Japan has always been known for its forward thinking in electronic gadgets. Most notably, Japanese cell phones always catch the attention of electronics enthusiasts from around the world. This is certainly understandable as by the time camera phones were initially being offered to the rest of the world, many Japanese were already watching television on their cell phones. Keitai Denwas, the Japanese translation of portable phones (aka keitai), have become fully integrated into the everyday life of the Japanese, both young and old.
To continue this trend, keitai companies are doing everything they can to transform the cell phone into an all-encompassing device. For some time now, these companies have partnered up with the Japanese subway lines to use the keitai itself as a subway pass, allowing users to bypass train ticket lines. Other recent developments have allowed keitais to substitute as credit or debit cards, where the user can simply swipe the device at the end of a checkout line to purchase anything from groceries to plane tickets. Some vending machines are now accepting keitais as a valid means of financial transactions. The most current development allows the phone’s camera to scan and decode information within special barcodes, called QR barcodes. QR barcodes essentially store information in the form of square shapes as opposed to traditional barcodes.
Once the keitai has scanned the barcode, it offers a number of options, the most basic of which is to learn more about the product. Users also have the option to buy the product, and have it shipped to their home. These QR barcodes can essentially be placed anywhere, though they are currently most popular on posters, magazines, business cards, and public transportation advertisements. Overall, Japanese cell phones often have far more complex and rich features than what are utilized in most other nations, and they have become a staple part of the modern Japanese lifestyle.
Among all the features that the keitai offers, one of the most popular uses is as a mobile music player. Japan is the second largest global music market after the US, and the nation has heavily impacted the mobile music industry and the growth of mobile music. Polyphonic ringtones were pioneered in Japan through NTT DoCoMo’s I-Mode, and today, mobile music in Japan represents an annual billion-dollar market. Mobile phone music downloads saturate Japan’s online music market and have overtaken the traditional CD-ROM market. The shift from CD-ROM sales to mobile phone music sales is occurring rapidly in Japan’s recorded music market, and has become a promising segment that is compensating for the decline of other areas in the market.
Japan has three major mobile network operators: NTT DoCoMo, KDDI “Au”, and SoftBank Mobile, all of which launched their first mobile Internet services in 1999. Since then, they have been in heavy competition against each other. One of the most popular uses for mobile music downloader’s is to be able to receive incoming calls through the sound of real music song files, a service known as Chaku-uta ring songs. Chaku-uta is a ring-tone download service that was started on KDDI Corp.’s Au brand cell phones in December 2002. Less than a year after its initial launch, in November 2003, it passed the mark of over 44 million downloads. The service has demonstrated drastic growth, making it worth a ¥10 billion market just in its first year.
There are some major distinctions between the groups of companies competing for mobile music downloads. The first segment includes providers of Chaku-mero ringtones. The majority of these companies’ income is generated through the sales of MIDI-like instrumental renditions of popular songs. The MIDI files that make up Chaku-mero ringtones are much more compact than the information required for Chaku-uta ringtones. A company selling a MIDI-like version of a song needs to acquire the publishing rights for the song, which are easily obtained by anyone through the Japanese Society for Rights of Authors, Composers and Publishers (JASRAC). Over the past decade, this service has become outdated and has rapidly been replaced by the second, more popular group of ringtone companies: Chaku-uta.
The record companies were the first to create Chaku-uta ringtone services. When Chaku-uta was initially released, it was an audio clip of only 20-60 seconds from a song, always in mp3 quality. However, users today can download songs in their full length to set as their “Chaku-uta” ringtone. The first Chaku-uta service was started in December 2002 by Label Mobile, which started as a joint venture between five Japanese record labels, and has expanded to include eleven major labels as shareholders. A Chaku-uta file is relatively easy to create. However, in order to make the file available for sale, it is necessary to acquire the master rights from the record labels.
