Differences and similarities in marketing music between the Japanese and the German music market

Bachelor Thesis, 2009

75 Pages, Grade: 1,8




1. list of figures and tables
1.1. list of figures
1.2. list of tables

2. introduction

3. the Japanese and the German music market: overview
3.1. comparing the current status
3.2. characteristics of the Japanese music market
3.2.1. the trend evolution velocity
3.2.2. fan following in Japan
3.2.3. the idol industry
3.2.4. otaku
3.2.5. domestic vs. international repertoire
3.2.6. karaoke
3.2.7. CD rental shops
3.2.8. ringtones / chaku uta
3.3. music diversity
3.3.1. domestic repertoire enka kayokyoku J-pop


4. advertising
4.1. defining the term marketing mix
4.2. one of 4 Ps: Promotion
4.3. media and its role regarding advertising in both countries
4.3.1. television
4.3.2. radio
4.3.3. press
4.3.4. internet
4.4. testimonials
4.4.1. definition
4.4.2. use of testimonials in Japan and Germany
4.5. the tie-in system
4.5.1. definition
4.5.2. TV tie-ins in Japan
4.5.3. TV tie-ins in Germany
4.6. the influence of mobile downloads for advertising in Japan
4.7. new ways of advertising
4.7.1. MySpace
4.7.2. games
4.7.3. other collaborations


5. online survey
5.1. assumption and goal of survey
5.2. survey structure and procedure
5.3. results
5.3.1. socio-demographics
5.3.2. media use
5.3.3. tie-in system games TV series anime
5.3.4. ring tones
5.3.5. testimonials.
5.3.6. music in German television
5.3.7. MySpace

6. conclusion

7. references
7.1. book references
7.2. online references
7.3. figures and tables references


8. appendix
8.1. Japanese survey (“music in Japan”)
8.2. German survey (“Musik in Deutschland”)



figure 1: Kose Fasio print ad

figure 2: Toshiba W55T print ad

figure 3: billboard ad in shibuya

figure 4: screenshot German survey

figure 5: screenshot notice-board doitsunet.com

figure 6: frame from “guitar hero: world tour” TV ad feat. Heidi Klum

figure 7: frame from Alice-DSL TV ad feat. Brad Pitt


table 1: use of pop songs in German TV ad campaigns


Five years before starting my studies at the University of Applied Sciences Bremen, I absolved an apprenticeship at Warner Music Germany, one of the leading major music labels. During these 2 ½ years, I gained a thorough insight of the various departments a record label has to offer such as TV, radio and press promotion, A&R as well as licensing and retail. I continued working for Warner Music after graduation and put my gained knowledge to good use.

My interest for music and the music industry in general didn’t end when I chose to study Applied Business Languages (emphasis Japanese) and International Management in Bremen, and during my yearlong stay in Japan, I couldn’t help but notice the abundance of pop music “made in Japan” and some peculiar differences on how music seemed to be promoted.

Why shouldn’t there be differences anyway? Japan is unlike the rest of the world in so many ways, why shouldn’t this be the case for the music business? This train of thought led to the subject of this bachelor thesis.

In order to compare the promotion tools of both markets, it is important to gain an overview of both music industries first: chapter three defines the current status as well as some of the characteristics of the Japanese and German music market.

Chapter four takes a closer look at the marketing mix and presents the most important promotion methods used in Japan while comparing these to the German market such as testimonials and the tie-in system. It also gives examples of new ways of advertising both in Japan and Germany.

The next chapter deals with the empiric research conducted for this thesis in order to support and/or disprove the claims and observations made in the previous chapters. Possible reasons for the differences between theory and practice are presented as well.

Last but not least, chapter six sums up all important information about the differences and similarities in a nutshell.



