of Japan. There is JASRAC which is the copyright society. There is
MPAJ, there is Oricon which is the equivalent to Japan’s billboard. There are multiple sources that wehave to rely on to give some of these information to you. That information varies between different
sources, so we’re just trying to amalgamate it as best we can, to give you a general overview.
The reason why I’m saying this is, if tomorrow suddenly everybody’s Facebook and Twitter pages
give all kinds of answers saying Japan is like this and like that, somebody may be saying that’s notcorrect, or maybe it’s a different number. But in general, most of the information that we’re giving actually all these information we are giving you is very accurate and accurate reflection of what’s inthe market at the moment.
So, as we go multiple choice question, we’ll go for the first question. Question Number One.
H: It’s an easy one, isn’t it?
J: Yes it is, actually. Maybe not so
Slide1easy. So Japan is the number one
which: A. music market in the world;
B. physical market in the world; or C.
performance income market in the3Music Publishers Association of Japan

General Overview of Japanese Market

world. By performance income, I mean copyright performance income. So which of the three?
Anybody who has the-? All right, we got Cs. We got Cs. Lots of Cs. Bs - Bs and Cs. Taniguchi-san,can you tell me what the correct answer is? <Slide 1>
H: I think the correct answer is, Japan is the number one physical market in the world.
J： That is correct! Japan is the number one physical market in the world, as of 2011. We don’t havethe data yet for 2012.
H：Right. Here is the figure <Slide 2>. As you can see, Japan is far larger than any other market, as
Slide2

far as the physicaldistributionisconcerned.

It’s

huge,

actually,

isn’t it?
J： It is very big,and actually thephysicalmarkethas increased inJapan last year,th

As of Jan,26 ,2013

year

on

year

compared to prior year, so it’s still a huge part of what makes up the Japanese market. We are verymuch a physical market in Japan.
H： Why is it so?
J： I think part of the reason has to do with the way Japanese society is in terms of how they still liketo keep and maintain, have some kind of tactile or physical thing to touch. Also, there are other things
involved. There are still rental CDs in Japan, and there’s other market factors are involved, you know,
but it is a very robust and very healthy, and actually it’s a very growing physical market in Japan. So
congratulations to the people who got the
Slide3right answer.
By the way, performance is actually, inJapan, we are the number three market in
the world in performance. And in terms of

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-10 things you don’t know about Japanese Music Market-

overall market, Japan is number two music market in the world, just behind United States.
H： Let’s move on to the next question.
J： Now, this gets a little more difficult. So Japan’s digital sales are: A. greater than physical sales andincreasing; B. less than physical sales but growing, or C. less than physical sales and declining <Slide
3>. Anybody want to go for answers? We have A’s. We have A’s and B’s - and B’s and B’s. Actually
the correct answer is C, isn’t it? The correct answer is C. Very good. Japan’s market is actually, in
Slide4

terms of - go ahead.
H ： Yes. As far as
Digital distribution isconcerned, as you cansee <Slide 4>, theblue portion, this is the
size

of

Digitaldistribution.

And ifth

As of Jan,26 ,2013

you compare that withthe pink portion whichis the physical as you have seen before, it’s much smaller. By the way, this is what Johnny had said.
If you combine physical distribution and digital distribution, Japan is number two only next to theStates, but still, the point is that US and Japan is more than twice as large as any other territories.
Again,this is the digital distribution portion. As you can see, for the past 4 years or so, it’s been
declining <slide 5>.
Slide5

J ： Part of the reason digital isdeclining in Japan which makes it veryth

As of Jan,26 ,2013

unique is that all during this period oftime, Japan was primarily in mobile
phone download base digital market.
As a matter of fact, around about
2007 and 2008, Japan’s digital market
was 90% mobile phone based andonly 10% internet/PC based. Digital

