Wednesday, February 23, 2011

Notes from the Field: Indie Index - Hip Hop Sales in Japan

So, I recently had a chat with a new friend of mine (who at least here will remain anonymous) who worked for an indie label that released Western/English hip hop in Japan between 2006-2008.  I thought I'd share a few highlights from our conversation.  Most interesting to me was that, since he's not working for the label anymore, he wasn't shy about numbers.  I'm in a lusty, desirous relationship with information about how many units people are moving, and how much money they're making, so, with no apologies to Harper's:

Note: This may be an empty gesture, but I ask that you NOT use this information elsewhere without permission.

20-30,000: Number of units moved by Nujabes, the Japanese producer of jazzy instrumentals.  These numbers were big enough to set off a wave of imitators/followers.  This was not a record released by my friend's label, but it helped guide the direction of what they chose to release.

18%: The very highest royalty rate offered by my friend's label.  This is for artists who were established or otherwise expected to do particularly well.  The lower end of the range was 12%.  According to another source,  royalty rates have plummeted since in the last four or five years.

9,000: The number of units shifted by a record that did "pretty good" for my friend's company.  This was a record that, I was amazed to hear, was crafted by a Western artist, specifically for the Japanese market, expanding on a particular sound found on a handful of previously released tracks.

Y2,400: A pretty typical retail price for a Japanese release.  More than $30 at current exchange rates.  My friend added a couple of pieces to the puzzle as to exactly why this is so high.  First - higher production values of the average Japanese CD (digipacks instead of jewel cases). Second - the henpen distribution system, which requires labels to accept returns of unsold product from distributors, who nonetheless take their distribution fee even on unsold copies.  This leaves the label exposed to a great deal of risk.

$25,920: What an new artist could expect to make from a "pretty good" CD release, assuming the numbers above, and at 2006 exchange rates.

30: A very, very rough approximation of the number of hours it takes to make one fully developed, professional song, from start to finish. Probably an underestimate.

12: Rough average of the number of songs on a full-length album.

260: Number of hours spent recording a full-length album.

$99.69: Hourly rate of pay for recording an album that sells 9,000 copies.

This looks pretty sweet at first, but at least from a purely economic point of view, doesn't take into account a few things.  Most immediately, the costs of recording and promotion, which can fall variously on artists, labels, or even clubs, would have made this number smaller (or in a few cases, larger, maybe) than when it comes out of this simple equation.  Especially for a first album, this amount would need to account for initial investment costs, i.e. gear a musician bought for the purpose of teaching themselves how to make music.  Similarly, there's no accounting here for many, many hours spent teaching oneself to be at least a half-decent musician.   If Malcolm Gladwell is to be trusted, this would be about 5,000 hours (we're talking competent here, not someone of the world-class, 10,000 hours type).  With that one adjustment, suddenly the hourly rate for that first, moderate-performing album becomes . . .


Eat your heart out, investment bankers.

A final tidbit, from a totally different source:

6,000: Number of units moved by a fairly well-known and respected Japanese DJ/Producer.

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