5．Left in charge of the Internet Department, which led to establishing a new company
As I mentioned earlier, my work in satellite broadcasting was going well, and that business stabilized in about 3 years. I was director in charge of new businesses, and so I thought to myself, "what shall I do next?" My answer was, "the Internet, of course!" That was around 2002. At that time, ADSL was the main infrastructure, but it was quite weak. So it certainly wasn't easy to distribute full movies over the Internet, unlike today when we have services like Hulu and Netflix.
It was at this time that I focused on the "i-mode" mobile Internet service being provided by NTT DoCoMo. The initial idea for "i-mode" was to highlight Japanese animations and characters, so DoCoMo made a partnership with Meiji Seika to create a character called "Kinoyama-san" using Meiji's famous "Kinoko-no-Yama" confectionary. This was a big hit, and "Kinoyama-san" remains popular to this day together with the "Takesato Brothers", characters made by the same confectionary manufacturers. It was this opportunity that led to me being appointed top of the Internet Department, which then led to the establishment of Sony Digital Entertainment.
6．Using reverse thinking, we published 14 books that originated from entirely digital works
We created 126 websites for i-mode, ranging from standby screens to ringtones. We also had 1.09 million pages-worth of incredible digital comics, including titles such as "GeGeGe no Kitaro", "Galaxy Express 999" and "Tensai Bakabon", which we started to distribute as e-books in December 2004. At present we produce around 5,000 pages of comics per month, and our company is the number one production company in the digital comic industry.
From 2006, a portal site known as "Maho no i-land" aimed at the teenager market had a huge hit with a mobile phone novel called "Deep Love". At that time, it was popular for high school kids to publish works from their flip mobile phones. There are a lot of stereotypical stories where the ending scene features one of the characters dying from a car accident or cancer, but popular works were printed as books after distribution and sold in convenience stores throughout Japan. High school students were receiving royalties of 10 million yen, and this became a really hot topic. There were great hopes that some of these mobile phone story authors would become professional authors, which is why the "Mobile Phone Literary Awards" were started. A few works also got turned into movies. Up until that point, digital was only seen as a media for re-using TV dramas or movies that had been hits in the past, or as a secondary media for turning old novels into e-books. Using reverse thinking, however, we turned all of our digitally created original content into 14 published books. Of these, a photograph collection called "Asada-ke" (Asada Family) (author: Masashi Asada) was awarded the Kimura Ihei Award, which is the photography industry equivalent of the Akutagawa Award. New media always takes a minor role, so we worked really hard to overturn this trend and were really happy with the results.
7．Apple ? the black ship that disturbed the Japanese market.
The destructive force of the iPhone in Japan
When the Great East Japan Earthquake happened in 2011, there was a great deal of commotion that "flip phones don't connect", and as a result of that the i-mode rapidly diminished. The iPhone was released in the previous year to a barrage of comments such as "that will never sell with that huge screen". But as a result of the great earthquake, the iPhone and Android smartphones spread at an explosive pace in 2012. This, however, caused a huge impact to our company. Until then, fees for the content market such as fortune telling and ringtones were paid directly from the customer's bank account together with their phone bill, and this system was providing us with stable monthly profit from our 126 i-mode sites. However, the smartphone system involves using sites like the Apple Store or Android Store to charge individual fees per download, which crushed many of the content companies that were making money through i-mode.
At its peak, the i-mode paid content market was around 800 billion yen per annum. It's difficult to imagine how big a number 800 billion yen is though. Explaining it in terms of the movie industry, total box office takings in Japan for the last 10 years average at around 200 billion yen per year, which jump to 230 billion yen in years that animations are released from Studio Ghibli Inc. So the i-mode market was four times bigger than the annual movie industry box office sales. A standard movie ticket costs around 1500 yen, whereas one i-mode content was commonly 100 or 200 yen, so you can see how big the market had become. It has now dropped to around 200 billion yen per year. In this way, Apple really did represent a black ship that severely disrupted the Japanese market. This was the destructive force of the iPhone when it reached Japan. Clearly, we were also forced to change our business model and change direction to adapt to the incoming flood of smartphones into the market.