3 observations on… how Japan’s music industry caters to (and relies on) ‘superfans’ more than any other market
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MBW Reacts is a series of analytical commentaries from Music Business Worldwide written in response to major recent entertainment events or news stories. MBW Reacts is supported by JKBX, a technology platform that offers consumers access to music royalties as an asset class.
If there is one key word (alright, other than AI) that 2023 will be remembered for in the music business it’s this one: ‘Superfans‘
Fans who are willing to spend more than the average fan on merchandise, music, and other content are a lucrative target audience for artists and their teams – and the music industry is starting to pay a lot more attention to this segment of the market.
Over in Japan, the world’s second-largest recorded music market, superfans arguably form the backbone of the country’s music industry.
But in contrast to streaming trends in mature music markets around the world, in Japan, physical music continues to reign supreme. And the CD continues to thrive as the market’s No.1 music format.
According to RIAJ data, revenues from CD sales in Japan topped $987 million (129.8 billion yen) in 2022, reflecting YoY growth of 5% – marking the reversal of the format’s decade-long sales decline in the market.
Beyond the stats, various well-respected Japan-focused music executives have told MBW about Japanese music fans’ love of physical music products and merchandise.
“Fans in Japan are particularly loyal to each artist, and many also have a collector’s mindset, making them partial to the physical product.”
Shunsuke Muramatsu, Sony Music Entertainment Japan
In a rare and exclusive interview with MBW earlier this year, he explained that, while music streaming is growing in Japan, he doesn’t “believe that the physical market will suddenly disappear as we have seen in some other countries”.
The reason for this, he added, is that “fans in Japan are particularly loyal to each artist, and many also have a collector’s mindset, making them partial to the physical product”.
Mr. Muramatsu added: “Japanese fans love well-made merchandising and often queue for hours to buy items before they are sold out.”
Here are three recent examples of how Japan’s music industry relies on and caters to serving superfans…
One of the clearest indications of how the Japanese market is positioned around superfans is the world’s largest music rightsholder’s decision to open a physical ‘superstore’ in Tokyo dedicated to this very segment of the market.
Just last week, Universal Music Group opened a new concept retail store in Tokyo that it says will be “dedicated to supporting music superfans”.
Located in the popular Harajuku shopping and entertainment district, the store spans four “curated” floors, and UMG says it will feature dedicated fan experiences, product launches, and retail pop-up shops.
It’s also the location of The Rolling Stones’ second permanent flagship shop after London.
“This store represents an exciting new venture for UMG, and celebrates the incredible impact and role, that fans play in supporting their favorite artists.”
Naoshi Fujikura, Universal Music Japan
A major music company opening its own dedicated retail store is an unusual move, with the global norm being traditional record and music memorabilia stores stocking products from a range of different rightsholders.
Japan, it seems, might be a perfect testing ground for the concept. “Japanese music fans are globally known for their dedicated fandom and this store will only help to strengthen the connection between our artists and their fans,” said UMG in the statement announcing the launch.
Commenting on the launch last week, Naoshi Fujikura, President and CEO of Universal Music Japan, said: “We are excited to welcome the new UNIVERSAL MUSIC HARAJUKU concept store to Tokyo’s world-famous Harajuku district, a gathering point for people, styles and culture from all over the world.
“This store represents an exciting new venture for UMG, and celebrates the incredible impact and role, that fans play in supporting their favorite artists. In the coming months, the store will offer unique fan experiences for our artists, both domestic and international, creating new commercial opportunities for our artists and business.”
2. Fender’s first-ever flagship retail store opened in Tokyo this year
In a world where content consumers are increasingly identifying as content creators, superfans don’t just want to buy artists’ music and merchandise, they might also want to buy the exact musical instrument used by their favorite stars.
Earlier this year, iconic guitar maker Fender – whose instruments have been used by legends ranging from Jimi Hendrix to Kurt Cobain – opened its own flagship retail store in Tokyo, in the same Harajuku district where UMG’s store is based.
The retail space marks the guitar maker’s first-ever physical store and expansion into retail in the brand’s 77-year history.
“We’ve left no stone unturned in planning and designing every aspect of the musical journey to deliver a complete 360-degree experience for all visitors.”
Edward “Bud” Cole, Fender
With what we now know about Japanese music fans’ love for physical products, the choice of location for the brand’s first physical store – over cities such as Los Angeles, New York, Nashville or London – makes total sense.
According to the press release, the Fender Flagship Tokyo store “manifests a one-stop destination where anyone who loves music – be it players, listeners or fans – can stop by, enjoy and be immersed in music”.
It features an event space that can host various events such as broadcast shows, panel discussions, performances and workshops. Fender also launched its own new ‘Made-in-Japan’ fashion brand, “F IS FOR FENDER ” available for purchase in the Fender Tokyo Flagship store.
“We’ve left no stone unturned in planning and designing every aspect of the musical journey to deliver a complete 360-degree experience for all visitors,” said Edward “Bud” Cole, President Fender APAC.
3. The continued success of Tower Records in Ja
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Tower Records has two very different stories in the world’s largest and second-largest music markets (the United States and Japan).
In the US, the historic, decades-old Tower Records brand disappeared from US towns and cities in 2006 following years of financial losses as it grappled with the rise of downloads and the music industry’s transition to digital.
Meanwhile, in Japan, the Tower Records story serves almost as a physical embodiment of the difference between the United States’ transition to a streaming-led market versus Japan’s own reliance on CDs and other physical music in the global streaming age.
Tower Records’ independent Japanese business is a thriving company that operates over 80 stores in the market.
Spread across nine floors, the flagship location in Shibuya, Tokyo, is one of the world’s largest record stores.
“Consumers value CDs for reasons other than music, particularly in Japan.”
Masato Hasegawa, Tower Records Japan ( speaking with Asia News Network)
Speaking withAsia News Network earlier this year, Masato Hasegawa, General Manager of the Retail Business Division of Tower Records Japan, explained that, “Consumers value CDs for reasons other than music, particularly in Japan”.
Reutersreported in 2020 that a key reason behind the continued popularity of CDs in Japan ‘has been that record labels often bundle CD singles and albums with perks for pop idol fans, including vouchers for priority concert ticket purchases and invitations to handshake events’.
Another way of looking at this is that superfans fuel the Japanese record industry, and recent moves in the market by global giants like Universal Music Group and Fender are clear evidence of them embracing the trend.
