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Merumaga: Paid e-mail newsletters make a come-back

by Akky Akimoto

Despite the fact that Japan has the world’s largest market for digital-manga, which are primarily read on cellphones, and that Amazon has recently brought out its Kindle platform in Japan — after a delay of 5 years — the e-book business here has yet to take off. As such, it’s probably no surprise that old-style digital content in the form of merumaga (paid e-mail newsletters) is blooming in the Japanese Web scene, though the scale of the business is still small.

Similar to many Net-related terms, the word merumaga is English, er … kind of. Taking the first part of English words to form new terms is quite common in Japan —for example Pokemon comes from “Pocket Monster.” Merumaga is an abbreviated word made from “mail magazine,” which is not exactly a common English expression, but you can guess that it means e-mail newsletter. The more exact Japanese word nyūsuretā is not as instinctive and doesn’t make for a nice abbreviation for Japanese.

Starting in the late 1990′s, periodical newsletters began sprouting from certain corners of the Japanese Internet. There are several merumaga newsstands, which are websites that distribute scheduled e-mails to anywhere from just a few, to thousands of different recipients. This includes cellphone e-mail addresses, to which you can not usually send bulk messages from PC-based software. Each cellphone carrier has different limitations, rules and anti-spam filters which often flag e-mails from PCs as spam, so when people in Japan began merumaga they tended to use these newsstand services to ensure their newsletters got through to their subscribers.

Another reason merumaga caught on in Japan is that early cellphone messaging was not based on the SMS platform and its limited text capabilities, but on Internet-based e-mail capable of including thousands of characters, so this newsletter platform was well timed with the expansion of the mobile-Web.

Magmag, one of the biggest newsstands, began a premium service in 2001, which acts as a middleman charging readers on behalf of authors. Since then, a few authors were able to become successful with paid-newsletters on topics such as business-hints, entrepreneurship, financing, and so on. It was a good business for a few, but these days the paid-newsletter model was thought to be an out-of-date method — until an unexpected person dug it up.

Takafumi Horie, the ex-Livedoor CEO was once the most successful and charismatic person in the Japanese Web scene, but lost everything when he was jailed for securities fraud. Then, while out on bail he began using Twitter and created a paid-merumaga.

He repeatedly tweeted to his fans that he would not work in the IT industry again; instead he built on a childhood dream and established SNS, a rocket company that plans to launch satellites into space. Horie seemed to have had enough of the Internet-service business, but his Internet-poster-boy nature had not changed. The colorful stories about his entrepreneurial activities, his run for national election, takeovers and ultimately his incarceration turned him into one of the most popular and influential Twitter users, followed by hundreds of thousands of people. In February 2010, he used that popularity, launching a paid-merumaga on Magmag that collected 10,000 subscribers in the first 8 months.

To promote his merumaga, he tactfully uses his blog and Twitter to interact with questions from subscribers on public tweets to rouse interest in the newsletter among his Twitter followers. It was an ingenious strategy.

Horie’s appeal against the charge of accounting fraud was rejected in May 2011 by the supreme court, and he was sent back to jail. However, Horie still issues his weekly newsletter to the now over-10,000 readers from behind bars — where there is no PC or Internet access. He does that by sending manuscripts to his staff with his comments on IT and other news; they in turn send out to his merumaga readers.

If Horie takes 60 percent of the sales (¥840 per month per reader) for 10,000 readers, he will make ¥5 million month, with no expenses to speak of — not bad for a guy in prison. Horie’s success, eventually attracted a lot of imitators. Notable bloggers, popular Twitter users, venture company presidents, TV commentators, freelance journalists, and more, have all started paid-merumaga.

Many of those entering the paid-newsletter business have admitted that just writing quality information on a blog or on social media had not rewarded them financially. If they can attract a decent number of subscribers, then they get a constant income, which will make them financially stable and allow them to write better information, free from commercialism and other pressures. They also claim that they can only provide timely information that is still just hearsay or unconfirmed in a private newsletter — as such information would be picked apart if published openly on the Internet.

I’m not sure whether that approach actually leads to better results for their readers in the end, but anyway, not many of Hori’s imitators got the number of subscribers they expected. If you get thousands of subscribers and pass a break-even point, it’s good business because more subscribers drive up your income; However, if your subscriber numbers stay small, you still have to write a newsletter every week, which may interfere with your regular business —and be hard to keep up.

Last week, a blogger named Hotaka Sugimoto wrote that he had failed to receive three out of four paid weekly newsletters by Web celebrities to which he is subscribing. One of them had not been issued for six weeks, yet the newsstand had still charged him. After his inquiry, his payment was refunded for the missing October newsletter. He accused the newsstand — which takes a commission — of not pressing the author enough to ensure that the merumaga is delivered on time.

The blog article was widely spread and discussed. Some people pointed out that those delays were not talked about much in public because paid-merumaga exist in very closed circles among fans, who do not like to criticize. It’s hard to believe that authors who do not honor their promise of a regular newsletter will really offer factual information to their readers if there is no one who will question them. And if their subscribers amount to only a small number of devoted fans, then their circle becomes almost cult-like.

The merumaga business sounds very attractive if you already have good number of readers on your blog and Twitter. Heavy Internet users also seem favorable toward the idea that independent authors are able to raise money through quality content — they may even think that they will be able to do the same in the future. But in the unpredictable world of the Internet, individuals buying or selling content in an unregulated market may end up with problems that do not occur in traditional media. And in turn merumaga authors may end up being looked down upon.

Akky Akimoto writes for Asiajin.com, an English/Spanish blog on the Japanese Web scene. Follow him @akky on Twitter.