TT-460 -- Match-Making Business, ebiz news from Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.
(http://www.terrie.com)

General Edition Sunday, March 9, 2008 Issue No. 460

+++ INDEX

- What's new
- News
- Candidate roundup/Vacancies
- Upcoming events
- Corrections/Feedback
- News credits

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+++ WHAT'S NEW

Last month (February, 2008), Symantec released some of the
results from its annual Norton Online Living Report,
compiled by Harris Interactive. In the snapshot on Japan,
the report states, "Japan is less likely than other
countries to use the Internet as a resource for socializing
and entertainment. It is also less likely than other
countries to take steps to protect their privacy and to
ensure the security of their personal information (and the
safety of their kids)."

While we agree that Japanese parents don't supervise their
kids while on the Internet nor take a lot of care over
network privacy, we definitely do not agree about the
comment that the Internet is not a medium for
socialization -- unless you are interviewing people past
their reproductive age -- which of course in Japan might be
half of the respondents...! ;-)

Instead, the report writers would have done better to
recognize the skewed demographics in Japan and cut off
respondents over 50. Then they would have found that in
fact online socialization is right up there with other
countries, if not more so. Japan's rigid social
structures have always made it difficult for unrelated
singles to meet and get to know each other. In the days of
old, it was the Nakodo (go-between) who resolved this
problem. These days it is Match.com or one of an estimated
5,000 other matching websites now active here.

[Continued below...]

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[...Article continues]

The problem with online dating services is that many of
them have been fronts for "Enjo Kosai" (Compensated Dating
aka Teen Prostitution), pairing underage school girls
desperate for spending money with middle-aged salarymen
desperate for some fantasy sex. Over the years this has
led to highly publicized date rapes (but they're not really
dates), and even a murder or two. All of these nefarious
goings on have prompted the National Police Agency (NPA)
to yet again announce new measures to bring online dating
and related crime under control -- this is a regular
3-yearly event, so clearly the NPA hasn't made much
progress since the focus on Enjo Kosai in the early 2000's.

In the first 6 months of 2007, the police say that there
were 907 crimes relating to Internet dating and apparently
about 85% of the victims were under 18 years old. One
measure suggested is that the NPA require the operators of
dating sites to be registered with local public security
boards. The operators will have to show character
references and maintain a contact number in order to keep
their licence. Unlicenced operators will be fined or face
imprisonment.

We don't know how effective this measure will be. Banning
the Yakuza is unlikely to have much effect -- they'll
simply hire front men or go down to the local park and sign
up a homeless person as the owner of the site. This is
what they do with underground casinos, and the police have
had little luck in closing them down. Also, the proposed
regulations will not cover companies with their servers
off-shore, and again, this parallels the gambling business
-- where the Japanese are the 2nd or 3rd largest customer
base for many online casinos even though online gambling
is illegal here. The reason, of course, is that users are
not prosecuted -- only the service providers. At least men
buying school girls are now prosecuted, thanks to the
law change back in 1999.

In parallel to the NPA initiative, the Ministry of Internal
Affairs and Communications decided several months ago to
require cell phone operators to enact filtering on all cell
phones registered to minors (normally a minor is a person
under the age of 20, but in this case the age will be 18),
to protect them from solicitation emails and unethical
dating sites. Again, we can't see this really working too
well, since a determined teenager can simply have a friend
supply to the phone, or fthe users will subvert the filtering
by using euphemisms for the terms people are actually
referring to. Much like "enko" is a euphemism for
prostitution.

One site that should not have a problem falling afoul of
the authorities is Match.com. It is by far the biggest
player in the online dating business globally and has had
over ten years to refine its services and navigate
international regulations. It has also gained some battle
hardening along the way -- such as a 2005 class action suit
filed over the way it allegedly created fake dates and
computer generated "winks" for members just before their
subscription renewal dates. This law suit was dismissed in
2007, but it nevertheless has allowed the company to think
hard about its business model and corporate governance in
general.

