Interview: Tomoo Okada of Nifty Corporationinterviewed by Terrie Lloyd
Computing Japan: How many PC users with modems do you estimate there are in Japan
Tomoo Okada: It's hard to say. However, penetration of modems among the PC-user population in the Kanto area [in and around Tokyo-Ed.] is about 5%. This compares with about 10% to 13% in the USA. So I think that there is still room for a lot of growth in Japan.
CJ: How accessible is Nifty-Serve to the general public?
Okada: Nifty-Serve's network is terminated in NTT. Most of our subscribers use dial-up access into one of our 180 nodes across Japan. Totally in Japan, there are 550 local-call areas; however, we are currently only concentrating on the 180 most populou s areas. To move messages around the country, NiftyServe piggybacks on Fujitsu's nationwide FENICS packet switching network. We charge users about 10 yen [$0.10] per minute for access to this network.
CJ: What are the fastest access speeds you offer your users?
Okada: From August 9, we having been providing 14.4K bps [bits per second] access. [Access at 9600 bps and above is 25 yen per minute.--Ed] By the end of the year, we will have about 60 nodes capable of handling 14.4K bps. The next step from here is 64 K bps with ISDN, but while we are already physically connected to FENICS and NTT and their ISDN networks, our communications software is not capable of these speeds yet, so we have infrastructure improvements to make. We are looking for a partner to help us produce an easy-to-use GUI [graphical-user interface] software to access the ISDN system. I expect that to take at least another one to two years.
CJ: What percentage of your users are business-related, versus private users?
Okada: About 35% of our subscribers are using the network for business. It used to be higher, around 40%, but the recession has reduced the numbers. We are still seeing healthy growth from the private-user sector, though.
CJ: Tell us about the competition.
Okada: NEC's PC-VAN is a major competitor for us. In June of this year, PC-VAN had about 764,000 subscribers; we had 690,000. However, while they are indeed larger, there was an interesting study done by the Database Promotion Center that polled the ne twork usage by 760 companies. The results showed that 74% of the pollees used Nifty-Serve as their main carrier. The implication of this is that people find our services more useful than those of our competitors. As further evidence, a November '93 poll of 200 computer users done by Nikkei BP (a respected computer magazine publisher) found that of the 34% of pollees using PC data networks, almost 90% were using NiftyServe.
CJ: What is your most popular service?
Okada: Access to forums. We have about 350 forums, and around 70% of all usage time on Nifty-Serve is into these forums. Generally, people like to meet to discuss issues and to get information.
CJ: Which forums are most popular right now?
Okada: Nifty forums divide roughly into cultural and computer-related. On the cultural side, animation, computer games, soccer, MIDI [music composition using the MIDI standard--Ed.], and horse racing are very popular. Month-by-month, the most popular f orum changes between these categories. It is a seasonal thing, too; for example, the skiing forum is becoming very active again.
Although we are seeing a huge volume of access hours for cultural forums, by far the greatest interest is still in the computer-related forums especially areas where people can find free software. Next in popularity are those forums disseminating infor mation about the IBM PC and Macintoshes.
CJ: PC-VAN has similar types of forums, I'm sure. Why are yours apparently more popular?
Okada: The important thing to interest someone in a service or a forum is the quality of the content -- not how many bells and whistles it has. So, Nifty-Serve forums now distribute about 200,000 different free software (shareware) titles, and this is very attractive to users. Third party software companies are also publishing titles directly on the network.
See this software directory? [Holding up a 1-inch-thick directory of software titles.] This is the 1994 listing of titles downloadable off the network. When this directory was first released two years ago, it was only half this size. Now look at it!
CJ: Of the freeware and shareware titles, were most of them developed in Japan?
Okada: Yes, most of them. They are mainly small utilities and games made by private individuals in their spare time.
CJ: Which commercial software companies are publishing on Nifty-Serve?
