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MOBILE MUSIC
Phone Services Bring New Hope to Music Industry (March 3, 2004)

A third-generation au phone.
In a quickly emerging trend in mobile phones, users can now be notified of incoming calls with songs performed by the musicians themselves. Called Chaku-uta - ring songs, if you will - the service is anticipated to create a new market for the music industry, where domestic shipments of CDs and other music content dropped in 2003 by 10% over the year before and the public is tuning in to radio less and less.
A ¥10 Billion Market in One Year
Chaku-uta is a ring-tone download service that was started on KDDI Corp.‘s au brand cell phones in December 2002. It had marked somewhat over 44 million downloads as of the end of November 2003, less than a year since its launch. The service has dramatically grown into an almost ¥10 billion market in its first year.
The charge per song ranges from ¥50 to ¥100 ($0.48 to $0.95 at ¥105 to the dollar). Adding to that the cost of transferring the data to the phone, users can download about 30 seconds of the chorus part of a song for ¥100 to ¥200 ($0.95 to $1.90). Whereas the currently mainstream melodic ring tones - commonly called chaku-mero - consist of familiar tunes reproduced with electronic sounds, chaku-uta uses the original recordings. Compared with chaku-mero, the live voices and instruments of Chaku-uta make for a fivefold data volume, and downloading them is only practical on third-generation cell phones that boast high-speed, high-volume data transfer.
The monthly download count currently stands at seven million. In addition to their originally intended use as ring tones, these "ring songs" are generating new demand as substitutes for rental CDs and as a way for consumers to sample a song before deciding whether or not to purchase the CD.
Beyond Chaku-Mero
The chaku-mero market has grown to a scale of ¥85 billion ($809.5 million). The leading chaku-mero distributor, XING (pronounced "ex-ing"), boasts seven million subscribers to its download service. Chaku-uta is expected to surpass this, however. The primary advantage is that a system is in place to ensure the proper flow of payments and prevent illicit copying.
Even if an electronic chaku-mero becomes a popular download, the copyright fees go to the karaoke company that rearranged the song for chaku-mero and the distributor; not a single yen is passed on to the record company that owns the rights to the original song. But since Chaku-uta replicates the sound of the original recording, permission for its use must be acquired, and the record company and artist concerned benefit from the sales as well. Thus, both parties are fairly willing to have their songs used.
Label Mobile is a music content distributor jointly established by a number of major record labels. Although it started with a Chaku-uta offering of just roughly 300 songs, the repertoire now exceeds 10,000 thanks to the increase in partners to 19, including industry leaders Avex and Pony Canyon. The breadth of genres covered, from pop to classical, as well as the convenience offered by Chaku-uta of being able to listen to one‘s favorite music - albeit only part of it - anytime and anywhere, have made the service highly popular. In addition to the three download sites operated by Label Mobile, currently more than 80 similar services are available.
Will They Replace CDs?
Another function that gives au phones lucrative potential for the music industry is chaku-movie. The chaku-movie service is being used to distribute short video clips of CDs before their release. Thanks to value-added services like these, KDDI is winning over the hearts - and subscriptions - of music fans. Competitor Vodafone has responded by coming out with Chaku-uta-capable phones, and NTT DoCoMo will soon follow suit.
Determined to maintain its edge in this area, in December 2003 KDDI introduced an au cell phone model equipped with an FM radio tuner. The phone not only can display the title and name of the performer of the song being played but also allows users to instantly search for the Chaku-uta of that song.
KDDI has further set out to realize the idea of using the cell phone as a portable music player. By working on achieving better sound quality, data compression, and increased data storage capacity, it will aim to create a new-generation music tool that eliminates the need to own a separate music player.
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Related Web Sites
KDDI Corp.
XING
Label Mobile (Japanese only)
Avex
Pony Canyon (Japanese only)
Vodafone
NTT DoCoMo_xyz