consumption of music in japan vs. us

© 2008 by the University of Texas Press, P.O. Box 7819, Austin, TX 78713-7819

New Technologies, Industrial Structure, and the Consumption of Music in Japan

Noriko Manabe

Introduction

As discussed by Wallis (2006), Burnett (1996), and others, the music business has had the power to influence what music is heard through collaboration with the media industries and access to marketing channels. Technological changes have often transformed these systems for both consumers and for corporations. The last eight years have brought forth a number of such technologies that have changed the way we hear music, such as Internet downloads, ringtones, and digi-tal audio players (DAPs), including the iPod. While consumers in all developed countries have adopted these technologies, their preferences have differed not only due to variables in the social environment, but also to corporate policies and technological infrastructure in these countries.

One case study examines the differences in adaptation of these recent tech-nologies between Japan and the United States. While Japan, the second-largest music market in the world, has had a similar industrial structure to the American one, with sales concentrated in a few, primarily global recording companies, differences between the two countries in the structure of radio and television broadcasting have affected the consumption of music.

More recently, the increase of mobile phone technologies has been far more rapid in Japan than in most Western countries.1 Since 1999, when NTT Do-como, Japan’s largest cell phone carrier, first introduced Internet access over cellular phones, the Japanese have preferred to access the Internet through cel-lular phones rather than PCs. This situation has been reinforced not only by the mobile, ambulatory nature of Japanese urban society, but also the policies of the telecommunications carriers, which offered heavily subsidized handsets to consumers and low commission rates to content providers, creating a favorable environment for the development of the mobile Internet.

Furthermore, the consumer adoption of 3G, a broadband Internet service on cell phones allowing speeds of up to 2MBps as of 2006, was significantly faster in Japan than in the United States and Europe. Initially rolled out in 2001, 3G was used by two-thirds of Japan’s mobile phone subscribers by December 2006,

compared with 8% of subscribers in the United States and 14% in the United Kingdom (Telecommunications Carriers Association 2007; International Fed-eration of the Phonographic Industry 2007, 10). Consequently, 85% of all Japa-nese mobile users browsed the web over their phones on a daily basis, while only 12% of young Americans and 14% of young Britons had ever done so (Internet Kyokai 2006, 28; M:Metrics 2006). 2

Such an environment was a boon for the distribution of music over mobile phones, which was adopted earlier and more widely in Japan than in most other countries. Musical content served as a driver for 3G diffusion, comprising half of all mobile content revenues before 2005. Mobile downloads have also had a positive impact on the Japanese music industry, where they comprised 15% of sales for the music industry and 90% of total music downloads in 2006 accord-ing to Record Industry Association of Japan (RIAJ).

Given the scale and breadth of Japan’s music business and its global lead in ringtones, a study of consumption patterns and responses from the music industry can provide several insights for scholars and industry representatives in other parts of the world. For example, how might consumer use of music on cell phones in Japan foreshadow their use in the United States or Europe where diffusion of advanced systems is currently not as wide? How have differences in corporate practice or technology affected what music is heard? How have corporate strategies encouraged or inhibited the use of technologies for music? How have corporate policies evolved over time?

The use of mobile phones in accessing the Internet in Japan has inspired col-lections of essays (Gottlieb and McLelland 2003; Ito, Okabe, and Matsuda 2005). Takeishi and Lee (2006) have compared the role of copyright in spurring the development of the mobile download market in Japan and Korea, while Dolan (2000) has examined the scope of the polyphonic ringtone in the early days of i-mode. Gopinath (2005) has examined the global ringtone phenomenon, while Uimonen (2004) has conducted an ethnography on their usage in Finland. Nonetheless, no study has examined the impact of these new technologies on the way music is consumed and marketed, tying together the opinions of record company executives with those of consumers, nor have there been many Eng-lish-language studies on the structure of the Japanese music market despite its importance as the second-largest music market in the world.

This paper examines how Japanese youth listen to and acquire music and how technological, social, and corporate factors have affected their choices. I will first explain key differences in the infrastructure of media and telecommunications in Japan relative to the United States. I will then discuss the results of a survey of Japanese consumers, with some comparison against American consumers. I will analyze these results against comments from executives in the telecom-munications, record, retail, and portal industries regarding their strategies and

82 Asian Music: Winter/Spring 2008

Manabe: The Consumption of Music in Japan 83

discuss how some strategies may be stimulating or inhibiting the consumption of music.

Methodology

In December 2006, questionnaires were distributed, and responses were received from 100 students at a junior college in Sapporo, a large city on the northern Japanese island of Hokkaido. The students were predominantly young women between 18 and 21 years of age. While the sample represents a limited demo-graphic, it was deemed worthy of study because young women are generally regarded as the heaviest users of cellular phone technologies and, in particular, mastertones. According to a nationwide survey of 1,600 consumers conducted in October 2006 by Mobile Contents Forum, usage of mastertones by women outpaced that by men, at 72% versus 61% respectively; in particular, younger women were far heavier users of mastertones than men, with 84% of women in their twenties using mastertones versus 71% for men (Mobile Contents Forum 2006, 121). The respondents fit the national pattern in terms of subscription to the different carriers, with 50% of respondents subscribing to NTT Docomo, 38% to KDDI, and 12% to Softbank Mobile, which resulted from Internet con-glomerate Softbank’s acquisition of Vodafone Japan. They were somewhat under national averages for subscription to flat rates for data services (65%) and to 3G (53%), both of which would encourage the downloading of music over the mobile Internet.3 These findings were then compared with information gathered from interviewing over two dozen executives from the telecommunications, Internet, record, mobile portal, and artist management industries. Comparisons were made against a survey of 30 students at a public university in New York City who ranged in age from late teens to early thirties; they were less likely to have flat data rates (29%) or 3G (26%) than the Japanese.

How Music Was Heard and Discovered

Figure 1 shows the electronic devices Japanese students used to listen to music, with the percentage of respondents who said they used a device and the percent-age who said they used it most. Figure 2 shows how Japanese students heard new songs for the first time, with the percentage of users mentioning a source and a score weighted by that source’s relative importance to the consumer. Western readers may be surprised by the overwhelming importance of television, the low importance of radio, the seemingly low rate of ownership of digital audio players, and the greater importance of mobile phone sites and other people’s ringtones relative to the Internet for discovering music. These factors are best explained by the structures of the Japanese media and telecommunications industries.


