Nation's cable music man turns his attention to broadband

by Gary Tegler

OSAKA — Music, as we’re often reminded, is a universal language. In Japan it is also ubiquitous.

Employees in the Osaka office of Usen Corp., the nation’s largest cable broadcaster, field hundreds of music requests a day.

Walk into almost any coffee shop, restaurant, company office or convenience store and there it is, “enka” (ballads), pops or Burt Bacharach — seeping out from speakers set into ceilings or mounted atop cigarette racks.

In over 80 percent of such establishments, the music is provided by Usen Corp., Japan’s largest cable broadcaster. It was established by Yasuhide Uno, the president of the company, in the Nipponbashi area of Osaka in 1961 as a humble two-channel operation broadcasting eight hours a day. Six years later it began broadcasting 24 hours a day and within 10 years had expanded the number of channels to 320.

Today, the firm is a multimillion-dollar media and retail enterprise with 440 channels of music and news programming on its cable broadcasting system and a host of subsidiaries divided into five basic divisions. These include a virtual shopping network, satellite television broadcasting and U-kara, a chain of karaoke stores that sprung up in 1995 in Osaka and now boasts 82 outlets nationwide.

Usen’s staff of 7,200 in its Osaka and Tokyo offices has a decidedly youthful bent, especially in Osaka, where the average age of employees is 31. For those involved in the program planning, it can be an excellent place to work, according to Keinosuke Kanai, director of media programming.

“If you work at other broadcast companies, you are not guaranteed work in the genre you like most,” Kanai said. “This is not the case at Usen. If you like jazz, you can program jazz. Our staff also stays up to date with the latest trends by going to clubs and keeping in touch with record company reps. We really can’t get this kind of information by relying on surveys.”

Kanai also noted that the cable music division is trying to make inroads into major clothing stores, such as the Gap, which traditionally provide their own in-house music.

Two years ago, the company shifted its headquarters to Tokyo, prompted by a need to be closer to major record labels and government regulatory agencies. Most of the programming of popular music emanates from Tokyo, while enka, the music of older generations of Japanese, jazz and classical programs, as well as most shows with live announcers are produced in Osaka.

One of the most popular services offered in Osaka is the request booth. A staff of 60, working in two shifts, fields phone calls and logs requests from 9 a.m. to 11 p.m.

With the founding of subsidiaries Usen-Net and PUON in 1996, the company moved into providing Internet services. In March 2000, it began offering inexpensive Fiber-to-the-Home broadband Internet services on an experimental basis in sections of Tokyo, utilizing a fiber-optic cable system that it now considers the core of its business.

The entry into this field has brought it into direct competition with firms offering Asymmetrical Digital Subscriber Line services. However, Usen believes fiber-optic systems are the wave of the future as they are able to provide significantly more information at greater speeds.

“As of the end of August, we had applications from 5,496 businesses and individuals,” said Michiko Shirakawa, assistant to the company president. “We will offer programming content in conjunction with other companies and will extend these services to Nagoya and Osaka beginning in October.”

Usen’s progress has not all been a walk in the park, however. Last year it registered a loss of just over 18 billion yen. One stock analyst in Tokyo said the main reason was that Usen had been forced to pay fees for the use of public and private utility poles it had been dodging for nearly 30 years. This involved some 220,000 km of cable the company had already laid and over 700 public and private utility poles.

“The company is planning to replace 50 percent of its land lines with satellite connections over the next five years,” Shirakawa said.

In addition, the recent drop in technology stocks and the high cost of laying land lines has forced the company to scale back its plans to provide fiber-optic cable hookups.

Last week, the company announced it would cut spending on fiber-optic operations by 75 billion yen, choosing instead to concentrate on new condominiums and corporate subscribers for whom it will provide broadband services at speeds of up to 100 megabytes per second.

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