MMW-51 -- Japanese Ringtone Providers Continue to Move Overseas

============================================
J@pan Inc Magazine Presents:
M U S I C M E D I A W A T C H
Commentary on the week's music technology news
=============================================

Issue No. 51
Wednesday, October 22, 2003
Tokyo

---------------------------------------------

CONTENTS

++ FEATURE: Japanese Ringtone Providers Continue to Move Overseas

++ NOTEWORTHY NEWS:
** iTunes for Windows Tops Million Downloads in First Few Days
** Webcasting Stations Must Pay Royalties
** More than 200 Music Swappers Receive Warnings

========== PAN PACIFIC LEISURE PACKAGE ========
At Pan Pacific Yokohama, you can have a relaxing experience
for only 20,000 yen per night, including an American breakfast.
For details, please check http://yokohama.panpacific.com/
================================================

++ FEATURE: Japanese Ringtone Providers Continue to Move Overseas

For much of the past year, the domestic Japanese ringtone industry has
been in a state of stagnation. While revenues are still strong,
subscriber growth has slowed considerably, and the providers are
engaged in a constant uphill struggle to adapt their songs and
software for new handsets. Faced with a saturated domestic market and
stiff competition from other music-related services such as chaku-uta
(KDDI's songclip download service), most Japanese ringtone providers
are looking for ways to continue their growth without major changes to
their basic business. One strategy is overseas expansion.

For providers here, setting up shop in a foreign market offers a great
chance to leverage their immense song catalogs and technical
expertise. Yamaha and Faith have been quick to establish not only
services, but also their ringtone file formats and authoring software
in European, US and Asian markets. In particular, the US market
(Verizon and AT&T Wireless) is attractive to many Japanese companies
at the moment, and providers such as For-side.com and Oricon are
rumored to be in discussions with the carriers there about setting up
services in the coming months.

In Europe, while DoCoMo's i-mode service has yet to really take off,
other carriers and platforms are welcoming Japanese ringtone providers
with open arms. Telefonica in Spain, Wind in Italy and, of course, the
growing Vodafone Live service are all capable of supporting polyphonic
ringtone download services and are attracting growing numbers of
Japanese providers, as are carriers in South Korea and Hong Kong. In
some cases, the carrier may take as much as 40 percent of the total
revenue (hence the warm welcome extended to Japanese ringtone
services), but the sheer number of potential customers is often enough
to make the venture worth the heavy royalties and setup costs.

And speaking of setup costs, the obstacles to setting up an overseas
service can be huge. Not only are copyright laws different in each
country, but there are also major technical and production challenges
to be faced. Establishing a service with Verizon in the US, for
example, requires each provider to develop its own Brew software
application that effectively acts as the browser software for the
ringtone service. Japanese providers must also learn to deal with new
formats such as SP-MIDI and need staff who are in touch with the local
market. Finally, handset differences have so far tended to be more
severe in the overseas markets, requiring a much greater degree of
on-site testing.

Despite these challenges, though, more and more ringtone companies
here are moving toward establishing overseas services, and those who
are already well-entrenched in foreign markets are looking to expand
even further into newer, emerging platforms. The pattern that seems to
be unfolding here is that these companies are adding less in the way
of new software on their domestic services, focusing instead on
adapting their existing software such as trial-listening and karaoke
apps for new models (no small task in itself). At the same time, they
are committing significant resources to researching overseas markets
and technical requirements, as well as actively negotiating with
foreign carriers.

-- Steve Myers

Link:
"Ready to Rock" from February 2003 explains KDDI's chaku-uta system.
http://www.japaninc.net/article.php?articleID=1014

==================== EVENT ===================
GARTNER'S SYMPOSIUM/ITXPO 2003
Date: Nov. 19-21, 2003
Location: Le Meridien Grand Pacific (Odaiba, Tokyo)

Business today is all about reducing time, increasing speed, and
improving profits. Technology is the enabler.
Keeping up - and looking ahead - is your challenge and our strength.
Join over 2500 senior IT decision makers to hear Gartner's leading
global and Japanese analyst address technology issues that will
have the biggest impact on your enterprise over the next year.

