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In Japan, people seem to want to stay in the spotlight all the time, so that they do not lose popularity and can enjoy publicity that brings profits (not only to music sales, but also invitations to perform on tv, live - more publicity - and join promotional campagins - even more publicity and high salaries). To achieve that, releasing single by single is the best way. You can release a single per every three months, while you can't do that with an album. Having releases regularly throughout the year keeps you present in the media, which is pretty important for all idol-kind performers.
In the west it's seen differently. An album is t h e thing to buy, while singles are an addition, a collectors item. On the side, they do generate some profit which obviously is not spendable (as no profit is ever considered so), but their main function is to start up and lead album sales. In the west artist don't seem to long to be present in the media and recieve publicity throughout the whole year, they just have their 'seasons': one or two new singles, then an album, then one or more cut singles to keep the album sales going and then it's all let to fade away, then it starts again, usually not sooner than in a year time.
On the logical side, it's just the west is used to treating the album as the actual product - and it's reasonable, why buy few CDs with single tracks when you will get them all later plus few more on one CD?... Singles are more like a collectors or diehard fans item, not really attractive to people who just happen to like that one particular song.
In Japan, people seem to be used to treating singles as full value products. It seems to be changing recently, as people there probably discovered the vast possibilities of internet where you no longer need to buy the CD itself to have all the content just if you want to listen, so only true fans who want the plastic and paper buy the singles. Maybe facing the crisis in single sales, peformers in Japan will switch to the western system.
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