Online dating is a big business. Started in 1994, Match.com
became part of the publicly listed IAC internet
conglomerate owned by Barry Diller, in 1999. Diller used to
be the former head of Paramount and Fox. In IAC's 2007
financial statements, Match.com was stated to have made
profits of US$78m on sales of US$349m. 30% of these sales
came from international sites such as the one in Japan,
and this ex-US business is expected to grow at least 300%
over the next four years. At the same time, the US business
has flattened out -- so Match.com has good reason to be
focused on Japan and countries like it.

Indeed, Match.com is active in more than 37 countries and
its websites speak 18 languages. The company has been
operating in Japan since 2004. A recent Forbes interview
with the CEO Thomas Enraght-Moony mentions that the site
has about 840,000 people living in Japan registered with
it, up substantially from the 10,000 or so when they first
started.

We did a quick calculation, and although the Forbes article
doesn't say how many of the 840,000 are paying members, an
ex-Match.com senior manager did disclose in the US media
last year that about 11% of members do pay. Thus, assuming
that 92,400 people are paying the currently JPY2,467
monthly membership fee, this means that Match.com is doing
about JPY2.735bn (US$26.56m) a year in Japan -- not too
shabby, and a number that is likely to double next year.

At first glance, and thinking about eBay and other major US
Internet companies' failures in Japan, it is easy to
suppose that Match.com will find it difficult to grow in
Japan in competition to Mixi and other SNS and dating
sites. However, Match.com has a no-minors policy and has
cleverly managed to position itself as a site for
professionals and middle-aged folks who are too busy to
find a partner by themselves. A quick review of user
profiles (yes, we signed up!) shows that divorcees also
figure high in users over 30 years old. Until recently
being divorced in Japan carried a stigma of the person
being emotionally troubled. But Match.com's personality
tests and other tools gives someone worried about getting
involved with an undesirable first-time date a bit more
confidence that their date will be normal.

This idea of focusing on professionals, divorcees going
around a second time, older folks, and other more serious
seekers is apparently very much a trend overseas as well.
Media commentators attribute Match.com's website redesign
and content as being reflective of this. Apparently people
in this demographic group are more likely to become paying
members and are more likely to use the service in a way
that might lead to testimonials (i.e., "I met my husband
on Match.com"). Expect Match.com and other companies duking
it out in this market to start using TV and paper media ads
highlighting these successes.

As far as we can see, there is a huge need for match-making
sites with sophisticated screening and confidence building
tools (such as EQ and IQ tests) here in Japan. Single women
in their late 30's are viewed by the popular media as
running out of time biologically and as 26-year old pop
singer Kumi Koda once famously said on TV, she thought
women over 35 have "rotten wombs". Likewise, men in their
50's are waking up to the fact that there is more than work in
their lives.

This is not just an idle observation. according to a 2000
survey done Ministry of Internal Affairs, 12.6% of men and
5.8% of women aged 50 or over were still unmarried. Given
the drop-off in marriages, presumably this number has
climbed several more percentage points. Combine this
with more than 260,000 (2006) divorced couples every
year, and you're looking at a potential market of millions
of people who are not young, attractive, sexy Mixi poster
material.

Yes, Match.com has excellent prospects.

We close with a comment about how running a dating site is
getting tougher for Match.com's competitors. Back in
January 2007, the President of a Tokyo-based dating site
called Takumi Tsushin was arrested by the police and
charged with trying to send an unbelievable 5.4bn junk
emails advertising his dating service, at a rate of 90m
emails a day (that's more than 1,000 per second!!!) in July
and August 2006, through compromised PCs based in China.
As with all such low-level operators, money appears to have
been the root cause. Takumi Tsushin was reportedly making
JPY120m (US$1.16m) a day from customers using its
services.

Match.com's performance looks modest in comparison...