In 2007, 267 million albums und singles have been sold in Japan, leading to a total production value of 333 billion Yen (app. 2.4 billion Euros), leading to a decline of 10% and 5% respectively compared to the previous year. On the other hand, download sales of singles and albums made a huge improvement compared to 2006 with 465 million downloads, 26% more than previous year, leading to sales of 75.5 billion Yen (app. 55.2 million Euros) with an increase in value of 41%. This marks an increase in digital music delivery sales for the third consecutive year. (RIAJ yearbook: 1)

In Germany, music sales such as singles, albums, music videos and downloads lead to a total production value of 1.6 billion Euros in 2007. The decline of 3.2% compared to the previous year is not as low as in Japan. (Phononet 2007: 12) While the album sales have been steady in Germany with only a small decrease of 0.6%, single sales have been replaced by downloads, making the digital music delivery an important part of the German music industry: 10.7 million singles were sold in Germany in 2007 compared to 15.9 million singles sold in 2006, leading to a decrease of 32.7%. On the other hand, the digital music delivery of single tracks increased with 40% compared to the previous year. (Phononet 2007: 18f)

In Japan, the growth of digital sales is due to the success of mobile digital contents, mobile downloads on ones cell phone. 92% of all downloads were carried out by mobile phones, while only 8% took place via computer and laptop. (RIAJ yearbook 2007: 1) The huge success of digital mobile sales is one of the characteristics of the Japanese market and will be discussed in detail in chapter 3.2.8.

In Germany, the fast growing use of technical devices such as MP3-ready cell phones or MP3 players such as the iPhone from Apple may be one of the reasons for the success of digital music delivery. (Phononet 2007: 27)

Digital piracy, the illegal digital distribution via uploading, is an important topic in Japan and in Germany. To raise the awareness of this topic, the Japanese music industry seems to focus on educational campaigns in order to inform the public of the consequences of illegally downloading music rather than looking for culprits. (RIAJ yearbook 2008: 1) German record companies have a much stricter approach regarding this matter: there have been 16,000 civil suits in 2007 due to illegal music file sharing, resulting in restraining orders to temporarily close down file sharing networks. The legal procedures against illegal file sharing seem to work in Germany: the number of illegal P2P network users decreased from 4.4 million in 2005 to 3.4 million in 2007, with more users starting to pay for their downloads. (Phononet 2007: 27f)

Another reason for the decline in single sales in Japan is not only the recession, but also the existence of a large CD rental market leading to CD piracy. Young music fans seem to rather wait for the release of the proper album of their favourite artists than spending money on their latest singles. (McClure 1999) This development is amplified by the presence of the large legal CD rental market in Japan, where one can rent an album CD for just 280 Yen a week. (Manabe a 2008: 260) More information on the rental shops in Japan can be found in chapter 3.2.7. While there is no CD rental market due to copyright laws in Germany, CD piracy also represents a significant problem to the German music industry. According to a survey conducted by the German research institute GFK, 391 million burnable CDS have been sold in 2007, with every third CD used for music. (Phononet 2007: 24ff)

Last but not least, the rapidly aging population, leading to a decrease of youth willing to consume and purchase music, is also a problem the Japanese record companies are aware of. (Takeuchi Cullen 2006)



The fast pace of e.g. consumer goods and fashion trends in Japan applies to music preferences and hypes too, meaning that the high trend evolution velocity of fashion trends, quickly preceding technological improvements (especially in the mobile phone business) and an extreme saturation in terms of offer influence the Japanese music market in a great way, forcing music companies to predict new tendencies in order to foresee upcoming music trends, which explains the multitude of releases. (European Music Office 2004: 10f, 17)


The impressive fan following for certain artists in Japan is well-known. Japanese fans are very passionate about “their” star. This applies to both Japanese and international music artists, with the successful Korean artist Boa (while living in Japan) being a good example. (European Music Office 2004: 10) To reach this level of fame though, the presence of the artist in everyday Japanese life through media coverage as well as concerts is an indisputable component in his/her career, one of the main reasons international music stars have a hard time breaking the Japanese music market. This explains the heavy use of tie-ins and testimonials, the use of a song and/or the artist itself for commercials or dramas. (European Music Office 2004: 12f) A more profound look at the tie-in system can be found in chapter 4.5. Besides physical presence, another important aspect is the need of constant evolution of the artist to maintain the public’s attention, based on the evolution of the public’s tastes and preferences, making it easier for the public to identify itself to the artist. (European Music Office 2004: 10) The key is to keep the fan base as well as the general public interested in the whereabouts of the artist, constantly feeding them with information and tidbits to keep up the awareness. Another more extreme form of fan following is described in chapter 3.2.4.


