Merchandise Disguised as Albums

There are certain parts of the world–notably South Korea and Japan–where physical music product is still a big and profitable business. But why. Mark Mulligan at Music Industry Blog explains:

The Handshake Economy

by Mark Mulligan

We are in the era of the always-on fan, with artists making themselves ever more available to their fans. It is a transition that comes with no shortage of challenges, not least the extra workload it places on artists and the way it chips away at the magical aura that surrounds them.  There is an inherent tension between increasing an artist’s appeal through increased accessibility and creating it by maintaining distance.  Contrast this with YouTubers like Jenna Marbles, PewDiePie and Phil and Dan who share so much of their lives with their fans.  Platforms like Kickstarter, Paetron and the ever excellent PledgeMusic have given artists the ability to balance artistic credibility with monetizing their super fans. But while such efforts are currently on the fringes there is a country where super fans are at the heart of recorded music revenue. Artistic credibility however is not exactly at the top of the menu.

Merchandise Disguised As Albums

In Japan 78% of music sales are still physical. On the surface, for such a technologically sophisticated country as Japan this looks like a resounding success story for the CD. But all is not as it may at first appear. The Japanese music business long ago mastered the skill of using the CD as a tool for driving ancillary revenue. J-Pop artists used to routinely simultaneously release multiple editions of albums. But while in Western markets special editions typically entail different tracks, artwork and packaging, J-Pop special editions often featured exactly the same tracks and artwork but a different free gift. In practice this was merchandise sales disguised as music sales. This strategy banked on the repeatedly proven theory that super fans would buy every single edition. The practice still continues but looks patently philanthropic compared to the successor strategy of Japanese idol artists.

Read on. Meanwhile, things are changing. Indications are that Spotify is looking to hire people in Japan.

Alan Cross

is an internationally known broadcaster, interviewer, writer, consultant, blogger and speaker. In his 30+ years in the music business, Alan has interviewed the biggest names in rock, from David Bowie and U2 to Pearl Jam and the Foo Fighters. He’s also known as a musicologist and documentarian through programs like The Ongoing History of New Music.

Let us know what you think!

This site uses Akismet to reduce spam. Learn how your comment data is processed.