There must be very few homes in the developed world that don’t have a television, and Japan is no exception. Even in the Internet era, as terrestrial TV is slowly being replaced by networked TVs, cable channels and computers, regular TV broadcasting still makes up for much of many people’s leisure time.
However, on-demand video services over the Internet have gradually been getting a foothold in the market. This week I’ll introduce several of the major services and their characteristics.
In Japan, it has been possible to watch TV on the go since April 2006 by using 1seg-digital-TV-capable cellphones. Despite the fact that the iPhone and imported Android handsets do not support 1seg, by March 2012, 81.6 percent of all cellphones in Japan had the receiver function, enabling users to watch regular terrestrial programs for free, though at a rather low quality.
Research by Japan’s largest cellphone service provider, Docomo, however, finds that only 1 in 5 cellphone users actually use 1seg TV.
Although having portable access to terrestrial TV is useful in the case of a disaster such as an earthquake, watching programs outside the home in low quality does not seem that attractive for the majority of people. To make watching TV outside the home worthwhile, such services must offer something better — such as higher quality, original content and on-demand viewing.
The U.S.-based service Hulu entered Japan at the end of August 2011. The local version, however, differs from that in America — where they offer both a free ad-supported plan and the Hulu Plus paid subscription. Hulu Japan only provides a Hulu Plus-like paid plan for ¥980 per month.
Hulu is an on-demand TV service that has hundreds of movies and TV shows, from both Japan and abroad. Users simply log in, select what they wish to watch and press play. Shows can also be paused for continued viewing later.
Hulu Japan seems to have been widely embraced by Internet-literate users here, maybe in part because those users are more likely to be familiar with the kind of U.S. TV dramas that are available subtitled on the service. Hulu also supports a wide range of devices and is not only viewable on tablets or smartphones but also on PC, major game consoles and Apple TV — an advantage that may match the lifestyle of its tech-savvy users.
However, it has never been revealed just how many users Hulu Japan has, so it may be too early to say whether the service is a success. U.S. Hulu had 3 million paid users as of last December.
Meanwhile, Docomo has been providing on-demand video since before the days of the smartphone. BeeTV, which began in 2009 and was a collaboration between Docomo and the entertainment company Avex, had about 2 million paid users (at ¥315 month) by 2011, who mainly accessed the service on Docomo’s i-mode feature phones, which were the first to have Internet connection.
In November 2011, Docomo and Avex then began an on-demand video service called Video Store, which was renamed as d-Video in January this year, and is available for ¥525 per month on smartphones. As of last month, d-Video had 4 million paid subscribers.
Japan’s second-largest carrier, KDDI-au, launched a rival service, VideoPass, in May 2012, which has a flat-rate of ¥590 per month for a select list of movies, plus pay-for-view on premium titles. Another difference from d-Video is that it supports access via PC. iPhone and iPad support was added last month, and these can be accessed even if the users are on another network, such as SoftBank.
SoftBank Mobile for its part is also working with Avex and began its UULA service in February (¥490 per month). There are fewer videos than d-Video or Video Pass available at this point, but it has a lot of non-video content, such as music and karaoke. UULA hit 300,000 paid users in its first month.
As I mentioned above, the advantage Hulu has is its wider options for watching content on various devices. The basic objective of cellphone carriers, on the contrary, is to keep customers locked into their cellphone services. However, as the market heats up these carriers are having to rethink their business models.
On March 1, Docomo released dstick, a small device that connects a user’s cellphone to their home TV and WiFi, enabling them to display d-Video movies which had been purchased on the phone. The price is ¥8,925, and Docomo is running a campaign to give away 70,000 units.
Docomo also started selling its dtab, 10-inch Android tablet, on March 27, for ¥25,725 (or ¥9,975 for Docomo/d-Video users). This is quite a competitive price when you consider that Google’s Nexus 10 is ¥36,800 and that Apple’s iPad starts at ¥42,800. No wonder that the dtab is currently back-ordered for weeks.
Both the dstick and the dtab only support WiFi, so won’t contribute any new cellphone contracts for Docomo. But by distributing such inexpensive devices Docomo is putting weight on selling d-Video content instead of carrier plans.
Both KDDI-au and SoftBank Mobile also sell devices that can connect with home TVs — meaning all the major carriers will soon be giving regular TV stations a run for their money.
Akky Akimoto writes for Asiajin.com, an English/Spanish blog on the Japanese Web scene. His Twitter account @akky is followed by 120,000 users.