...The information janitors/

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

+++ NEWS

- NHK to ramp up English-language broadcasts
- Groups matter more for Japanese
- Electricity demand to increase 10%
- Macquarie tie-up for used PC exports
- Fish is next on export menu

-> NHK to ramp up English-language broadcasts

NHK has announced that it will create a wholly owned
subsidiary to substantially increase the output and
broadcast of English-language programs for its foreign
viewers both inside and outside Japan. Because the venture
is outside the organization's mainstream mandate, NHK will
allow it to be financially self-sustaining through
advertising. Nonetheless, NHK has also allocated a budget
of JPY6.88bn (US$66m) to kick things off, more than triple
the budget for last year. (Source: TT commentary from
nikkei.co.jp, Mar 7, 2008)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20080307D06JFA09.htm

-> Groups matter more for Japanese

In an interesting experiment, researchers from the
University of Alberta and Hokkaido University have found
that Canadians and Japanese assess the moods of people they
interact with differently. In the experiment, people from
both nationalities were asked to judge whether a face in a
photo was happy, angry, or sad. The photographed subject
was standing in front of a group of other people who were
also visible. More than half of the Canadians focused just
on the face of the subject, while 72% of the Japanese took
into account the looks on the faces of the group in the
background. ***Ed: So it's official, Japanese care more
about groups when deciding a course of action.** (Source:
TT commentary from sciencedaily.com, Mar 7, 2008)

http://www.sciencedaily.com/releases/2008/03/080305120850.htm

-> Electricity demand to increase 10%

A report from the Japan Electric Power Survey Committee
estimates that Japan's consumption of electricity will
increase by at least 1% a year over the next 10 years.
Currently Japan consumes an estimated 1.0752trn KW Hours
annually. ***Ed: The report doesn't say why the demand
levels will increase, but we can assume that more gadgets
at home and increased public works are behind the extra
growth. The estimates were made by assuming the economy
would expand by 1.6% a year. However, we think that the
power authorities are seriously underestimating the
potential impact of electric and hybrid plug-in cars due to
be launched into the market next year. We think that the
public switch from gasoline to electric will be slow for a
year or two then take off rapidly -- much the same as our
society switched from vinyl to CDs, paper media to the
Internet, and fixed lines to cell phones. It's all about
convenience and price.** (Source: TT
commentary from guardian.co.uk, Mar 6, 2008)

http://www.guardian.co.uk/feedarticle?id=7362535

-> Macquarie tie-up for used PC exports

The folks at Australia's investment bank Macquarie are busy
here in Tokyo. They have announced that they will be
creating a joint venture company with NEC Leasing to export
used post-lease PCs to SE Asia, India and Africa. Macquarie
is already deeply involved in the Japanese PC on-selling
business, having moved about 500,000 units to customers
primarily in Australia. ***Ed: Only problem here is that
this is a competitive business, and NEC Leasing is not a
particularly major player. Macquarie needs to look at
buying out some of the other players with greater access to
the massive volumes of PCs coming out of the Japanese
market -- such as those dealing with NTT East and NTT West.
These two organizations alone apparently generate almost 1m
used PCs a year.** (Source: TT commentary from
nikkei.co.jp, Mar 6, 2008)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20080306DA6J3064.htm

-> Fish is next on export menu

While one normally thinks of Japan as a final market for
food grown/caught elsewhere, the changes in food costs
brought about by inflation overseas means that Japanese
farms are suddenly internationally competitive again. And
in particular, they have an image of high quality produce
which is attractive to consumers elsewhere in Asia. Markets
have been rapidly growing for Fuji apples, nashi pears, and
now... fish. Two major fish farming firms, Maruha Nichiro
and Nippon Suisan have said that they are starting to gear
up for export. Maruha Nichiro says it will start selling
500 tons of frozen yellowtail ("Buri" or "Hamachi") fillets
to the US and Europe from next year. Likewise, Nippon
Suisan is already exporting and will do 100 tons of farmed
yellowtail to Europe this year, rising to 1,000 tons in
2010. In case you were wondering, global imports of seafood
totaled 31.58m tons in 2005, of which 3.3m tons were
imported by Japan. Conversely, Japan exported just
520,000 tons of seafood last year. (Source: TT commentary
from nikkei.co.jp, Mar 6, 2008)

http://www.nni.nikkei.co.jp/AC/TNKS/Nni20080305D05JFF04.htm

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.