The term “アイドル” (pronounced “aidoru”, from the English word “idol”) characterizes young female and male performers whose common trait is the image of “the girl or boy next door” while being an object of worship. Some of these artists even toy with the gender representation while presenting themselves as androgynous. (Aoyagi 2005: 16, 31) Idol performers are typically presented as pure, innocent, childlike and cute. (Aoyagi 2005: 33) They represent a subgenre of Japanese pop music, emerging from kayokyoku in the late 60s. While kayokyoku was more targeted towards a more mature audience, the main audience for idols was teenagers. (Aoyagi 2005: 4)

Besides selling music in form of CDs and downloads, the main goal of idols is to act as lifestyle role models in order to gain a large fan following which will buy “アイドル グッズ” (pronounced “aidoru guzzu”, Japanese for “idol goods”), merchandise such as photo albums, key chains, apparel such as shirts, pencil cases etc. (Aoyagi 2005: 3f)

The idol phenomenon is not limited to Japan: throughout the years, there have also been international artists or groups being idolized worldwide, such as the New Kids on the Block in the 80s, the Backstreet Boys and the Spice Girls in the 90s and in recent years Britney Spears and Christina Aguilera. (Aoyagi 2005: 4) The difference is the sheer size of the Japanese idol industry and the vast amount of players involved: there are various idol promotion agencies whose sole purpose is to scout, train and turn young potentials into marketable commodities, organizing castings and auditions every year. (Aoyagi 2005: 46f) Then there are advertising agencies such as Dentsu, Japans biggest ad agency, which has a division being devoted to bring together these promotion agencies representing the idols and marketing corporations which hire idols for ad campaigns to heighten the image of their product. (Aoyagi 2005: 136) Then there are media institutions, especially tabloids, which rely on young idols to fill their magazine pages with stories about them, having enough power to end or to start idol careers. (Aoyagi 2005: 48) Last but not least, there are plenty of companies such as manufacturers of confectionery, toiletries and electronic products which are the main employers of these idols, because the company products and the idol personalities both appeal to young consumers. (Aoyagi 2005: 49)

3.2.4 OTAKU

The term “おたく“ (pronounced “otaku”) means translated “another’s house” or “another’s family”, but is commonly used and translated as “nerds” and refers to people who are practically obsessed by a certain artist or celebrity. Idol otaku are the fans who rave about Japanese idols presented in chapter 3.2.3 and who collect any goods related to that artist, attending their concerts as well as fan conventions. The devotion to certain idols doesn’t stop there, as many otaku also publish their own newsletters and magazines revolving around their favourite star. (Aoyagi 2005: 205ff)

Originally used as a word by comic book fanatics and artists to address each other in conversation in the early 80s, the once positive term received a negative connotation when police arrested 26-year-old Tsutomu Miyazaki in 1989 for murder of four girls. The media coverage was huge and reports especially highlighted Miyazaki’s lifestyle, particularly his passion for comic books with mostly pornographic content where young female characters were most typically victims of rape. In the aftermath of this incident, otaku people were generally stigmatized as not being able to socially interact with individuals, especially with the opposite sex, making the term derogative. (Aoyagi 2005: 210f)

There seems to be a grain of truth in this description, as the abnormal attraction of male idol otaku toward young and cute-looking female celebrities is often explained by the fact that these fans gain a sense of selfhood by worshipping a non- threatening and submissive image of a young woman that female pop idols embody. (Aoyagi 2005: 229f)


