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How to penetrate
the Japanese Music Market?

Japan is a vibrant, prosperous country, with the world’s second largest economy. Japanese consumers spend hundreds of billions of dollars on food, clothing, travel, entertainment and a wide variety of other consumer goods and services each year. The top Japanese firms are among the most efficient and best-run firms in the world. Unemployment is down to about 4.1%, lower than in most developed countries. The average Japanese household has over $100,000 in savings, and disposable income of about $4,000 per month. Japan is the largest overseas market for U.S. exporters, with imports from the U.S. in excess of $59 billion in 2006.

The difficulty of penetrating the Japanese market depends to a great extent on the product or service involved – the presence or absence of local or third-country competition, the number of regulatory hurdles to be overcome, and cultural factors such as language (both spoken and written), strict service and quality expectations, and business practices. Companies serious about entering the Japanese market should consider hiring a reputable, well-connected agent or distributor, and to cultivate business contacts through frequent personal visits. Japanese attach a high degree of importance to personal relationships, and these take time to establish and nurture. Patience and repeated follow-up are required to clinch a deal. Business executives are advised to be accompanied by a professional interpreter, as many Japanese executives and decisionmakers do not speak English, or prefer to speak Japanese.

Establishing a direct presence in Japan is the best way to penetrate the Japanese market. The use of agents/distributors is a more realistic marketing strategy for a small or medium-sized firm, but this approach requires great care in the selection of the representative. SX CONSULTING can help Companies find business partners in Japan.

Record companies around the world are struggling to compete with internet business, and as a result stores are suffering also. If you want to get your music into the Japanese market, be less concerned about getting your work in the stores & more concerned about getting it in people's ears. This can best be done by setting up some part of your website in Japanese and catering to their interests. Just like any business if you want to bring in a new crowd, you've got to find out what they like. From there you can submit to internet radio sites and use internet music stores. Also, stay in touch with your Japanese customers. There's nothing better than word of mouth through internet social japanese community to spread the news that you're doing something that may be of interest. If promotion happens and word gets out though, people are interested in seeing overseas' bands and are generally very receptive.

Although there are hundreds of retail music shops throughout Japan, there are only a few (mainly vinyl record shops) that will actually carry an inventory of indie products. Most have to be specially ordered by the customer. This is alright since the shop can order it wholesale from the distributor who can have it sent to any place in Japan within 24 hours (Japan is about the size of California State and has a vast, cheap and efficient next-day delivery system). Naturally, if there are a lot of requests by customers for a certain product, a store may put it on its shelves. Larger record companies employ an army of retail shop promoters whose job is to encourage retail shops to put the products of their company on shelves. Smaller record companies may only have 1 or 2 people to do this type of work. With the growing boom in the indie scene, more and more Japanese music retailers-even HMV, Virgin Megastore and Tower Records-are including an "indies" section in their stores.

If you already have a finished master, it is not so hard nor expensive to manufacture a retail-ready product and find a Japanese distributor-be it the traditional method or online (i.e. direct sales via your Japanese website and/or other online marketplace). The "hard" part comes in sales promotion. Since the job of the indie distributor is to sell products to wholesalers and retailers they provide virtually no promotion directed to the general consumer. So it is the job of the indie artist/band or record label to provide sales promotion directed at Japanese consumers. So don't celebrate just yet if you do manage to find a Japanese distributor for your indie product (or manage to get it in some online shop). Celebrate when you get paid because if your product does not sell in Japan, you probably won't see any money. Most indie distributors will take a box of your product and only pay you when all are sold (or return them to you if they don't sell).

The indie scene is booming in Japan with new distribution, sales, and rights administration systems setup especially for indie bands/artists. Some indie bands/artists can make a living playing at "live houses" and selling CD's and merchandise. Successful indie artists have sold over 100,000 units. Though rare, some have sold 1 million units. The album "Message" by the Okinawan band Mongol 800 became the first million-seller independent release in 2002 and "Street Story" by the independent band HY was a million-seller in 2003. Some independent artists, such as Chitose Hajime, have signed to major labels and enjoyed a high level of success, leading some major labels to focus increased efforts on scouting independent artists for new talent. Many foreign independent artists/bands and record labels have found Japan to be a very receptive environment for their music and a valuable source of revenues.

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