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+++ CANDIDATE ROUND UP/VACANCIES

=> LINC Japan Ltd., an affiliate of the LINC Media group,
is actively marketing the following positions for market
entry customers setting up in Japan, as well as other
employers of bilinguals.

** HIGHLIGHTED POSITION(S)

We are currently accepting applications for a UNIX
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-----------------------------------------------------------

+++ UPCOMING EVENTS/ANNOUNCEMENTS

------- Marcus Evans Events - Supported by J@pan Inc ------

- Customer Relationship Excellence
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- Compensation and Benefits
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- 3rd Annual LNG World
15th - 16th July 2008, Tokyo
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This event aims to focus on the key operational aspects of
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'J@pan Inc readers are entitled to a 10% discount upon
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For further details and brochures, please contact:
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Tel No: +603 2723 6736
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Email add: estherw@marcusevanskl.com
-----------------------------------------------------------

-------------- YMCA/FCSC 2008 Charity Concert -------------

In support of the YMCA's Challenged Children Project (CCP),
the YMCA's Foreign Community Support Committee (FCSC) will
hold their annual Charity Concert on the evening of April 9,
2008 starting from 18:30 hosted by FCSC Honorary Chairman,
His Excellency Ambassador Jaromir Novotny, at the Embassy
of the Czech Republic in Hiroo.

Featuring two performers: Chan Chan (Latin & Cuban Rhythms)
and Hideki Ikegami (Marimba Percussionist).

Donation is JPY10,000 and all proceeds go to benefit the
CCP. Beverages and canapes will be served during the
intermission.

Attendance is limited so please contact the FCSC office;
03-5367-6640, fcsc@ymcajapan.org
for tickets and more information.

Performances of Hideki Ikegami can be seen on YouTube:
http://www.youtube.com/watch?v=yPeufQ_slZY
-----------------------------------------------------------

-------------- FEW Career Strategies Seminar --------------

If you are an English-speaking woman looking to advance
your career (or if you know one!), sign up for the
FEW Career Strategies Seminar 2008, to be held on March 15
at Temple University's Mita Hall.

This all-day event includes presentations on career
education, job planning, choosing or changing career paths,
as well as starting and running a business.

There will also be several workshops about different
industries, and each participant will receive the '2008
Career Guide,' which includes detailed information and
advice about working in Japan.

Breakfast, lunch and refreshments will be provided, and the
closing session will be followed by a wine reception.
Tickets are 12,000yen (10,000yen for students and FEW
members) in advance, or 15,000yen at the door.
For more information contact and to register online visit
www.fewjapan.com

Time: 9:00am - 8:00pm
Date: 15th March 2008
Venue: Temple University, Minami-Azabu, Tokyo
Map: www.tuc.ac.jp
-----------------------------------------------------------

______________________________________________________
Events announcements are priced at JPY50,000 per week.
For more information, contact sales at japaninc.com

***------------------------****-------------------------***

+++ CORRECTIONS/FEEDBACK

In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to editors@terrie.com.

-> In TT458 we wrote about dual nationality issues and how
Japan appears to be cracking down on Japanese taking a
second nationality, despite the fact that cutting these
peoples' citizenship will lead to a hastened population
decline.

*** Our reader says:
I just read your article in Terrie's Take on the dilemma
that many dual nationals have with dual citizenship. It
caught my attention because I myself grew up with two
passports, American and Japanese. Both of my parents are
Japanese (living in the USA), but I was born on U.S.
territory, hence the dual citizenship.

But, when I decided to come to Japan about 6 years ago to
work here, I had a hard time deciding which passport to
enter Japan with. I could've come here as a Japanese
citizen, but I also didn't want to take the chance and lose
my U.S. citizenship. So I ended up coming and working here
as an American. I guess time will tell whether I made the
better decision...

And then there's the whole issue with family registrations
("koseki"), the spouse's maiden name not automatically
"changing" in interracial marriages, still many landlords
not allowing foreigners to rent apartments, etc.

Sometimes I wonder what internationalization is all
about...

***********************************************************
END

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+++ ABOUT US

STAFF
Written by: Terrie Lloyd (terrie.lloyd@japaninc.com)

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