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Reimported CDs under threat in Japanese stores

Japanese salaryman Hidefumi Akashio, 30, surveys aisles of CDs in a Tokyo music store, noticing the huge price difference between the Japanese editions and Asian imports of the same albums by Japanese musicians.

"I am a big fan of B'z [a Japanese rock duo] so I want to get the Japanese edition of their album. But if I weren't a big fan, I would be happy with the reimported version [of the same CD] because it's much cheaper and has the same songs," Akashio said.

"I think music CDs sold in Japan are pretty expensive. I think it's meaningless trying to ban imports of cheaper CDs made in Asia," he said.

The Japanese government, however, is trying to do just that, even though the CDs are made legally and intended for overseas markets.

The Agency for Cultural Affairs is aiming to get Cabinet approval for the proposed ban this month, said an agency official in charge of the intellectual property section.

"Companies produce cheaper CDs for Asian markets for various reasons. Those products are authorized to be produced and sold for Asian consumers, not for Japanese clients," said the official, who declined to give his name.

"The government wanted to ensure the CDs authorized to be sold in certain markets stay in those markets," he said.

The move for the ban came in response to complaints from Japanese music companies, which have claimed they are hurt by an influx of cheap CDs intended for overseas markets, mostly in Asia.

The proposed ban should help maintain CD prices at home for Japanese labels and artists, who may then find it easier to expand in Asia, said Taizo Shinya, spokesman for the Recording Industry Association of Japan.

CDs by Japanese musicians sell for about 550 yen to 1,600 yen (US$5 to 15) in many Asian nations, such as China and South Korea, compared with 2,500 yen or more in Japan, according to the association.

Because of this price gap, some 680,000 CDs, roughly 15 percent of CDs intended for sales in foreign markets, find their way to Japan every year, the association said.

"Cheaper CDs are produced in, and marketed for, certain markets with unique consumer demographics. They are not designed to be brought back to Japan," Shinya said.

About 65 countries already have laws that ban the importation of domestic music CDs made abroad, he said, adding that Japan is the only industrial nation without such a legal framework.

Consumer groups argued, however, that the recording industry is unfairly getting protection from the government at the expense of Japanese music lovers.

"Prices should be decided openly and fairly. The government's decisions are not reflecting voices of consumers," said Keiko Sekine from advocacy group Consumers Japan.

"If they can make CDs cheaply, why not sell them for cheaper prices for Japanese consumers?" she asked.

"Japan is gradually opening up its markets even for some farm products. The move to ban the importation of music CDs is simply a step backward in that process."

The ban, even if imposed, would not stop the entry of cheap CDs produced abroad, analysts said.

"The effectiveness of such a ban is doubtful. For one thing, I doubt Asian nations would help enforce such rules, which basically stop products made in their nations being exported," said Nobuo Ikeda, senior fellow at the Research Institute of Economy, Trade and Industry.

Retailers expressed fears that the proposed ban may pressure their sales.

"Banning the cheaper imported CDs would particularly hurt students who want to listen to CDs but cannot afford the full price of the Japanese edition. It would also hurt us, who sell those CDs as a category of popular products," said the managing director of a major Japanese music store chain.

The executive declined to identify the company "because I have to do business with record companies" that are pushing for the proposed ban.

"I believe the cheaper imported CDs expand the customer base for the music industry, both for record companies and retailers," the executive said.

"What the Japanese record industry has to do is to add value to Japanese editions of CDs, like including extra songs," he said.
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