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General Overview of Japanese Market

downloads to mobile phones were popular in Japan because each of the mobile phone companies had
their own proprietary encoding systems for music, so if you downloaded music to your phone at thetime, you couldn’t transfer the music to any other phone. You could, but you had to go through somevery illegal technical processes.
So, what happened was, if you go back to this line, during this period of time, it was 90-10.
Somewhere around 2010 and particularly during last year, the transitions to smartphones occurred,
and as a result of that, the market has dropped very rapidly. As a matter of fact, off the record, mobile
downloads and sales could potentially disappear within five years and that is a view held by many inthe music industry.
And just how much it’s dropped is pretty incredible. Comparing 2011 to 2012, up until Septemberof 2012, the mobile download market in Japan has dropped both in terms of value and in terms of theactual number of downloads, 40% compared to last year. So it’s definitely declining.
At the same time, PC-based or internet-based downloads have increased by 25%, so we areseeing an increase on PC or internet based and decline on the mobile side, and overall, that contributes
to about a 30% decline for the digital market
Slide6in Japan.
That’s not to say that there isn’t a digitalmarket.

It’s just much, much smaller.

Currently it only makes up about 20% of themarket. On a copyright basis, it’s significantly less than that, which we’ll get to in a minute. So
anyways, that’s the overall kind of digital picture at the moment.
This is probably, everybody’s going to get this right, I think. International sales in Japan are
greater than 50% of the total market; less than
Slide7

50% of the total market or equal to 50% of the total
market? <Slide 6>. David, what do you think? A!
We have A’s. We have B’s. We have lots of B’s,
actually.
Actually the correct answer is - you’re right - thecorrect answer is B, less than 50%, yes.
H： Here is the correct answer <Slide 7>. It’s only

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16%, actually. Those of you who aren’t creators, directors and publishers from outside of Japan,
primarily you are looking at this market in Japan. But if you are songwriters or publishers, of course
there are chances of having your songs recorded by Japanese artists. In that case, songs will bewithin this side of the market.
J： Traditionally Japan has been, for a longest period of time, it’s been 75% domestic, 25%international. Over probably the past 10 years, just the Intrernational part of the pie continues to get
smaller and smaller. There are a number of reasons for that, some of which would be discussed
maybe in some of the seminars that happen tomorrow, one of which is on co-writing and pitching.
But it is declining, and the actual physical sales, even though still relatively strong as we still haveinternational artists who sell over 200,000 copies or maybe 300,000 physical copies, but it’s still a very,
very small pie, and it continues to decline which is worrisome for those of us representing international
repertoire.
Year on year, for the past two years, international actually went down in volume and went downin value 20% for two years in a row, so we lost about close to 40%, if not so of total market value interms of what occurs Internationally. There are, but as Taniguchi-san said, there are other things thatare happening to counterbalance that which is this part of the physical pie, also includes a large
number of international songwriters who have contributed songs to major Japanese artists. And thatmakes a huge difference and that’s also accounted for some of the growth on the domestic side as
well. You know, I don’t know what the pink means.
H： I just realized your shirt matches it.
J： Thank you, yes it does. Now, this gets a little difficult, because we’re mainly talking about
Slide8copyright a little bit. Copyright income in Japan
which is very, very important. Japan is, I thinknumber - I was going to say number two or so interms of copyright income in the world. In order,
what

are

the

highestcopyright

incomecategories? What are the categories that generate most revenue in Japan in order? <Slide 8>A, we have Performance, CD Mechanical, Digital and Videograms which would be videos andmusic videos. B, we have a different order. We have CD Mechanical, Performance, Karaoke andDigital in the Japanese distribution. And C, we have Performance, Videograms, CD Mechanicals, and7Music Publishers Association of Japan

General Overview of Japanese Market

Digital. Now, it gets a little confusing looking at all this, so just take your best guess to what seems likethe one. Lots of B’s.
H：Lots of B’s.
J： Yes, after all this talk about how big the mechanical market is and how big the physical market is,that’s where I obviously would go. But actually the answer is-?
H：I’m not sure, but I think it’s C, isn’t it?
J： You are correct.
H：It’s C.
J：It’s C by about this kind of margin which is pretty incredible, actually<Slide 9>. Performanceaccounts for 49%. Physical music videos account for 18%. CD mechanicals 17%, digital is 9%,
karaoke is 6% and printed, 1% of the digital pie in Japan. This part is huge primarily because JASRAC
which is the copyright society in Japan has in

