Ever since the first ringtone sites began appearing on NTT DoCoMo’s i-mode menu back in 1999, most mobile music content providers in Japan have pushed to have their services appear on the ‘main menu’ of the wireless carriers. This ‘closed garden’ model has been widely criticized for putting too much power in the hands of the wireless carrier. However, it has still been attractive to CPs because of the enormous traffic that comes from the carrier’s menu, as well as the convenience of having customer billing handled by the carrier.
For the past seven years, CPs have flooded Japan’s three major wireless carriers with thick, 150-page proposals, in the hopes of getting their ringtone, mastertone, or other content listed on the menu. Despite the high barrier of entry and heavy restrictions, this method has until recently been the preferred way to operate a mobile music service in Japan.
Recently, however, there has been a sharp increase in the number of music content providers choosing to forego the ‘official portal service’ option, instead opting for a ‘non-official’ site off the carrier’s main menu. Most of these sites rely on revenue from banner ads, and an entire industry has sprung up to match advertisers with the most appropriate non-official mobile sites. Because these non-official, ad-supported sites have no access to the carrier’s billing system, most of the content is essentially free to users, provided they subscribe to the service (also free). Alternatively, some services are point-based, allowing users to obtain points clicking on ads or introducing friends to the service. Continue reading via Music Media Watch.
Other notes of interest:
Major shakeups at Faith Inc., Moderati and Digiplug
Following its board meeting last Friday, Faith Inc. announced that co-founder and COO Makoto Nakanishi will resign from the company and acquire 100% of its struggling US subsidiary Faith Communications. According to the statement, the US subsidiary is losing money and plagued with problems, including a postponed trial launch of its Mobile Virtual Network Operator (MVNO) service and heavy capital requirements. With Nakanishi’s acquisition of the company’s stock, the name will be changed from Faith Communications to Voce Wireless, and will no longer be affiliated with Faith Group. Faith also announced a major reorganization of its overseas subsidiaries, including the sale of its music distribution businesses in the US (Moderati) and Europe (Digiplug). A small portion of Moderati devoted to platform development will remain with the group, with the name of the company reverting back to Faith, Inc., the name under which it was originally founded in 2002. Management of the overseas business will pass from Nakanishi to Faith CEO Hajime Hirasawa.
RIAJ releases survey on illegal chaku-uta sites
The Record Industry Association of Japan (RIAJ) released results from a survey on the usage of illegal chaku-uta (mastertones) and full-track downloads. Illegal sites were defined as those offering free chaku-uta content (with the exception of corporate campaigns, which often include free downloads). According to RIAJ 74% of those who answered know about the existence of illegal sites and 51% have used such services. RIAJ estimates the number of illegal downloads to be more than 287 million per year and concludes that those using illegal sites tend to purchase fewer CDs or legal chaku-uta tracks.