May 2003 |
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Market Snapshot - Japan
Internet VOD
Each month the Japanalyzer takes you
inside one of Japan’s IT industries- showing you who’s who and where
the market is heading. This month we focus on the upcoming Internet
Video on Demand (VOD) market, which promises to give Japanese
broadband users a new channel for entertainment while presenting
telecommunications carriers with additional revenue opportunities.
Japan’s activity in this area mirrors some of the activity occurring
in the US with one exception- superior end user bandwidth. While
most US DSL or cable customers are stuck at 1 Mbps, an increasing
number of Japanese have Fiber to the Home (FTTH) which can clock in
at speeds of up 100 Mbps. US Carriers have long been talking about
the triple play (voice, video, data) as the way to finally beat
Cable in the Broadband race. In Japan , that talk may soon start to
look like reality with the announcement by several Japanese Carriers
that real Internet VOD is soon to come.
The most recent company announcement
comes from you guessed it, Softbank. The company that sparked the
DSL price war and ensuing revolution in Japan (through Yahoo BB) is
now turning its attention to making even more money off its efforts,
through VOD. After a 6 month trial, Softbank’s Broadmedia subsidiary
announced in March of this year that it would offer Yahoo BB
customers its BB Cable TV service. The service is currently limited
to Tokyo and costs around $82 for setup along with a $21/month set
top box rental fee. The basic service includes 19 channels but 3
additional channels are available as an option. Users can also
purchase movies and other Video content on Demand at prices ranging
from $2.50 to $6.50 per item. Yahoo’s VOD service looks, acts, and
feels a lot like Cable TV only the delivery mechanism is DSL.
Competing with Softbank are companies
like NTT Data, a spin out from NTT whose affiliate Solid Exchange,
plans on providing content via ADSL and FTTH using Broadband network
PCs and set-top boxes. Underlying NTT Data’s content is a
relationship with US-based Cinema Now who recently inked a
distribution agreement with the company. CinemaNOW is one of the few
IP-based Video-on-Demand (VoD) subscription services still in
existence (competitors like Intertainer and Movies.com are gone).
CinemaNow, which recently signed a distribution deal with MGM, is
majority-owned by Lions Gate Entertainment, Microsoft, and
Blockbuster. Of the company's 3,000-title film library, a subset of
movies (approximately 250) with international distribution rights,
are to be translated into Japanese with subtitles and made available
to Broadband users in Japan.
More announcements in the Internet
VOD space are sure to follow, driven largely by the excitement over
rapid high-speed Broadband proliferation. The slow rise of VOD in
the US is often attributed to the poor performance that comes with
typical DSL. But in Japan, user proximity to the telecommunications
infrastructure yields much high performing DSL and FTTH, as a
realistic service. Last month, the Ministry of Posts and
Telecommunications reported that as of March 31 2003, there were
already 8.8 million broadband subscribers in Japan (~20% of
households), an increase of over 500,000 (6%) from the previous
quarter. Of this increase, over half were from FTTH technology which
can bring enormous Internet speed to ordinary home users. The
Ministry is expecting that there will be more than 10 million
subscribers by the end of May, with much of the increase derived
from FTTH.
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This
Month's Bridge Builder
Featuring
the real voice of IT across the Pacific
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May, 2003
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Connecting
the Bay Area to Japan
Mr.
Christopher J. Sigur, Executive Director, the Japan Society of
Northern California
When it comes to US cities that profess a
strong link to Japan, San Francisco is to many, the most
influential. From serving as the site of the 1951 Treaty of
Peace with Japan to today’s role as the gateway for Japanese
firms into the US IT industry, the San Francisco Bay Area is
simply the de facto hotspot for transactions between the two
countries. As the Japan Society that represents this
connection (there are 38 in the US), the Japan Society of
Northern California often plays an important role in
facilitation between the two cultures. As the organization’s
Executive Director Mr. Chris Sigur puts it “ the Japan Society
of Northern California is one of the largest and second oldest
Japan Societies in the US… It also the most significant given
the history and regional focus in technology.” Mr. Sigur had
lots more to say about the mission of the Japan Society and
his role in bridging the cultures when we sat down recently to
chat with him about his experiences and thoughts on the
future. This month’s Bridge Builder features the key points
from this interesting discussion.
Q. Please tell us about your background. How
did you get interested in Japan and other Asian countries?
A. My interest in Japan started when I was a
child because I lived there for eight years, during my
elementary to high school years. While at college
(Georgetown), I studied the Japanese language and then
continued to study the culture while getting graduate degrees
at Johns Hopkins and Columbia. Early in my career, I joined
the Peace Corps serving in Korea then worked for The Asia
Foundation as Representative in the Korea office. While at the
Asia Foundation, I served as Assistant Representative in
Indonesia, and as Executive Assistant to the President in San
Francisco. Before I was appointed Executive Director of the
Japan Society, I had served as Vice President for Asia at the
Carnegie Council on Ethics and International Affairs.