Slide9place, particularly on the television side, hasblanketagreements

in

place

with

the

broadcasters. I can’t say anything further thanthat. My parent company is a broadcaster. But
tomorrow, there is a seminar on sync, which
will cover some of that and discuss why thispart of the performance side is so huge. Part ofit also, a large part of it has to do with the television commercials in Japan and how music is used in
television commercials in Japan.
The other interest thing is, getting back to the physical side, you both have CDs and you bothhave videos which are DVDs and Blu-rays accounting for close to 35% of copyright income in Japan.
This part of the pie far over here, in one year, compared to 2011 to 2012, actually grew by 18%,
which probably, compared to any other market in the world when you think about sales moving todigital, physical actually increasing and certainly DVD physical is increasing. It’s pretty unique andpretty incredible.
Even so, just on the copyright side, because of the fact, even though there are still downloads,
because of the shift to smartphones the margins are getting smaller, and so digital only still accounts
for 9% or 10% of the total copyright income in Japan. On the master side, it’s close to 20%, on the

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copyright side, it’s a much, much, much smaller share, which also, in a country where we yet to haveSpotify and we don’t have any major streaming services for music, is a very worrisome trend as well.
H：It’s a trend for its revenue. Only 10 years or so ago, the split was like one third performance or
one third mechanical and one third everything else.
J： Yes, there’s been a big change. I think it’s a reflection of - certainly the domestic side is much
more physical market, but also the fact that in terms of digital, the growth in Japan is very, very slow,
and will continue to be slow I think for a period of time.
H： We should also note that - this figure is from JASRAC, Japan’s copyright society. The total
revenue of JASRAC has been quite steady in the past 10-15 years, pretty much the same amount forthe past 10 years. It’s only the allocation that has changed.
J： I think the good thing to say is that the pie chart itself changes, as Taniguchi-san is saying, andcertainly JASRAC itself, year on year, usually is either marginally up or down or the same, so it’s a very
stable copyright market in that regard. But the parts of the pie have certainly changed significantly
over the past 10 years or so.
H： Next.

Slide10How many million-selling physicalsingles were there in the year 2012, which is lastyear? A. 5. B. 0. C. 2? I see A’s. <Slide 10>
J： Lots of A’s.
H： Only A’s.
J： A is correct. You’re actually all very right. Very good.
H： Yes, there were five million-selling CDs last year, but amazingly, those five singles came from thesame group, for AKB48.<Slide 11>
J： If anybody asks me to name all 48, I’m leaving. I can’t do that. Taniguchi-san’s correct. AKB48
Slide11have 5 million-plus-selling singles
in one year alone. This group of48 girlsH： I think more than 48.
J： Actually there is more than 48.
They account for about US 200
million dollars in music revenue

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General Overview of Japanese Market

with one group. Just one group. I think their biggest selling single is 1.82 million copies for a CD single.
It actually still exists in Japan. We have all round pieces of plastic that you can still play in the CD
player. I’m not even accounting for a lot of the digital sales, but primarily the physical side, that’s 5
million-selling singles for one given artist, which is a huge number of singles.
As a matter of fact, we just received the figures yesterday and for 2012, the Japanese market, in
terms of the total music market, increased by 8% over prior year, which means this group probably
accounted for maybe 4% or more of that just on their own, just in terms of sales by itself. Can youname all 48?
H： I can name three of them.
J： I’m not going to ask.
H：Question number six.
J： Actually, this is, I think it’s time that we give something away, as this is going be something wegive something away for, so we give something away for the right answers for everybody here. Go
ahead.
H： Excluding K-pop and Adele’s “21,”what was the biggest selling international album in the year
Slide12

2012? <Slide 12>
J： Now it gets tricky. This is not so easy. Oh
come on, there is - you want to wave the - thereis good food over there. There is here we go. We
got C’s. We got B’s. We got A’s. This is - we got

A’s? The correct answer is actually B. Anybody has B’s, we can-.
H： We got B’s?
J： Yes, we got B’s.
H： All right.
Slide13

