Avex – Normally artists have to die for a bump in sales. In Japan they just retire

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Normally a music artist needs to pass away for the tribute albums to soar. In Japan they just have to retire. Namie Amuro has been a hit singer for over 20 years. She announced her retirement yesterday. While the market will expect Avex (her label) shares to take a pounding the reality is they will cream it in coming quarters. Why?

Japan is the largest CD market in the world by a country mile. 200mn hard copies CDs are sold  every year. Japanese love collectors editions. For exactly the same content on the disk they’ll pay 3x the basic offering to get a collector’s edition version. Then they’ll buy 3. One to use, one to keep and one to trade.

So while markets will likely torch Avex  (music division is 35% of revenue and a moving feast on profits) on losing a long term famous artist the dip will likely mean an upside surprise in quarterly earnings as high margin Amuro CDs, music videos and other goods rush out the door. Note Amuro hasn’t been a feature in album sales for several years meaning her album sales will be a proper bump to profits.

Don’t forget what Sean PHEKOO is doing for Atsushi of Exile, another Avex name. One of the few Japanese artists that has a voice that can properly cut it overseas. Sean is a NYer who was the first ever gaijin to win a Japanese ARIA award on his first song.

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