Billboard’s “International Power Players” list recognizes leaders who are driving the success of the music business in countries outside the United States. Universal Music Japan’s president and CEO, Naoshi Fujikura, was chosen from the music industry leaders of the world for inclusion in the list a fourth consecutive time, making this his fifth appearance. Billboard Japan interviewed Fujikura in recognition of his selection in which he looked back on his decade as the company’s president and the challenges it faces in its global expansion.
This is your tenth year as president of Universal Music Japan. During your time in office, the company has recorded record profits. Looking back, what are your impressions of this past decade?
A lot of things happened, but the one thing they all share in common is “connection.” When I was first appointed, Japan had less visibility within the industry as part of its global music strategy, so coming into UMG it was always important to me to push the narrative forward around the overall importance and commercial scale of the Japanese music market.
Working under the leadership of Sir Lucian Grainge definitely helped with this, as before he took over as global Chairman & CEO, Lucian had run UMG’s international business for many years and he was very familiar and supportive of our dynamic physical-led market. One of the major benefits of working very closely with UMG’s leadership team in Santa Monica and around the world has been that we have had access to strategic insights around the broader shifts in the global industry, helping us to shape our own path over the last decade to stay ahead of the curve, navigating the arrival of streaming in the marketplace, and maintaining our physical business.
At the time, industry people would say things like, “Physical product sales are going to continue to decline, so we should just get rid of that whole segment.” I felt the need to strengthen our connections with the head office in various areas of my work. Back then, in 2014, Apple Music had yet to arrive in Japan, and CDs accounted for 80% of sales. Japan also had a price maintenance system, so products could be sold at set prices. That’s why I told people that in Japan, we were going to put our weight behind both growing our digital business for the future and continuing to support the traditional physical sales market. When I first took this position, I was traveling to the US on what felt like a monthly basis, taking advantage of every opportunity to explain the Japanese market to my new colleagues, introduce our artists, and integrate our vision for the future of the market into UMG’s global plans.
You were trying to help them understand the situation in Japan?
Right. My English wasn’t the best, but I would meet directly with overseas colleagues and reiterate that in Japan, unlike the rest of the world, there was still high demand for physical products, so we weren’t going to switch over completely to streaming, but instead advance on both fronts. Ultimately, we put out multiple million-sellers, like DREAMS COME TRUE THE BEST! Watashi no Dorikamu in 2015 and Hikaru Utada’s Fantôme and RADWIMPS’s Your Name in 2016. Thanks to successes like these, they came to understand that our approach was the right one. I think these successes also led to us signing new artists such as BTS (for Japanese language recordings) in 2017 and King & Prince in 2018.
What do you mean?
We are a global company, and we’re often seen as being focused on digital sales, but our track record of successes showed artists that we also still place importance on physical sales and we have the power to move significant physical units for our artists. I think that helped us connect with new artists and make UMJ an attractive home for Japanese domestic and Korean K-Pop talent, with broader ambitions for both regional and global success.
Spotify was launched overseas in 2008, but Japan was a latecomer, with Apple Music and LINE MUSIC becoming available in 2015 and Spotify arriving in 2016. You took office during a time when the situation in the U.S. was very different than the situation in Japan.
Right, so I think the fact that we had that kind of success is connected to our efforts to grow for the future. Universal Music Japan and the former EMI Music Japan merged in 2013, the year before I became president. Every aspect of how these companies did business was different, so when they merged there were initially a few voices of frustration and confusion, and the company needed to find better ways to “connect” with employees. When I took office, I wanted to remember everyone’s faces and names, so I made a chart in my office with photos of every employee alongside their names.
How many employees did the company have at the time?
I think it was around 500 or 600. Thinking back on it now, there were probably some more efficient approaches I could have used, like putting them on magnets, but at the time I did it by putting the photos on four sheets of butcher paper and writing their names directly on the paper (laughs). I thought it would truly be a waste to end up with the company divided between two antagonistic “ex-EMI” and “ex-UMJ” factions, so whenever I met someone in the elevator, or anywhere in the office, I tried to address them by name.
One of the major initiatives we conducted over the past ten years was having the employees become full employees. Previously, the majority of our staff were contract employees, and because of that it felt like everyone was focused on playing it safe, avoiding any potential failure, in order to keep their contracts from being terminated. I was one of them, and I sometimes felt like I was applying a short-term perspective in my work. Furthermore, starting in 2015, the business of the music industry was on the brink of a major shift as the rise of streaming began to increase consumption and access to music globally, even though this came later to Japan.
For physical CDs, the sales peak for a product is when the CD is released, but with streaming, the number of streams will rise over the course of several months. In some cases, people will continue to listen to a song or album years after it’s released, sometimes even decades if it is a catalog song or album from an artist. Because hits can take all kinds of different shapes, I didn’t think our approach of having employees rotate every year or two and focusing exclusively on single fiscal year periods was a good match for our long-term growth as a company, or for us to innovate and help lead UMJ and the industry into the streaming age.
Did changing over to full employees have a major effect on the atmosphere in the company?
There was a huge change in the year when we switched over to full employee status (in 2017). We held an all-company meeting where we announced that anyone who had been working at the company for a year or longer that wanted to become a full employee could do so. I expected there to be huge cheers from the audience, but it was surprisingly quiet (laughs). I thought people would show their happiness right there on the spot, but I heard later that, after the meeting, those in attendance were happy to be able to tell their families and partners the good news.
At the same time, I didn’t want people to lose their drive upon becoming full employees, so we reviewed and revised our HR evaluation system and established a multi-label system to grow our domestic business. Employees on the same label would compete with each other and help each other reach new heights, and I think that is what helped us to produce all of these different hit artists.
