1) Case Study : Using QR codes to drive users to rich media like music and film
2) Mobile Marketing: The Mobile Contents Market Expands! Music, Books and One-Seg
3) Mobile Research: 78.4% of Users Browse Mobile Sites Nearly Every Day
4) Carrier Trend: Number Portability is Almost Here!
5) Japan Cellular Subscriber Data

Suntory and mobile operator KDDI launched a cross-sector, cross-media campaign using magazines and mobiles to promote their respective product brands, namely Suntory's Premium Malts and KDDI's au brand. In the campaign, magazine advertisements presented a QR code that, when captured with a mobile, led users to a campaign mobile site where they could download high-quality video content. This innovative approach captured a lot of attention. Regarding the background for the collaboration, Suntory's PR spokesman Hasuzawa commented, "From the outset, both companies have shared a number of common goals. Au is dedicated to producing developed extremely precise devices, from their design through to their functionality, while Premium Malts adheres to the most demanding standards in terms of ingredients and production methods. Both companies' brands are strongly dedicated to the pursuit of these types of high standards and superior quality." In addition, the Head of KDDI's Marketing Strategy Group, Ms. Emi Koda, remarked, "Up until now, au has developed its advertising to target the core group in the younger generation, but in partnering with Premium Malts, which appeals to customers in their 30's and 40's, we think that the au brand will also become better equipped to penetrate these higher age groups. While beer and mobile phones appear to be completely different businesses, both companies share a common commitment to high standards." This same commitment to high standards and quality can be seen in the creative aspect of the campaign. The scene of the resort that appears in the magazine advertisement is extremely refined, utilizing a QR code that enables users to download motion video content. This mechanism enabled readers not only to view the magazine ad but also to experience in a more realistic way the feeling of being on a southern island by watching video on their phone. The high quality of the image conveys the sense both of au's superior functionality and a feel for the product being provided by Suntory. The video content consists of a story with 18 different segments. Says Hasuzawa, "We made high quality music and video available exclusively to customers who accessed the campaign by their mobile in order to give them the sense that they were experiencing what we term "quality time" in the creative planning for the campaign." The advertisement was published in magazines such as pen and casa Brutus, which are read by the more perceptive opinion leaders being targeted by both Suntory and au. Regardless of the magazine title, there were an impressive number of accesses and responses from the target groups, surpassing expectations. Looking back on the campaign, Hasuzawa commented, "Mobile is the medium that is always at the fingertips of the customer and is highly appealing for its accessibility. Furthermore, by combining mobile with the magazine, we were able to move from a two-dimensional to a three-dimensional experience, dramatically increasing the volume of information from a flat image to video and music. Far from a superficial connection, we were able to establish much deeper communication with the consumer. In this QR ad campaign, we not only achieved high visibility, but also strengthened our product branding and presented our corporate brand to convey a company that takes on new challenges."

According to the Ministry of Internal Affairs and Communications, Japan's mobile market last year was worth 3.5 hundred billion yen. This represents a 21% increase over the previous year. While the highly-profitable ringtone market showed a trend toward shrinking, there was rapid growth in the usage of real tones and games, leading mobile content providers to put more resources in development. With the launch this April of digital terrestrial broadcast for mobile phones known as One-Seg, the mobile entertainment space has once again increased and is anticipated to turn into an entirely new market. In June 2006, 93% of terminals shipped were next generation devices supporting high-speed data for music downloads, while there was rapid growth in the usage of flat-rate priced data services. This combination of increased handset penetration and technological innovations has helped drive growth of the mobile content market.

Mobile Music Listening Habits Take Root

In August 2006, actress Erica Sawajiri released the music from her debut CD as a mobile download real tone before the CD went on sale, racking up 500,000 downloads and making it an all-time record breaker. The very fact that hit music was being defined by the number of mobile phone downloads makes this a symbolic event and an index of the changing market. The Japan Record Association began to publish that same month a monthly chart showing mobile phone real tone rankings in the units of 100,000 and also began issuing licenses for paid music downloads. They also established awards for over 500,000 downloads ("double platinum" and over one million downloads ("million"). This shows that the music industry has begun to recognize mobile music downloads as a key index for ranking successful hits.

