Mobile Music Japan

SUMMARY

NTT DoCoMo pioneered the mobile music market by introducing polyphonic ringtones (Chaku-Melody or Chaku-Melo) on i-Mode in 1999. Polyphonic ringtones were a tremendous success, and a vibrant market for mobile music started to develop in Japan. Today mobile music in Japan represents a totally new Billion Dollar per year market for the benefit of consumers, artists, composers and the music industry. In the meantime, mobile music has become a substantial fraction of the music distribution market in Japan, replacing traditional music distribution methods such as CDs and DVDs and tapes.

The rapid development of this new market also allows opportunities for several newcomers, freshly founded companies, several of which have in the meantime completed very successful IPOs on stock exchanges in Japan. Traditional corporations, such as record companies and technology companies, as well as new players and young companies together are creating and driving the vibrant new music market.

Technological advances and improvements in the sound reproduction have been introduced constantly since 1999, and several new services and markets have been introduced, such as "Melody call", which might be called "reverse ringtones".

The present report describes the development, structure and trends of the mobile music market in Japan. The report also presents several of th mobile music market participants, and presents market data and quantitative estimations for the music market size and trends in Japan.

Our market reports and earlier versions of the present report have been purchased by major global telecom carriers and equipment manufacturers from US, EU and Japan, investment bankers, equipment manufacturers, service providers, University students and professors and many professionals from all over the world. The Government of Finland has engaged us to advise on the research funding strategy for mobile services, and the Harvard Business School (HBS) is using one of our reports for research and teaching.

