The Herald Tribune’s Todd Zaun wrote an interesting article about the state of online music sales in Japan. The following three paragraphs give an idea of what is going wrong.
Because Label Gate [=a gateway to online distribution services] is owned by record companies, they also set the prices. And to keep online sales from eating into music store sales, online prices have been kept relatively high. Songs by Japanese artists sell for ¥210, or $1.90, each, while those from Western artists sell for ¥158. Apple sells songs for 99 cents in the United States, 99 euro cents, or $1.20, in France and Germany and 79 pence, or $1.45, in Britain.
“If we make songs too cheap – make them a commodity – we’d only end up hanging ourselves,” said Yasushi Ide, a spokesman for Sony Music Entertainment. “We have to strike a balance” between expanding online sales and maintaining sales of CDs in stores, he said.
Mora uses Atrac3 audio compression technology, so its songs won’t play on many MP3 players or on Apple’s iPod. Mora also uses Sony’s OpenMG digital-copyright protection software to prevent songs from being copied more than three times.
So, what do we have: ridiculously high prices, a proprietary and not well-supported file format and DRM. Well, well.