Last time we looked at the decline in Japanese wages, increased demand for inferior goods, and decreased demand for luxury brands. This time we look at the effects of lower incomes on markets for explicitly cultural goods.
Part Two: The Implosion of Cultural Markets
Within Japan almost every single market for cultural goods has seen prolonged decreases in sales since the late 1990s or has headed into troubled waters.
- Music: The music market exploded in the 1990s thanks to karaoke, mini-CDs, TV tie-ups, and female-oriented J-Pop but that growth has been completely wiped out and now sales returning to late 1980s levels, even with increased digital downloads.
- Publishing: Revenues in the book and publishing industry decline yearly, and the manga and anime industries are in crisis. Manga magazine sales are collapsing, and even relatively stable single-title comic collections have started to drop. Consumer magazines are going under faster than new titles can be created; just in recent years, we’ve said goodbye to Esquire, Pinky, Studio Voice, and PS. Discount chain Book Off is increasingly unable to sell its cheap used books, CDs, and games. And of course, the Internet has also ravaged porn magazine sales, which kept many publishers in Japan able to support its other non-porn magazines.
- TV: TV viewership is down — with the main broadcast channels routinely getting less than 10% shares weekday prime time — despite no serious competition from cable or satellite TV. 13.5% of young men say they watch no TV. TV sales were down 73% in October 2011, and 75% of 3D TV owners were “disatified” with the technology.
- Clothing: Clothing sales have declined 30% since their peak in 1991, with the men’s suit market essentially halving in size since 1997. Sales are also shifting away from premium goods and onto fast fashion and low priced brands like Forever 21, Uniqlo, and Shimamura. Meanwhile “select shops” — once the main site of sales for small boutique import brands — have shifted their inventory to their own cheaper Chinese-made lines.
- Gaming: Games sales did very well over the last decade, but the once-dominant Japanese game industry has been faltering on the global stage, and even stalwart Nintendo — who hugely expanded the audience for gaming through the Wii and DS — is beginning to see major declines. Sony now makes most of its income from its insurance business rather than its consumer electronics or gaming. Meanwhile working class hobby pachinko is also bleeding money.
- Cars: Although automobiles are not strictly cultural goods, there has been a great decline in Japanese auto sales and part of that stems from young consumers no longer buying cars as part of a “driving” hobby.
One exception is films: 2010 was a banner year for motion pictures at ¥220 billion in ticket sales. The film market, however, is increasingly aggregating around mega-hits rather than supporting a wide diversity of titles. Some key art-house theaters, like Ebisu Garden Cinema, closed after 17 years.
Why the decline?
There are a variety of factors to blame for the declines in these markets. As suggested in Part One, lower salaries have decreased consumers’ discretionary income with which they buy cultural goods. Young workers in particular are having trouble finding work, and when they do, have very low salaries and no clear track for salary increases. Uncertainty about future earnings also means a higher saving rate, which further decreases discretionary spending in the present. Among the marketing community, Japanese millennials are known as the “generation who doesn’t consume.”
Demographics have also played a big part in hurting the cultural industries: An anemic birthrate has evaporated the youth consumer base. In 1964 — at the height of the “baby boom” — 18.6% of the top population was between 15 and 23 (18.03 million). During the Bubble Era, the Dankai Jr. generation made up a relatively high 14.1% of the population (17.47 million). Although statistics are not immediately available for the last nine years, we can assume that the number of youth is already lower than the meager 11.1% of 2000 (14.13 million) — which was already the lowest recorded since 1920. (Statistics from here.) This means that 3-4 million consumers have disappeared from the zone that in the past has been responsible for most cultural expenditure. Smart companies are thus shifting their product lines to appeal to the larger demographic swaths of older, richer consumers.
Moreover young people are increasingly entertaining themselves with free to low-priced content on mobile phones and the web, and to a certain extent (although less than the West), much material is available online in pirated form. Spending has also shifted towards paying off phone bills rather than being spent on CDs and clothing directly like in the past. Phone companies are capturing much more of consumers’ money and then distributing it to content providers themselves.
Isn’t the Internet making up for all of this cultural decline?
Of course, most countries have also seen an implosion of “analog” content in the face of a digitizing world, and Japan is no exception to this trend. Despite high Internet penetration, however, web culture has yet to establish itself as a legitimate pillar of content in Japan. Most offline cultural producers, like newspapers and weekly magazines, do not put a significant amount of material online. There are no start-up sites with the influence of Boing Boing, or the political importance of Huffington Post, Talking Points Memo, and the Drudge Report. There have been few D.I.Y. bloggers who rival offline cultural influencers; no 14 year-old bloggers invited to haute couture fashion shows in the vein of Tavi Gevinson. In fact, the Internet in Japan still retains a “techy” or “nerd” image, and an impenetrable otaku site like 2ch is still the central heart of Internet meme creation.
Magazines in Japan usually directed consumers towards the “proper” goods to buy and how to use them, and there have been almost no websites — at least for traditional mainstream genres like fashion — that have taken over this role from print. Magazines get the latest information and bestow a legitimacy upon their advice. An anonymous kid with a blog just doesn’t have the same effect over the market.
There have been cultural and structural barriers towards moving offline content online and creating new web content businesses (see “The Fear… of the Internet”), and the overall result is that the Internet in Japan is not picking up the slack of the traditional culture markets as they shrink. Most importantly web use in Japan is relatively passive and anonymous, and this only further questions the culture created upon it.
This means that cultural institutions still have to look at analog markets — like the number of CDs or magazines sold — as a way to gauge success and popularity. Our best understanding of a “hit song” in Japan remains a “number one” on the Oricon charts. A “hit” TV show pulls numbers that were once understood to be a “failure.”
The total effect is that as Japan’s economy declines, Japanese popular culture is not just dropping in terms of sales but also in terms of total participation as well as “visible” participation. Consumers were once engaged with pop culture most actively through the act of consumption — buying a CD, book, or video game — but not only have they ceased buying goods, they are increasingly not even participating passively when media is virtually free, like in the case of TV. And they are not building significant new cultural spaces online with the same power, influence, and legitimacy as their precedents. There are almost no barriers to creating and distributing content, and yet the amount of legitimate content with engaged consumers is decreasing.
The U.S., in particular, has seen an explosion of content from cable TV proliferation and new Internet businesses in the last decade, which has made everyone assume the universality of the Long Tail theory. Japan shows the opposite: a decrease in the amount of culture in the market, as well as the number of participants in pop culture. There may not be any parallel to this phenomenon in any other major country.
Next time we look at how the market once made its products for the middle-classes and leading-edge consumers and why it’s no longer profitable to do so.