There is a remarkable disequilibrium regarding the domestic and the international repertoire sold in Japan: the share of domestic products in total sales accounted for 77% compared to 23% of international products in 2007. (RIAJ yearbook 2008: 2)

This demonstrates a preference for music made in Japan (Asai 2008 b: 102) and explains why independent record labels such as Avex Inc. play such an important role in Japan. Due to its specialization in producing and marketing only domestic repertoire, Avex Inc. possessed 15% of the Japanese music market in 2003. (handbook Japan 2004: 23)

While domestic repertoire is performing quite well in Germany, it is not doing as well as in Japan: Germany’s share of domestic single sales is 49% in 2007, the domestic album sales is around 39%. Almost half of the 25 most successful single and album chart performances in 2007 were achieved by German artists. (Bundesverband Musikindustrie 2007: 44ff)


Karaoke means literally translated “empty orchestra”, the term being a combination of the Japanese words “カラ” (pronounced “kara”, Japanese for empty) and “オケ” (pronounced “oke”, an abbreviation for “okesutora”, orchestra) and was first introduced in 1971 in Kobe. (Cahoon 2005) Karaoke is a form of entertainment, where amateur singers sing along the lyrics being shown on a karaoke machine screen while an instrumental version of a song is playing. (Nakata 2008) Singing takes place in a private room, while food and drinks are being served. (Cahoon 2005)

The impact of karaoke on the music business is huge: it influences the way Japanese songs nowadays are composed and written, trying to come up with songs which are not only good to listen to, but which can also be a suitable hit for audiences to sing along in karaoke boxes. (Cahoon 2005) Enka songs in particular are very popular in karaoke boxes, and a karaoke version of a song is always included on Enka singles. (European music office 2004: 8)

The karaoke industry, reaching its peak around 1997, gradually declined throughout the years. Main cause was the emergence of leisure activities and entertainment electronics such as the internet, video game consoles and MP3 players. (Nakata 2008)


One of the major differences between the German and the Japanese music market is the presence of record and CD rental shops in Japan, which was briefly mentioned in chapter 3.1. (Nippop 2005)

A CD rental shop is not legit in Germany due to Germany’s copyright law. It wasn’t legal in Japan at first too: one year after the first rental shop opened its doors in 1981 in Mitaka (Tokyo), a consortium of record labels filed suit against these kinds of stores due to Japanese copyright law infringement. (Nippop 2005)

The reason behind the suit was the fear of declining album and single sales. In the end, the law was changed to address music rental rights: rental shops had the right to offer singles and albums for rent three weeks after their official commercial release in Japan. Customers looking for albums from artists overseas need more patience though: the rental prohibition period for foreign repertoire is one year. (Nippop 2005)

The high time of the record rental shops was in 1989, with 6,000 stores nationwide. Looking back, the fear of crashing sales was uncalled for, quite the contrary: it seems that these shops helped spark the interest of customers for new music, offering the possibility to try out new music for a reasonable price. (Nippop 2005)

Nowadays, there are around 3,300 of these stores left, which turned to a sort of hybrid shop throughout the years: besides renting CDs, many stores offer new and used CDs for sale as well as games and DVD rental. (Nippop 2005)


Music downloads for mobile phones of chaku-utas (mastertones and ringtones sampled from the original song) and chaku-uta full (downloads of the whole song) in Japan (Manabe 2008 a: 258) have become a mainstay of digital music delivery since its introduction in 2004. There has been a 91% growth in sales of chaku-uta in 2007, accounting for 51% of all mobile digital contents. (RIAJ yearbook 2007: 1) Unfortunately, piracy is also a big issue regarding digital music products, and record labels and content distributors try to come up with effective countermeasures to stop mobile-based piracy. (IFPI digital music report 2009: 16)

It all started with the access to the internet through mobile phones in Japan in 1999. (Manabe b 2008: 81) The increasing use of the mobile internet was due to various factors: one of the reasons may be what Noriko Manabe calls “the mobile, ambulatory nature of Japanese urban society” (Manabe b 2008:81): mobile phones with internet access are very convenient considering the fact that an average Tokyo resident commutes app. two hours a day from home to work or to school with public transportation. (Manabe a 2008: 258)