Broadcast Media

While the radio was the most broadly-used device for American students (93%), it was the least-used device for the Japanese, with only one respondent citing it as her favorite device. Such findings were in line with the national norms, where according to Internet Kyokai (2006, 60, 63), 60% of Japanese rarely listened to the radio, and those that did were likely to be over 60 years of age; meanwhile, J-Pop, the Japanese pop music that dominated the charts, was targeted toward those in their teens and twenties.4

This lower radio listenership may be explained by the fact that most Japanese commuted by public transportation, while many Americans drove, listening to the radio in their cars. In addition, many Japanese radio stations carried diverse sets of programs, each playing a different genre, instead of focusing on a particular genre, as was more common in the United States. Furthermore, radio formats tended to be dominated by talk shows or talk interspersed with music (e.g., “Jam the World” by J-Wave), rather than mostly music, as in many American or British formats. Some Japanese radio programs featured recording

Figure 1. How music was heard: percent of Japanese respondents using device*DAP=digital audio player, such as iPod; MD player=minidisk player


artists as DJs, but these artists were typically already well-known. Consequently, while 96% of American students said that they heard new songs on the radio, making it the most important source for discovering new music, only 63% of Japanese students mentioned it, putting radio below ringtone portals and other people’s ringtones as a source of new music. Hence, radio was a less effective way of promoting new artists in Japan than in the United States.

On the other hand, television was the most important media for music for both Japanese and American students, almost 90% of whom were tuning in to music programs. Nonetheless, television was of far greater importance in Japan where virtually all respondents (98%) said that they often heard songs for the first time on a television show. As one user put it, “When I hear a song I like on television, I download it. This accounts for 90% of the songs I download. Recently, I’ve been too busy to watch TV, so I don’t know what’s current any more.”

These Japanese shows were usually not on specialized music channels on cable or satellite, such as the MTV or BET that the American students watched, but were weekly programs offered by one of the five terrestrial television net-works, the free television that continued to dominate the industry. The favorite

Figure 2. Where music was discovered: percent of Japanese respondents hearing music first, by venue

*Chaku-uta=mastertone; SNS—social networking site (e.g., Myspace, Mixi)

program by a wide margin was “Music Station,” broadcast on the Asahi TV network; “Utaban,” on TBS; and “Hey, Hey, Hey!” on the Fuji TV network—all long-running programs. Cable television outlets such as MTV-Japan were named by only two respondents, reflecting the low diffusion rates of cable and satellite television in Japan relative to the United States. As one record executive told me, “MTV in Japan is not mainstream. It’s a small crowd, like the record store enthusiasts” (personal communication). Furthermore, the promotion of music as theme songs for television series or commercials was often more important than appearances on these music-related shows.

This finding illustrated the stranglehold that television had on Japanese listen-ers and the great difficulty of promoting new artists in Japan. Without significant viewership of dedicated music channels, managers were limited to placing their acts on a highly limited number of slots on a handful of weekly programs. Such programs tended toward mainstream tastes, intended to appeal to as much of the population as possible; for example, the lineup for the January 19, 2007 show of “Music Station” included veteran J-Pop stars Exile and Glay, rocker Shiina Ringo, Hirai Ken (a male star who had the best-selling album in 2006), J-Pop idol Kimura Kaera, and American R&B star John Legend. Likewise, theme songs for commercials and television series tended to be catchy J-Pop tunes. This media setup created a problem for what would be niche genres in Japan, such as hip-hop. As one manager of a Japanese hip-hop group explained:

Television is by far the most important way of introducing new songs to the Japanese

public. But the number of music programs has been declining, so that we are even

more dependent on TV commercials and drama series. It’s just too dominant a media.

A handful of artists receive promotion and dominate people’s mind-space, while the

majority of artists are forgotten (personal communication).

Given the dominance of television as a means of popularizing an artist or song, it was not surprising to see that 81% of Japanese respondents professed to being fans of J-Pop, as might be expected in a group of youthful students. However, they also showed an appreciation for a variety of genres, particularly hip-hop (37%), R&B/soul (34%), rock (18%), jazz (15%), reggae (12%), world/Latin (11%), pop (10%), and classical (6%). Dance, trance, techno, punk, blues, and gospel also attracted fans. On the whole, most respondents were equally split between listening to Japanese and foreign artists.5 For some global genres, par-ticularly hip-hop, R&B/soul, and reggae, and to some extent rock and jazz, for-eign artists were preferred over Japanese artists recording in the same genres. Some users said that they acquired different genres through different methods, with one user copying J-Pop from a rented or borrowed CD, purchasing classical CDs, and downloading jazz.



The American respondents also showed a range of tastes, including R&B (82%), hip-hop (75%), rock (54%), Latin/world (32%), reggae (29%), soul (18%), jazz (14%), and classical (11%).

Internet Sites and PC Ownership

Given the limited access to television to introduce a new artist, one might have imagined that the industry would have pounced on opportunities on the Inter-net. However, as shown in Figure 2, neither Internet sites such as iTunes, Yahoo Music, or Mora (the music downloading site run by Label Mobile) a consortium of record companies, nor Social Networking Sites (SNS) such as Myspace or the more popular Japanese equivalent, Mixi, were important for discovering new music among Japanese students. This low ranking contrasted with the American students who ranked the Internet fourth in importance (after radio, television, and friends) for discovering new music, with many students mentioning iTunes, Youtube, Myspace, and especially Limewire.

One reason for this difference was that Japanese individuals were less likely to have a PC at home, let alone to themselves, than Americans. As of 2006, only 57% of Japanese households owned PCs (Internet Kyokai 2006, 42); part of this low ownership was attributable to a shorter history with keyboards, where a commercial word processor was not available in Japan until 1978, and the fact that many Japanese spent more time on foot or on public transportation, making the instant startup of a lightweight mobile phone more practical as a portable information device than a PC. Only half the Japanese respondents had a PC at home, whereas 85% of American respondents did. Nonetheless, given the ubiquity of cheap Internet cafés in Japanese urban areas, one could have expected Internet music sites to have been more important.6

Given the high-profile breakout of artists such as the Arctic Monkeys on Myspace, some readers may be surprised by the relative lack of importance of Japanese SNS sites to promote musical artists. This underperformance was partly tied to corporate policy, where some record companies such as Sony did not allow artists to upload downloadable music samples onto their own web-sites or spaces on social networking sites, lessening their attraction for potential consumers. As a result, the Japanese rap group Rhymester’s Mixi site had a community of only 4,000 to 5,000 members as of mid-2006; less popular art-ists had as few as 100 (personal communication). Such numbers made SNS a less effective marketing tool. Nonetheless, iTunes and Mora, the downloading site run by a consortium of record companies, had linked with Mixi, where the Mixi page showed the songs that a user was playing, creating a community of listeners, and Mora had reached a similar agreement with Mixi.

iPods and Other Portable Devices

As the majority of both Americans and Japanese respondents listened to music while commuting, walking, waiting, or otherwise on the go, it was not surprising that both groups had multiple portable devices. However, American students were far more likely to own iPods or other DAPs than the Japanese students, at 75% of American respondents versus 43% of Japanese respondents—not surprising given that fewer Japanese students owned a PC. Those that owned one used it heavily; a majority of DAP owners in both countries used it more frequently than any other listening device.