According to a survey conducted by the Mobile Content Forum and the International University Global Communications Center, 41% of users downloading full-track downloads of music use their mobile phones as their primary playback device to listen to their music. This represents a major increase of 25% over the previous year. In the past, ringtones and real tones were used primarily as phone ringers and alarms, and phones were used mainly to play back these alerts and confirm their musical content, but we have now entered a phase in which mobile phones are being used as a means to enjoy listening to music. The trend toward using mobile phones as listening devices for music is anticipated to continue as time goes on. With regard to the planned transition in 2011 to digital terrestrial audio broadcast, referred to as digital radio, KDDI announced on September 15 that it will collaborate with FM Tokyo. By next spring, the companies will form a jointly-owned enterprise and begin to deliver motion video advertisements and music data to mobile phones equipped with radios. KDDI is developing trial devices and planning to begin commercialization by the end of the year.

Mobile Digital Book Market Grows by 380%

Although the market size of digital books is still relatively small compared to real tones and mobile games, this market is nonetheless showing extremely rapid growth. According to the Internet Lifestyle Research Bureau, the digital book market was expected to reach 9.4 billion yen, representing a nearly 200% increase over the 4.5 billion yen the year before. This breaks down to approximately 4.8 billion for PCs and PDAs and 4.6 billion for mobile phones.

Looking at digital books overall, the sharpest growth was seen with digital comics. Estimates of the digital comic market for 2005 are placed at 3.4 billion yen, making up 36% of the overall market. Of this 3.4 billion, the digital comic market for mobile phones can be placed at about 2.3 billion yen, making up 50% of the digital book market for mobile phones.

This growth can be attributed to the emergence in 2004 of ways to download entire comic books, which also led to the increase in the number of related content providers in 2005. In terms of official portal sites, NTT DoCoMo has historically been in the lead; however, as of this past August, Vodafone (now Softbank Mobile) was providing over 2000 digital comic book titles to its customers. At this point, companies are offering special incentives to users such as stand-alone narratives by famous comic animators.

One-Seg Usage to Reach 30%

According to market predictions by the Yano Economic Research Institute, the number of One-Seg-compatible mobile phones in 2006 is expected to reach 2.94 million, and to grow in the course of next year to 7.87 million. One-Seg is expected to emerge as the killer content platform for the 2008 Peking Olympics, and with the expected launch of One-Seg independent broadcasting, the number of compatible devices should reach 18.35 million in 2010. This will undoubtedly increase its accessibility as a convenient medium for users.

In terms of viewing habits, One-Seg is expected to be the favored platform for viewing programming with strong real-time value, such as news, weather reports, and sports broadcasting, while programming such as movies, TV dramas and less time-sensitive material is likely to be more appropriate for HDD recorders, where users record the content and view it later on another device. In terms of the breakdown in these genres, One-Seg viewing and recorder viewing are both expected to increase moving forward. In terms of breakdown of consumers, existing One-Seg device owners and those likely to purchase are expected to be company employees and those likely to have limits on their TV viewing time imposed by their work schedule, but who nonetheless want to watch TV. This type of growth in the One-Seg market is expected to be accompanied by the development of a variety of innovative business models led by each media sector and content providers as well.

In this way, the mobile phone continues to drive new possibilities in content distribution. We will no doubt continue to see new waves of development by mobile operators and content providers, even in the wake of major changes such as the introduction of number portability.

