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Spotify's 40 Million Tunes Won't Go Far With CD-Happy Japanese

The music streaming service will have to fight record labels that still sell a lot of profitable compact discs.
A member of staff listens to music as he plays a vinyl record at the HMV Record Shop operated by Lawson HMV Entertainment Inc. in the Shibuya district of Tokyo, Japan, on Wednesday, Sept. 28, 2016. Spotify Ltd. is bringing its popular online music service to Japan, a large and lucrative market where fans have demonstrated a continuing fondness for CDs and even vinyl records.
Photographer: Noriko Hayashi/Bloomberg
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On a recent muggy afternoon in Tokyo, 21-year old Shintaro Naganuma joined several hundred customers browsing CDs at the eight-story downtown outpost of music retail chain Tsutaya.

Having discovered a couple of new rock artists on YouTube, the third-year university student hit Tsutaya Co.’s flagship store in trendy Shibuya to look up their albums. That process encapsulates the dilemma now facing Spotify Ltd.’s head Daniel Ek, who on Thursday presided over the music streaming service’s long-awaited entry into the world’s second-largest music market.