Rakuten beats Spotify to streaming in Japan

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Spotify took another jab in Japan today as ecommerce company Rakuten announced its own music streaming service.

The service launched with 3 million Japanese and international songs. Rakuten says it’s aiming to bring that number up to 20 to 30 million by the end of the year. Costs are on par with Apple and messaging app Line’s music streaming at around US$10 for all-you-can-listen and US$5 for 20 hours a month. Fees are slightly lower if you use a Rakuten account to pay.

Rakuten is also looking to cash in on Japan’s love for physical music goods. Music-related products will show up in search results and artist pages with links to buy through Rakuten’s online bookstore for five percent off.

Taking its sweet time

Maybe Spotify is rope-a-doping in Japan but every second it waits brings more competition from local mobile carriers like NTT Docomo to multinationals like Apple.

Even if you can crack the licensing nut, Japan remains a CD loving nation.

Spotify has had a team in Japan since at least last year and looks like it is ramping up hiring with 10 positions currently available in the country.

Japanese site IT Media reported Spotify was rumored to launch last month in the country. A few of my friends moving between Japan and other countries have mentioned hearing advertisements in Japanese requesting them to upgrade to premium.

It sounds like years of tussling with music companies over licenses and freemium options may finally be coming to a close.

Tough nut to crack

Streaming services have come and gone in Japan. Sony even killed its own service last year after joining hands with Spotify. Gaming company Dena stopped the music after one year.

Even if you can crack the licensing nut, Japan remains a CD loving nation. While in 2015 revenues from digital music overtook physical music globally for the first time, it’s not even close in Japan.

Numbers from the Recording Industry Association of Japan show that revenue from streaming services was around US$43 million in quarter one of 2016. Physical sales were more than ten-fold that amount at US$450 million. Although these numbers are skewed by idol group loving fans who often buy more than one copy of a CD, overall consumption habits will not change so fast.

With Rakuten joining the fight, Spotify better start looking for knock-outs because if things go to a judge’s decision it might not survive.