Growth has stalled in Japan’s digital sector, which no longer makes up for the steady decline in physical sales, despite a steady rise in PC-based downloads in the world’s No. 2 music market.

According to data released Feb. 22, the 54 member companies of local labels body the Recording Industry Association of Japan (RIAJ) sold 468.2 million units of digital product in 2009, down 2% from 2008, for a wholesale value of 91 billion yen ($996 million), unchanged.

Mobile still dominates Japan’s digital market, although mobile sales fell 4% in volume terms last year to 421.3 million units, for a value of 79.2 billion yen ($867.5 million).

Full-year results for PC-based music downloads showed a 12% rise in volume terms to 46.8 million units, which were worth 10.2 billion yen ($111.7 million), up 13%. Much of that increase is credited to the Japanese branch of Apple Computer’s iTunes Music Store, whose sales took off following 2008’s iPhone launch. 

Adding the RIAJ’s digital and physical sales data together shows that the value of all audio product shipped by the association’s members in 2009 was down 11% from 2008.

Shipments of CDs and other physical audio product in 2009 were worth 249.6 billion yen ($2.7 billion) on a wholesale basis. The total value of audio product – physical and digital – sold by RIAJ labels last year was thus 340.6 billion yen ($3.7 billion). The corresponding figure for 2008 was 386.2 billion yen ($4.2 billion).

The RIAJ's members, who account for roughly 90% of music sold in Japan, sold 117.4 million units of digital product in the October-December 2009 quarter, down 3% from the fourth quarter of 2008, for a wholesale value of 23.3 billion yen ($255.6 million), unchanged.

Fourth-quarter sales of ringback tones rose 1% to 28.6 million units, for a value of 2.5 billion yen ($27.8 million), a 6% rise over October-December 2008.

After showing strong growth in the third quarter, sales of mobile-based full-track downloads slowed in the last quarter, falling 1% in volume terms to 36.7 million units, but rising 3% in value to 13 billion yen ($141.8 million). 

Reflecting a saturated market, mobile-based master-ringtone sales continued to head south, falling 1% to 37.6 million units, for a value of 3.9 billion yen ($42.8 million), down 15%.

Overall, mobile-based downloads fell 5% in the fourth quarter to 105 million units, for a value of 20.3 billion yen ($221.9 million), down 1%.

In contrast, sales of PC-based music downloads continued their yearlong upward trend, rising 9% to 12 million units in the October-December period, for a value of 2.7 billion yen ($29.8 million) in value, up 13%.

PC downloads comprise singles, albums, mini-albums and other content sold over wired networks, according to the RIAJ, and albums and mini-albums count as single units regardless of the number of tracks they contain. Singles, however, constitute almost all PC-based download sales.

(Don't forget to click on "Market Reports" to the left of this text box to order your copy of Steve McClure's definitive Japan music-market overview!)