When Japanese Carriers Buy Content
When Japanese Carriers Buy Content

When Japanese Carriers Buy Content

When Japanese Carriers Buy Content

At lunch today, I almost choked on my okonomiyaki. But it wasn’t the fried noodles, vegetables, bits of squid, or pancake-like dough that comprise this Hiroshima delicacy (only rarely reproduced with any satisfaction in the Tokyo area) that caused my trouble; it was an involuntary reaction to my lunch-mate’s comment that DoCoMo looks like it’s becoming “a media company.” Whew!! Regular readers of this newsmagazine will know that one of my themesin the past couple of issues has been how Big D is morphing from an engineering-centric technology company into a media player, just like one-time ISP AOL has.

David Collier, my lunch companion — and a sort of Java-focused wireless entrepreneur who runs around Tokyo with a lot of gadgets in his pockets — had just mentioned that his last DoCoMo cell phone bill included a brochure touting all the different content now available on i-mode. “There were lots of sports listings — it looked just like a media company’s offerings,” he added, alluding to the glossy mailings frequently seen in monthly cable bills. Finally! Someone else who shares my overall sense about the direction (misdirection?) of Japan’s wireless Internet.

David pointed out, however, that neither he nor I are the first to realize the scope of change affecting Japan’s Wireless Webs. It may beuseful to consider how — or when — we might be able to tell that Japan’s carriers (J-Phone and KDDI are drifting in the same directionas DoCoMo, if somewhat later) have started the media conglomerate morph. It seems to me that the first significant milestone will occur when the likes of NTT DoCoMo start to **pay for content.**

Now that hasn’t happened yet — but just wait for it! In fact, my choke-inducing conversation with David got started when I asked him what he foresaw for the future of Java. Java is, of course, the highly successful mobile application environment that has been helping boost handset sales for DoCoMo, J-Phone, and KDDI since 2001. David says he is looking forward to a wider choice of downloadable Java apps (they’re primarily games right now — on all three major carriers) as well as — and this is key — “revenue sharing.”

Sure, the carriers already feed back most (but, to no ones’ surprise,not all) of the content fees gathered from peripatetic surfers either as subscription fees, for example, on i-mode, or as subscription**and** per-event fees, for example, on J-Sky. What the carriers don’t share is more significant — and that’s the data traffic fees (100percent of which goes straight into the corporate coffers, thank you very much).

David, speaking as a mobile Java-focused entrepreneur, asks where’s the motivation to create any sort of Java application that gets downloaded once and then resides on the handset for good and that makes use of the network (such as mail, file sharing, chat, database access, corporate apps, etc.) versus ones that get downloaded repeatedly because they are updated every month — as most Java games are now (because that’s how Java game makers can maximize their revenue). Hmmm…. He has a point (thought I as I wiped bits of squid from my lap…).

But when the carriers deign to share their massive packet-fee revenues with content providers (or are forced to because competition for the best content (including Java apps) starts to seriously affect new subscribers’ choice of carrier), then we will have seen the carriers start to become content-owning media companies.

Note also that Japan’s population will start to shrink in 2007 (according to some estimates), so there’ll be fewer new subscribers to fish for and stealing them away from a competitor via better content offerings will become a significant factor.

“Carriers will have to do something to sweeten the deal,” says David, and I think he’s right. But anyone who thinks about the mobile Internet should be concerned with the scope, manner, and direction of that deal-sweetening, lest Japan’s wireless Webs turn into miniversions of cable, broadcast TV, or other electronic media (or even ofthe Internet at large) — where concentrated ownership and global corporate brands rule the network.

— Daniel Scuka