J： These are the numbers<Slide 13>. Now, if wego back to what I said earlier, if you looked at thequestion, excluding K-pop because there were10
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-10 things you don’t know about Japanese Music Market-

several artists in K-pop that were a little bit above this. And we also exclude Adele’s “21” even though- well, we did that because the timing that the album was released. So if we’re just looking at locallypressed albums that were released in 2012, that’s the ranking order of the albums in Japan.
This album by this artist, Che’Nelle “Believe”, is unique in that it’s an international artist that’s
developed in Japan, locally, by a Japanese label for the Japanese market. I’m sure they’d like toexport it as well. But that was primarily what they did. And I believe this album, there were covers ofJapanese songs in English, and she also did some other originally written songs as well. But that kindof gives you a picture of where the international market is in Japan.
We talked about AKB48 earlier in their sales of 5 million-selling singles. The best tha Internationalcan do, and this is even the Japanese locally developed artist, so if we get down to the next level, we’relooking at something like Linkin Park at 140,000 copies, which is about where the international market
is in Japan now. If you can sell anything above 100,000 locally-pressed physical album copies in theJapanese market as an International artist, you are doing very, very well. As a matter of fact, thethreshold now is closer to 50,000 copies.
But on the other extremely, you have Japanese artists who are selling 10 times more thanInternational artists.
H ： Maybe, if you’re going to produce good sellinginternational artist, they should always follow what
Che’Nelle did?
J： No. {Laughter} It depends, I think. I think the pointthat Taniguchi-san is trying to get me to make is, theimportant thing is that there is a market for Internationalmusic in Japan.

I think what’s very critical about theInternational market in Japan is, at some point we got away from kind of tailoring International artists
or songs for the Japanese market, and I think that’s hurt a lot of International sales in Japan.
If, again, whether it’s the song, whether it’s the artist, there are different things that can be doneto help an International artist become successful in Japanese market. Some of those, again, will be
discussed tomorrow. There are different steps to be taken to be able to do that. But just to give you aquick run through some of the other artists that we’re talking about, and where they rank in terms ofJapan’s combined Domestic/International chart. This Che’Nelle album is actually, with Japanese

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General Overview of Japanese Market

albums and the International albums combined, that album is actually number 22 on the combined
chart, so there are 21 other, domestic artists which have physical sales that are significantly higher
than that.
Just the run through some names that you would befamiliar with.

Right after that, Carly Rae is at about

number 44.

Maroon 5 is at 57 with 110,000 copies.

Taylor Swift is about 100,000 copies at 64. If we startgetting way down lower, Lady Gaga - yes that was a little
earlier but still selling in Japan, and that was 90,000.
Madonna was 83 at 80,000. And then we get down at
Offspring at 100, with about 70,000 copies.
So that’s kind of where, as I said earlier, that between probably the 50,000 mark and upwards of
100,000 or 150,000 is really what you are looking at in terms of International sales, which is a lot lessthan it was certainly 10 years ago, and even a couple years ago, as a matter of fact. So there are,again, it has to do a lot with the music itself. It also has to do with the fact that Japan domestically has
incorporated so much of International into its own music that the fan base in Japan is used to listening
to domestic songs which are much closer to Western songs than they’ve beenbefore.
H：What percentage of music consumers purchase CD in Japan? <Slide 14>.How many of them
Slide14

would actually buy CD’s? A. 25%. B. 15%. C.
35%? C - C - C…
J： Everybody’s got this right. You are correct. C iscorrect.

Somewhere around 35% of music

consumers in Japan still actually purchase CD’s.
Now, if we start getting into demographic breakdown of what that 35% is, you will find that it is largely
a much older audience, actually. It’s actually an audience that’s somewhere between - actually above
30 and above who continue to purchase CD’s.
But, that doesn’t rule out the younger age group which is somewhere between 14 to 22 which isout purchasing all of the AKB48 singles, and as a matter of fact, 14 to 20 year old guys and the otherguys are buys AKG singles. But it’s still a very, very heavily CD based and still a large part of the
populations still do purchase CDs in Japan.

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This doesn’t necessarily mean the rest of them download. Matter of fact, what’s not in here isJapan still has a very huge rental CD market which most consumers still rely upon to get their music.
As amatter of fact, most CD releases in Japan are available at your local rental store usually for somecases a week and most cases a day after the actual release, so you can actually go and physically renta CD and then go back and rip it into whatever player you want.

