Spotify seeking to be big in Japan

Spotify is gearing up for a crack at the Japanese market, in what could open up a lucrative Asian opportunity for the music service.

paidContent understands the outfit is speaking with record labels about opening up shop in Japan around January.

Spotify and some of its peers amongst the new wave of unlimited musi subscription services have already had feet on the ground for some time in places like Tokyo, Hong Kong and Beijing to explore new opportunities in Asia-Pacific.

Such services are moving in to new countries in a rapid grab for consumers. If, versus the already-popular MP3 download sector, the subscription segment is relatively new in the west, in Japan it is positively virginal. This summer, Sony’s Music Unlimited launched in its owner’s backyard as only the country’s first legal subscription music service.

It is thought Sony Music Entertainment and the local label Avex have been reluctant to license their music for subscription, preferring the downloads model. Ringtones also remain relatively more popular in Japan than elsewhere. If Sony Music Unlimited proves popular, it could convince owners of subscription’s viability.

Back in March, blogger Alex Cosentini wrote: “The top five largest music markets (in order) are the US, Japan, Germany, the UK and France. Spotify is in four of those countries with the exception of Japan.

“There is a lot of potential in Japan for Spotify. A launch in Japan can help them to expand into other Asian countries. If Spotify is to expand into Asia, Japan is where to start.”

Although Japan is a large music market, the large Chinese population could represent an even bigger opportunity. Today, China barely has a legal downloads market to speak of. If services like Spotify can enter alongside an improved intellectual property regime, they would leapfrog the hurdle of converting existing legal downloaders to subscribers, as they are facing in established markets, going straight in to signing up long-term subscribers from a populace of former pirates, for whom subscription may be their first taste of legal digital music.

Spotify gained early investment in 2009 from Hong Kong’s Li Ka-Shing Foundation, owner of Hutchison Whampoa. But, whilst many expected that to lead to its entry to China, it went only as far as bundling on handsets via 3, the network owned by Hutch, and in its INQ smartphones.

Twenty-three music services are licensed to deal in digital music in Japan, according to the Pro-music industry resource…