Land of the rise in fun: Why booming Japan is such a tough market to crack
‘Big in Japan’ was a term, in the 80s and 90s, for modestly successful American and European acts that found slightly unlikely mega-stardom in the Land of the Rising Sun.
It wasn’t an insult, exactly – who wouldn’t want to be big in Japan? – but it was often used sneeringly, whether directed at Mr Big, the early-90s rock supergroup who still hop up into the big leagues every time they touch down at Narita International Airport, or Scatman John, whose 1994 record Scatman’s World is, remarkably, Japan’s 17th biggest-selling international album of all time.
But the days when Japan might have been seen as an easily impressed bonus market for Western acts are long gone. Over the past 20 years or so, the balance has shifted dramatically, as Japanese domestic music output – as well as that of nearby frenemy South Korea – has surged in both quantity and quality. Today, international music takes, at most, a 10% share of the live market, with domestic on a commanding 85% and South Korea’s K-pop juggernaut accounting for about 5%.
Today, the Japanese music market is the second biggest in the world, behind the US and ahead of Germany. Its live sector has set new records in both of the past two years, hitting ¥332 billion in 2017 (around €2.7bn) and then rising again to ¥345bn (€2.8bn) in 2018 – a 3.7% uplift that came in spite of a small decline in the number of shows – according to the All-Japan Concert and Live Entertainment Promoters Conference (ACPC).
“The Japanese market in live entertainment has been on the upward trend since the middle of 2010,” says ACPC director Takao Kito. “That’s not only because of the increase in live shows caused by a drop-off in CD sales, but because of a change in users’ minds from consuming products to experiences.”
Clearly, Japan remains a highly appealing market for international promoters and artists, and the big ones are certainly chipping away at it. Live Nation has a Japanese office and, with local partners, has co-promoted plenty of recent arena shows. AEG, meanwhile, worked in partnership with Japanese giant Avex on its recent Ed Sheeran and Celine Dion concerts. But both global promoters know they face a stiff challenge to get much deeper into the Japanese business.
Korean stars record Japanese versions of their songs. In a country where little English is spoken, and even less Korean, such things make a difference
“It is a very mature, competitive market that Live Nation has had a hard time getting traction in,” concedes Live Nation Japan president John Boyle, who has headed the giant’s Japanese push since early 2018. He says Live Nation has big hopes for Japan but fully appreciates the challenge of bringing them to fruition. “I think it is more challenging than anywhere else in the world,” he says.
The fact is, for all its surging fortunes, Japan has numerous characteristics that fly in the face of Western music business orthodoxies and, in many cases, restrict access from outside. CDs remain dominant, claiming 80% of music sales, but though the physical market has certainly declined, streaming has not yet caught on, removing a vitally important channel for artists seeking to find exposure in a new market.
Record companies remain powerful but heavily domestically focused, with local majors – of which there are many, including titans such as Avex, Universal, Sony Music Entertainment Japan and JVC Kenwood – unlikely to take a punt on an unknown foreign act, however successful they may be elsewhere. Tour support, once commonplace, has fallen out of fashion.
Meanwhile, large venues, remarkably scarce in the immense sprawl of Tokyo, book up years in advance, with weekends often block-booked by domestic promoters working in groups. For international operators attempting to route world tours and finding only assorted weekday evenings available, locking down an appropriate venue at the right time becomes profoundly difficult.
Where smaller international bands are concerned, the situation is not much easier. There are no booking agents in Japan, and mixed festival bills are limited and hard to crack. While promoters are heavily engaged in scouting new talent, few are tempted by foreign artists with little following. So new indie artists looking to build an audience typically need to deal direct with Japan’s rai-bu houses – small, private venues that usually don’t pay – and organise their own promotion.
But of course, that 10% doesn’t come from nowhere. Sheeran, needless to say, does good business, selling out the Tokyo Dome and Osaka’s Kyocera Dome in April, supported – as he was across all of Asia – by Japanese rock heroes One OK Rock. Live Nation, too, has its own pipeline: recent arena shows include Bruno Mars, Taylor Swift and Maroon Five, with U2, Queen and Adam Lambert and the Backstreet Boys coming soon.