In addition, as Japan is the home of several leading consumer electronics companies, the market for digital audio players in Japan remained contested, un-like in the United States. While practically all DAP owners among the American respondents owned an iPod, amongst Japanese users, the iPod was restricted to 58% share, followed by the Sony digital walkman (33%), while other respon-dents owned iRiver and Toshiba.7 The presence of other hardware manufactur-ers had implications for iTunes, as will be discussed later.

The minidisk (MD) player still proved popular in Japan, ranking as the sec-ond most heavily-used device (Figure 1). This format, which did not catch on as widely outside of Asia and was well over a decade old, remained popular in Japan because it allowed for easy, high-fidelity copying of CDs through stereo sets or boom boxes without having a PC. The popularity of the device was also supported by the existence of a large and legitimate CD rental industry, to be discussed later. In an effort to migrate users to DAPs, Sony announced a line of digital walkmans in October 2006 that allowed the inputting of CDs without using a PC.

Mobile Phones and the Mobile Internet

While PC diffusion in Japan has lagged the United States, its experience in mo-bile phone technologies has historically been ahead by roughly three years. In-ternet over mobile phones quickly became commonplace after NTT Docomo’s introduction of the i-mode service in 1999, helped along by the policies of the carriers. For consumers, the carriers not only implemented web technologies in all handsets but also heavily subsidized them so that most consumers could acquire new phones with the latest technologies cheaply. As of 2006, the average replacement cycle for a handset in Japan was two years, versus over three years in the United States and Europe, while the cost to the carrier of acquiring a new customer (largely through subsidizing handsets) was 38,000 yen (US$317) in Japan versus $100 in the United States (Katsuma, JP Morgan, personal commu-nication).8 Within a few years after the introduction of i-mode, it was impossible



for a consumer to buy a cellular phone without web capability. The carriers also created a favorable environment for entrepreneurship by providing content companies with an open model and a low commission rate of 9% versus 20–30% for American and European carriers; these low rates allowed more content com-panies to survive (personal communication). Finally, settlement for purchases of services or products was easy for the customer who only needed to pay through his or her phone bill; this system eliminated the need for credit cards, which were required by most fixed-line e-commerce sites.

Music over mobile phones played an important role in stimulating growth of the mobile internet, personalized content, and 3G, with music accounting for about half of paid content as of 2005 (Mobile Content Forum).9 Personalized programmable ringtones and polyphonic ringtones (chaku-mero) were devel-oped as early as 1996 in Japan and were commonplace by 1999, several years before their popularization in the United States. Ringtones using samples of the original recording of a song, or mastertones (called chaku-uta or ringsongs), were introduced in Japan in 2003. Originally set up as 30-second ringtones at 100 yen (US$0.83), portal operators soon realized that downloaders were using them for listening pleasure rather than as ringtones, as the sampled music was initially considered too revealing of one’s tastes to use as a ringtone (personal communication).

In November 2004, KDDI, Japan’s second-largest carrier, launched its full track download service (chaku-uta full), which allowed the downloading of an entire song to a handset for 300 yen (US$2.50). In only 13 months, the service had downloaded 30 million songs, and KDDI’s service was continuing to down-load at a pace of about four million songs a month as of mid-2006 (KDDI).

Use of Phones as a Music Device

Of the Japanese respondents, nearly three-quarters used cell phones to listen to music. However, they generally used phones for music more lightly than MD players and DAPs: only 9% of those surveyed said that their cellular phone was their most heavily-used music device. Japanese consumers were twice as likely to use a DAP or an MD player to listen to music on the go than a phone. Subscribers of unlimited packet data services or 3G tended to be heavier users, as the re-duced download costs of the former and the faster download speeds of the latter encouraged them to download more songs; on the other hand, PC users, who were more likely to own DAPs, tended to use phones less heavily. Respondents mentioned the lower sound quality on phones relative to CD or MD players, and many tended to have more 45-second mastertones than full tracks stored on their phones. Some listeners differentiated their usage so that they listened to their iPods during long commutes but listened to ringtones during short waits

on their phones when they preferred to listen only to song hooks. Similarly, over three-quarters of American respondents used cell phones to listen to music, but most only used it as a backup in case their iPod ran out of batteries.

Use of Cell Phones to Discover Music

As shown in Figure 2, mobile portal sites for mastertones and full track down-loads (75%) and other people’s ringtones (66%) were important sources of hearing new music for Japanese users, underlining the increasing importance of cell phones in the musical landscape. Particularly remarkable was the fact that the respondents were about as likely to hear new music through another person’s ringtone as on the radio, considering that most respondents normally used vibration or silent mode, as will be discussed later. These sources were acknowledged but less significant for American users.

The high number for chaku-uta portals illustrated how Japanese record com-panies and retailers had become aware of the potential marketing viability of mastertones and were attempting to use it to promote music. The record com-panies had not benefited from many new technologies, having not profited from karaoke initially and having received low royalties on polyphonic ringtones (if they owned the songwriting rights). With the exception of Avex and Toshiba-EMI, they initially approached mastertones conservatively, often only making a limited number of current hits available at Rekôdo Chokuei, the site operated by Label Mobile. Such policies were much to the detriment of independent ringtone portals, who saw their polyphonic ringtone sales peak out while they had difficulty acquiring mastertones from the record companies.

Attitudes toward portal sites started to soften as mastertone usage continued to skyrocket—and Avex, which had pursued a more open strategy of providing mastertones to other sites, gained share. By mid-2005, several record companies, including Victor, Universal, and Warner, had become willing to deal with portal sites outside of Label Mobile. (In contrast, Sony Music, Japan’s largest record company, had steadfastly refused to make its music available outside of Label Mobile-operated sites, as of late 2006.) By mid-2006, record companies were using mastertones as a key part of the marketing campaign for a new album. According to executives from several record companies, mastertones highlight-ing the hook were typically released two weeks to two months before an album was to be sold; for major pop idols such as Hamazaki Ayumi, Utada Hikaru, or Ayaka, the mastertones were made available to as many as 80 to 120 mobile sites to create buzz (personal communication). By observing the popularity of the mastertone, record companies gauged the potential sales of an album and adjusted production, distribution, and marketing strategies. Record company



executives and artist managers generally thought—or hoped—that promotion through cellular phones and other interactive media would increase in influence to become as viable a promotional outlet as television.

