Music Streaming is Gaining Popularity in Japan But Not The Largest

While streaming is steadily gaining popularity in Japan, CDs still account for the largest share of recorded music revenue in 2023.

This is a unique trend compared to many other major music markets where streaming has surpassed physical formats.

Some key observations:

1. CD sales remain strong: Despite declines in other formats, CD revenue has stayed relatively stable over the 5-year period, dropping only slightly from 2019 to 2023. CDs still make up over 60% of total music revenue in Japan as of 2023.
2. Streaming growth: Streaming revenue has increased significantly from 2019 to 2023, nearly doubling in share. However, it still lags far behind CDs and hasn’t disrupted the physical market dominance yet.
3. Downloads in decline: Revenue from music downloads has decreased steadily over the years, likely due to the rise of streaming services. By 2023, downloads contribute a very small portion of overall revenue.
4. Niche formats stable: Vinyl records, music videos, performance rights, and synchronization make up a small share of revenue throughout the period, not showing major changes.

Several factors contribute to Japan’s strong CD market:

• An older demographic that prefers physical formats
• A collectible music culture valuing high-quality packaging and bonus items
• A lack of streaming service adoption among older generations
• Strong physical music distribution networks and retail presence

Japan will likely see further streaming growth in the coming years. One of the most iconic DVD and CD rental stores shut down recently to catch up with the technology shift. But the data suggests CDs will remain a vital part of the country’s music landscape for some time.

The Japanese recorded music industry has managed to sustain a healthy physical market alongside a steadily growing streaming sector, demonstrating a unique balance not seen in most other countries.

As record labels and artists continue to navigate changing consumer preferences, the Japanese market shows that physical sales, especially CDs, can still be a reliable source of revenue in the increasingly digital music era.

However, the industry will need to adapt strategies to maintain this balance as streaming inevitably becomes more widespread.