Whether that’s good or bad isanother point. Next.
H： It’s a bonus question.
Slide15

J： We should giveaways for this as well.
H：How many CD’s per year does the average
Japanese music consumer purchase? <Slide15>. A. 2 CD’s. B. 9 CD’s. C. 5 CD’s.
J： We got A’s. We got C’s. We got - lots ofC’s. Actually the correct answer is B. It’s about 10 CD’s per year, somewhere around that per year.
Actually, anybody with B’s will receive a prize. Again, that’s a little bit of an older market, but still, by
CD’s we’re talking either singles or albums but this is primarily an album based question. That 35% of
the market is still purchasing about 9 or 10 CDs per year, at a pricing threshold which is very
interesting, which we’ll get to in a minute.
But it is, again, this is just to emphasize the fact that it is still a very healthy, still a very robust
physical market, and there are still, even though we’re talking the entire world about the impact ofdigital and certainly it’s already happening in Japan and will continue to grow, the timetable for thatgrowth is probably much different in Japan than it is in the rest of the world.
H： Question 8. What was JASRAC’ s top income earning foreign song in the year 2012? <Slide 16>.
Poker Face - Lady Gaga; Shall We Dance? -Slide16Rodgers & Hammerstein; Each Other’s Way EXILE.
J： All right. What do we have? We havelots of C’s and B’s. We’re all across the board,
actually, which is very good.

The correct

answer is B. Can anybody take a guess as to why it might be B? Do you know why it’s B?

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General Overview of Japanese Market

Female1: It might be that Japan’s great tool is English teaching and English speaking and- I don’t
know. What is it?
J： You’re close, actually. The reason why Shall We Dance? is JASRAC’s top income earning foreign
song in 2012 has largely to do with one factor which is television commercials. It’s been used for aparticular brand for a long period of time, and it continues to be used. And that generates a hugeamount of performance income in Japan. If you attend tomorrow the Sync Seminar which I would
encourage you to do because it’s a very - the sync market in Japan is much, much different than it isin any place else in the world. And a large part of that difference has to do with the fact, one, whatkind of songs are used in television commercials, but two, where those songs generate revenue. And
it isn’t necessarily always the sync. There is another component that goes in it. If I give this away, myfine colleague in the back wearing a hat will be angry at me because then he will lose something to talkabout tomorrow, so I’m not going to tell you yet.
H： I was going to say that if this is really the foreign song, because EXILE is a Japanese group, pop
group.
J： It would be wise for Taniguchi-san to talk about EXILE because they are Avex-based artist which
will be very - {Laughter}. What’s interesting about this is, you have - actually there are multiple
components in one question. Shall We Dance? as we talked about before, being the standard song,as used in a lot of television commercials as most standard songs in Japan do. Lady Gaga’s Poker
Face, because of the fact of what Gaga did worldwide and how successfully she sold in Japan physically,on the physical CD bases. It’s in here less in performance, more physical base.
But why is there a Japanese artist on the foreign income earning song list? And the reason forthat is, this song is actually a co-write by two International song writers and the Japanese song writer.
And the song is written by an International writer. It’s considered a foreign income or foreign income
earning song. This single, I think, sold - don’t quote me on this - I think it was close to - I don’t think it
did a million copies. I think it was 700,000 copies or something like that, which is a huge number inJapan.
But the important thing about that is, we’ve talked about the decline of the international market
on an artist based side, but at the same time, there has been an increase in the International market
on a songwriter base. International songwriters now have an opportunity to get their songs placed in
the Japanese market which is something we’ll talk about in tomorrow’s Co-write seminar.