View complete Symposium information at:
http://www.gartner.co.jp/symposium/eng/
==============================================

++ NOTEWORTHY NEWS

** iTunes for Windows Tops Million Downloads in First Few Days

In brief: Apple Computer announced last Monday that more than a
million copies of its iTunes software for Windows had been downloaded
since its release the previous Thursday. In addition, Apple said it
has sold more than a million songs using the software in the same
period. The Windows version of iTunes is expected to further increase
sales of Apple's iPod digital music player.

Source:
http://news.com.com/2100-1046-5093702.html

============== ADVERTISEMENT=================
NOKIA Japan Co.,Ltd.

FINALLY THE NEW NOKIA 6650 ALLOWS YOU TO USE THE
SAME NUMBER IN JAPAN AND OVERSEAS*

The Nokia 6650 phone supports both WCDMA and GSM (900/1800MHz),
which can be used in Japan and many other countries outside Japan.
It can meet your calling needs across national borders -
look how convenient and comfortable it could be!

*Check out NOKIA 6650 phone at:
http://www.nokia.co.jp/products/n6650/eng/index.html
========================================

** Webcasting Stations Must Pay Royalties

In brief: A US appeals court on Monday upheld a previous ruling made
by a lower court that radio stations must pay royalties to the artists
and record labels whose songs they play on the Internet. Last year,
the Copyright Office set the royalty rate at around one cent per hour
for each listener, but this was reduced by the US Librarian of
Congress for the smaller, Internet-only broadcasters.

Source:
http://news.com.com/2100-1027-5094122.html

Link:
"A Web of Rules" from November 2002 looks at Internet law in Japan
http://www.japaninc.net/article.php?articleID=945

==================== NEW LAUNCH ===============
Japan Inc Communications K.K. is proud to announce the launch of its
new portal site: japan.com - your primary access point for Business,
Leisure and News on Japan.

Check it out now at: http://www.japan.com

We welcome your input, feedback, insights -- even gripes. Please share
your comments and ideas. Help make this site rock!
Contact: Yves Bennaim on 3499-2175-1322 or email: yves@japaninc.com
================================================

** More than 200 Music Swappers Receive Warnings

In brief: The Recording Industry Association of America (RIAA) began
sending out warnings to 204 suspected users of online music-sharing
software last week, saying that lawsuits were being prepared against
them. The recipients were given 10 days to contact the RIAA to discuss
a settlement. The association says that of the 261 lawsuits filed last
month, it has so far settled 64 of them, receiving an average of
$3,000 per suit.

Source:
http://story.news.yahoo.com/news?tmpl=story&ncid=&e=9&u=/ap/20031019/
ap_on_hi_te/downloading_music_warnings_6

Link:
"File Swappers Download 75 Million Music Files" from August 2002
http://www.japaninc.net/article.php?articleID=859

================================================
Subscribers: 2,020 as of October 22, 2003

STAFF
Written by: Steve Myers (steve@thetamusic.com)
Steve Myers is president and chief enthusiast of Theta Music
Technologies, which specializes in the development of music-related
software applications.

Edited by J@pan Inc editors: (editors@japaninc.com)

CHECK OUT OUR OTHER JAPAN-SPECIFIC NEWSLETTERS
http://www.japaninc.com/subscribe_news.html

UNSUBSCRIBE
To unsubscribe from this newsletter, click here:
http://www.japaninc.com/unsubscribe_news.html

ADVERTISING INFORMATION
To advertise in this newsletter, contact:
ads@japaninc.com

GET THE MAGAZINE
Subscribe at:
http://www.japaninc.net/mag/subs.html

FEEDBACK AND PROBLEMS
We welcome your viewpoint:
editors@japaninc.com
(NB Please do not reply to this newsletter -- it's outgoing only,
so we won't get it!)

TECHNICAL PROBLEMS:
webmaster@japaninc.com

(C) Copyright 2003 Japan Inc Communications KK. All Rights Reserved.

business