“The market for international artists – not counting K-pop – is now around a third of what it was 45 years ago”
Paul McCartney, who spent a memorable nine nights in a Tokyo jail in 1980, once again has the run of the place: he has played 19 shows and a dozen VIP soundchecks in Japan since 2013 – at the Tokyo Dome, the Ryōgoku Sumo Hall and the Nippon Budokan in the capital, plus trips out to arenas in Nagoya, Osaka and Fukuoka.
What is very clear though, is that, Western rock and pop sensations aside, Japan’s growth is very much coming from within. “I have been in this business for nearly 45 years,” says Yoshito Yamazaki of long-serving music, sport and musical theatre promoter Kyodo Tokyo, which promotes Korean sensations BTS in Japan, “and I’d say the market for international artists – not counting K-pop – is now around one third of what it was 45 years ago.”
Japan’s own J-pop is a broad and varied thing, nominally encompassing everything from singer-songwriters such as Kenshi Yonezu and Gen Hoshino, to multiplatinum pop-rockers Mr Children, to J-pop/metal fusion Babymetal, although its most prominent category is idol groups – manufactured pop bands assembled by all-powerful, notoriously controlling management agencies. Many of Japan’s major pop stars are made this way, including boy bands Arashi, KAT-TUN, Exile, Suchmos and others, and girl bands such as AKB48, Morning Musume, Momoiro Clover Z, Keyakizaka46 and Nogizaka46, who inspire obsessive cults and make most of their income through live work and, more to the point, relentless merchandising.
Homegrown rock is booming in Japan, too, led by Babymetal but also One OK Rock, Band-Maid, Scandal and Man With a Mission. And, of course, the nation has long supplied intriguing cult artists to the rest of the world, from the Yellow Magic Orchestra and its lynchpins Haruomi Hosono and Ryuichi Sakamoto to Shonen Knife, Cornelius, the Boredoms and Boris.
K-pop, meanwhile, has made a big impression in Japan, even as diplomatic relations between the two countries have soured in recent years. But unlike Western artists, Korean stars such as BTS, Blackpink and Twice record Japanese versions of their songs. In a country where little English is spoken – and even less Korean – such things make a difference.
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Japanese live business reaches record high in 2017
The value of the Japanese live market hit a record high in 2017, according to preliminary figures from the latest edition of the annual Live Entertainment White Paper.
While the market shrunk slightly in 2016 – down 2% year on year, to ¥501.5 billion (US$4.56bn), largely owing to a shortage of available large venues – the live business recovered 2.5% last year to reach a record high of ¥513.8bn (US$4.67bn) reveals the provisional Live Entertainment White Paper 2018.
According to the 13 companies and associations that compile the report – collectively the ‘Live Entertainment Investigation Committee’, and including the All-Japan Concert and Live Entertainment Promoters Conference (ACPC), Japan Association of Music Enterprises (JAME) and Ticket Pia – the recovery was largely attributable to the reopening of two arenas, Saitama Super Arena (37,000-cap.) and Yokohama Arena (17,000-cap.), both of which were closed for renovation through much of 2017. (Pia itself announced in mid-2017 it is building its own arena in order combat the venue shortage.)
However, smaller venues also fared well, with venues under 10,000 capacity reporting an increase in the number of performances compared to 2016.
Courtesy of Ticket Pia, a graph shows the growth of the live entertainment business since 2007 (pink is live music):
The full report, with detailed analysis, will be released in September.
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Pia bets on dynamic pricing with Yahoo partnership
Pia Corporation, the dominant player in the Japanese ticketing market, has revealed plans for a new company dedicated to rolling out dynamic pricing for concerts, sports and other live events.
Dynamic Plus – a joint venture between Pia, web giant Yahoo! Japan and leading sogo shosha (general trading company) Mitsui & Co. – will dynamically price “various tickets for concerts, sports, theme parks, events, etc.”, as well as for more traditionally surge pricing-friendly industries such as hospitality, delivery services and car parking.
