CAMPAIGN REPORT ON WORLDWIDE ADVERTISING: A line on new media in Japan - The sight of people in Japanese cities pounding the pavements while staring intently at their mobile phones signifies the arrival of a potentially huge phenomenon - the mobile intern

The most dramatic and progressive of developments to hit Japan

recently is the mobile internet. The 11 March issue of The Economist

carried a provocative article on the mobile internet that bid America to

hurry up if it wanted a piece of the pie.

But why? The Japanese people, whose confidence has been deflated in this

post-bubble era, are less than enthusiastic about the mobile internet

and its rapid growth. They do not have a sense of being a global leader

in this area. What is true, however, is that many people can be seen in

Japanese cities walking the streets while talking on their mobile phones

or using them to make airline reservations, read the news or check their

e-mail.

Mobile internet services began in February 1999 in Japan and in less

than a year acquired eight million users - growing by more than one

million new users a month, or between 30,000 and 40,000 a day. These

figures far surpass any trends related to electronic products that have

taken place in the past. Some forecasters even estimate that 45 million

mobile internet devices will exist in Japan by 2003.

One phenomenon of particular interest regarding the use of mobile

internet services in Japan today is that these services have not been

taken up by the highly educated, techno-literate, high-income users of

computers. Instead, it is youths and people in less prestigious

employment who have been more aggressive in seeking out these

services.

Internet access from the home is not rising as dramatically.

Today, a computer can be found in 38 per cent of Japanese homes - and

just 15 per cent have access to the internet. But two factors indicate

that a steep rise in internet use is about to occur. One is that mobile

internet users are craving more content-rich services; the other is a

new call-rate system for internet access.

This August a new ’fixed internet protocol service’ will start up in the

Tokyo area. It will cost 4,500 yen (pounds 28) per month for 24-hour

ISDN access. Even an average household could afford to use the internet

at this price. Internet advertising generated just 24 billion yen in

1999, but this is expected to grow at a rate of between 50 per cent and

70 per cent a year over the next few years.

There are also significant developments in broadcast media. In 1988, NHK

(and WOWOW, a private movie broadcasting company) began satellite

broadcasts in Japan. This has been the driving force toward a

multichannel era for the past decade. This three-channel analogue

broadcast service today reaches approximately one-third of all

households in Japan, including CATV reception. (The number of households

receiving service through CATV is approximately three million.)

In digital satellite broadcasting, which began in 1996 and now has the

potential for about 100 channels, a fierce battle has been raging for

the past three years between the News Corporation and the Sony-backed

SkyPerfecTV and DirecTV.

In March this year SkyPerfecTV came out on top and absorbed DirecTV.

The service now has a subscriber base of two million.

The next major change to hit the broadcasting world is expected at the

end of this year when five leading commercial terrestrial networks, in

addition to NHK and WOWOW, begin new advertising-based digital satellite

broadcast services.

Expensive new equipment must be purchased to receive these

broadcasts.

Electronics manufacturers have high hopes for the demand but the jury is

still out on how fast it will disseminate.

Regardless, the digitalisation of satellite broadcasting will be a key

direction for Japan ahead of the digitalisation of terrestrial

broadcasting which will come later.

In terrestrial broadcasting, supply and demand for advertising slots has

been very tight until now. Many clients therefore welcome an expansion

of choices. Up to this point, Japan has been the global exception in

that its commercials are mainly 15-second spots, but the new satellite

broadcasting is more open to accepting 30- and 60-second

commercials.

What effect will the emergence of all this new media have on traditional

media? The fastest means for people to get news will increasingly be the

mobile internet. As predicted in many advanced nations, the newspaper

industry is likely to be hit hardest by the development of the internet

and digital broadcasting.

It remains to be seen, however, how well the magazine industry, with

such frequent start-ups and closings, will be able to respond to such

changes. Radio, meanwhile, might turn into a medium carried over phone

wires and cellular wireless instead of radio waves.

The advertising industry has hopes for the expansion of mobile access

which will have a direct effect on out-of-home advertising. The industry

believes that people will no longer keep phone numbers in their heads

but will store them on their mobile devices and use them to connect.

The next time you visit Tokyo, take a good look at the buses. Buses

today - more than 1,000 of them - are decked out in colourful

advertisements, brightening the mostly grey landscape of the city.

It is easy to imagine that in the near future these outdoor ads will

contain important new elements - internet addresses.

Nozomu Yoshida is a senior manager, Research Department Media & Contents

Strategy Planning Division, Dentsu. E-mail: d09249@dentsu.co.jp.

This article was first published on Campaign