KDDI to migrate its music service to Kkbox, joining Asia’s largest music network



Japan’s second largest telco KDDI (TYO:9433) announced today that it would rebrand Lismo, its subscription mobile music service, to the ‘Kkbox’ effective in June.

KDDI subsidized Taiwan-based Kkbox in December of 2010, and has been using the platform for its existing flat-rate music subscription services, Lismo unlmited and Utapass. For those not familiar with it, Kkbox is an on-demand music subscription service, founded in 2004 in Taiwan. KDDI acquired a majority share of its outstanding stock in 2010, and Taiwanese handset maker HTC took a 11.1% stake in 2011.

The service is now operating in Taiwan, Hong Kong, Singapore, and Malaysia, and has acquired more than 10 million users in those countries. More than 10 million songs are available for play, either using desktops, laptops, smartphones, or tablets. One of its more remarkable features is ‘Listen With,’ which allows you to share what you’re listening to with other users.

With the rebranding, KDDI joins Asia’s largest music distribution network, providing more music titles not just to KDDI customers but also to mobile users on rival carriers NTT Docomo and Softbank Mobile.

Kkbox app

Competition is starting to heat up in the online music distribution space in Japan. DeNA launched Groovy a couple of weeks ago, and Music Unlimited, Sony’s online music subscription service available in 18 countries worldwide, also recently reduced its subscription rate to 980 yen a month, the same price as Kkbox.

Global player Spotify is expected to launch in the Japanese market soon, as they have begun hiring in Tokyo. There are also other newcomers like Mironi as well.

Kyodo reports today that Japan has just surpassed the US as the biggest recorded music market in the world, with $4.3 billion in sales of CDs and music downloads. Interestingly, 80% of that figure was non-downloadable items like CDs and records, so there’s a lot of money just waiting to shift to the online space.

It will be interesting to see which of companies above can best position itself to capitalize on Japan’s love of music.