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What’s the most popular way to listen to music in Japan? Many people in the music industry’s first answer would be CD, given the market’s continued domination by physical sales.

But no. According to research published earlier this year by industry body the RIAJ, the most popular way to listen to music in Japan is actually a streaming service: YouTube.

Or at least, it was in August 2016 when the online survey of 2,216 Japanese people was conducted. The RIAJ published the results in Japanese in April 2017, but it’s only now – thanks to Aira Fukushima, who is working with Music Ally – that they have been translated for the west.

The key question: the RIAJ asked people how they listen to music, with 42.7% saying they used YouTube. That’s ahead of the 38.4% who listened to physical CDs and the 27% who play digital files ripped from their CD collections.

9.7% said they listened to music downloads; 8.7% to internet radio; 6% used free streaming apps or services; and 3.9% used paid (subscription) streaming services.

Streaming is a growing sector in Japan, albeit one in its infancy. Global body the IFPI reports that industry streaming revenues grew from $126.6m in 2015 to $204.6m in 2016, although that was only 7.5% of overall sales. Physical sales accounted for 73.4%.

The $204.6m figure was entirely subscription audio streams, since income from video streams were not tracked. It is strange, to say the least, that the most popular music-listening method in Japan is entirely unquantified in terms of its revenues.

One caveat to this concerns the date of the research: August 2016, the month before Spotify finally launched in Japan. It may not have had a big impact on revenues, but the publicity around the launch may have driven greater awareness of streaming.

That’s relevant to some more figures from the RIAJ survey, which asked people about their awareness of different music services. Only 15.5% of respondents said they knew about the content and prices of paid-subscription streaming services, up from 12.6% a year before.

51% said they’d heard of paid streaming services but didn’t know much about their content or prices, while 33.5% had never heard of them at all – down only slightly from 52.2% and 35.1% respectively in 2015.

Awareness is a key challenge for streaming services and the music industry alike in Japan. But once people are aware of what’s on offer, persuading them to pay for it is the next step.

In August 2016, only 2.2% of respondents to the RIAJ’s survey said they wanted to use paid-subscription services “very much” while 9% said they wanted to use them. 43.7% of people clicked the “not so much” box, while 44.5% opted for “not at all”.

One key point here: in 2016, 87% of CD sales in Japan were by Japanese artists, versus 13% from international artists. But it’s the top Japanese artists’ catalogues that have often been withheld from streaming services in their home country. The risk for the industry there is that as more people do become aware of what content the streaming services offer, the missing stars may be a key barrier that stops them signing up.

We’ll be keen to see the results of the RIAJ’s research a year on, even if it may be April 2018 before it’s published. On the positive side, there is evidence of a willingness to pay for music in Japan, particularly among young people.

42.6% of junior high school students in Japan said they’d paid to listen to music in the last half-year at the time of the last survey, while 54.3% of high-school students and 47.6% of university students agreed with that statement. This drops to 40.2% for working people in their 20s, 32.1% for those in their 30s, 31.5% for those in their 40s, 25.5% for those in their 50s, and 23.1% for those in their 60s.

Converting that willingness to pay (mainly for CDs) into similar habits for streaming music subscriptions is the key challenge for Japan, which remains the second-largest recorded-music market in the world overall.

Music Ally will be publishing a more in-depth report on trends in the Japanese music market later this year.

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