Although Japan is the second largest music market in the world, the structure and practices of the music industry are little understood internationally. People overseas need to know how the music business works in Japan so that they can conduct business comfortably. The Japanese music industry has unique features in some respects. First, Japanese record labels remain heavily dependent on traditional physically packaged music although its profitability is much lower than that of digital distribution. Second, full-scale competition in the music copyright management business has just begun. While JASRAC monopolized this market for more than sixty years, the new entrant, NexTone has gradually increased the market share thanks to the frustration experienced by many music publishers and songwriters in their dealings with JASRAC. Third, the relationship between artists and artist management companies is more like an employer-employee relationship than a client-agent relationship. Artist management companies are fully invested in discovering, nurturing, and marketing young artists just the way big businesses handle their recruits. This chapter illuminates practices of the Japanese music industry for an international audience.