In addition to highlighting upcoming CD sales on mobile portals, carriers and portals provided a number of other services that help users to discover new songs. Many portals had recommendation engines that tracked the mastertones that a user had downloaded and suggested similar songs, providing links to mobile websites of similar artists. Users could also review every artist he or she had ever viewed through the “my page” on the mobile portal. There were also search functions that allowed a user to identify the name of a song by typing the name of an artist or keyword into the cell phone browser.

Perhaps more interesting were the music recognition functions. Some cell phones were enabled to play FM radio through their speakers and to identify the song and artist being played with the press of a button. If a user sitting in a café heard a song and did not know the artist, he or she could simply point the cell phone in the direction of the music, whereby the phone recognized the music and returned the name of the song. About 30% of Japanese master-tone users in the survey employed these search functions; most users searched one to four times a month, but some searched as many as ten times a month. Three-quarters of these users said that they had downloaded a song after hav-ing identified it through these search functions; KDDI estimated that 30–40% of searches resulted in a download (personal communication).

How Music Was Acquired

The Japanese respondents were most likely to acquire music by renting CDs from a store (Figure 3); 93% of respondents used rentals, with 53% claiming that renting was the most frequent method for obtaining music. Renting CDs was common among teenagers and students; as of 2006, Japan had 3,200 CD rental shops whose revenues, at over 420 billion yen (US$3.5 billion), were two-thirds the amount of CD purchases at retailers. As the name of the largest such chain—Culture Convenience Club—would indicate, they were conveniently located near major train stations, offered a wide selection, and rented albums for only 280 yen (US$2.30) a week. At about 20 yen a song, it was much cheaper than downloading through iTunes (150–200 yen, or US$1.25–$1.65 for a song) or a mobile site (200–300 yen, or US$1.65–$2.50 for a full track), or purchas-ing an album (3,000 yen, or US$25). Moreover, these stores were completely legal because Japanese law allows copying for personal use. Users copied the rented CDs onto either MDs through a stereo, or to PCs, to be copied onto digital audio players.

In particular, rental CDs—rather than downloading—were overwhelmingly the most popular way of filling DAPs, followed by borrowing a CD from a friend. As the spokesman of Cultural Convenience Club explained:

Given that the selection of music on PC downloading sites is incomplete, people still

prefer to walk to the rental store and rent CDs out for a week. And to fill an iPod,

you would need 15,000 albums. At the beginning of the iPod boom, we had some

people rent fifty albums at a time! (personal communication)

Although 72% of respondents downloaded music onto their cell phones, buying or borrowing CDs continued to be the more popular ways of acquiring music. Users with either 3G or unlimited data services were more likely to download to cell phones. Downloading onto PCs was far less popular, at 39% of total respondents—not a surprise given that only half of the respondents had PCs.


Figure 3. How music was acquired: percentage of Japanese respondents acquiring music, by method. Respondents were asked to identify all methods of acquiring music and rank them from 7(=most frequent)

to 1(=least frequent), with a zero for methods that they did not use. “Top method” means that the respondent cited this method of acquiring music as the most frequently-used method. “Use” indicates that the respondent acknowledged using the method.


However, those who used downloading seemed to be heavy users and appeared to be downloading genres less likely to be available at rental stores or using free sites. The conditions underlying mobile and Internet downloading will be dis-cussed later. That users still preferred to acquire music through physical rather than digital means, and by mobile rather than fixed-line Internet, was reflective of industry sales figures, where physical sales of music, at 85% of industry rev-enues, still outpaced mobile sales (14%), which dwarfed PC downloads (1%) in 2006.

As with the Japanese, American respondents were most likely to copy CDs, and would likely have made good use of rental shops had they existed. However, the Americans were far more likely to use peer-to-peer (P2P) sites, primarily Limewire, BearShare, and Ares, with nearly two-thirds of respondents claiming to use them. Only a third downloaded music to a cell phone or used a pay site such as iTunes.

Which Ringtones Were Used

Japanese etiquette required people to switch off ringtones in many public places, such as trains, workplaces, and classrooms. Hence, over half of respondents used vibration or silent mode as their primary ringtone. Several of these respondents used silent mode outside the home or at work or school, reverting to using mastertones at home or when out with friends; other respondents used silent mode during the week and used audible ringtones during the weekend. Among audible ringtones, the most popular type was a mastertone (chaku-uta), used by 45% of respondents; 20% used a polyphonic ringtone (chaku-mero); 5%, a chaku-movie (a video that plays when a call is received); and 3%, a full track download (chaku-uta full).10 In contrast, only a quarter of the Americans used vibration mode, with the majority using mastertones.

The Japanese respondents used an average of 3.2 ringtones at a time, but this number belied a large distribution. Of the 69 respondents using ringtones other than vibration or silent mode, 43% used one ringtone; 21% used two to three ringtones; 22% used four to five; 13% used six to ten; and 1% used more than 10 ringtones. Over three quarters of respondents with multiple ringtones used them to distinguish phone calls from text messages or emails, but about 29% also used ringtones to identify different callers. Only 17% of Japanese respondents used ringback tones. American respondents used an average of 3.7 ringtones and were more likely to use them to identify different callers; they also used them to distinguish among types of messages.

Most Japanese respondents (82%) chose songs that they simply liked them-selves as ringtones. Others liked to play current hits or picked a song that had a special meaning for them; several favored upbeat songs with lyrics inspiring

confidence. Relatively few respondents chose ringtones their friends liked (8%) or music they wanted to show others they liked (6%). Even people who used multiple ringtones to identify different callers picked ringtones out of their per-sonal taste (77%), while a minority (25%) selected songs that reminded them of these callers. Similarly, over 80% of ringback tone users downloaded music they themselves liked as ringtones, while only a quarter chose tones that the caller liked or that reminded them of the caller—even though it was the caller that would be subjected to this music.

Users typically selected mastertones from one of their three favorite genres as their ringtone. In Japan, the most commonly picked genre was J-Pop, although R&B, rock, and reggae were also popular. A small number chose theme songs from movies or those associated with commercial characters (such as Mickey Mouse).

