CDs still hold sway in streaming era in Japan

By Yusuke Tsuruta / Yomiuri Shimbun Staff Writer

12:00 JST, January 27, 2023

Forty years after the release of the first compact disc, CD sales are still alive in Japan, despite the proliferation of online streaming services.

In the heyday of CDs, people hailed their ease of use compared to other music formats, but now they are likely to be purchased as a way for fans to show their support for an artist, or prized as collector’s items.

Billy Joel’s “52nd Street” and Eiichi Otaki’s “A Long Vacation” were among the first CDs to be released in Japan on Oct. 1, 1982.

At 12 centimeters in diameter, CDs were more compact and lighter than the popular analog audio format they would eventually overtake, vinyl records, which are usually 30 centimeters in diameter.

Another benefit of compact discs is that the format solved the problem of crackles, pops and hiss associated with analog audio sources such as tape and vinyl.

Philips and Sony were involved in the development of CD technology and wrestled over the specifications of the format. Philips wanted CDs to hold 60 minutes of recorded music and have a diameter of 11.5 centimeters. Meanwhile, Sony insisted the format should have a diameter of 12 centimeters and hold 75 minutes of music so that Beethoven’s Symphony No. 9 could be recorded on one disc.

Although other types of compact discs have been developed over the years, such as 8-centimeter discs and Blu-spec CDs that can hold audio of higher fidelity, standard discs have not changed since the original specification was settled, and the format is still kicking 40 years on.

“It proves that the specs that were initially decided were not wrong,” said Hirofumi Nakayama, Vice President of Sony Music Studios Tokyo. “The sound quality suits human ears. That’s why they’ve been loved for so long.”

According to the Recording Industry Association of Japan (RIAJ), the CD market overtook analog records in 1987 and hit a peak of about ¥587.8 billion in 1998. Since then, CD sales have gradually fallen partly because of the emergence of online music distribution. In 2021, the market was worth about ¥123.2 billion, about one-fifth of the peak value.

While streaming music services have gained popularity around the world in recent years, the appeal of physical music formats such as CDs has continued in Japan.

Compact discs and records accounted for about 10% of music revenue in the United States in 2021, according to data from the Recording Industry Association of America. In contrast, CDs, records and other physical formats accounted for about 70% in Japan, having more than doubled compared to that of digital formats, according to the RIAJ.

To tempt the fans of the pop stars and K-pop groups that dominate music charts, music labels often release multiple versions of a CD with different jackets or track lists, or come with event tickets.

Meanwhile, CDs that contain songs that are not on streaming services are fetching high prices in the second-hand market.

Tower power

Over the years, Tower Records Japan Inc. has changed the layout of its shop floors to fit the times. Initially, the retail chain sold CDs and records in the same section, but by around 1988, compact discs had replaced most of the vinyl.

In the 1990s, the chain mainly operated mega-stores with large inventories and a wide range of genres, but in the 2000s, the chain rolled out smaller stores inside shopping malls nationwide, specializing in popular Japanese artists.

Since the start of the 2010s, the chain has targeted die-hard fans with eye-catching signs and corners where shoppers can take selfies. Some of the stores even have stages where musicians can hold mini concerts.

“Consumers value CDs for reasons other than music, particularly in Japan,” said Masato Hasegawa, General Manager of the Retail Business Division of Tower Records Japan. “The market still exists.”