Okada: Mainly small companies who are trying to reduce their packaging and distribution costs. It is quite common for a product that would normally be sold for 5,000 [$50] after packaging and marketing costs to be available for only 1,000 [$10] when pu blished on Nifty-Serve.
CJ: How much of the material on Nifty-Serve is in English ?
Okada: We do have an English-language area called Nifty-Serve ES. Unfortunately, it is not very active. So if someone wants to access Nifty-Serve from overseas, over the Internet for example, they would really need to be able to read Japanese and have a Japanese-capable computer to get the most benefit from our service.
CJ: Do you have any other special marketing strategies, apart from content, to compete with PC-VAN?
Okada: Well, currently we are mainly targeting computer specialists. We are therefore providing many forums and information sources aimed at such people. We also have a new area called vendor forums, whereby users can give vendors feedback directly, an d where the vendors can make news announcements and make drivers and utility software available.
CJ: Is Microsoft or any of the other large software houses listing material on Nifty-Serve?
Okada: Yes, through a vendor forum. They offer utilities and seek user feedback. They are not offering commercial products for sale yet.
CJ: Can you give us any data on user access patterns?
Okada: This is a very interesting topic. Over the last three years, our user hours peak daily at around 1:00 am! Some 50% to 60% of our users are computer specialists of one kind or another. After they get home at around 9:00 PM, they probably eat, tak e a bath, have a beer, then get on to the computer!
CJ: Given this peak of 2 - 3 times normal usage, do your lines ever get choked?
Okada: No, we are very conscious of quality of service, and we try to always keep at least 80% to 85% of peak volume as our standard capacity. When we need it, we have the ability to switch in more capacity.
CJ: Do you operate any commercial shopping services on Nifty-Serve?
Okada: Yes, we have set up a mechanism for retailers to establish virtual shops on Nifty-Serve. We call it Online Shopping, and the GO command is EMALL. Retailers pay a flat monthly rental and a usage fee for uploading and downloading times.
Also, we do have special areas for hundreds of other services. Examples include Recruit, the big manpower company, which lists job vacancies, and Fujitsu's Atlas service, which provides online machine translation between Japanese and English. Typical c osts for listing ads and recruiting information are 100,000 yen [$1,000] for a 39-character x 300-line "page," for a 2-week duration.
CJ: Do you offer any other commercial services?
Okada: Yes, for example, we have an anketto (poll-taking) service. This is popular with businesses because there are no postage charges. [A postcard costs 50 yen ($0.50) to send in Japan, vs. Y10 ($0.10) per minute for an e-mail message on Nifty-Serve. -Ed], And because the responses are already electronic data, it is easy for us to format the results for consumption by the customer. Among our better known customers have been Nikkei Business (magazine), Shukkan Gendai (magazine), NTT, and various consul ting companies. The rates are very reasonable. The response rates are good, too. In one recent poll, we received about 2,000 responses in three days.
CJ: Do you employ any censorship on the network?
Okada: Yes, of a sort. We have hired a person to monitor everything going up onto the boards. Mainly, we are looking for unacceptable commercial activities, and we have been able to reduce the frequency with which these people have been able to list. H owever, one problem is that our monitoring person works office hours, so there has been a troublesome resurgence of such listings late at night. In cases where it is not clear whether a message will be offensive to subscribers or not, we generally wait an d see if people complain before taking action.
CJ: I believe that you enjoy a strong relationship with CompuServe.
Okada: Yes, we are linked with CompuServe in the US. CompuServe has many access nodes in Europe, Taiwan, Korea, and other countries. CompuServe, FENICS, and other networks that we have relationships with let us use reverse charging and require no pre-s ubscription from our users. So Nifty-Serve subscribers can very easily take their laptop computer to Korea or elsewhere, dial a local number in that country, and connect back to NiftyServe to check their e-mail, send messages, or whatever. Their home acco unt in Japan is charged, and the overall rates are much cheaper than if the person made a direct international call.
Since Japanese users of international services have to deal with the challenges of reading and writing English, though, while we have about 90,000 IDs registered for access to CompuServe, only about a relatively small number of these accounts are reall y active.