Second, low commission rates to content providers and subsidized mobile phones helped to further develop the mobile internet. (Manabe b 2008:81)

Third, the early adoption of 3G, a cell phone broadband internet service first introduced by NTT Docomo in 2001 helped pave the way. While the companies overseas seemed reluctant to use the new technology, already two-thirds of Japanese mobile phone customers used the service to go online with their cell phone, leading to 85% of mobile internet use by the Japanese mobile owners on a daily basis, compared to 12% and 14% in the US and Great Britain respectively. (Manabe b 2008: 81f)

All these factors helped pave the way for the success of the distribution of music over cell phones in Japan. Actually, musical content was a driving force for the success of 3G. (Manabe 2008 b: 82)

One reason for the tremendous success of downloading music on mobiles was the unreasonable pricing of internet downloads: initially, downloading a song on Mora, an online music store for the Japanese market, cost 400 yen. Prices only dropped when iTunes was launched in Japan in 2005, it was too late: the cheaper mobile downloads had already been effectively established. Another reason was the easy payment system for mobile downloads, as costs were just added to the phone bill, which was especially helpful for young consumers owning no credit cards. (Manabe 2008 a: 260)


To put it simply, the Japanese music market can be divided in two categories: “Domestic” and “International” (European Music Office 2004: 7) This may seem odd at first, but this assumption is backed up by the fact that even the yearbook of the Recording Industry Association of Japan has two different charts: one for the domestic, one for the international artists. (RIAJ yearbook 2008: 18ff) International repertoire is divided into different kinds of main and sub categories, the main categories being rock/disco, jazz/fusion, pop, screen and classical. (RIAJ yearbook 2008: 12)


The main category “Domestic” is divided in many different sub categories. Three of these sub categories are a particularity to be found only in the Japanese market: Enka, Kayokyoku and J-Pop. (European Music Office 2004: 7) To take a closer look at these genres is crucial, as they make up almost 70% of total domestic sales: Enka 16%, Kayokyoku 19% and J-Pop even 34% (RIAJ yearbook 2008: 13) ENKA

Main target audience for Enka, perceived as traditional Japanese music, are consumers who are over fifty years old. The consumer group may be small, but it is still highly profitable. Enka songs are very popular in Karaoke bars, which is why Enka is closely related to the karaoke culture. (European Music Office 2004: 8) KAYOKYOKU

Kayokyoku, also known as contemporary Japanese popular song, is a mixture of traditional Japanese folk music and Western-style music. Most of the Kayokyoku songs are modified or urbanized folksongs from the countryside. Same as Enka, Kayokyoku may be compared to the “French chanson” (Kitahara 1966: 271f) and marketing efforts are also targeted to an older audience. (McClure 2002) J-POP

The word J-Pop has several meanings. In general, J-Pop is an umbrella term for all Japanese productions, be it pop, rock or electro made in Japan. (European Music Office 2004: 8) This is comparable to the general meaning of “manga” and “anime” overseas, referring to comic books and cartoons made in Japan.

Originally, the term J-Pop was used by the Japanese music industry to refer to a particularly commercialized music genre. J-Pop is highly promoted and marketed and in synch with the “idol” culture in Japan, trying to come up with new stars best suited to public demand. One main characteristic of J-Pop artists is the defined image and intricate style they are representing. (European Music Office 2004: 8)

Another use of the term J-Pop refers to the absorbing and remaking of foreign productions. As pointed out in chapter 3.2.5, the Japanese audience favours domestic repertoire. Nonetheless, international music stars are idolized in Japan too, leading to copycats, mimicking the stars personal and musical style while the song lyrics are Japanese. (European Music Office 2004: 8)