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Just to give you an example, there is a company that we work closely with, an independent songpromoter. They had somewhere around about I think 120 songs cut last year. One company, withwriters from Scandinavia, writers from Germany, writers from US, writers from all around the world;
and those songs get placed - unfortunately they don’t get placed in the AKB48, that would be really
nice, but unfortunately they don’t quite make it there. But they do get placed with other Japaneseartists who are very successful, such as EXILE. And by the way, EXILE is Japan’s second largest selling
artist. AKB48 accounted for about 200 million US in the music sales last year. EXILE accounted forabout 120 million US in sales last year, in terms of - I’m talking dollars, not total songs.
It’s just to show you that there are multiple sides. You can still be successful as an International
artist and generating a lot of income. You can, obviously if you have a catalog or a very good standard
song that people are very familiar with in Japan, there are opportunities for that in televisioncommercials and other usages.
But, also, if you have songwriters or if you work as an artist yourself and are also a songwriter,
there are avenues for you to get your songs placed with Japanese artist, and also achieve the kind ofsales that we see here for foreign songs. Let’s move on.
H： Question number nine. What is the average price for a CD album and CD single in Japan? A.
Album 10 Euro / Single 5 Euro; B. Album 20 Euro
Slide17/ Single 10 Euro; C. Album 15 Euro / Single 7.5
Euro.<Slide 17>
J： Everybody look at this, this is all - we got lotsof C’ actually, and there are a couple of B’s.
H： I see some B’s also. I do see some B’s, yes.

J： The correct answer is B. Very high price point in Japan. It continues to be a very high price point
in Japan. We just talked about this earlier. That’s 10 CDs a year. 35% of the market is still virtuallypurchasing physical CDs. 20 Euro adds up very quickly. For singles, for something like AKB, that’s
about 10 Euro per single. And we were talking about DVD sales earlier. For some of these artists, if
you put another line over here with DVD sales, the average DVD is somewhere around about, for amusic DVD, somewhere around about, I want to say, close to 60 Euro for a physical DVD.
Now, a lot of those artists are idol artists and there is lots of extras that go into the DVD packaging,but still, if you think that something that costs 60 Euro has increased in one year 18% of the previous

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year, it’s a pretty incredible number to think about how much physical side still continues to grow inJapanese market.
H： This is really one of the reasons that Japan still has a very healthy physical market.
J： And remember, if it’s a domestic artist and it’s a domestic release, where else can you get it?
Nowhere else. So, maintaining those price point isn’t necessarily that difficult in a market where Japanis the only place, realistically, you’re going to be able to purchase that product; which kind of helps
Japan maintain certainly not only its price points but certainly it really makes domestic very, very, very
important in terms of anything in Japan, and how you deal with the domestic market really determines
your future in terms of working in the Japanese market as well.
H： Now we’ll move on to Question number 10, which is the last question. Which country generates
the most foreign income royalties for Japan on

Slide18

a copyright basis? A. USA; B. France and C.
Korea. <Slide 18>
J： It being the last question, we’ll give awaysome more goodies with this as well. What thisbasically means is Japanese music outside ofJapan generating income outside of Japan, what country generates the most for Japanese musicoutside of Japan. Go ahead. I need to see everybody’s answer. A - we have A. We have C’s. We
have lots of C’s actually, lots of C’s.
Yes, it would look like that, wouldn’t it? Fine folks in Korea is just over there. Actually it’s B. It’s
actually B. I don’t know if there were any B answers, but it is actually B. France accounts for, in termsof income outside of Japan for Japanese repertoire, France accounts for nearly 20% of all income fromaround the world, which is pretty surprising if you think about it. There is a very healthy market inFrance for J-pop and also idol pop. It was surprising to me as well. I didn’t know. And this figure has
been for two years running now, in 2011 as well as 2012. So it’s very consistent.
Korea is actually way, way, much lower than you would anticipate on the list. As a matter of fact,
I have a list that I’m not supposed to tell you so you didn’t hear from me. But actually the number
one is France. Number two is Italy. I have no idea why. Number three is Germany. Number four isHong Kong and number five is actually Korea.