CJ: What are your plans for the Internet?
Okada: We started 2-way e-mail traffic with the Internet in August 1993. Usage volume is increasing by about 10% per month. Currently, we are seeing about 500,000 messages per month going to and from the Internet. Unfortunately we have no statistics to say how many of our own subscribers are using Nifty-Serve to connect to the Internet.
However, by way of comment, I can say that the volume and scope of Internet connectivity in Japan is already quite respectable. There are currently 300,000 to 500,000 computer users in this country with access to the Internet. Most of these are inter-n etworked via 1,700 to 1,800 local area networks (LANs)-- which, you may be surprised to know, is roughly the same volume of connectivity as for the UK, France, and Germany. Most of these LANs are universities and, more recently, corporations.
CJ: You have said that you have only a small percentage of users active on CompuServe, and yet there are more than 300,000 Japanese users connected to the Internet. Why the big difference?
Okada: The Internet is used for the exchange of Japanese-language e-mail -- between corporations and their overseas offices, and within Japan between corporations and universities. The true international traffic, outside e-mail within these groups, is actually quite low.
CJ: It's interesting that these companies are using e-mail. I thought Japanese computers users didn't really like using e-mail.
Okada: Well, it depends on the field the company is in. In the financial industry and other tradition-steeped fields, the computing culture is not widely accepted. However, with companies doing manufacturing, information processing, and communications, e-mail is an important part of their business, as are computers in general.
CJ: I have heard a lot about the high charges in Japan for network users.
Okada: Well, our charges are not much more than overseas. For example, we only charge Y10 [$0.10] per minute within Japan, so long as the person lives in a local call area serviced by one of our nodes. We charge about 40 yen [$0.40] per minute for user s connecting in from Europe, the US, and elsewhere outside Japan.
CJ: Do you think it is in the Japanese culture to use a remote BBS service like Nifty-Serve? Many people say that computers will never be part of the Japanese culture.
Okada: These days, most young people joining a corporation are required to at least know how to do word processing and use Lotus or Excel. Therefore, they are familiar with computers and keyboards. And since most computers are now capable of communicat ions, it is only a small step to logging on to Nifty-Serve. Furthermore, Japanese do like to know what like-minded people are thinking, especially if they are clearly defined groups. Therefore, networking would seem quite well suited to this purpose.
CJ: Do you have any special programs for schools?
Okada: Not yet, but we do have plans. With MITI [the Ministry of International Trade and Industry] and the Ministry of Education investing so much money in computers and networking for schools, remote networking will become a normal thing for the next generation.
CJ: Do you have much interaction with the government apart from satisfying regulations?
Okada: We do carry public announcements from the Ministry of Posts and Telecommunications (MPT) and MITI. The MPT data is free; however, MITI charges since their information is actually handled on a for-profit basis by an independent company.
CJ: What are your plans for the future?
TO: Well, CompuServe provides a CD-ROM, actually a CD magazine, that is an online shopping catalog. We want to make something similar, but in Japanese and featuring Japanese vendors.
Another project we are working on is to provide weather forecast video clips, including full weather maps, by compressing the image data with JPEG and making the files available for downloading by subscribers. The information is updated hourly, and w ill cost 30 yen [$0.30] per report. We expect this service to be popular when typhoons approach Japan and users want to know where they will strike.
We also want to provide corporate LAN-to-LAN and LAN-to-Nifty-Serve services. This will include support for Microsoft MS-Mail, Lotus CC:Mail, and other Japanese vendors. Until now, we have mainly focused on email exchange, but the future for us is wi th LANs and WANs.
In order to connect with Nifty-Serve, you first must register and obtain an online ID and password. The easiest way to do this is to purchase a "members pack" (available in most computer stores for 5,150 yen). To gain the full benefit of membership, yo u'll need a Japanese-capable computer; the English side of NiftyServe has less information and fewer files than many local usergroup BBSs.