The Japanese music industry’s digital-music revenues rose just 5% in the first half of this year, according to figures released by industry body the RIAJ.

The market generated ¥22.9bn ($191.8m) of digital sales, and although there was growth to report in download sales and streaming subscriptions, there was continued decline in mobile tracks and ringtone sales – although physical sales rose by 1% to  ¥109.3bn.

Mobile sales have been falling for some time, so the 31% drop in master ringtones and the 23% drop in ringback tones was no surprise.

So what about newer formats? Sales of single-track downloads fell by 7% to ¥9.8bn, although album downloads rose 14% to ¥4.7bn. “Internet download subscriptions” rose 43% to ¥5bn in a market where the big western streaming services have yet to launch, and even local services are still relatively thin on the ground.

The picture in Japan is of a market still dominated by physical sales – digital accounted for just 11.6% of total revenues, compared to 10.7% a year ago. Physical revenues rising isn’t making people panic in the world’s second-largest music market yet – but arguably that’s a problem for Japan in the longer term, because there isn’t yet the impetus to energise the market for streaming and subscriptions.

The last time Music Ally profiled Japan for our fortnightly report in August 2014, we were told that international streaming services had been finding it tough to strike licensing deals with local labels, who account for a big share of music consumption in Japan.

“Music companies in Japan find Spotify’s payments formula esoteric and its payouts low, exacerbated by some wariness of dealing with a foreign service,” as we wrote at the time. Following a 4.6% dip in 2014, watch closely to see if the climate becomes more favourable to streaming: messaging app Line’s music service launched in June 2015, for example.

This story was amended to correct the physical sales figure from a 3.8% drop to a 1% rise.

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