Digital Content Market in Japan
- From DCAj’s “2003 Digital Content White Paper” -
July 2003
Digital Content Association of Japan (DCAj)
Table of Contents
1. Introduction
1.1 Definition of Digital Content
1.2 Items Included in the Digital Content Market
1.3 Composition of the Digital Content Market
1.4 Chart: Items in the Market
1.5 Chart: Production/Distribution/Consumption of Digital Content
2. Size of the Digital Content Market
2.1 On the whole
2.2 By Segment
3. Trend in the Content Industry
4. Challenges and Expectations
1
1. Introduction
1.1 Definition of Digital Content
What is digital content? (Definition in this paper)
(1) Digital content is digitally recorded content to be provided to consumers
in such forms as package, online distribution and broadcasting
(2) Content and digital content
Content = Content of information. It can roughly be categorized into
<audiovisual (incl. movies)>, <music>,
<publication/information/newspaper>, <game>
It includes both analog and digital contents
Digital content = Digitally recorded content of above
(3) Digitally-created contents not to be covered in this paper
•Printed materials, such as newspapers, magazines and books
•Contents that are contained in systems or solutions
•Corporate websites or contents made personally
•Theatrical films, TV commercials, etc.
(4) Distribution formats of digital contents
•Package [mainly CD and DVD], online distribution (the Internet),
mobile phone, digital broadcasting, fixed location (karaoke shop)
3
1.2 Items Included in the Digital Content Market
Shown below are products and services included in the digital content
market.
Audiovisual
Music
Game
Publication/
Information
Package
Sales
Rental
(DVD)
Sales
Rental
(music CD)
CD-ROMs (game)
DVDs (game)
CD-ROMs (publication)
- Navigation
- References
- Education/
Entertainment
Online
Video distribution
Music distribution
MIDI distribution
Online karaoke
Online games
Online databases
Electronic books
Others
- Pay mail magazines
- Pay websites, etc.
Mobile phone
Stand-by screen/
wallpaper distribution
Video distribution
Ringtone/Ringsong
Karaoke
Music distribution
Java application
Other games
Pay websites
Pay mail magazines
Digital
broadcasting
Digital broadcasting
(charged)
(Music distribution)
(Application distribution)
Data distribution
4
1.3 Composition of the Digital Content Market
Creation/utilization of digital content
= Digital content + Platform + Service
Digital content market
Digital content market = Creation/Sales of digital content
Digital content-related market = Platform (hardware/software) +
services that utilize digital
content
5
1.4 Chart: Items in the Market
Content
[Package]
·Audiovisual (Sales + Renal)
DVD
· Music (Sales + Rental)
music CD, karaoke
· Game
Video game console, PC game
· Publication/Information
Navigation, references
- Education, entertainment
[Online]
· Audiovisual
· Music
· Online game
· Publication/Information
[Mobile phone]
· Mobile phone
[Digital broadcasting]
· BS
· CS
Products
[Audiovisual]
· Digital broadcast terminals
· Digital videos
- DVD players
- Digital video cameras
- Digital still cameras
[Music]
· Consumer players
- CD/MD players
- Memory audio players
· Commercial karaoke machines
[Game/Software]
· Personal computers
- Hardware
- Software
· Mobile tools
- Internet-ready mobile phones
- Car navigation systems
- PDAs
· Game machines
- Home video game consoles
- Commercial video game machines
· Internet terminals
Services
[Network services]
· Communications line (Internet)
· Internet access
· Digital broadcasting commission
[Value added services]
· Internet advertisement
· BS digital broadcasting ad
· Electronic clearing
(B to C business)
[Fixed location services]
· Karaoke shops
· Amusement arcades
· Internet cafes
· (Digital cinemas)
6
1.5 Chart: Production/Distribution/Consumption
of Digital content
Composition of Digital Content/Digital Content-Related Market
Audiovisual
·Movie studio
·TV station
·Audiovisual prod agency
·CG production agency
·Anime prod agency
Software
·PC software vendor
·CD-ROM publisher
·Game software vendor
Products
(Creation
environment)
·Hardware vendor
·Software vendor
·Info service
provider
·Wholesaler/retailer
Distribution
Digital content
Consumption
·Music production agency
·Record company
·Distributing agency
·Renting business etc.
Production
Music
Package distribution
Package
production
·Print
·Copy
·Press, etc.
