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Doing mobile music business in Japan

Until recently, Japanese record companies were mere onlookers to the mobile music market. The chaku-mero (ringtones) phenomenon was booming, and the music industry didn’t see any direct profit from it. The many chaku-mero distributors only had to clear their catalog’s copyrights by paying a fee to JASRAC and they were set; as the creation of ringtones doesn’t involve any remixing of original sound fragments, neighboring rights were left untouched, keeping the record companies out of the game (more info). All that changed in the last two years. The Japanese record industry’s recipe for turning the tide:

  1. Agree with a couple of big labels that chaku-uta are the next big thing; as chaku-uta are 30 second remixes of popular songs, neighboring rights (and thus the music labels) are part of the game.
  2. Create a central chaku-uta distribution service (Label Mobile), which offers chaku-uta of the labels involved.
  3. Convince mobile phone makers and carriers to jump on the chaku-uta bandwagon so that their devices:
    • support chaku-uta‘s (uncommon) audio format (amc, later 3g2 & 3gp)
    • support the restrictive DRM chaku-uta are wrapped in
  4. Use the power deriving from your neighboring rights: deny all licensing requests from (potential) chaku-uta distributors other than Label Mobile without giving a clear reason.
  5. Get your offices raided by the Japanese Fair Trade Commission (JFTC).
  6. (In the meantime: introduce chaku-uta full, highly priced, DRMed mobile music downloads for next-generation handsets)
  7. Get an order of the JFTC to “[s]top the practice of refusing licenses to companies other than Label Mobile.”
  8. Reject the JFTC’s warning.
  9. ???

(via MocoNews)

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