Korean Boy Bands, Anime: Saving Japan’s Music Biz?
It’s not easy trying to make money in Japan’s music industry. For years now, much of the revenue from higher-margin CD sales has been robbed by the bursting growth of digital music downloads and pirates.
Avex shares registered a fresh 2010 high on Thursday and shares are up 64% year-to-date versus a 12% decline in the broader Nikkei Stock Average.
The reasons are even more intriguing: a boost in CD and DVD sales linked to mega-hit animated series “One Piece” and the hugely popular South Korean boy band Tong Vfang Xien Qi, known better in Japan as Tohoshinki.
Earlier this year, the five-member South Korean pop group, which made a debut here in 2005, devastated fans with an announcement that it would cease group activities in Japan and focus on solo work. Fortunately for Avex, that sparked sales of a Tohoshinki greatest hits album and solo singles.
“I have to admit this bad luck has also brought us good luck,” said Avex spokesperson Taishi Arashida. “These guys are clearly beyond the conventional South Korean boom.”
Beyond the Tohoshinki and One Piece phenomena, market experts say there is also a longer-term cause for optimism in Avex’s earnings: new sources of revenue. Tomoaki Kawasaki, an analyst at Cosmo Securities, said many investors expect the company to also raise its full-year earnings outlook soon on faster-than-expected growth in subscriptions to “BeeTV” — a paid-for service launched in May 2009, owned 70% by Avex and 30% by NTT Docomo Inc., that produces and broadcasts content for mobile phone users.
The number of users has reached over 1.4 million subscribers from just 440,000 in June last year, well ahead of the company’s 1.5 million target by March 2011. Okasan Securities projects the BeeTV business to turn profitable on an operating basis as early as by the next fiscal year.
That’s good news for Avex, because it has been particularly successful in luring female consumers in their twenties to BeeTV drama contents featuring their favorite actors and screenwriters, while also diversifying its contents to meet the needs of different age groups.
“The industry faces difficult market conditions, but it boils down to whether each music company can deliver strong content,” Cosmo Securities’ Kawasaki said.
And whether that content derives from South Korea, animation or mobile phones, it looks like Avex is on the winning side, at least for now.
credit: japan real time
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