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78.4% of users browse mobile sites nearly every day, with the most popular
browsing sites being weather reports for men and ringtones for women
Survey of 4,472 i-mode users
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The following is a survey conducted on mobile phone usage in Japan. It was conducted by the Internet-based DTR (Desktop Research) service INFO PLANT Co., LTD (Head office: Nakano-ku, Tokyo, Japan; Masaki OTANI, President, http://www.info-plant.com). Data was collected via a nationwide survey of mobile phone users from NTT DoCoMo's Toku Suru Menu, and based on valid responses from 4,472 users during a one-week period between August 22 - August 29, 2006. InfoPlant is dedicated to the expansion of research using mobile phones.

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<Survey Results Overview>
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78.4% browse mobile sites "nearly every day"

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When users were asked about the frequency of browsing mobile sites, the most popular response was everyday (78.4%), far surpassing the other responses of two to three times a week (8.4%) and four to five times a week (7.7%).

In terms of gender, males slightly exceeded the member of females (males: 80.4%, females: 77.2). Looked at by gender and age, both males and females checking sites daily were mostly in their teens, with more than 90% of the males being in their teens (Table 1).

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The most popular browsing sites are weather for men (43.7%) and ringtones for women (42.1%)

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In terms of the most popular browsing sites, the most popular were weather forecasts (41.7%), followed by search engine sites (41.2%), ringtone sites (38.8%), games (36.3%), general news (35.8%), and TV/radio information (34.7%). Looked at by gender, men were mostly browsing weather forecasts (43.7%), followed by general news (42.5%), search engine sites (40.6%), and games (35.5%). As for women, the most popular browsing sites were ringtones (42.1%), followed by search engine sites (41.5%), weather forecasts (40.5%), and games (36.7%). The types of content browsed more by men than women were as follows: general news (males: 42.5%, females: 31.7%), sports information (males: 27.9%, females: 10.6%), bank deposit/stock related information (males: 14.2%, females: 6.6%). The services more frequently browsed by women were as follows: entertainment information (males: 16.5%, females: 26.1%), fortune telling (males: 8.2%, females: 26.4%), ringtones (males: 33.2%, females: 42.1%), realtones (males: 26.5%, females: 31.9%), decoration mail (males: 8.4%, females: 27.9%), fashion/cosmetic information (males: 6.5%, females: 26.4%), and online shopping (males: 23.5%, females: 31.3%). Viewed by age and gender, among both males and females, the following sites were viewed mostly by teenagers: ringtones, real tones, screen savers, and bulletin boards/blogs. In addition, books/CDs/game information sites were most popular among male teens, decoration mail was most popular among women in their 20s and online shopping was favored by women from their 20s to their 40s (Table 2).

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64.7% find sites via mobile internet, 57.6% via mobile mail

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In terms of the ways in which users found information about mobile sites, the most popular means was via the mobile Internet (64.7%), followed by mobile email (57.6%), and books and magazines (33.3%). Looked at by gender, females were more likely to find sites via mobile email (males: 54.4%, females: 59.5%).

Looked at by age and gender, those finding sites via the mobile internet were more likely to be male in all age groups or females in their 20s, while those favoring mobile email were mostly women in their 30s (Table 3).

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Survey Summary

Questions

1. How often do you ordinarily browse mobile sites on your phone? (choose one)

2. Which of the below mobile sites do you usually browse? (choose more than one)

3. How did you find the information about mobile sites you usually browse? (choose more than one)

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Survey Method: Open Survey on the i-mode Tokusuru menu
Target Audience: i-mode Users Nationwide
Survey Period
Valid Reponses: 4,472 (Male: 37.9% Female: 62.1%

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Q1) How often do you ordinarily browse mobile sites on your phone? (choose one)
<Table 1> = By gender/age =
Survay paramenters: 4,472 i-mode users browse sites via i-mode

Q2) Which of the below mobile sites do you usually browse? (choose more than one)
<Table 2> By gender and age

Q3) How did you find the information about mobile sites you usually browse? (choose more than one)
<Table 3> By gender and age