According to Kotler, “the marketing mix is the set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market” and is therefore one of the major concepts in modern marketing. These tools are divided into four groups known as the ”four Ps”, namely Product, Price, Place and Promotion. Companies are using these instruments in order to create and enhance the demand for its product. (Kotler et al. 2008: 76)

Product stands for the goods-and-services combination which a company offers to their target market Price is the sum a customer has to pay to obtain the desired product Place is the location where the product can be purchased by consumers Promotion is the sum of all activities used to communicate the benefits of the product and to persuade the target customer to purchase it (Kotler et al. 2008: 76) Ideally, the marketing program consists of all of the above mentioned tools in a healthy relationship to one another in order to deliver the desired value to the customer. Therefore the marketing mix is seen as the company’s tactical tool kit for establishing strong positioning in target markets. (Kotler et al. 2008: 76f)

One might argue that the “four Ps” concept takes the seller’s point of view of the market and not the buyer’s. Realizing that customer value is more important these days, the four Ps can be described as the four Cs as well, taking the customers stance, turning Product into “Customer Solution”, Price into “Customer Cost”, Place into “Convenience” and Promotion into “Communication”. (Kotler et al. 2008: 77)


In the music industry, promotion takes place at different kinds of levels. Concerts and live appearances on TV or radio shows for example are a successful way to keep in touch with the target audience and to maintain a certain level of awareness. Video clips play an even more important part than traditional advertising. Target audience of Promotion in the music industry is not only the end customer, but also retail in general in order to stimulate demand. Sales promotion such as posters and cardboard displays is also used to generate buzz at the point-of-sale as well as radio and TV competitions with tour tickets as prizes. (Breyer-Mayländer et al. 2006: 225f)

Promotion is generally divided into two parts: “above-the-line” and “below-the-line”. Above-the-line promotion is also known as traditional advertising and refers to all promotion in media such as TV, radio, newspapers as well as outdoor advertising. All other forms of promotion are therefore called below-the-line promotion such as public relations, sponsoring, trade shows, product placement and online communication. (Meffert et al. 2008: 647ff)

The following chapters will focus on below-the-line promotion such as testimonials, the tie-in system as well as new methods of advertising.


Mass media such as TV, press, radio and internet is used more often than any other leisure activities such as e.g. sports or meeting friends in Germany. (SevenOne Media 2005: 6) Media also plays an important role in Japan, making it necessary to take a closer look at the various main media actors. (European Music Office 2004: 31)


Television plays an important role in advertising, as Japanese people watch TV four hours per day on average. Leaders in terms of market shares are the private networks offering mostly entertainment programs such as Japanese soaps called “どらま” (pronounced “dorama”, from the English “drama”). The popularity of these dramas, self-contained mini-series made especially for TV, is the reason for the frequent use of tie-ins, which will be further discussed in chapter 4.5. (European Music Office 2004: 31f)

In Japan, the daily broadcast of various entertainment shows such as games or music programs and the high number of viewers make TV appearances of music stars indispensable. This measure is taken to not only promote new singles or albums, but also to ensure the fans ongoing loyalty. (European Music Office 2004: 32)

For the German public, television is the most important and most used mass media, with consumers turning on their TV more than 5 hours daily, with radio being number two. (SevenOne Media 2005: 20) When asked to pick only one mass media in a survey, every second participant chose TV, with the world wide web close behind: every fourth person picked the internet, with radio and press far behind. (SevenOne Media 2005: 40)

Nevertheless, there is a discrepancy between the popularity of television in Germany and the spent advertising budget: the advertising industry is spending more money on print advertising, using 38% of the ad budget for ads in newspapers and magazines. (SevenOne Media 2005: 20)

Compared to advertising in other mass media, TV ads are considered entertaining and are not as annoying as radio spots. (SevenOne Media 2005: 32)


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Differences and similarities in marketing music between the Japanese and the German music market
University of Applied Sciences Bremen
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Yves Gilbert (Author), 2009, Differences and similarities in marketing music between the Japanese and the German music market, Munich, GRIN Verlag, https://www.grin.com/document/323906


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