And the last important “connection” is the one we’ve been establishing with listeners and fans. Our business is a B-to-B-to-C business. We provide people with music through retail shops and streaming services. However, the nature of fandom has changed over the last decade. That is why we opened the world’s first Universal Music Group concept store, UNIVERSAL MUSIC STORE HARAJUKU, as a place where fans can come together. Last year, we worked to bring music to people using experiential events, other than just traditional live shows, such as producing shows that combine fireworks with Disney music and music from diverse artists like King & Prince. We have also done these experiential events with international acts including Queen and Bon Jovi.
Just like the rest of UMG, we always strive to be the company of choice for artists, and with our successes in breaking new artists, embracing streaming technology ahead of the curve, as well as nurturing the traditional lucrative physical business here in Japan, our market share has also grown consistently. I think we’ve now been able to achieve ten consecutive years of market growth because of our track record in breaking new artists and also because our artists recognize our commitment to helping them have long careers, connecting them to the world outside of Japan as part of the world’s leading music company. This has made them want to stay with Universal Music Japan for the long-term..
Is there any advice you give to employees about how to remain the company of choice for artists?
UMJ’s creed is “Love People, Love Music, and Deliver Excitement.” I always tell employees that, no matter what department they are in, it’s important that they never forget that they joined our company out of a love for people and music. At the global level, as well, UMG places great importance on its message: “We are the home for music’s greatest artists, songwriters, innovators, and entrepreneurs.” It’s important that we continue to focus our efforts on putting our artists, labels and businesses first so that we continue to push the entire industry forward for the benefit of our artists.
Mrs. GREEN APPLE has demonstrated a tremendous presence in this year’s Billboard JAPAN Hot 100. What do you think is the key to their hits?
It may seem like a trite answer, compared to the kind of answer you might be hoping for, but, at the end of the day, it just really comes down to their talent. First and foremost, we’ve kept on believing in the great music written by Motoki Ohmori and the talent of the whole band. I think that’s what’s led to this success.
They did two days of shows at Yokohama Stadium in July, and later this month (October) they’ll be playing eight days of shows at K-Arena. They don’t set aside time as “input time” to create new work. They don’t stop. They just keep on going, and looking at them, you know you’re looking at a new superstar phenomenon that will continue to grow and inspire fans in this new era.
In September 2023, we launched the Global Japan Songs excl. Japan chart, which ranks Japanese music that’s become a hit overseas. I feel like the Japanese music industry has kicked it into higher gear as we can now see the global success of hits by artists like Fujii Kaze and imase. Physical media sales still account for a lot in Japan. Do you think there’s any potential for physical media sales in the global market?
I do. We’re now exporting CDs and vinyl records of the Japanese versions of albums by the Beatles and the Rolling Stones to the U.S. and the U.K. I think there’s more demand for physical media. Fujii Kaze, Joe Hisaishi and Ado have toured the U.S. in the last year, selling out large venues and arenas and as discovery and demand grows, there will hopefully be opportunities to reach those fans with physical media too, like K-Pop artists have experienced.
In July, the Ministry of Economy, Trade and Industry released its Report on Music Industry Business Models for a New Era. Do you think that collaborations with the national government are going to be accelerating going forward?
In April, as a member of the music industry, we gave a presentation to the LDP’s Special Committee for the Promotion of the Cool Japan Strategy. We want to keep on taking on new challenges, and working together with diverse artists, so it’s very reassuring to know that people in various positions are supporting the sharing of Japanese talent and culture with overseas audiences.
Japanese anime and games have achieved some degree of market share worldwide, but for music, there’s still a long way to go. What challenges do you think the Japanese music industry still faces?
Maintaining a high level of originality. There’s no substitute for ONE PIECE. There’s no substitute for Jujutsu Kaisen. There’s no substitute for BTS. It’s extremely important that you can’t just swap out an artist or collaborate with someone else to make a hit. K-pop has an originality, such as in its group choreography and visuals, that transcends language barriers to move people’s hearts. That’s why carbon copies of BTS or NewJeans fail.
Another key challenge in localization is communicating with fans in various languages, including English. I think that an important part of globalization is close coordination not only inside the company but also with overseas promotion and creative teams. At UMG, one of the core strengths of the company is that it has huge global reach. Offices in sixty countries and all of our markets and business units work in unison to create the best possible environment for artists and projects to succeed.
BTS changed their name from Bantang Sonyeondan to BTS. They made music for the Japanese market, and they made English songs. Step by step, they expanded their reach and audiences, and built a loyal army of fans around the world.
There is no single formula for achieving success for an artist. Instead, I think you’ll now see a lot of different paths to reaching that level. For example, Fujii Kaze’s first wave of global recognition was in Thailand, before catching on in other markets. There are always a lot of different potential scenarios, and it’s important to take immediate action whenever you see the seeds of a future hit starting to sprout.
One last question: Which do you think constitutes a hit, a song that 100 people listen to 100 times, or a song that 10,000 people listen to one time?
This might seem like cheating, but both. We live in an age where there is no single standard of value—not just in music, but in many areas. As far as whether a CD that 100 people each bought one copy of could be called an equal hit as a CD that one person bought 100 copies of, I don’t even know myself.
I’ve asked a lot of different people this same question, and most people who work in record companies or management pick “100 people listen 100 times.” But when I ask people in the media, most pick “10,000 people listen one time.” I think it’s fascinating how people have the same shared understanding of actual hit songs, but this gap when it comes to the actual definition of a hit.
That is interesting. If I can ask you a question, then, do you think if the sensibilities of music companies and the media were better aligned, it would result in bigger hits being made?
Hmm, I’m not sure. I think for each artist there are times when they’re listened to one time each by 10,000 people and other times when they’re listened to 100 times by 100 people.
I agree completely.
—This interview by Seiji Isozaki and Naoko Takashima first appeared on Billboard Japan
