Low CD sales kill HMV Shibuya

Hiraku Iwasaki and Etsuo Kono / Yomiuri Shimbun Staff Writers

Music enthusiasts crowd HMV Shibuya in Shibuya Ward, Tokyo, to bid it farewell as it closed its doors Sunday.

After 20 years spent influencing the pop music tastes of a nation, HMV Shibuya has closed its doors, symbolizing the disappearance of music retail outlets and the CDs they sell.

The rapidly rising popularity of downloading songs from Internet outlets such as Apple's iTunes has contributed to the marked decline in CD sales in Japan, which have fallen 60 percent from their peak, and caused retail stores to close.

The closure of HMV Shibuya, which pulled down its shutters for the last time on Sunday, is symptomatic of what is happening throughout the industry. Elsewhere in central Tokyo, too, other large CD retailers have been closing their doors.

"Thank you, HMV Shibuya!" cried the members of boy-girl duo Wyolica on Sunday afternoon after their final performance on the second floor of the shop, where they and so many other artists have performed.

Since the shop's closure was announced in June, it has hosted daily concerts by artists who had performed there in the past.

The Shibuya branch was the British chain's first outlet in Japan. It opened in Tokyo's trendy Shibuya district in 1990, at the same time as CDs were overtaking records as the mainstream format for music. The shop moved to its current location in 1998.

Music lovers were smitten with the original location and its 1,400 square meters of floorspace. In addition to the unusually large size for a music store in Japan, the retailer also offered a large selection of imported CDs, which were difficult to come by at that time.

A number of young musicians influenced by Western pop music, including dance group Pizzicato Five and pop singer Kenji Ozawa, made their live debuts on the store's special stage, spawning a sophisticated genre of pop dubbed Shibuya-kei. Shop staff often wrote special comments to accompany the new bands' CDs to help them sell.

"They introduced new music from a distinctive viewpoint," said DJ Yasuhiko Akasaka. "It was as influential as any radio station."

One 37-year-old woman remembered the shop fondly: "What made it brilliant was that they introduced cutting-edge music. It was like a holy place for me."

What goes up...

By the late '90s, music retailers were experiencing a boom in CD sales, helped along by million-selling albums such as Hikaru Utada's octuple platinum 1999 debut "First Love."

But with the new millennium came the prevalence of cell phones and the Internet, which completely changed the situation.

U.S.-based Amazon.com began selling CDs online in 2001, taking customers away from CD shops.

Ringtone songs made their full-fledged debut in 2002, and became instantly popular because they made it possible to buy individual songs.

Online music downloads saw a jump in popularity after Apple Inc. made them reputable with the 2005 launch of its iTunes Store, through which music buyers can download music media to a variety of devices.

Peter Barakan, a critic familiar with the Japanese music industry, said most sales of hit songs are made online.

In 2007, HMV Japan found itself in financial hardship and was sold to a Japanese investment firm, which was planning on selling it to yet another company.

Although the outlet was still recording annual sales of about 46 billion yen in recent years, one industry source said the Shibuya shop was forced to close because it wasn't generating enough profit to pay for the lease on its prime Tokyo real estate.

In June, the British chain also closed its Ginza shop. At the end of 2008, the chain had amassed 67 outlets; by the end of this month, that number will have been reduced to 45 in an attempt to pull through this difficult time.

Virgin Megastore, which landed on these shores at the same time as HMV, quit the Japanese market in 2009.

Shinseido Co., one of the largest domestic CD retail chains, meanwhile, was 1.2 billion yen in the red this year and has been forced to reduce its number of employees.

While downloads seem to be the wave of the future, record labels still face problems in terms of sales.

In 2009, the industry saw its growth suddenly slow to only 0.5 percent from the previous year to 91 billion yen. The decline is being blamed on illegal downloads, according to one industry source.

If the music industry continues to see its sales--both CDs and downloads--fall, it will begin to feel the loss in its wallet, effectively discouraging musicians from doing their craft. One of the central government's growth strategies relies on the promotion overseas of Japan's pop culture, including music and fashion.

The government should work with the industry to prevent illegal free music downloads and keep the music industry alive.