Terrie's Take 447 -- 1-seg primer, ebiz news from Japan
terrie at mailman.japaninc.com
terrie at mailman.japaninc.com
Sun Nov 25 22:47:48 JST 2007
* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.
General Edition Sunday, November 25, 2007 Issue No. 447
- What's new
- Candidate roundup/Vacancies
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- News credits
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+++ WHAT'S NEW
If you're not a cell phone buff, you're probably wondering
what all the fuss is about having TV on the cell phone.
And especially a TV service that is basically unusable when
you're moving in a vehicle such as a train, bus, or car --
which we'd have thought was the most likely time you'd want
to be entertained by the 08:00 news or a late night chat
show. And yet, amazingly, cell phone models featuring
built-in TV receivers, known as "won-segu" (1-seg), are
flying off the shelves all around Japan.
1-seg is a terrestrial digital TV (ISDB-T) broadcast to your
cell phone. Since it is digital, the data can be streamed
and buffered so that the temporary passage of the receiver
through a low-signal strength area won't have so much
impact on the quality of the reception. In this respect,
the benefits of 1-seg are similar in concept to the way the
old Sony Discman players would buffer your portable music
as you walked, thus ensuring uninterrupted playback.
Digital TV (HDTV) broadcasting itself started in Japan in
2003 and by 2011 will completely replace analog broadcasts.
It was introduced to not only provide more efficient use of
the airwaves, since digital signals can be highly
compressed, but also because it allows much better
reception quality both in terms of definition and fidelity.
As a subset of HDTV, 1-seg became available in April, 2006,
and is produced as a mobile signal alongside and
simultaneously to regular digital broadcasts. All the major
TV broadcasters today provide a 1-seg programming channel
free of charge to users having handsets equipped with a
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1-seg initially appeared to be a slow starter when the
handsets first became available a year and a half ago, and
many wondered if it might fizzle. However, once the regular
broadcasting started in April this year, the market
suddenly came alive. Perhaps this is an excellent case of
"seeing is believing" as a means of prompting consumer
decision-making. Or perhaps it's a function of media hype,
which is pretty much full-on right now.
At any rate, as of March-end this year, around 7m 1-seg
handsets had been shipped, and that number soared further
to 11.7m units by the end of July. In fact, in July alone,
1.8m units were delivered to phone stores around the
nation, comprising almost 40% of the total handset
shipments. Industry experts expect around 18m 1-seg
handsets to be in circulation by the end of the calendar
year, and more than 20m by the end of the financial year,
March 31st, 2008.
This is quite an amazing growth curve, and we have to ask:
"Do people really want TV on their cell phones, or is this
just a temporary 'nice-to-have' fad, much the same as MP3
capability was several years ago?" Yes, people listen to
their cell phones for music, but not a majority -- simply
because there are better, higher-output, easier-to-use
devices out there that cause people to regard the cell
phone as a back-up player.
This same sudden growth in popularity was also seen with
camera phones and in 2003 everyone had to have one. People
do indeed take candid shots with their cell phones, but
limited functionality and quality mean that very few users
rely on their cell phones alone for their closest pictorial
memories. Thus, we wonder if it will be a similar case for
the TV phone: today it's a handy and desirable option, but
tomorrow it will be left unused due to other distractions.
Actually, this is an interesting question to ask. And if
you think within the confines of someone simply wanting to
watch mobile TV outside the home, then yes, there is
probably with a good-sized but gradually shrinking
audience. Overall, once handset subsidies on mobile TV
phones are removed, there is going to have to be something
more compelling that postage-stamp chat shows.
Therefore, what is the potential killer application? We
believe that this is the TV-enabled cell phone's ability to
tie one-to-many broadcast quality with Internet-related
instant feedback for viewers. Although user direct-feedback
TV is already available through set top boxes and
broadband, these are neither convenient nor reliable. There
are way too many technical choices to be made.
With a carrier-defined cell phone system, however, the
guess work is taken out making a vote or a purchase and
it becomes extremely easy for users to dial in responses
as they watch their favorite shows. Indeed, they may
wind up watching on a regular size TV, while responding
on their handsets showing the same content. This
capability extends the trend of the cellphone becoming a
"personal controller". By this we mean that the cell phone
is becoming a kind of swiss army knife of convenient
mobile entertainment and info-tainment systems,
including: payment systems, barcode reading, music,
video, GPS, remote control and monitoring of devices,
and thin-client control of larger computers.