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So, Europe actually is a very strong market, more stronger than we probably anticipated or think
about for Japanese music, which means there are lots of opportunities for, I think that’s part of thereason why European song writers have had success in Japan; maybe European artists as well. But it
is a very huge - it’s very important for Japan obviously to continue to be able to export its music out,
but where it places its priority, going forward, I think this kind of shows you that maybe developmentin Europe is certainly, and territory throughout Europe might help lead to some additional income forJapanese music outside of Japan.
H： Japanese culture has been introduced to these countries in Europe, and Anime, for example, hasbeen - Japanese Anime has been brought into France, Italy and many other European territories foryears now. They use Japanese products in their broadcasting. That’s probably why. That’s probably
one of the reasons that Japanese music is generating lots of royalties in those territories.
J： That’s kind of just a big general picture, again as I said earlier, varying numbers across different
sources, but it kind of gives you a little of a glimpse of what the market is line in Japan. Again, we’regoing into some more details tomorrow. There is a Co-writer seminar at 12, and there is the Sync
seminar after that in Auditorium I, so I’ll do questions in a second. If you want to learn a little bit more
about issues on those topics, I would encourage you to attend these sessions.
But we still have some time. I’m actually out of time. We still have time, so I’ll be happy to open
up to questions. Go ahead.
<< Q&A >>Male1: How do you define a music consumer and a non-music consumer?
J：That’s a good question, actually, and what I was worried about the most was I was going to get aquestion like I am getting here. (Laughter) The way that Japan does it is, the reason why we limited
it at the music consumer was the survey itself that was done was with people who actually purchasemusic. They are obviously people who don’t purchase music, who listen to it via other means. So, thebasic meaning of that question is just somebody whether it’s a physical CD, whether it’s a download,some form of actually purchasing music is what they consider to be a music consumer. A non-music
consumer would be somebody who doesn’t actually purchase music.
Now, that actually includes rental as well. So anybody who rents a CD is considered a music
consumer also, so it’s a pretty broad market. I had it just as consumers but I was asked to limit it to17Music Publishers Association of Japan

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music consumers. I hope it answers your question. Does anybody else have any questions? Anythingelse?
Male2: I had a question; what about foreign artists singing in Japanese? Do you think that would
affect success of foreign artists in Japan?
J： There are varying debates on this. Taniguchi-san, how do you feel about foreign artists singing inJapanese?
H： I think it’s cheesy.
J： That was direct.
H： I don’t know - I can’t think of any song in Japanese by non-Japanese artist. I mean, hit in Japan.
Can you think of it?
J： It’s not impossible. But it’s extremely difficult. It’s going to be interesting in the coming years
because with all the exposure to the Japanese music and all the exposure to the Japanese Anime andall kinds other things, I think we’re going to see more and more individuals like yourselves who aregoing to be saying - no, seriously, who’re going to say, “You know, I get it, and I can hear it, and I
want to try it”. If it was 10 years ago, I probably would have said, “Never”. I would probably agreewith Taniguchi-san as well, you know, it’s cheesy, it’s kind of - it’s cheesy in a sense that you’re nevergoing to be able to convey the same kind of emotion in Japanese regardless of how good yourpronunciation is, much the same way that Japanese artists trying to sing in English wouldn’t be able toconvey the same kind of emotions as well.
But, at the same time, as music changes, and depending on what kind of music you are doing,that may not necessarily be that important. As a matter of fact, there is a lot of us who believe thatmaybe it’s not really necessary to have Japanese artists singing in English overseas. Just have themsing Japanese is good enough. So by the same token, would I say just don’t do it? No. Is it difficult?
Yes. And you’ll get a lot of people who will say, “Nah, nice try, it’s great, but it’s just not going to work”
but somebody will take a chance.
H：Having said that, what do you think about other Asian artists? They are non-Japanese, most ofthem are singing in Japanese, and probably because they are Asians, we don’t really consider foreign
artists, Chinese artists, non-Japanese. But they are non-Japanese. I don’t know.
But if I see a great singer coming to Japan - actually residing in Japan, singing in Japanese, I don’t
know. I think the artist’s performance should be first successful in their own territories.

