Media reports that Tokyo-based video-game company Konami is set to buy the Victor Entertainment record label from current owner JVC Kenwood Holdings are unfounded, JVC Kenwood says.

“JVC Kenwood is studying various measures for its entertainment business in order to boost its corporate value,” the company said in a Nov. 4 statement. “But what was written in the news (stories) is not true."

Konami has yet to reply to a request for a comment concerning the reports, which appeared in the Nov. 4 editions of the Nikkei and Yomiuri Shimbun newspapers.

The unsourced reports say that JVC Kenwood has decided that the parlous state of the music industry means it makes sense to concentrate on its core operations and unload Victor, Japan’s second-oldest record label.

In October 2008 consumer electronics maker JVC, previously a subsidiary of electronics giant Matsushita (now known as Panasonic), merged with electronics company Kenwood to create JVC Kenwood. Victor has since continued to operate separately from the merged entity’s other entertainment businesses.

Victor boasts a strong domestic roster, including veteran acts such as pop/rock band Southern All Stars, male idol group SMAP and female vocalist Ua, as well as being the Japanese licensee for metal acts such as Helloween and Stratovarius.

“I think Konami taking them over would probably be a healthy development,” says one Tokyo industry source. “Victor until now has been a quite domestic company, while Konami has well-established arms in various countries.”

Another industry observer is less convinced of the merits of Konami’s putative takeover of Victor, which according to SoundScan Japan had a 4.7% share of the Japanese recorded-music market in calendar 2008.

“You would certainly think the market is ripe for consolidation,” he says, “but it’s hard to see how someone could run Victor better than the current management without (merging) with another music company.”

Recently there were rumors of merger talks between Victor and two other long-established Japanese labels, Teichiku Entertainment and Columbia Music Entertainment, which are also struggling as the Japanese physical music-market steadily shrinks.

(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!)