Could Line Music spark a revenue shift in CD-loving Japan?
Last week messaging app Line launched its streaming service in the world’s second largest music market, Japan, beating most Western services including Spotify, Rdio, and Pandora to the territory.
It’s aim is to change the direction of the country’s long lean toward physical (in 2014 78% of recorded revenues (AU$3.36 billion) came from physical sales), andas Line Music told TMN, it’s decision to not offer a free tier is strictly business.
“The idea of a free model seemed to pass up too many opportunities from a business perspective,” said a Line Music spokesperson. “The balance of revenue versus expenditure just did not make sense for us this time, so we decided against implementing a free model for Line Music.”
With just 17% of recorded revenue attributed to digital sales in 2014, it could be said that Line Music is in for a slow first year. However, physical sales have actually been slowing since 2012, when the sector was previously growing year-on-year. It’s expected digital sales are in for a boost, which is great for Line Music but bad for the music industry as a whole; the price for a CD is around AU$38 and iTunes tracks go for around AU$3.20, compare that to 99c in Australia.
“[The objective] is to breathe new life into the music industry, by serving as a conduit that connects users with music and allows them to discover new content,” the spokesperson told TMN.
The service launched in its home country with a modest catalogue of 1.5 million tracks from labels including Sony, Universal, and local heavyweight Avex, following its entrance into Thailand last month.
“We had been working on all the preparations necessary to make Line Music the perfect service for users, while also planning to release it at the right time,” the Line Music spokesperson said. “Everything we needed to ensure a flawless user experience, including the service’s library size, price plans, and features, came together and culminated in the launch of the service in Japan and Thailand.”
Line Music is currently the only streaming service in Japan; Sony Music Unlimited closed in the territory in January to favour its partnership with Spotify. However, another reason behind its stance against freemium is thatit will have its only rival in the market before the month is out. Apple Music will launch in over 100 countries come June 30 and is expected to include Japan in the global rollout.
Its pricing tier is more expensive than Apple Music's $9.99 offer – ¥1,000 (about $8) for unlimited access, or ¥500 ($4) for 20 hours of streaming – and its music catalogue presumably pales in comparison to the tech giant’s, despite its promise to expand to 30 million tracks by the year’s end. However Line Music saidit has 205 million monthly active users in total; Apple Music currently has none.