American respondents also picked primarily songs they liked, often current hits, but were perhaps more conscious of what the ringtone said about them—not surprisingly, as they were more likely to use audible ringtones than the Japa-nese. Many picked songs with an eye to projecting an image of themselves (i.e., “party girl,” “sensitive and gentle,” “in control”), while others picked songs that expressed pride in their national or ethnic background or showed sophistication in tastes. Some also judged others through their ringtones. A co-worker with a trance ringtone was assumed to be a late-night clubber; several respondents considered rap ringtones to be inappropriate due to rough language; and a per-son with a ringtone recorded from a radio with unclear sound was considered a cheapskate. In addition, they were more likely to assign ringtones to identify specific callers and often chose songs whose lyrics or music expressed how they felt about the caller (i.e., “Can’t Take My Eyes Off of You” for a romantic partner, “Girls Just Wanna Have Fun” for close friends). Conversely, when the special as-signment was not reciprocated, there was resentment; as one respondent said, “My boyfriend’s ringtone is the same for everybody. It tells me that he’s not very thoughtful.” Ringtones were also considered an integral part of one’s im-age, along with dress; one respondent described a 40-something co-worker as follows: “She looked older, and she was dressed as if she wanted to be 20. Her phone had this reggaeton song, real loud too, and it said she wished she was young and sexy when she really looked like a sad old woman.”

Parts of Songs

The Japanese respondents found all parts of a song available on mastertone por-tal sites—the chorus, verses, instrumental sections, introductions, and bridges as well as the full song. While the full song appeared to be most preferable (chosen by 70% of respondents), the chorus was the favorite part of a song to



download by a wide margin, used by 67%. Verses and introductions were the next in popularity followed by the instrumental section. The bridge was the least popular. The gap in popularity was even clearer when one considers the ranking of these song parts in terms of frequency of download; in this sense, the chorus drew more than twice as many points as the verse, introduction, or instrumental section. Similarly, American respondents found all parts of a song available on portal sites and were far more likely to download choruses.

How Ringtones Were Acquired

Of the Japanese respondents, 80% acquired ringtones by downloading them through their cell phones, with two-thirds using portal sites that were on the official menus of their carriers. The most popular site was Label Mobile’s Rekkôdo Chokuei. Other sites included Tsutaya Online (run by Cultural Convenience Club), Music.jp (MTI), Iromero (Dwango), Pokemero Joy Sound (Xing), Xodam, and Utauta Souko. Prices varied, but typically a subscription to a chaku-uta site allowing 15 downloads a month cost 315 yen (US$2.60), while a full track down-load would likely be in the 200–300 yen range (US$1.65–2.50). One respondent

Figure 4. Favorite parts of songs for mastertones

subscribed to portals which allowed unlimited downloads of mastertones for as little as 100 yen. Only 20 percent used ringtones that were built into the phone, and only 3% used a ringtone that had been downloaded through a PC. In contrast, while about half of the American respondents also downloaded their ringtone onto their cell phone, they were more likely to transfer their ringtones from their PCs, often after having downloaded files from P2P sites.

Piracy in mastertones and full track downloads had been remarkably rare in Japan until late 2006. Most users had been accessing the web through the menu system of the carrier, which accepted or rejected websites for its official menu; to use unofficial or free sites, the user would have to type in a URL or have it sent to the cell phone. However, along with greater diffusion of 3G came freer browsing of unofficial sites on the mobile web at large. As of mid-2006, over 60% of mobile web activity was thought to be on free sites, not on the official carrier menu—up from 40% the previous year. In August 2006, KDDI made a Google-run search engine available, helping the user to find and access such free sites. Perhaps as a result of this move to an open Internet system on mobile phones, free mastertone sites and bulletin boards mushroomed in the course of 2006; a handful of respondents admitted to using them, and they were by far the heaviest downloaders.

Indeed, illegal site usage appeared on the verge of an explosion. According to a November 2006 survey of mobile users by RIAJ, 70% of users under 40 years of age were aware of illegal chaku-uta sites, half of them had experience using them, and a third used them regularly; 60% of these respondents expected to use illegal sites in the future. While no Japanese respondent said that they had created their own mastertone, software was available on bulletin boards that allowed individuals to make mastertones out of mp3s, improve sound quality for specific handsets, and set the files as ringtones.

Reasons for Using Mastertones

Virtually all Japanese users were downloading at least some of their mastertones for practical use as a ringtone. About half of all users said they only used mas-tertones as ringtones, while about half of the users also used them for listening pleasure. Few respondents (8%) downloaded mastertones only for listening.

As suggested previously, phones were being used for listening for shorter time periods than MD players and iPods. Out of those who listened to music through their cell phones, over half did so for less than thirty minutes a week, while an-other quarter listened for less than 15 minutes a day. Only 9% listened to music through their phones for more than 30 minutes a day, and none of them used it for more than two hours a day. Several users preferred iPods or MD players for listening to whole songs or albums. Heavy users of phones as music players



were more likely to listen while on the move and less likely to use iPods or MD players than the respondents at large.

Indeed, listening through cell phones rather than DAPs or MD players seemed to be tied to a desire for short, instant gratification: 78% of interviewees claimed that they used their cell phones to listen only to the parts of the song they liked. Over 60% used mastertones as a low-commitment trial purchase; if they liked the song, they bought the album. Some respondents downloaded more than ten mastertones a month and were also heavy users of MD players and DAPs; they were first trying out songs through mastertones and then playing whole songs or albums on their MD player or DAP—an economically rational behavior, given that album CDs were normally sold for 3,000 yen, a price maintained by the fixed-retail price system for CDs in Japan.11 Some users also played their favorite music to their friends through the phone’s speakers. Several respondents used the phone exclusively to play current hits, while turning to their MD players and DAPs for albums; this behavior reflected on the availability of songs on master-tone sites, which the record industry tended to fill with current hits rather than back catalogue. Others used the cell phone as an alarm and used mastertones that would be attention-grabbing or set the appropriate mood.

Only a handful of American respondents reported listening to their master-tones—not surprising, given that many had iPods. Those who did listened less than once a day while waiting for short periods.

Reasons for Getting a Full Track Download

Given the high cost of full track downloads relative to that of alternative meth-ods, consumers were downloading them for reasons other than price. The most common reasons for the Japanese respondents included the convenience of be-ing able to purchase any time, anywhere (cited by 70% of full track download users); users particularly appreciated the instant gratification of being able to buy a song immediately after having heard it. Other users justified the high cost of full track downloads through their practical use as alarms or ringtones (33%). Only five American respondents used full-track downloads, and those who did enjoyed the convenience, the ability to pay without using a credit card, and their practical use as alarms.

