WW-113 -- Keitais Will Rock the Record Industry

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J@pan Inc presents the Wireless Watch Newsletter:

W I R E L E S S W A T C H

Commentary on Japan's Wireless World
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Wireless Watch Newsletter
Issue No. 113
Tuesday, November 18, 2003
TOKYO

Subscribe for FREE:
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CONTENTS

>> Viewpoint: Keitais Will Rock the Record Industry

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>> Viewpoint: Keitais Will Rock the Record Industry

Downloads of 15- to 30-second MP3 files are very popular among KDDI's
young Japanese customers. The carrier was able to introduce the
service ahead of its competitors because its network capacity and
phones could handle the larger downloads. But soon, KDDI will
face some stiff competition.

On December 1, Vodafone will launch the so-called "chaku-uta" service
for its new 3G phones from Sanyo, and DoCoMo is expected to start the
service in the first quarter next year.

To clear the rights for chaku-uta, content providers must make
licensing deals with the collector's society -- JASRAC in
Japan -- the record labels and artists. This is a costly and time
consuming affair. In Europe, for example, ringtone providers are even
now forced by record labels to pay for the use of artists' names on
their mobile sites. Content providers try to prevent this by
displaying only song titles.

Cross-border licensing deals are even more difficult to make nowadays.
Japanese ringtone providers encountered this challenge while planning to
launch their European i-mode services. By last year, JASRAC had not
made agreements with its sister organizations in time.

A few new initiatives aim to provide a "one-stop license" service for
Internet and mobile outlets. IFPI, the international body representing
the recording industry, announced last week the creation of a one-stop
shop for webcasters to stream music programs to consumers. Through this
service, cross-border webcasts will be easier to establish. European
providers in particular will benefit from this.

Another and more interesting initiative is offered by Toryumon, a
Japanese spin-off of Sony Corporation that is targeting the mobile
industry. According to Nobuhiro Tone, CEO of Toryumon, there is a lot
of interest in chaku-uta from foreign music performers because they
can immediately generate revenue through the service.

"We have exclusively licensed more than 1,500 tracks," Tone says,
"80 percent of which is UK club music. We also license other genres
such as jazz, rock, and classical music. Our library is growing by a
few hundred songs per month," he adds.

Toryumon is wisely using Japanese DJs to get the tunes out.
For simply promoting Toryumon music in their clubs, Japanese DJs
get part of the revenue share.

In the coming year, Toryumon will be quite busy in Japan. Once MP3
downloads on mobile devices become more popular in Europe and
the US, the company will be ready to offer its expanding
portfolio of exclusive music tracks to music service providers.
If the recording industry does not act soon to embrace the new
technology and provide more flexible licensing agreements, smaller
companies like Toryumon might take away an even bigger part of
their pie.

-- Arjen van Blokland

**FOR MORE:

"Karaoke versus Keitai" from J@pan Inc magazine, June
2003:
http://www.japaninc.com/article.php?articleID=1113

LINKS:

IFPI: www.ifpi.org
Toryumon: www.toryumon.co.uk

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STAFF
Written by Arjen van Blokland; Edited by Roland Kelts
(editors@japaninc.com)

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