Products
(Use/creation
environment)
·Hardware vendor
·Software vendor
·Info service
provider
·Publishing house
·Newspaper
·Printing press
·Info service provider
·Mail order house
·Public offices
·Schools
Distribution
Online distribution
Publication/Info
Business user
·Companies
Service
(Creation
assistance)
·Info service
provider
Value-added online service
·Internet advertisement agency
·Electronic clearing house
Service
(Fixed-location)
·Amusement arcade
·Karaoke shops
Consumer
·Home use
·Mobile use
Online service
·Broadcast operator
·Communications provider
·CATV operator ·Internet service provider
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2. Size of the Digital Content Market
2.1 Entire Market (1)
Digital Content Market in Japan (2002 Estimation)
\2,057.3 billion (+108.1% over the previous year)
Breakdown: Package \1,456.2 billion Online \287.3 billion
Mobile phone \175.7 billion
Digital broadcast \138.1 billion
1) Packaged content accounts for 70% of the market. (DVD maintains robust
sales as the previous year)
2) Online content accounts for only 20% of the market, but distribution of
audiovisual, music and game content showed rapid growth. In 2003 video
distribution and online games are expected to double.
3) Mobile phone content is mostly ringtones, but games have doubled over the
previous year.
4) As for broadcasting, CS increased thanks to free live coverage of the World
Cup. As for BS, migration from analog to digital (charged) increased thanks
to proliferation of the terminal.
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2.1 Entire Market (2)
Digital Content Market & Digital Content-Related
Market
2003 digital content and related markets (Projection) = \13,614.3 billion
(in billion yen)
0
2000 estimation
2001estimation
1,000
2,000
3,000
4,000
5,000
1,787
1,903
8,000
6,852
3,238
2,057
2003 projection
7,000
5,958
2,478
2002 estimation
6,000
6,575
3,709
2,278
4,294
7,042
Digital content Related/Products Related/Services
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2.2 By Segment (1)
2002 Estimation
Audiovisual:
(1) DVD’s sales hit \323.0 billion (110.4% over the previous year)
“Spirited Away” and “Harry Potter” became the first DVD million sellers.
Box sets of anime titles were also welcomed by enthusiastic fans. Thanks
to accelerated migration from the rental market and video tapes, DVD sales
showed rapid growth to \16.9 billion (211.3% over the previous year).
(2) As for the Internet, video distribution, such as movies, TV programs and
anime titles apparently reached \1.9 billion thanks to proliferation of
broadband access. The market is expected to reach \11.2 billion in 2003.
Music:
(1) The sales of music CDs declined for 4 consecutive years, to \431.8 billion
(88.2% over the previous year). Decline of album sales broadened.
(2) Music distribution over the Internet was \39.3 billion (105% over the
previous year). New releases recorded robust sales. This success results
from significant theme-oriented addition, such as music of 80’s and
seasonal music.
11
2.2 By Segment (2)
Game:
(1) The market of software for home video game consoles was
\422.9 billion (114.8% over the previous year)
Nintendo “Pokémon” became a success with 3.6 million copies
(2) The market of PC games is \65.7 billion (113.5%)
Online game gained wide recognition thanks to FF XI.
Adult games account for 80% of PC games.
(3) The market of online games has grown to \6.0 billion
Subscribers to FF XI exceed 200,000. Korean online games
(Fortress, Lineage, Ragnarok) were launched in Japan in rapid
succession
2003 projection of the online game market is \22.5 billion
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2.2 By Segment (3)
Publication/Information:
(1) As for the package market, navigation accounts for \34.4 billion (111.3%
over the previous year)
The references (e.g. dictionaries) market grew thanks to revised Education
Ministry guidelines
Cultural/entertainment segment was \29.7 billion (139.4% over the
previous year). Shift toward the Internet has been accelerated
(2) As for the Internet, online databases represent a huge market.
Electronic books \0.5 billion Pay websites/mail magazines, etc. \12.9 billion
Mobile phone:
Audiovisual contents such as wallpapers, stand-by screens and videos is
\22.0 billion. Ringtone accounts for most of it (\85.2 billion). Game (\24.2
billion) also shows rapid growth. Miscellaneous services such as news and
weather forecast (\44.3 billion) are also robust.
Digital broadcasting:
\138.1 billion (111.7% over the previous year). CS attracted new
subscribers by free live coverage of the World Cup. As for BS, proliferation of
receiving terminals contributed to the increase.
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3. Trend in the Content Industry
3. Trend in the Content Industry (1)
*This section describes several noteworthy trends in the Japanese content industry (audiovisual, music,
games, publication), both analog and digital.
1. Animation
(1) Movie: Of 01 Japanese movie market (box-office sales) of approx. \200.0
billion (\1,090.0 billion for the U.S.), animation accounts for \53.0 billion
(26.5%). “Spirited Away” earned \30.0 billion.
(2) Video/DVD: Steadily rising, \75.4 billion in 01 and \107.6 billion in 02. In 02,
DVD version of “Spirited Away” became a million seller.
(3) Digitization of animation creation
As Japanese animes are consumed
worldwide, techniques and
technologies of “Japanese digital
anime” are likely to become the
global standard.
250000
200000
(million yen)
Since the release of animation
authoring software “RETAS! Pro”
(CELSYS), almost all Japanese
animes are now made digitally.
