If recording labels in the US want a share of Apple's digital music success, in Japan they much rather prefer taxing iPods for their losses. In a new move, Japan's music industry has requested the government to add a royalty to the retail price of the ipod and other portable mp3 and digital players such as the iPod to the tune of 2 to 5 percent that would be handed as compensation to recording companies for revenues lost.
That some of Japan's biggest labels Sony Music Entertainment (Japan), BMG Japan, Warner Music Japan and Victor Entertainment are unwilling to dance to the tune of iTunes is also possibly an indication of the brewing trouble. Recently singer-songwriter Motoharu Sano unable to get his back catalog (with Sony) on the hugely popular iTunes music lists, signed directly to change that situation. His August-released mini-album “The Sun Studio Edition” with four rehashed tracks and two unreleased ones made its exclusive debut on iTunes Japan to become No.1 on the iTunes Japan charts.
Sano who believes that inter company bickering unduly limits the music choices of fans, hopes to make available his entire catalog quickly on iTunes for download in Japan and abroad. Similarly singer-songwriter Kazufumi Miyazawa (Toshiba-EMI) has recorded for distribution via iTunes Japan, a rehashed version of “Shima Uta”, an international hit originally released in 1993 by Sony. The appeal of iTunes in Japan is unquestionable and while labels are trying to battle the popularity with undue demands, the artistes are trying to bridge the gap by finding ways to cater to the demand without hurting their agreements with the labels.
Given that Apple iPod's wildly popularity in Japan, iTunes too has become a hit with 1 million songs being sold in just four days following its 4th August launch. It is clear that the likes of Sony are disconcerted by Apple's move into their turf and as a key threat to the "Mora" download service on the Sony-backed ATRAC file format, that is backed by Japan's major labels. With price being key to the signing of an agreement between iTunes and Japanese music labels, iTune's 150 yen per song clearly undercuts Mora's pricing. But they do not see the opportunity that iTunes' 1 million titles offer over Mora's mere 200,000.
One industry member suggests, “As much as industry tried to convince the press and the public that iTunes would fail in Japan or take years to get anywhere, the reality is that iTunes is doing very well…And artists and their fans want their material available on iTunes". But the struggle of traditional music industry to catch up with Internet's prevalence has brought to the limelight the industry's ability to force its view on the public by lobbying with the government. Even if it gets away with this request for royalty, the media finds the very idea of an "iPod tax" as a ruse to slowdown iTunes' arrival in Japan as one of “the very in things”.
While Japanese recording industry cries wolf, the rise of the portables is inevitable even as CDs and MDs lose their very raison d'etre to “silently, lose money” as Koichi Numamura, head of the recording at the Japanese Society for Rights of Authors, Composers and Publishers puts it. But given that a similar 2 percent fee exists on the earlier generation “new devices” like compact disk recorders and mini-disc recorders, the proposed fee on iPod-like portables is very imminent but unlikely to deter iTunes fans from downloading more music.