An IQ investigation into dynamic pricing – in which prices are allowed to fluctuate based on market demand – in December 2016 discovered uncertainty around its potential applications in live music.
Barry Kahn, the CEO of Qcue, a leading developer of dynamic pricing software, said the practice is difficult in the US – where venues usually have exclusive agreements with ticketing providers – and expensive, so for that reason is more popular for long runs at a single venue. However, Andrew Parsons of Ticketmaster UK said he believes dynamic pricing is suitable for multi-venue tours, as opposed to just residency-style shows, explaining that the company can easily “manage it across multiple promoters and venues”.
Currently, Ticketmaster only dynamically prices tickets sold on its premium Platinum platform, although Parsons said he’d “love to think” there will be a time when the company’s GA tickets are sold in the same way.
“We will respond quickly to customer needs by automatically increasing and lowering prices”
At press time, it is unclear which tickets Pia – whose Ticket Pia platform is, according to the International Ticketing Yearbook 2017, Japan’s leading entertainment ticket agency, and which is soon to be a venue owner in its own right – is intending to dynamically price, but the company says it and its partners are upbeat on the potential of the new pricing strategy.
According to a news release sent to investors, Mitsui & Co. has been collaborating on a dynamic pricing pilot with a prominent Japanese baseball team since last year, and Pia has already conducted several “proof tests” and is “preparing for commercialisation”.
“We will respond quickly to customer needs by automatically increasing and lowering prices on the basis of our forecasting, and also contribute to the improvement of profits,” reads the letter.
“We aim to contribute to the healthy development of this industry.”
According to industry publication Live Entertainment White Paper 2017, the value of the Japanese live market as a whole decreased slightly in 2016 (the most recently available data), declining 2% on 2015 to ¥501.5bn (US$4.6bn), largely owing to a shortage of available large venues. However, even at 2016 levels, the market has doubled in value since 2001.
Japanese ticketer Pia to build own arena
Pia Corporation, which operates Japan’s leading ticket agency, Ticket Pia, is to construct its own arena in Yokohama in response a “venue shortage” in Japan’s second city.
The 10,000-capacity arena, which has yet to be named, will be used solely for music, with the company aiming to stage more than 200 concerts annually.
According to Pia’s Live Entertainment White Paper 2016, the value of the Japanese concert market has more than doubled in the past five years, but the country’s venue infrastructure has failed to keep pace with the increase in concertgoers. The last new arena to be built in the greater Tokyo area was the 36,500-cap. Saitama Super Arena, completed in September 2000.
The new venue is set to open in 2020 in Yokohoma’s Minato Mirai 21 district, on 12,000m² of land leased from the Mitsubishi Estate Co. Ltd, Japan’s largest property developer.
Pia in May launched Tiketore, Japan’s first Twickets-style face-value ticket resale site.
Pia launches Japan’s first ticket exchange site
Pia Corporation, the company behind Japan’s largest primary ticket agency, Ticket Pia, has established the country’s first face-value ticket exchange.
The launch of Tiketore (チケトレ), which went live on 10 May, comes after several industry groups, festivals and artists took out newspaper ads in support of #ResaleNO, an initiative aimed at ending the “huge profits” being earned from the secondary ticketing market, last October.
The new site is endorsed by the four industry associations – the Japanese Federation of Music Producers (FMPJ), Japanese Association of Music Enterprises (JAME), All-Japan Concert and Live Entertainment Promoters’ Conference (ACPC) and Computer Ticketing Council – all of which backed #ResaleNO.
In a joint statement, the four organisations express their hope Tiketore will offer an alternative to “the present situation, where ticket resale is rampant” on for-profit secondary ticketing sites.
Pia charges both seller and buyer a 10% handling fee, with the buyer also paying for the cost of posting the ticket.
These fees, although the same as the 10% charged to buyers by Twickets (although it doesn’t bill sellers), have already provoked criticism from some users of social media, with many Japanese complaining the cost of buying and selling is too high. (Ticket Camp, for example, has a lower rate of commission, although it also allows listings for tickets above face value.)