Japan and South Korea lead the world in mobile TV on the
cellphone, and have 16m users between them. The reason for
this is that both countries have decided that technological
leadership in mobile usage is a national cause, and they
have freed up public bandwidth to make such services
available. This simple fact puts both countries light-years
ahead of much of Europe and the USA, where bandwidth is in
the hands of independent bodies who see themselves almost
as adversories of the carriers.
Each 6MHz digital TV channel broadcasting slot in Japan is
broken into 12 segments to carry High Definition (HD) data
and control signals, plus there is an extra 13th segment
for broadcasts to mobile receivers -- hence the name 1-seg.
As will be obvious by the constrained data bandwidth, the
definition of the mobile broadcasts is much lower than that
for HDTV, at: 320 x 240 pixels and 15fps, versus 1,920 x
1,080 pixels and 60fps.
By law, 1-seg broadcasters have to broadcast the same
programs as regular TV, which has meant that 1-seg is
currently receiving mainstream programming on-the-go. This
rule on programming is likely to be lifted mid-2008, and
thereafter special programming is likely to be developed
for the public. Experts expect that we will get an
interesting and innovative blend of TV broadcasts, targeted
commercials, discount coupons and other offers appearing
below those broadcasts (i.e., same screen but below the
content display area), and Internet-enabled voting and
feedback interactivity. We can just see the opportunities
now: elections, pop groups and teen idols popularity
ratings, quizzes and competitions, TV shopping, program
rankings, natural disaster evaluations, public responses
to police investigations, and more...
Not just cell phones, digital mobile TV also appears to be
a hit with console game players as well. Nintendo has just
released its DS TV module in the last week, and the
consumer response was so great that in the first couple of
days it crashed the company's server! Over 4 million
pre-release orders were received for the JPY6,800 card,
representing about 25% of all Nintendo users in Japan.
With this kind of rapid consumer acceptance of TV on mobile
devices, it is not hard to predict severe traffic
congestion caused by large audiences watching popular TV
shows suddenly wanting to interactively respond to the
broadcaster. KDDI has already come up with a piece of
software that samples the number of users tuning in to any
particular show, and models what type of access volume will
be likely at a given period of time (i.e., the duration of
the show) on a given server or bank of servers. When
access attempts exceed the actual preset bandwidth and
server performance, those handsets generating the excess
traffic are sent control codes to put them on hold until
the jam is cleared. Although this may not lead to a great
user experience, it is probably better than a crashed
Perhaps the best vignette of carriers' eagerness in
promoting 1-seg as the next great thing was highlighted in
a news item a few weeks ago. It turned out that customers
were buying the heavily subsidized 1-seg phones from DoCoMo
and after a couple of days canceling their contracts but
keeping the phones, thus gaining a low-cost portable TV.
What was surprising is that DoCoMo hadn't thought through
the business model properly, and forgot to tie reception of
the services to active subscribers only.
Lastly, if you're overseas and wondering if TV is coming to
your mobile any time soon, there is a high possibility that
it won't. For an excellent reference on the technology and
the trends, check out:
As the writer points out, for Mobile TV to take off outside
of North Asia, the telco's have to back off from their
obsession of soaking their customers with high fees for
everything, and instead let users get their broadcasts free
of charge, so as to establish a head of steam.
A reluctance to pass on any sort of extra value to
consumers is probably the main reason i-mode and other
content-rich business models have not worked overseas.
Let's hope this time around that Japan's and Korea's
experience is accepted positively, and reproduced in other
countries without the nickel-and-diming of consumers.
...The information janitors/
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- Major shift in mobile opportunities
- Workers to fall 10.7m in 22 years
- Platinum jewelry consumption down
- M&A small but promising
- Tax revenue to drop
-> Major shift in mobile opportunities
In what is probably a landmark decision in the
telecommunications arena, the Minister of Communications
has backed independent telecommunications operator Japan
Communications Inc. (JCI) in its dispute with NTT DoCoMo,
and has ordered DoCoMo to give JCI accurate and detailed
pricing of DoCoMo's interconnection costs. In effect the
Minister's decision removes the ability for DoCoMo to pad
its margins by charging unfairly high wholesale rates.
Now, instead, DoCoMo has to price connections based on its
actual costs, not what it feels like charging. Industry
experts say that as a result, prices for mobile
telecommunications could come down by as much as 20%-30%.