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About the Survey Sites
i-mode sites: Tokusuru Menu
Access method: i-menu top page -> Tokusuru Menu
For more information, please contact D2C Communications at press@d2c.co.jp
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Number portability is almost here!
Japan's 3 carriers prepare for fierce competition by introducing a full line-up of handsets and flagship models
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In the time leading up to the introduction of mobile number portability (MNP) on October 14th, all three major Japanese carriers have been waging a number of similar promotions and campaigns, such as offering cost-free transfer from other carriers' networks, charging a handling fee of 2,100 yen to change to another network, establishing the same fees as each other, and also running loyalty point campaigns. Furthermore, in line with the start of MNP, they are also announcing a number of new devices and services. Each carrier is offering video programming, radio, music download services, as well as high-speed java games, communication services and other services with high entertainment value in order to attract users.

In the case of KDDI, the carrier has announced it will launch twelve new handsets this fall. All new devices in this line-up feature the music download service "Lismo" and the ability to listen to FM radio with EZ-FM. Eleven of the models are compatible with full-track music download, giving the fall line-up a strong appeal in terms of musical functionality. The W43SA is compatible with One-Seg services, and the W47T, known as the "Drape", supports a new video calling service, while eleven of the handsets also feature the mobile wallet function. In terms of new services, starting in September, KDDI launched EZ News Flash, a news program download service, as well as EZ Channel Plus, a musical program download service supported by four of the handsets. Starting in December, KDDI will launch its high-speed data service "EV-DO Rev. A" (maximum speed 1.8 mbps upstream, 3.1 mbps downstream), which will be supported by two handsets.

Meanwhile, NTT DoCoMo has begun to sell its new high-speed data service HSDPA (maximum 3.6 mbps downstream), which is supported by the N902i-X high-speed handset. In combination with this, DoCoMo has begun to offer its Music Channel, a music download service. In keeping with the continued roll-out of next generation services, this no doubt marks the start of true rich content supported by ever increasing high-speed communication infrastructure carrying high volumes of data traffic. As part of its next 903i series handset line-up, it has announced the "Mega i-appli" service, which supports java applets of up to one megabyte in size. It has also launched its "Mega Game" product featuring games with extremely high-resolution graphics and sound effects, such as "Street Fighter Zero" and "Bio-Hazard Episode." In the second half of 2006, DoCoMo plans to release some twelve different handsets, of which two or three models will support HSDPA. The HSDPA coverage areas are expected to be increased to include all major cities in Japan by the end of October.

In addition, there will be continued growth and expansion of the mobile wallet, which is being boosted through a number of deals with companies like Japan Railway, JCB, Bitwallet, and Coca-Cola with its compatible vending machines. All of these companies will leverage DoCoMo's transaction service known as "iD."

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Softbank Mobile Launching a Wide Range of New Services and Handsets
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This October, Softbank changed the name of Vodafone to Softbank Mobile and to help establish the Softbank brand more firmly, introduced thirteen new handsets, as well as a wide range of accompanying services. It changed the name of the official Vodafone live portal to Yahoo! Keitai, which is accessible via the Y! button on the new handsets. In addition, users can make use of Yahoo! search, Yahoo! mail, and Yahoo! messenger, which is powered by the java application Yahoo! mocoa. All of these developments serve to reinforce the synergy with companies in the Softbank group.

In addition, Softbank Mobile is launching an on-line communication service called "S!Town." This service also uses a downloadable java application, which enables users to enjoy seamless communication on a virtual "street." Furthermore, the new email service called "S!Mail" allows users special functions such as the ability to change background colors and to attach flash files and images and audio files. In terms of new communications applications, the carrier is also offering services like "Hot Status", which allows users to manage their presence and confirm the status of others, as well as "Circle Talk", which supports conversations between multiple users.

With the launch of DoCoMo's "3G High-Speed" powered by HSDPA and Softbank Mobile's next-generation services, This October promises to bring about the introduction of true rich media services in Japan.

Here is the latest Japan cellular subscriber data for your reference.
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