Q. What attracted you to your current
position and how would you define your current mission?
A. I had been working in Tokyo through my
work in relation to the Carnegie Council, when I first heard
about the position. At that time (1997), the Japanese economy
was still staggering but the US IT sector was beginning to
show signs of a boom. I thought that given the age and size of
the organization and its relationship with Silicon Valley,
there would be tremendous potential for growth. During the
first few years, we were able to take some advantage of the
dotcom bubble but mostly its been an “up and down” experience.
However, the mission remains the same- to promote US-Japan
relations. Our location gives us a focus on high technology
but we are not just about business. We try to give our
sponsors a cultural context for their relations with Japan.
Q. Please elaborate a bit on the history of
your organization. How does it distinguish itself?
A. The Japan Society of Northern California
can trace its roots back to 1905 when a lawyer in Palo Alto
named Henry Pike Bowie came together with others, who shared
an interest in Japan, to found the organization. The
organization started out as the Japan Society of San Francisco
and had strong ties to Stanford and the Japanese Consulate
(Japan’s first in the US) from the beginning. Over the years,
there have been ups and downs but in the 80’s and 90’s we
developed a clear focus on business. Today, we try to
distinguish ourselves by focusing not just on business but on
people- because doing business with Japan means building
relationships. Our organization is the second oldest member of
the NAJAS (the National Association of Japan-America
Societies), which includes 38 Japan and Japan-America
Societies in the United States and Canada.
Q. In addition to Japan, you’ve worked with
many Asian countries on behalf of US interests. Comparing
Japan to other Asian countries, what comes to your mind as
some of the key characteristics about Japan one should
remember.
A. Japan’s culture is simply so unique, it’s
difficult to define. For Americans, there is a special
historical connection that may not come up day-to-day but its
there nonetheless. Japan has been an economic powerhouse for
so long that the American interest is just natural. One point
I recommend for those doing business with the Japanese is to
do one’s homework because that’s what they do. Thorough due
diligence on potential Japanese partners is critical to
maintaining an equal footing.
Q. In your tenure at the Japan Society,
you’ve had some great events with a clear impact on Japan-US
relations. Which one was the most significant?
A. From September 6-8, 2001, we hosted a
celebration and conference of the US-Japan relationship, the
US-Japan 21st Century Project, a series of events to
commemorate the 50th anniversary of the signing of the San
Francisco Peace Treaty between the United States and Japan.
U.S. Secretary of State of Colin Powell, Japanese Foreign
Minister Makiko Tanaka, Former Japanese Prime Minister Kiichi
Miyazawa (who attended the signing of the 1951 Peace Treaty as
a junior Ministry of Finance official), and CEO of
Hewlett-Packard Company Carly Fiorina, participated as keynote
speakers. One of the panels featured all the former American
ambassadors to Japan, chaired by Howard Baker the current
ambassador. We believe the US-Japan 21st Century Project was
the most significant gathering of business, academic, and
political leaders of the United States and Japan in the last
20 years. Going forward, we will be working with the
National Association of Japan-America Societies who will
be coordinating the Celebration of the
150th
Anniversary of US-Japan Relations.
Thank you Mr. Sigur. Individuals and
companies that are interested in finding more about the Japan
Society of Northern California, please see their
website.
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Networld
+ Interop 2003 Tokyo
July 2-4, 2003 Tokyo
Makuhari Messe (Nippon Convention Center
The 10th NetWorld+Interop Tokyo introduces leading
edge technology and products that reflects the market and technology
trends. This year there will be a new exhibit zone "Media broadcasting" in
addition to existing zones: Network Infrastructure, Carrier Services,
e-Platform & Software, Security and Mobile/Wireless.
SODEC : 12th Software Development Expo & Conference in Tokyo
July 9-11, 2003 Tokyo Big
Sight (Tokyo International Exhibition Center)
Features technology and tools to support software
development, maintenance, and operation for business systems and
engineering systems. The conference is run concurrently with with te ESEC
/ DWH & CRM EXPO and the Data Storage Expo and Conference.
ExpoCom Wireless
Japan 2003
July 16-18, 2003 Tokyo Big
Sight (Tokyo International Exhibition Center)
An exhibition of wireless broadband, mobile
internet, 5GHz/2.4GHz W-LAN, 3G application/contents, hot spot, internet
ITS & telematics, mobile IP, bluetooth, CRM/SFA, and security
technologies.
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