Animation Market in Japan
TV
Theater
Video
150000
100000
50000
0
2001
2002
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3. Trend in the Content Industry (2)
2. Changes in the content business brought by multimedia
(1) Audiovisual: Short interval from theatrical release to video (DVD) release
“Spirited Away” Released in Japan (01). After subsequent release in Asia
and North America, DVD went on the market (02). More than 2 million
copies were sold. Then broadcasted on TV (03).
(2) Music: Decline in CD, rise in DVD and ringtone
• Sales of music CDs declined for 4 consecutive years, resulting from
decrease of young customers and casual hacking.
• On the other hand, music DVDs, mobile phone ringtones and music
distribution on the Internet is growing.
(3) Game: Game consoles v.s. Online games
• Japanese games are known worldwide. The business needs to sell
both game consoles and software. Japan lags behind in Web-based
games.
• Online games, that show rapid growth in Korea and Taiwan among
others, have become a threat to Japanese game industry.
PS (PlayStation) also launched online games.
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3. Trend in the Content Industry (3)
3. Accelerated international deployment
(1) U.S. version of “SHONEN JUNP” was launched
The U.S. version of “Shonen Jump,” a weekly manga magazine popular
among Japanese children (circulation 3 million) was launched (Nov. 02).
Japanese manga is 80.0 billion market in Asia.
(2) Japanese animes received global recognition
• “Spirited Away” won the Academy Award (Animated Feature Film),
indicating global recognition of Japanese animes. The economic effects
of Pokémon is said to be \2 trillion worldwide. North American market is
\1 trillion.
• “Sailor Moon” and “Dragon Ball” are popular TV programs in Europe.
(3) Games have been aiming at overseas from the start
• For the game industry that requires enormous investment, overseas
deployment is a must. Japanese vendors have been considering export
as a premise in R&D since 1970's.
• Starting from Nintendo’s first release (1983), home video game consoles
came into wide use in 1990’s.
• Sony shipped 100 million units of PlayStation 1 and 50 million of PS 2
worldwide. Regional distribution of PS2 software developers is in the
order of North America, Europe and Japan.
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4.Challenges and Expectations
4.Challenges and Expectations (1)
Challenges for the digital content industry
(1) Dependence on the media industry
A. Media industry (movie distributors, TV stations, etc.) leads content
distribution.
B. Contents creators are subcontractors.
C. As most contents are created by small production agencies with limited
financial resources, it is difficult to secure copyrights or for the contents
industry to take the initiative.
D. There is insufficient system and schemes to nurture talents
(2) Slow content distribution
A. In the time of broadband access and multimedia, labor and costs
associated with complex copyright-related procedures hinders smooth
content distribution.
B. As content will be exposed to P-to-P copying using digital/online
technologies, copyright holders are reluctant to Internet distribution
(3) Illegal copies/Piracy
A. In Japan, music gets the hardest hit. B. Piracy is rampant in East Asia.
19
4.Challenges and Expectations (2)
Policies of Japanese Government
(1) Improvement of business environment
A. Promote contract-based business
B. Regulate abuse of dominant bargaining position concerning copyright and secondary use of
TV programs and others against subcontractors
C. Establish the scheme to allow funding using copyrights and patents as collateral (revision of
the trust business law, creation of the completion guarantee system)
D. Development of human resources: Establish the institution to to train producers (DCAj will
conduct an experiment)
(2) Promotion of content distribution
A. Improve the functionality of the copyright management business that serves as the windows
of copyright-related issues and provides centralized management
B. Develop technologies for content protection
C. Stronger legal protection of contents: intellectual property regulations suitable for the
digital/online age
(3) Prevention of illegal copy and piracy/support to international deployment
A. Package: Copy-protect technologies Online: DRM and CID technologies
B. Crack down on piracy in overseas: Content Overseas Distribution Promotion Organization
(02)
C. Content Industry Global Strategy Committee (03. Ministry of Economy, Trade and Industry)
- Examine spillover effects (effects on other industries, tourism, culture and diplomacy, etc.)
- Examine assistance to companies that operate overseas
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4.Challenges and Expectations (3)
IT policies: e-JAPAN Strategy, e-JAPAN Plan, e-JAPAN 2002 program
(2001), e-JAPAN Plan 2002 (2002)
IT Basic Strategy II (2003): Promote utilization of communication
infrastructure
Improve the international competitiveness of the content industry,
promote understanding of Japanese culture in overseas
Intellectual Property Strategic Promotion Plan (2003) Assist
funding, assist deployment in overseas markets
Expectations of the Content Industry
(1) Contribute to industrialization of culture
(2) Lead the change of industrial structure toward knowledgeintensive industry
(3) Make Japan-made products to global products (animes, mangas,
games, digital cinemas)
(4) Shift focus from GDP to GNC (Gross National Cool)
From hard power (economic power, military power) to soft power
(cultural value, brand value)
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End
http://www.dcaj.or.jp