Avex’s CEO Katsumi Kuroiwa on the Challenges of Creating Global Hits: Interview

Billboard‘s International Power Players list recognizes the leaders driving the success of the music business in countries outside the United States. Avex’s CEO, Katsumi Kuroiwa, was chosen from the music industry leaders of the world for inclusion in the list for the first time.

Billboard Japan interviewed Kuroiwa in recognition of his selection for the list and discussed the challenges involved in creating global hits and the potential of female artists.

You were selected for the 2023 Billboard International Power Players list in recognition of the success of XG’s debut and their appearance in the Mediabase Top 40 Radio Airplay charts, the first time ever for Japanese female artists. Could you start out by discussing some of the challenges you faced with XG’s debut?

Kuroiwa: We launched XGALX, a global artist project behind artists like XG, six years ago, in 2017. This was when the world’s attention was first turning to K-pop. Of course, K-pop already had its fans at the time, but this was about when it started to establish an overwhelming presence due to BTS. Avex has a long history of producing K-pop artists such as BoA, TVXQ, and BIGBANG. We formed a partnership with S.M.entertainment in 2001, and we created a label with YG Entertainment. The strong impression I got through our activities with them was that they were keeping a close eye on the Japanese and global markets. Leveraging this experience, we launched the XGALX project with the aim of creating global hits. Initially, we were aiming for a 2020 debut, but the COVID pandemic but a halt to any major moves, so the debut ended up being in 2022. We built up even more knowledge in the intervening time, so in the end it turned out for the best.

XG is based in Korea, but all of the members are Japanese. How does it differ from K-pop?

Kuroiwa: We have a great respect for K-pop, but what really sets XG apart is their originality and freshness. We built the group together with our partners around the world, taking the best elements from Korea, Japan, and the US. The potential of the members, the music production, the video, and the fashion all came together, overlapping and giving birth to XG. We didn’t want to make them a J-pop or K-pop group, but instead create an all-new genre, X-Pop.

The members of the group had a lot of different ideas about what language the lyrics should be in. Some said that since the members are Japanese, they should sing in Japanese, but ultimately they came to the conclusion that since they’d be targeting the global market, including the Korean market, English would be best. None of the members are native speakers, so we really focused on pronunciation from the very start of their artist development.

Comparing the Japanese and US hit charts, it feels like in Japan, songs are often supported because of their strong melodies, while in the US and K-pop charts, songs with distinctive rhythms enjoy a lot of support. Do you take things like that into consideration?

Kuroiwa: Yes. Part of our company’s DNA is dance music, but we want to create an “XG rhythm” that features the originality of the members.

Could you talk a bit about the future you see for XG?

Kuroiwa: We don’t have any experience or expertise with creating global hit artists. That’s why we’ve been working with marketing firms and digital streaming platforms (DSPs), sharing ideas with each other. Thanks to these efforts, we’ve achieved organic growth, and I believe that the knowledge we’ve accrued will provide extremely valuable.

In the world of sports, like baseball and soccer, Japanese players have become really prominent presences, but that’s not the product of the sporting scene suddenly changing. No, the world has changed because of the efforts of all kinds of players, like Hideo Nomo, over the course of decades.

I don’t want the XGALX project to just shut down after a year or two. I hope it keeps going for 10, 20 years, creating a world in which Japanese artists thrive in the mainstream music world. Of course, I’d love it if XG were the breakthrough artist, but by having various artists take on the challenge, we can shift from these being isolated successes to a tide that creates a new market.

When YOASOBI took the top position in the US Billboard “Global Excl. U.S.” chart in June 2023, it created quite the buzz. Artists like Ado, Fujii Kaze, and imase are starting to build up support around the world.

Kuroiwa: It’s extremely encouraging. Every artist gains ground in a different way, so I think we need to take a close look at the data to see just how they’re growing in each individual country, including Japan. Right now, roughly 30% of XG’s listeners are in Japan, 20% in the US, and 50% in other countries. I think this is an ideal distribution, and if Japanese artists from all kinds of genres become widely listened to — if people say “Fujii Kaze’s great and YOASOBI’s great, but XG’s also great” — then I think the future of the Japanese music market will be a bright one.

In August 2023, NewJeans took the number 1 position in the US Billboard200 album chart for the first time. Overseas, female artists like BLACKPINK, Taylor Swift, and Olivia Rodrigo have been very successful, but looking at the Japanese charts, most of the artists have been men for a while now, and there are still few high-charting female artists. What do you think about that?

Kuroiwa: Male artists, especially male groups, enjoy a lot of support from female fans, which makes it easy for them to generate revenue. However, we’ve made a lot of female artists, like Namie Amuro and Ayumi Hamasaki, into hit artists. Around the 2000s, what happened is that although these artists had some male fans, there was a societal phenomenon of female fans who aspired to be like these artists. For both men and women, it’s common for an artist to enjoy a lot of support from the other gender when they debut, but once they reach a certain level, female artists also have a lot of female fans. They have the power to create a kind of culture of their own. I’m not sure if, in our current age, it’s right to speak in terms of gender, but I think female artists have the power to transcend gender and generation barriers.

In closing, the rise in streaming sales is driving ongoing, positive music market growth in Japan and worldwide. However, the rate of growth of that streaming is slowing, and new market development is starting to take place. What plans does Avex have for the future?

Kuroiwa: I think that issues like that affect the countries who were at the forefront of the adoption of music streaming, but in Asia, including Japan, in the Middle East, and in Africa, the streaming market still has a lot of room for growth. I think that Japan has come out of the gates late with respect creating global hits, including hits in those regions. We’re not a major foreign-funded record company, so we don’t have the kinds of internal resources those companies have. That’s why we established Avex Asia Pte. Ltd. in 2013 and Avex USA Inc. in 2018, and we’re adding new Avex sites around the world. In August of this year (2023) we established a new company, Avex Saudi Arabia Entertainment LLC. I think the strategy of connecting all of these sites in Japan, the US, China, Singapore, and Saudi Arabia organically will be an effective way for us to generate global awareness of the IP we create.

So you’re setting up new sites around the world?

Kuroiwa: Singapore, where Avex Asia Pte. Ltd. is located, is our Southeast Asian hub, and Avex USA plays an extremely important role in our creative and marketing efforts. I feel there is tremendous market potential in Saudi Arabia and the Middle East. As far as creating global hits, Japanese anime is an important form of IP, and it’s extremely popular in Saudi Arabia. That’s why in 2022, we produced the “Anime Village” event area.

In the fields of music, video, and anime, we’re going to sell original Japanese IP, which we create, around the world, and feed the results back into our future efforts. I hope we can become a company that keeps doing that for decades to come.

—This interview by Seiji Isozaki and Naoko Takashima first appeared on Billboard Japan