Nonetheless, most users of full track downloads did not abandon master-tones entirely but continued to use both mastertones and full track downloads. The primary reason for continuing to use the partial clips of mastertones, even if one’s handset could download the entire song, was to use them as ringtones (88%). Other reasons included the lower price, at 100 yen or less for master-tones versus 200–300 yen for full track downloads (24%), and the ability to isolate the hook (16%). In addition, some users received mastertones for free

when they bought albums. Such presents were a common promotional tool used by record companies and retailers such as Cultural Convenience Club, which offered a free mastertone to consumers who reserved an album for pur-chase prior to its release. American respondents also continued to download mastertones to use as ringtones or listen to song hooks.

Number of Ringtones Downloaded

The average Japanese respondent downloaded an average of 3.5 and a median of two mastertones per month, with a quarter of respondents downloading one mas-tertone and 31% downloading between one and four mastertones. Nine percent downloaded more than ten mastertones per month. These numbers were higher than the national average, where 43% downloaded less than one, 40% down-loaded between one and four, and 5% downloaded more than ten mastertones per month (Mobile Contents Forum 2006, 121). American respondents showed a similar distribution of ringtone usage, with an average of 3.2 ringtones.

For full track downloads, the Japanese respondents downloaded an average of four and a median of one per month. Of those holding phones capable of full track downloads, 53% did not use full track downloads or downloaded less than one song a month; 31% downloaded one to three; and 16% downloaded five or more. One person downloaded seventy full tracks a month.12 The five American full-track users were relatively heavy users, downloading more than five tracks a month.

The Japanese respondents stored an average of 9.4 mastertones (median, 6) and 6.8 full track downloads (median, 3) on their phones. Most users were no-where near their capacity limit, although twelve respondents were erasing more than two mastertones a month to replace them with new ones, suggesting some capacity issues. Nonetheless, ten users had more than twenty mastertones stored on their phones, while three users had more than twenty full track downloads. These heavy users of cell phone downloads tended not to have DAPs, although a large percentage of respondents used both DAPs and full track downloads.

Changing Ringtones

As many users download mastertones for reasons other than as a ringtone, their actual usage merited separate questions. The average Japanese respondent changed her ringtone once a month, with 31% of respondents saying that they changed their ringtone once or twice a month. However, the range was quite wide, from never to ten times per month. Infrequent users outnumbered the frequent users, with a quarter not changing a ringtone for more than six months. Only 10% changed a ringtone twice a month or more, and only 3% changed them more than five times a month. Users said that they changed their ringtone



when their “mood changed” or they “got bored with the ringtone.”13 Likewise, the American respondents were split between frequent changers and infrequent ones, with 18% changing them twice a month or more.

Reasons for Not Using Cell Phone Downloads

Many users did not seem to be taking full advantage of the musical capabili-ties of their phones. The Japanese respondents were more likely to make use of mastertone capabilities; of the 94% who had phones with the capability for mastertones, 80% used them. Full-track download capability, however, was more likely to go untapped; of the 60% who had the capability for full track down-loads, only 40% used them. Fifteen percent of respondents said that they used neither mastertones nor full track downloads.14 The American respondents were less likely to use these capabilities: of the 67% of respondents whose phones were capable of downloading mastertones, only a third used the service; and of the half with phones capable of full-track downloads, only 40% used the service.

The most common reason for not using mastertones or full track downloads was that it was too expensive. At 200–300 yen a song, a full track download was more expensive than iTunes at 150–200 yen a song, or better yet, renting an al-bum, where for 280 yen a week, users could copy all twelve songs on the album. Even among users of full track downloads, 83% said that they would download more full track downloads if the service cost less. About 40% of chaku-uta full users felt that more songs should be made available, suggesting that record com-pany policies, which distributed current hits but not always the back catalogue, were losing an opportunity. Sound quality was also an issue for about 40% of chaku-uta full users. American respondents cited expense as the primary reason for rejecting full track downloads.

Non-users of full track downloads also commented that “it’s too troublesome (mendokusai)” or that “I use my iPod or MD player to listen to whole songs or albums, so I don’t need full track downloads.” Others continued to use master-tones rather than full track downloads even when they had the capability for the latter because they only wanted to hear their favorite parts of the song. As one user put it, “Full track downloads take too long for the hook to come on. They’re also too much data—they take up too much space on my phone and too much time to download.” Another commented, “I don’t need the whole song; I just want the hook.”

PC Downloading not as Popular

Only half of the Japanese respondents had access to a PC at home; however, 96% of those with a PC had broadband access to the Internet from home.15 Com-pared with the respondents at large, PC owners were more likely to use DAPs,

download music to their PCs (47% versus 39% for the population at large), and discover new music through Internet music sites (but not through SNSs), while being less likely to download music onto their cell phones.

Downloading to PCs was relatively less popular in Japan than other methods of acquiring music, with downloads of music to PCs only a tenth of the quan-tity of downloads to cell phones. Growth has historically been hampered by the policies of some Japanese record companies, which initially showed little interest in downloads, pricing single-track downloads from Mora originally at 400 yen (US$3.30). It was only the iTunes entry into the market at a price of 150 yen (US$1.25) a song in August 2005 that caused Japanese downloading sites to lower prices; by that time, cell phone downloads had been firmly established, giving mobile downloading the first-mover advantage.

Another issue has been limited offerings. By the end of 2006, iTunes was the top download site in Japan, helped by the iPod’s high share. Despite this domi-nance, only three of the top five record companies—Toshiba EMI, Universal, and Avex—had made their music available to iTunes. Sony Music, the largest record company in Japan, was not offering music on iTunes and supplied only to Mora, in which it had a stake. Warner Music Japan’s artists were also unavail-able on iTunes Japan. Nonetheless, record companies appeared to be softening their stance toward iTunes; the available catalogue on the site doubled to two million in the last six months of 2006. Although other domestic labels such as Pony Canyon began to make their music available in the second half of 2006, some domestic labels such as Crown seemed to be waiting for Sony’s lead on iTunes. Compatibility between Mora and iTunes was also an issue: iTunes in Japan only downloaded in AAC format to iPod, and for a long time, Mora only downloaded in ATRAC3 format to Sony’s digital walkman. In late 2006, Sony changed its strategy so that Mora also began to support downloads in the Win-dows WMA format.

