Japan In Imports Fight

Battle lines are being drawn in the fight over import rights in Japan.

Eight Japanese music industry organizations have issued what they call an "emergency request," publicly calling on the Japanese government to introduce legal measures to prevent "gray imports" into Japan of domestic repertoire licensed to overseas labels.

The request is phrased in largely positive terms, claiming the introduction of these measures will help promote Japanese music in other countries. Fulfillment of the request will "make it possible for Japanese music to be actively promoted in countries that have different costs of living and therefore is in accordance

with the government's goal of creating a country built on intellectual property," the document states.

The eight trade bodies behind the request are the Recording Industry Assn. of Japan (RIAJ); the Japanese Society for Rights of Authors, Publishers and Composers; the Japan Council of Performers' Organizations; the Japan Assn. of Music Enterprises; the Music Publishers Assn. of Japan; the Federation of Music Producers; the Japan Record Mercantile Union; and the National Record Wholesalers' Union.

"The introduction of these legal measures will encourage the distribution of licensed works in foreign countries and will help to wipe out pirated versions," the declaration states.

The declaration has caused concern among other industry players, particularly major merchants, who fear that permitting record companies the right to ban imports would give them excessive leverage over entertainment retailers.

"They shouldn't have the right to ban yogaku [foreign music]," says Osamu Wakamatsu, managing director of trade group CDV-Japan, which represents Japan's CD-rental industry.

Wakamatsu says he understands the labels' concern about lower-priced Japanese repertoire being shipped into Japan from such markets as China and South Korea but opposes changing the law to give labels a blanket import right. Many CDV-Japan members sell and rent music software.

A major driver of the campaign to give labels the right to control imports is South Korea's recent removal of remaining restrictions on Japanese repertoire (Billboard, Jan. 24).

Music industry executives were reluctant to speak on the record about the reasons behind the declaration. But according to one well-placed source, "There's no physical market left in Korea, so there's an enormous temptation to export [Japanese product] to Japan."

He notes that South Korea's piracy problem recently caused the country to be placed on the U.S. Trade Representative's Priority Watch List (Billboard, Jan. 24).

Giving Japanese labels the right to ban imports could also endanger the current retail practice whereby retailers operating in Japan source imported product through local affiliates of the major international record companies.

Characterizing the import-right campaign as "a misplaced initiative," the source asks: "In what other country in the world do retailers import through local labels?"

Another industry source says the Japanese Fair Trade Commission may oppose granting labels the right to ban imports on the grounds that it would give them too much power in the domestic market.

Nevertheless, the Japanese government's Cultural Affairs Agency is expected to introduce legislation to grant labels that right later this year.

Insiders tell Billboard there have already been high-level discussions between trade bodies, including the RIAJ, and government officials about such proposed legislation.

It is unclear whether it will be legally possible to give labels the right to ban only product from certain territories or only Japanese repertoire.