HYPERNET soliciting partners for free Internet connectivity services to be supported solely by ad revenues

Tokyo-based HYPERNET will from April start soliciting Internet connectivity service providers (ISP) to offer HyperSystem, a free-of-charge Internet connectivity service system supported entirely by advertising revenues. The franchised service is designed to create revenues by offering advertisers guaranteed placement on user screens through the use of a browser-resident program called Hot Cafe. Hot Cafe changes the advertising message every minute, and won't let the browser to open without a message in place, guaranteeing exposure for the advertisers. HYPERNET hopes to expand the service nationwide and reportedly is negotiating franchises with ASCII and other ISPs.


Nifty-Serve subscriber base tops 1.5 million

The number of subscribers to Nifty-Serve, Japan's largest commercial online service, has topped 1.5 million, according to Tokyo-based NIFTY. Rapid growth in PC usage in households accounts for much of the growth, said a company spokesman. If new subscriptions increase at the current rate, Nifty-Serve will have more than two million users by this summer, the spokesman said. Nifty-Serve started in April of 1987 and took more than six years to win its first 500,000 subscribers.


NIFTY to invest 3.0 billion yen to establish backup center, accommodate rapid growth

Tokyo-based NIFTY, operator of Nifty-Server, Japan's largest commercial online service, will spend approximately 3.0 billion yen ($28.0 mil) by spring of 1997 to establish a backup center in the city of Tatebayashi in Gunma Prefecture. The action will be taken to accommodate rapid subscriber growth and more extensive Internet connectivity service offerings. NIFTY expects to have two million subscribers by summer and wants to alleviate congestion. Already some users are complaining that they can't connect during peak periods.


CANON SALES to move into Internet business

CANON SALES plans to make a full-fledged entry into the Internet business. The company has teamed up with systems integrator CANON SUPERCOMPUTING SI, LAN installer CANONTECH and Internet connectivity service provider FIRSTNET. It plans to offer a full menu of Internet-related services, including consulting, LAN development, World Wide Web server installation, dedicated IP access, system management and Web page content development. The company foresees annual Internet-related revenues of 50-60 billion yen ($467.3-560.7 mil) two to three years from now, and wants to develop Internet-related services into a third business mainstay, following sales of APPLE and Windows-related products.


NEC to handle Internet connection, fee collection for BANDAI's Pippin home-use Internet terminal

NEC has been asked by toy giant BANDAI to handle Internet connectivity services and online fee collection for the Pippin home-use Internet browser terminal that BANDAI plans to release in March. BANDAI has structured its Pippin business to profit from online communications charges, not simply hardware sales, and therefore decided to team up with NEC, which has a strong track record in network management. NEC's Internet service team will set up access points for the Pippin terminals, operate the servers, and collect fees. Customers will be able to use their terminals on the Internet for up to ten hours per month for a 2,000 yen ($19) fee.


TOHAN to start taking book orders over Internet in March

TOHAN, one of Japan's largest book wholesalers, will start taking book orders from consumers over the Internet starting in March. TOHAN will receive the orders, but local bookstores will handle fulfillment, either using parcel delivery services or holding books for customers at their service counters. TOHAN will start the service in combination with BOOKS TOKIWA of Tokyo, but from April plans to expand fulfillment nationwide so that customers will be able to order online, then pick up their orders at the nearest bookstore.


NIS to offer flat rate, nationwide Internet connectivity service

Tokyo-based NETWORK INFORMATION SERVICE (NIS), a Type II telecommunications carrier, will from February 20 start an experimental Internet connectivity service whereby users can access the Internet from anywhere in Japan at a fixed cost of 20 yen ($0.19) per minute. The new service, to be offered in cooperation with domestic long distance carrier DDI, will enable users living in areas without local access points to use the Internet without incurring long distance telephone charges. NIS will monitor demand for the experimental service under a plan to offer full-fledged commercial access from the end of June.


COMMENTARY

How many Internet users are there in Japan today? No one knows for certain, but research done by the Ministry of Posts and Telecommunications (MPT) found that Japan had 1.6 million Internet users as of the end of July 1995, putting the nation sixth worldwide in terms of total number of users. The study also showed that Japan had 279 Internet connectivity providers as of December 31, 1995, a ninefold increase compared to a year earlier.

MPT also conducts an annual survey of communications usage in Japan. The latest study found that 2.6% of the responding households use PC communications of some type, either the Internet or a commercial online service. If this finding represents the population at large, approximately 3.5 million people are online in Japan today in one form or another.

Commercial online services account for a large portion of those online. Today Nifty-Serve has more than 1.5 million subscribers, PC-VAN has more than a million, and the smaller services such as Asahi-Net, Nikkei MIX, MSN, ASCII-NET and People probably have a combined total of between 500,000 and one million subscribers. But a fair number of these subscribers have multiple accounts, meaning the numbers can't simply be added to estimate the total number of users. Moreover, not all the commercial online services offer Web access, though the biggest players do.

When these factors are taken into consideration, it is probably reasonable to assume that the total potential Japanese audience for Web sites is somewhere between two and three million, and that the total potential Japanese audience for e-mail messages is somewhere between three and four million.

This report is sponsored by TKAI of Portland, Oregon, specialists in Japan-specific online marketing, and Digitized Information, Inc. of Tokyo, a leader in providing daily English language coverage of electronics industry developments in Japan.

For more information on monitoring electronics industry developments in Japan, or to receive a free e-mail sample of service offerings, please contact Digitized Information at diginfo@gol.com.

For more information on marketing to Japan via the Internet, please visit:

http://www.tkai.com/

Japan Internet Report is a free e-mail newsletter concerning Internet-related developments in Japan. The subscriber mailing list is maintained manually and the newsletter is sent once or twice monthly using a distribution list rather than an automated mailing program. Subscribers are not sent any e-mail other than the newsletter and their names and e-mail addresses are not disclosed or transferred to third parties.

Tim Clark
Editor


Copyright 1996 by TKAI and Digitized Information, Inc. All rights reserved.