Consequently, a minority of the iTunes Japan catalogue was Japanese, and as of early 2007, only about 8 out of the top 20 songs on the best-selling CD charts could be found on the site. Hence, iTunes was running some risk of be-ing seen as a site for Western catalogue and Japanese independent releases, but not necessarily the hottest J-Pop hits, which comprised the majority of Japanese popular music sales. Meanwhile, Sony and other record companies used Mora to promote new songs rather than present a comprehensive historical catalogue. Hence, while downloads to PCs were growing, they were not as compelling an alternative for consumers as they could have been given the lack of a compre-hensive lineup and high prices relative to rental shops, who benefited from the boom in digital music players.

Nonetheless, a minority of Japanese respondents used downloads to PCs quite heavily, downloading as much as a hundred songs a month through P2P



sites such as Limewire. P2P use was relatively low in Japan compared with the United States, with only 3.5% of PC owners using them actively; industry ob-servers believed that the existence of the CD rental market and the arrests and convictions of people such as Kaneko Isamu, the developer of popular P2P site Winny, discouraged P2P use. Nonetheless, 2006 saw a doubling of users who had had some experience with P2P to 12% (RIAJ). In comparison, half of the American respondents used Limewire, which was the top site from which users downloaded more than four songs a month.

Among pay-sites, the most popular among the Japanese survey participants were iTunes, Tsutaya Online, Yahoo Music, and Mora, in that order. iTunes enjoyed top share as owners of iPods, the top DAP, tended to use it. Tsutaya Online benefited from the brand name of its CD retail and rental operation and its wide selection. Yahoo Music also benefited from brand name, being part of the franchise of Yahoo Japan, Japan’s largest portal and now a gateway to Softbank Mobile. Mora, used by only one respondent, was considered less easy to use than other sites.

When asked what factors would need to change for them to download music more often, 69% of respondents wanted lower prices; at 200 yen for a hit song and 2,000 yen for an album, prices for downloads in Japan were roughly two-thirds higher than in the United States. Over a third of respondents wanted downloading to be easier to use. Several wanted more songs to be available, with some looking for current hits, others historical hits, and others a greater variety of genres. Several respondents wanted a way of paying without using credit cards.

Impact on CD Sales

When asked if downloading onto cell phones or PCs had had any impact on their purchases of CDs, 74% of Japanese downloaders claimed that it did not. Of the respondents, 15% claimed that downloading had increased their purchases of CD singles and albums. On the other hand, 11% claimed that downloading decreased CD purchases, primarily of singles.

The Japanese survey suggested that downloading was having a positive impact on CD sales. Of the respondents, 68% said that they had purchased a CD after having downloaded a song. Of this number, 87% wanted to hear the whole album after having heard the song; 56% wanted to play it on a home or car stereo; and about 30% wanted the accompanying CD sleeve notes or lyric sheet or the better sound quality afforded by a CD. As mentioned previously, industry revenues in 2006 showed that gains in downloading were offsetting losses in CD sales.

Downloading seemed to have a more negative impact on CD purchases by Americans, where a third of respondents claimed that downloading had reduced

their CD purchases. Nonetheless, a quarter of respondents claimed that their downloading had increased paid downloads, while a handful said that they had bought more CD albums as a result of discovering music on the Internet. Similar to the Japanese respondents, over half of American respondents had bought a CD after having downloaded a song, in order to hear the entire album, play on a stereo, or enjoy better sound quality.

Implications for the Record Industry

Since the beginning of music downloads on the Internet, attitudes of Japanese record companies toward digital distribution have varied from being willing to distribute through many portals, as with Avex to having focused on exclusive channels, as with Sony. Some record companies were initially reluctant to make their music available digitally due to concerns about piracy or cannibalization of CD sales. In addition, content rights tended to be held by parties close to artist management, which was not always integrated with record companies; in such cases, record companies had less incentive to increase digital distribution because they would not have benefited directly from digital sales. Nonetheless, Avex’s financial record in 2005 and 2006 suggested that the open strategy was more beneficial to profitability; by mid-2006, a quarter of Avex’s revenues and the majority of its profits were gained from cell phone downloads. Downloads carried higher rates of profitability because they reduced the cost of distributing physical CDs and carried no risk of inventory writedowns. The visible success of Avex and growth in the downloading market eventually spurred other record companies to adopt more open policies.

According to some managers of artists in niche genres, the tendency of record companies to use mastertones for promoting mainline J-Pop artists was actually skewing the industry ever more to these mainstream genres. Portals for master-tones of hip-hop, reggae, and other genres did exist, but because they were not part of the official menu of carriers, they tended not to get much traffic. With the increased use of free sites on the mobile internet, this profile appeared likely to change over time, and a number of respondents reported using non–J-Pop ringtones in tandem with their J-Pop ones.

Over the long term, some record executives expressed concern that increased digitization of music sales would lead to the death of the album. In 2006, 72% of downloads to PCs were single tracks rather than albums, while 85% of CD purchases were for albums. Most downloaders claimed that downloading was cheaper than buying an album because one could buy only the songs one wanted rather than the entire album. However, as of mid-2006, record companies, re-tailers, and artists were all continuing to promote albums as the primary unit. Musicians wanted a longer format than a single to express themselves as artists,



while record companies and retailers wanted the higher price points of albums relative to singles. Nonetheless, the concept of what made a good album, or how an album was marketed, seemed to be shifting to that resembling a greatest hits compilation. Particularly noteworthy was the project “12 Singles Collection” by Avex’s J-Pop star Koda Kumi who released 12 singles over 12 consecutive weeks starting in December 2005 and later repackaged them into a top-selling album. Meanwhile, some independent record companies were moving toward releasing singles exclusively in the chaku-uta full format (RIAJ). Nonetheless, the album as a marketing unit seemed hard to relinquish: some record companies were making only a few songs out of an album available on iTunes, forcing fans to buy the album to get the other songs, while others bundled extra videos into the CD album (personal communication).

Another point to explore was the potential for changes in the construction of a song. As with most Anglo-American pop songs, most J-Pop songs followed a verse-chorus format, sometimes with a bridge. However, as of September 2006, downloads of full tracks accounted for only 35% of mobile phone download rev-enues; in terms of the number of downloads, mastertones outpaced full tracks by a factor of nearly five to one. Many record industry executives believed that most consumers would migrate to full track downloads once they either acquired phones capable of the service or the prices per track came down. However, sev-eral respondents expressed a preference for partial song clips precisely because those contained only the hook, and the survey showed a large preference for the chorus over other parts of the song.

