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TOKYO -- More and more Japanese viewers are tuning out TV for YouTube,
the fourth-most popular website in Japan little more than a year after
its official launch in June 2007, in cooperation with six local
partners, including satellite platform Sky PerfecTV.
The site,
however, has been wrangling with copyright holders, including such orgs
as Eiren (Motion Picture Producers Assn. of Japan) and Jasrac (Japanese
Society for the Rights of Authors, Composers & Publishers), which
demand YouTube crack down on pirated clips. "Legally, they are in the
right, but it's extremely difficult to find and take down all the
(pirated content)," says Yasushi Nozawa, deputy director of the
Commerce and Information Policy Bureau in the Ministry of Economy,
Trade & Industry.
Rather than fight YouTube, some local media companies are embracing the Internet themselves.
Kadokawa
Holdings, a media conglom active in pic and toon production, linked
with YouTube in May to run ads on pages with uploaded Kadokawa
contents, such as its TV toons "Haruhi Suzumiya" and "Lucky Star."
Staffers
search for Kadokawa toon clips on the site. The pirated ones are taken
down, while posters of those that display a more creative take on the
material, such as anime/music mash-ups called MAD in Japanese, receive
a request from Kadokawa to allow its logo and ad to appear on the page.
Kadokawa also operates a YouTube channel, Kadokawa Anime, where
approved clips appear.
"The business model is totally different
from television," says Fumiyuki Kakizawa, a Kadokawa rep. "We can't
expect to earn the same revenue. But YouTube has a worldwide reach that
we can use to present our contents to a large number of people, so in
that way it serves as a publicity tool."
Following in Kadokawa's
footsteps is major pic producer and distrib Shochiku, which in July
started its own YouTube channel, with promotional clips from its new
pics. The channel also displays clips from Shochiku DVDs and
made-for-Internet video content.
Another media conglom, the Usen Group, launched its own video contents platform, GyaO, in April 2005.
Unlike
YouTube, GyaO contents, including promotional clips from upcoming pics,
music shows, TV dramas, toons and sporting events, are provided by GyaO
and its partners. In the beginning, GyaO offered all its contents for
free, planning to raise revenue from ads and sponsor fees.
"To be
frank, we are still trying to make the (GyaO) business model pay, but
we're confident we can do it," says Usen rep Akari Mano.
One
problem is that, though GyaO has a large registered user base -- 20
million by the latest count -- relatively few log onto the site with
any frequency. To lure them in, GyaO has been beefing up its lineup,
including a new free Asian contents sub-site that streams entertainment
from South Korea, Taiwan, China, Thailand and elsewhere in Asia.
For
TV viewers with broadband, GyaO has opened GyaO Next, a premium service
with 30,000 titles, including such recent Hollywood pics as "Babel," "Perfume" and "National Treasure 2."
Usen
projects the Japanese market for all forms of Web-based video,
including GyaO's three main service areas -- free PC webcasts, pay PC
webcasts and IP television -- will grow from $655 million in 2008 to
$1.56 billion in 2011.
Meanwhile revenues from terrestrial TV,
currently at $18.5 billion, will decline slightly in the same period,
while satellite TV will grow 2% from $3.42 billion and cable TV 9% from
$3.18 billion.
"We expect GyaO to really take off from 2010," Mano says.
It
had better -- Usen has shifted the focus of its visual media strategy
from struggling subsid Gaga Communications, which announced its
withdrawal from the pic production and distribution biz in April, to
GyaO.
Whether GyaO succeeds in drawing enough eyeballs from
YouTube -- and moving into the black -- is still anyone's guess, but
for Usen and other media companies in a rapidly digitizing market, the
old ways are no longer an option.
© Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.
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