The cost per song ranges anywhere between ¥50 to ¥100 ($0.56 to $1.12 at ¥89 to the dollar). Since Chaku-uta is MP3 quality, it requires more hard disk space, which makes downloading them only practical on third or later generation cell phones that are equipped with high-speed, high-volume data transfer technology. Universal Music Japan’s Takashi Kimoto (Managing director of sales), says the release of master ringtones has helped maximize physical product sales: “We tend to release ‘Chaku-uta’ one or two months before the physical release for test-marketing and use the market’s response to judge the song’s hit potential in physical form.” Conversely, “ring songs” have also stimulated demand for CD rentals, facilitating consumers to sample a song before deciding to purchase the CD. In 2003, a total amount of ¥180 billion was spent for mobile premium content, 50% of which was music-related business. This is a significant amount compared to the declining CD-ROM industry in Japan, which has an estimated value of ¥400 billion.
Chaku-uta ringtones can be downloaded either directly from a mobile users phone, or from the Internet. One of the most popular and well-known places to download Chaku-uta from the Internet is directly from the Label Mobile websites. In 2004, an estimated 150 million Chaku-uta ringtones were downloaded from these websites. This is a significant statistic to consider, because at the time only 15 million phones were capable of downloading and using Chaku-uta ringtones. Today, however, Chaku-uta ringtones and mp3’s can be used interchangeably and are negatively affecting both industries. In an effort to salvage what they can, these companies are moving away from a per song business model to a new method which involves charging for access.
Though Japan is working on its own distribution methods, other countries have also stepped up in the competition to find the next big thing. In 2008, Nokia launched its “Comes with Music Phone” in the United Kingdom, allowing users to download an unlimited amount of music for one year with the purchase of their phone. Consumers must use a PC application to download songs from the Nokia Music Store, which then allows them to transfer the downloaded songs to their phones. When the first year ends, users are allowed to keep all downloaded tracks and continue purchasing individual songs, or renew a one year unlimited downloading contract by upgrading to a different Comes With Music phone. Despite this, “Comes with Music” has struggled to catch on. Sony Ericsson, in partnership with Omnifone, offers a similar service called “Play Now”- available only in Europe. The service allows a network of mobile users to share, download, and recommend music at their own convenience. Contracts for the subscription are 6-18 months long, and new phones come pre-loaded with 1000 of the most currently popular songs. Users are allowed to keep up to 300 of their most played songs once the contract expires.
Advancements in mobile music content and services are also creating a rise in piracy that is becoming an increasing concern for this industry all over the world. The RIAJ (Recording Industry Association of Japan) has stated that the number illegally downloaded mobile tracks have been on the rise since 2005. The trade body estimated a total of 407 million in 2008, an increase of 8 million since 2007, and 287 million in 2006. An estimated 35% of mobile users in Japan visit illegal websites to download mobile content such as full ringtone tracks. 60% of those users are between 16 to 19 years old. In fact, the number of illegally downloaded ringtone tracks currently exceeds the number of legally downloaded tracks by 70 million units.
In an effort to combat mobile music piracy, the Japanese government has teamed up with the RIAJ and some others to crack down on the number of illegal mobile content downloads. They plan to do this through the use of a new technology that detects and disrupts illegal downloads as they occur. The government’s Internal Affairs and Communications Ministry, in conjunction with local operators and music industry representatives, are responsible for this new campaign against mobile piracy. As Japan’s Yomiuri, a daily newspaper, reported in September 2009,
When users download music files to their cell phones, the song’s ID information will be sent from the cell phone to a computer server, which will check the information. The server then judges whether the music file was distributed legitimately. If the file was copied illegally, a warning message will be sent on the user’s cell phone.
When the warning is disregarded, the system will take preventative measures to either stop the downloads or render the music unplayable. The use of this type of innovative and rather aggressive technology is new to the war against music piracy. The success of this technology would definitely be a victory for those in the business of recorded music, but will almost certainly leave others upset. This anti-piracy technology cannot be put into service until the next generation of phones are offered, but it could make Japan the first country in the world to find an effective answer to illegal downloads. The Recording Industry Association of Japan, the Telecommunications Carriers Association and other major players in the Japanese music industry have been talking to each other, yet Japan has not released any substantial information on the progress of this technology since they introduced the idea back in 2008. However, rumors are circulating that the country may finally be able to implement the system by the end of 2010.
By Jason Chang
Quoted in http://www.mobile-ent.biz/news/34276/Japan-cracking-down-on-mobile-music-piracy
Other Sources consulted
-See http://www.indicare.org/tiki-read_article.php?articleId=60 for a historical overview of Japan’s mobile music industry.