France-headquartered music company Believe has taken another step in its expansion in Asia, announcing the opening of a new office focused on Japan.
Believe’s Tokyo office was launched in March and is now open for business in the world’s second-largest recorded music market, the company said in a statement on Thursday (October 5).
Some of the company’s key executives in the market include Erika Ogawa as General Manager for Japan, and Mari Ochiai as Head of Artist Services.
The office offers services in two categories: Label and Artist Solutions, a marketing and consulting service for artists and labels, and Artist Services, which provides marketing strategy, data analysis, financial support and music distribution to artists.
Believe is also the majority shareholder of TuneCore Japan, which has been active in the market for the past 10 years
Believe’s expansion into the market follows a year (2022) in which subscription music streaming was a half-a billion-dollar-plus business in Japan, reaching 75.62 billion yen or USD $575 million.
The CD continues to thrive as the market’s No.1 music format, however. According to RIAJ data, revenues from CD sales in Japan topped $987 million (129.8 billion yen) in 2022, reflecting YoY growth of 5% – marking the reversal of the format’s decade-long sales decline in the market (see below).
Commenting on the state of the music market in Japan, Erika Ogawa, Previously Head of Label Services of TuneCore Japan, said in an interview in August: “Our data and forecasts indicate continuous acceleration in music streaming growth. This won’t change, but what might evolve is the mix of key players in the domestic market, as we’re seeing global players growing faster than local ones.
Ogawa added: “I also tend to think that labels and artist management companies will have more focused roles, because distributors like Believe have a big role to play in a Japanese digital market that didn’t exist before. Rather than overlapping, I think the players in this ecosystem will each have a more focused role to complement each other.
“Above all, I’m looking forward to seeing how the digitization of the local music industry will influence Japanese artists and music, both at home and abroad. We’ve seen global chart-topping Latin artists being increasingly influenced by Japanese culture and anime, something I’m eager to see develop in the future, as it can become a real opportunity for our artists.”
“Our data and forecasts indicate continuous acceleration in music streaming growth [in Japan].”
Erika Ogawa, Believe (speaking in August)
Billing itself as “the world’s leading digital-first music company,” Believe has built up a staff of 1,720 in 50 countries.
The company has made Asia a key part of its strategy since it began operations in the region in 2013. It recently announced it had paid more than EUR €700 million in royalties to the music industry in the APAC (Asia-Pacific) region.
That income is “further fuelling the growth of a sustainable local music ecosystem by fostering new artist development,” the company said.
Believe CEO Denis Ladegaillerie is counting on continued growth in local artists and the rise of “regional superstars” to fuel the company’s position in the Asian market.
“What we’re starting to see in Asia is some Chinese artists starting to resonate in Thailand, Indonesia or some other markets; Indonesian artists starting to resonate in Japan, Malaysia and other local markets,” Ladegaillerie told MBW in a recent interview. “So we do think there will be a layer of regional superstars that is in development. That is part of what our teams in various territories are focused on.”
Ten years from now, “local markets are going to be dominated by local artists in most territories around the world,” Ladegaillerie added. “So one of our objectives as a company is helping to ensure that local artists have at least 50% share in their local markets.”
Believe, which trades on the Euronext Paris exchange, posted a 17.9% YoY jump in revenue for H1 2023, with revenues reaching €415.4 million.
“We are positioned in markets in Europe and emerging markets that are faster growing markets, so naturally that positions us to drive faster-than-market growth in the years ahead.”
Denis Ladegaillerie, Believe (speaking on the MBW podcast in September)
The APAC/Africa region now accounts for 27% of Believe’s revenues, having grown by 23.6% YoY in H1 2023 to a level of €112.2 million. The only region where Believe saw stronger growth was in Europe excluding France and Germany, where revenues grew 23.9% YoY to €121.9 million.
“We are positioned in markets in Europe and emerging markets that are faster-growing markets, so naturally that positions us to drive faster-than-market growth in the years ahead,” Ladegaillerie told MBW.
Additionally, “there are a number of markets like the US, where we have not yet set foot on a large scale, which we’re going to be exploring, which for a company like us provides additional room for growth,” he said.
Some of the company’s growth has been fueled by strategic acquisitions, such as its 2015 takeover of digital music distribution service TuneCore.
“With the acquisition of Sentric, we intend to foray into new services, bringing a new level of services for our artists and labels across regions,” Ladegaillerie said.Music Business Worldwide