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J： I agree. Go ahead. I think somebody else has a question. Somebody else?
Female2: I’m just going to comment that culturally, in Japan, there is this sense of purity and thedesire for non-intermarriage, that kind of thing historically. And that would make a Western-looking
person sing in Japanese, it would be like fingernails on a chalkboard, to my Japanese friends who said
that.
J： I would agree to a certain degree. However, being a product of a Japanese mother and an
American father, it’s difficult for me to respond to that.
Female2: Were you raised in Japan?
J： Both. I would agree with you to the extent that, as I said earlier, it’s not easy. It’s difficult. A lot of
it has to do with cultural bias. There are some that exist. But I think more has to do with the emotionof the song, what they are able to convey in a song. There have been many numbers of Japaneseartists who have tried to travel outside, and it just doesn’t work. No matter how much money you
spend, whatever.
But that’s not to say that there are not other ways for the music to travel both ways. Not to soundlike a broken record just emphasizing the fact that other than artist based development in Japan, there
is also songwriter based development, and the song really can travel anywhere in the world regardlessof what the lyrics are, regardless of - because those lyrics can be translated. It would actually be donein Japanese again. So I think if you look at it from purely artist’s standpoint, yes it’s difficult. But there
are ways in the market. Anybody else?
Female3: Hello. In the presentation you may have already spoken about this. I’m interested toknow how strong is Classical music in Japan?
J： My boss will probably have a better answer to that. That’s a good question. The market sharewise, it’s not very big, actually, very minimal. Afterwards, when we are done, I have documents overthere that would tell me exactly what the percentage is. My guess, off the top of my head, I want to
say less than 5%, but I might be wrong. But it’s close to that. It’s not huge. But I can show you justwhen we are done. Promise. I can show you.
H： Classical music in Japan is one of the categories that probably create more income from live
appearances etc. than from recordings.
J： Sure, go ahead.

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Male3: Hi. In regards to the international co-write, what would you say trending wise, would it bemore successful for the song to still be in English but still sung by the Japanese artists, or could songs
translate and do, be more successful in the sense?
J： I would not want to go into self-promotion, but tomorrow, we’re getting into a little bit detail onthat. The short answer to your question: any song that’s written by an International in Japan, 95% of
those songs will be sung in Japanese. That song that you’ve written, when it gets to be done inJapanese, there will be a Japanese lyric writer who would write original Japanese lyrics to that song
regardless of what the lyrics you’ve written.
Communicating the message of a song in Japanese becomes very, very important, so it’s not to
say that they disregard the lyrics. Matter of fact, they may use part of the lyrics within the song. But
it’s very rare for a Japanese artist to sing100% in English. So you have to be prepared for the fact thatyour songs will go under some major changes in terms of what’s going to happen. But then it
becomes the issue of your wonderful song having a chance to be on an album in another market in
the world or is it better to just really protect it and have it sung the way you want to have it sung? And
that’s something for each individual song writer to have to decide what they would think is best. But it
will be done in Japanese. And your lyrics, as important as they may be, will be largely - I don’t want to
say ignored, but won’t be used.
H：That’s the short answer?
J： Tomorrow is the long answer.
Female4: My question with you is actually there are two. You talk about co-writing and songwriting
with Japanese artist to get you introduced. What type of material are they interested in?
J： Everything.
Female4: Can I get your card and make an appointment?
J： You can make an appointment afterwards. We’ll talk later and we’ll figure out. But no, you’re right.
That’s a very, very important point. One of the points is going to come up tomorrow, actually, in thesync side as well. It’s very important. We get the same question all the time which is, where do I go?
This is all nice and this is what the market’s like, and what you can do for co-write opportunities andwhere it is. But who do I talk to? And that’s the hardest part. That’s something that we really haven’t
solved yet. Others who come into places like this, we hope to do more of that.

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Part of the reason for doing this kind of presentation is to make everybody a little more aware of
the fact that there are opportunities in Japan, as it is difficult to meet the right people, but much moreso than it used to be. I think there is a lot more people who are actually looking for good songwriters.
I know Taniguchi-san is also really, in fact, still looking for songwriters, many international
songwriters are actually signed directly, not to original publishers but directly in Japan. My company
does the same way as well. There are others also. The good thing is, it’s changed. There is a muchbigger markets for songs in Japan. The hard thing is, it’s a multi-stage process, so you have to getused to writing for the Japanese market. And that’s not necessarily easy. It can be frustrating. It canbe time consuming. And it takes a lot of patients. It also takes a lot of flexibility. But if you persevere,
you can sometimes have tremendous success. But it’s a good question.
Okay, I’ll stop. I’ve been told to not talk anymore. Okay. Probably too much. I think the reason
why is, for all of you, I thank you very much. We’ll hope to do this more, maybe next year withdifferent information. At the same time, as I said earlier, there are two other seminars tomorrow
which well go into greater detail on these points particularly. So, again, I thank you all very much forattending.
(End)

The data which I introduced in the sentence are past. There is a part unlike the current market situation.

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Music Publishers Association of Japan
www.mpaj.or.jp

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