When asked whether the use of songs in ringtones was changing the way artists conceptualized a song, most music executives and artists claimed that this was not the case. Most songwriters preferred to think of the song as telling a story, which they found easier to do with multiple verses. Other executives claimed that as many Japanese pop songs were promoted as theme songs for commercials or tele-vision programs, songwriters were used to writing songs in a way so that the hook was delivered within thirty seconds. Nonetheless, there were several instances of thirty-second mastertones being released into the market first with the full track only becoming available (or even composed) once the success of the mastertone had been established. Examples included a song by Nakama Yukie, which started as a KDDI television commercial and mastertone, and a thirty-second clip by Mihimari GT, both of which were later made into full songs (RIAJ).

Conclusion

This study of the consumption of music provides several views on how corpo-rate policies and industrial structure can affect how music is heard and acquired. Open, consumer-friendly business models, such as the environment created by


NTT Docomo for the mobile internet, were stimulatory to music distribution; initially high prices and limited availability of titles for PC downloads were not. Differences in corporate strategies within an industry were also revealing, where Avex’s open policy toward supplying portals with product fit well with its musical lineup and enhanced its overall profits. It took well over a year for other record companies to appreciate the power of mastertones as promotional tools, either as trial purchases or as free advertisement from another person’s phone. Furthermore, the case of iTunes Japan underlined the fact that the global music industry was not a monolith but a collection of locales, where Sony and Warner set policies differently in Japan than in other countries. The relative importance of various types of media also played a large role in what music is heard; for example, the Japanese music industry’s concentration on J-Pop would seem a self-fulfilling prophecy, given that exposure through a handful of spots on mass-audience television remained the key to popular success.

Comparisons between Japanese and American users revealed remarkable similarities, such as the number of ringtones in use, the purposes of multiple ringtones, the prevalence of copying CDs, and the tendency to listen to music while on the go. Such similarities should dispel notions that ringtones and other mobile phone applications, often first popularized in Japan and Asia, were culture-specific phenomena but were in part products of industrial en-vironments. The primary differences between Japanese and American users stemmed from the fact that the American respondents were more likely to own PCs, which made them more likely to own iPods and download music from the Internet; on the other hand, the Japanese were more likely to use mobile phones, which was the result of an industrial environment that was historically more user-friendly than in the United States.

Nonetheless, cultural differences may have come into play in the meanings that each population attributed to certain ringtones. While clearly these mean-ings had a highly personal element for both cultures, particularly for ringtones assigned to particular callers, cultural norms for extroverted behavior appeared to influence the degree to which one expressed emotions and projected images through ringtones and attached signficance to other people’s ringtones. Many Japanese had adopted the norm of non-obtrusiveness through the use of silent mode yet continued to use audible ringtones within the confines of their homes and social groups. Such cultural differences in the interpretation of ringtones may prove a promising line of inquiry.

Acknowledgments

My special thanks to Edgar Pope for help in distributing the questionnaire; to Katsuma Kazuyo (JP Morgan) and Nathan Ramler (Macquarie) for data and


guidance; to the executives, A&R managers, producers, and artists at Avex, Baby Mario Productions, Cultural Convenience Club, Dwango, Faith, File Records, For-side.com, Index, KDDI, MTI, Nippon Crown, Nippon Enterprise, NTT Do-como, Pony Canyon, RIAJ, Rightscale, Softbank, Sony, Sony Music, Solomon I&I Production, Toshiba EMI, Yahoo Japan, and others who wished not to be named for their time in interviews; and to my students at John Jay College and Brooklyn College for sharing their opinions. Finally, I thank the editor, Jennifer Milioto Matsue, for her help.

CUNY Graduate Center

Notes

1 See Manabe (2008) for a discussion of the history of the mobile internet in Japan and

the role of ringtones in its development.2 United States and United Kingdom figures from M:Metrics, as quoted by IFPI. Ac-

cording to a survey by TNS Global Technology Insights, 16% of U.S. subscribers have 3G

but only 10% use 3G-related functions (ZDNet 2006). 3 Of all subscribers nationwide, 67% hold a 3G contract as of December 2006. Na-

tionwide market shares for the carriers are similar to the sample group, at 55% for NTT

Docomo, 29% for KDDI, and 16% for Softbank Mobile as of the end of December, 2006

(Telecommunications Carriers Association 2007).4 See also Video Research 2007, which shows that only about 45% of Tokyo area teen-

agers listened to the radio for more than 5 minutes a week, and that these radio users

listened for only 35 minutes a week on average. 5 This split is more heavily weighted toward foreign artists than the national average.

According to RIAJ, about a quarter of audio recording sales were for foreign artists in

2006 (RIAJ 2007). 6 In the area where the survey was taken, most Internet cafes charged 270 yen (US$2.25)

for 30 minutes. 7 According to market research firm BCN, iPod’s share in Japan was estimated at 47%

and Sony’s at 20%. (Nikkei Net 2006) 8 Only 17% of Japanese subscribers had handsets that were more than two years old,

and only 5% had handsets that were more than three years old (Internet Kyokai 2006,

38). Yen estimates were made at 120 yen to the U.S. dollar, the prevailing rate in January

2007. Japanese carriers were able to justify higher acquisition costs because monthly rev-

enue per customer is higher, at 7,000 yen, versus US$40 (Katsuma, JP Morgan, personal

communication).9 See Manabe (2008) for a detailed history of the ringtone in Japan. 10 Numbers add up to more than 100% as many respondents use more than one

ringtone.11 Executives of record companies and retailers, as well as industry watchers such as

RIAJ, felt that the fixed retail price system, which essentially creates a uniform retail price

for a particular CD across the retail environments, was unlikely to disappear because it

helped to maintain prices.


12 These numbers were less than the national average, which was 42% for less than one,

42% for one to four, and 16.5% for five or more (Mobile Contents Forum 2006, 126).13 The respondents were heavier users of ringtones than the national average, where

43% download less than one ringtone per month (Mobile Contents Forum 2006, 121).14 Even with these rates, the respondents had higher rates of usage than the national

average, where of the 82% of subscribers who had mastertone capability, 67% used it, and

of the 29% of subscribers who had full track download capability, 67% used it (Mobile

Contents Forum 2006, 119, 123–24).15 Penetration of fixed-line broadband Internet climbed earlier in Japan (72% in

February 2006) than in the United States or Europe, thanks to low prices instigated

by Masayoshi Son of Softbank who drove prices down to about 3,000 yen a month for

the Yahoo BB service in 2001. This rate was lower than the all-in cost of dial-up at the

time. Current rates at the service start at 2,180 yen per month (ca. US$18) for a 8MB

ADSL service. (Internet Kyokai 2006, 39; Manabe 2001)

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consumption of music in japan vs. us

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