TABLE OF CONTENTS

• Executive Summary: mobile music in Japan Introduction
• Japan music markets overall
  • Characteristics of Jpaans music markets and trends
  • Mobile music compared to total music market
  • Ranking of Japans record major labels (figure: ranking of top labels by sales, data for 2002 and 2003)
  • Mobile music compared to network music markets (figure: mobile music, MIDI music, online music sales for 2001-2004)
• Mobile music in Japan as a new eco-system
  • Mobile music - introduction
  • Mobile music as an eco-system
  • The innovative nature of mobile music in Japan
• Development stages of mobile music in Japan
  • Development stages of mobile music in Japan (time line of developments)
  • The progression of mobile music (table)
• Polyphonic ringtones (Chaku-melo) versus songs (Chaku-Uta)
  • Ringtones vs chaku-uta songs
  • Ringtones vs chaku-uta songs (table)
  • Polyphonic ringtones (Chaku-melo) versus songs (Chaku-Uta)
  • Royalties and licensing for ringtones
  • Key market players, Karoke (figure: Karaoke sales data for 1998-2003)
• Market size for mobile music in Japan
  • Market size for mobile music in Japan (overview)
  • Mobile music compared to total music market (figure showing data for international/imported and local Japanese recorded music, music videos, and mobile music for the years 1994 - 2003)
  • Mobile music as part of the total music market
  • Royalties for ringtones (data for 1999-2003)
  • Market size for ringtones estimated from the royalty data (figure showing data for 1999-2003)
  • Daily downloads for ringtones
  • Mobile music market size in Japan (ringtones, subscriptions, songs etc) (figure showing data for 1999 - 2003 with projection to 2006)
  • Comment on the size of the mobile music market
  • Japans global market share for mobile music
  • Japans global market share for recorded music (figure comparing the size of the ten major music markets
• Music: from Chaku-Melo to Chaku-Uta and full songs
  • 3G to revolutionize music distribution
  • 3G to revolutionize music distribution: trends
  • Chaku-uta downloads on KDDI/AU
  • Full songs on KDDI/AU from 2005
• Chaku-Uta versus i-Tunes: statistics and implications
  • Chaku-uta vs Apple i-Tunes downloads
  • Chaku-uta vs Apple i-Tunes (figure comparing download data for 2003-2004)
  • Implications
• "Chaku-Uta Full"
  • Description, overview, analysis
  • Chaku-uta Full top menu, user interface
  • Segmentation, music types, menu categories
  • J-pop menu
  • Top three chaku uta full sites
  • Handset user interface
• JAVA applications - i-Appli
  • Types of JAVA applications for music
  • Example: "Dance Dance Revolution" ("DDR or D. D. R.") by Konami
  • DoCoMo i-Mode partner Konami and Konami Networks
• "EZ.FM on air check appli"
  • Introduction, description, discussion
  • Site menu
  • JAVA appli user interface
  • Usage demonstration and functionality
  • Music recognition and music data base applications
• Mobile music as a competitive advantage for KDDI/AU
  • Music distribution via EZweb, the official menu, discussion
  • EZweb: the official menu, discussion
  • Music distribution via EZweb, AU-records and EZ music store
• Music distribution and marketing via EZchannel
  • Introduction, top menu
  • What is EZchannel?
  • EZchannel program guide menu
  • Sample listing of three subscribed and stored EZchannels in user handset
  • Example for music distribution via EZchannel: "Chaku uta ranking channel"
• The i-Mode eco-System
  • The i-mode eco-system
  • The i-mode eco-system for music (schematic figure)
  • Todays 3G i-mode in a nut-shell (overview of the user perspective)
  • The i-mode user experience 2004/2005 - navigating the menu (with timing estimations)
  • The i-mode user experience 2004/2005: top menu for FOMA (listing)
  • The i-mode user experience 2004/2005: the i-menu (using Macromedia Flash) (listing and explanation)
  • The i-mode user experience 2004/2005: the i-mode top menulist (highlighting music sections)
• Mobile music on i-mode
  • Music on the i-mode official menu list, discussion and explanations
• The chaku-melody (ringtone) sub-menu on i-mode
  • The top of the ringtone i-mode section (J-POP, top positions and ranking)
  • The J-POP section of the i-mode ringtone section
  • Discussion of the top ranked sites of the J-POP section of the ringtone (chaku-melody) devision
• The chaku-uta (song) sub-menu on i-mode
  • The Chaku-Uta portal section (top positions and ranking)
  • The Chaku-Uta portal section (J-POP division: top positions and lower ranks)
  • Discussions of rankings and top site on the Chaku-Uta portal section (J-POP division)
  • Reasons and discussions for the difference in ranking for Chaku-melo and Chaku-uta
• Music sales and music information on i-mode
  • Music / movies and show business portal section (top level positions and ranking)
  • Reasons and discussions for ranking
• Music playing on handsets
  • Music players
  • MPEG Music player for i-motion and chaku-uta
  • Player for chaku-melody (ringtones) (functionality and equalizer function)
• DoCoMo "Melody Call"
  • DoCoMo "Melody Call" - creating a totally new market for music
• Mobile phone handsets for mobile music
  • Handsets for mobile music
  • KDDI: music sells phones
  • DoCoMo "Music PORTER" by Mitsubishi
  • Vodafone "Music" concept model
  • Matsushita / Panasonic concept model "Beyond 3G"
• Overview of Japans telecom markets as relevant for mobile music
  • The second wave of 3G introduction in Japan (from 2005)
  • Japan telecommunications landscape (schematic showing transactions and major players as of March 2005)
  • 3G and 2G cell phone subscriptions in Japan (figures showing cell phone subscriptions for different carriers and different technologies for the period 2002-2004 with projections to 2007)
  • First wave of 3G introduction (2G to 3G conversion for the major carriers: KDDI/AU, DoCoMo and Vodafone) (figure showing 3G conversion ratios for the time period 2001-2004 with projection to 2009)
  • Competition in the mobile phone market in Japan (figure showing subscriber numbers and macro trends for the period 1998 - 2004)
  • Competition in the mobile internet market in Japan (figure showing subscriber numbers and macro trends for the period 1999-2004)
• From 2005: the second wave of 3G development in Japan
  • The second wave of 3G introduction in Japan (from 2005)
  • Second wave of roll-out (from 2005) (table comparing systems)
• Mobile music in Japan: Summary