(Source: TT commentary from nikkei.co.jp, Nov 23, 2007)
-> Workers to fall 10.7m in 22 years
The Labor Ministry has said that Japan's working population
will drop by around 17%, or 10.7m people, by 2030. This
will cause the current labor force of 66.57m to fall to
55.84m. The Ministry says that the fall could be held to
less than half this amount if more women and elderly joined
the workforce. ***Ed: And tell us again why the Japanese
government has turned xenophobic about foreigners living in
Japan? It's only a matter of time before the realities of
the market force a mind shift in the politicians and
bureaucrats who today are so busy trying to keep foreigners
and their child-breeding ways out of Japan.** (Source: TT
commentary from nikkei.co.jp, Nov 23, 2007)
-> Platinum jewelry consumption down
Indicating both tightening pocket books and possibly a
large drop in marriages, a leading British precious metals
dealer says that the consumption of platinum for jewelry in
Japan is at the lowest level since 1973. Net consumption is
now 305,000 ounces a year, about 15% less than last year.
According to the company, Japanese couples are choosing
cheaper white gold and abandoning the traditional
engagement ring. As a result, while Japan still accounts
for 25% of global consumption of platinum for jewelry, it
has been overtaken by China, where demand is still growing.
(Source: TT commentary from bloomberg.com, Nov 22, 2007)
-> M&A small but promising
A recent Finance Asia (FA) article does a good job in
defining the scope and nature of M&A in Japan. In various
interviews, FA concludes that Japan still has a lot of
headroom for more M&A. As of 2006, approximately US$103bn
of deals got done here, which may sound like a lot until
you realize that in the same period, US$1.6trn of deals
were done in the USA alone, and US$3.8trn globally.
Further, while global M&A activity increased 38% in 2005,
and by 40% in Asia except Japan, in the bamboo isles, it
actually fell 36%. The article notes that the fall is not
a trend, however, and more reflects the sudden surge of
blockbuster deals last year ***Ed: such as the
Softbank-Vodafone deal.**. (Source: TT commentary from
financeasia.com, Nov 23, 2007)
-> Tax revenue to drop
Signaling a slowing economy and proving that Japan's
fortunes probably are still tied at the hip with the US,
the Ministry of Finance has said that it will downgrade its
income tax estimate for the first time in 5 years. The
initial estimate for the national tax take for the year was
JPY53.46trn, but is now expected to be closer to JPY53trn.
(Source: TT commentary from nikkei.co.jp, Nov 22, 2007)
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
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No Japanese language skill is required.
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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 at terrie.com.
-> In TT445 we wrote about our misgivings on the
re-introduction of compulsory fingerprinting for
non-Japanese in Japan, for every entrance and exit of
anyone other than Zainichi Koreans, diplomats, and kids
under the age of 16. We have since received some excellent
feedback, and in particular, on the first day (November 20,
2007) we had a number of reports from people who underwent
the procedure. For those of you who are wondering about the
practicalities of pre-registering, we give you the following
feedback from a reader who just did it.
*** Our reader says: Today is the first day for the new
fingerprinting law and as I am leaving to Europe on a
business trip I decided to do the pre-registration before
the Christmas rush. The first thing that I found is that
pre-registration is only available at the Narita Terminal 1
South Wing and Narita Terminal 2 South Gate. As I usually
fly Air France, departing from Terminal 1 North Wing, this
was quite inconvenient and I had to trudge over and do
the immigration at the South Wing.
When I got there, I found only one other person
pre-registering. There were numerous staff on hand to guide
me through the process (3 Japanese for us 2 gaijin!), and
they give me an explanation text in English and Japanese,
as well as a form to fill in. Once I was done with the
form, I was able to go to the normal passport control desk
equipped with the finger print device and webcam.
The idea is that they then register your fingerprint,
passport front page and photo; verify that everything is
automatically recognizable; then place a stamp in your
passport showing the expiry date for the pre-registration.
This date happens to coincide with the re-entry permit
After this, you go through the automated gate. There is an
unmanned one, which doesn't seem to be working yet, and a
manned one where you check your passport and do your
fingerprints automatically. On this second gate the
inspector will manually stamp your passport.
An advantage of the unmanned gate system is that, according
to the guidelines, you do not need to get your passport
stamped every time you exit or enter Japan, unless you
request them to do so. The guidelines also say that
pre-registration can be deleted by filling out a form at
the registration points (Narita airport or the Tokyo
Immigration office), or by mailing in the completed form.
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+++ ABOUT US
Written by: Terrie Lloyd (terrie.lloyd at japaninc.com)
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