BB bows cutting-edge VOD via internet

By the end of September, 900 titles were available

TOKYO — Confidently, Chiyo Yanagida pushes buttons on the remote control. The TV in front of her displays a menu with initial options, including 17 channels and video-on-demand (VOD), the latter grouped in Japanese movies, Western movies or animation.

She chooses a Western, presses one more button and the movie starts — almost as crisp as a playback from a DVD and definitely better than VHS tape. After a couple of minutes, she pushes the “pause” button. The film changes into a still. “Want to rewind?” she asks, and pushes. The film runs backwards.

Nothing special — if it were not a demonstration of the world’s first commercial VOD service via ADSL Internet connection. It’s offered by Japan’s BB Cable TV, a subsidiary of Softbank Broadmedia, itself a part of Softbank Holdings.

“We have achieved the quality that makes this service attractive,” says Yanagida, who manages VOD acquisitions for BB Cable TV.

Only slight delays measured in fractions of a second betray that the commands from the remote control have not been sent to a DVD player but to a sophisticated decoder in a set-top box.

It’s a budding revolution of Japan’s TV world, partly made possible by changes in broadcasting law that does away with the strict separation between broadcasting and communications, allowing operators in one sector to use dissemination networks of the other.

The result: a rush by Japan’s communications and broadcasting industry to dip into the potential honeypot that new services over the Internet make possible.

Never a company afraid to be at the edge of new developments, Softbank moved quickly.

BB Cable TV, which started up in spring, is Japan’s first licensed cable TV broadcaster over the Internet.

At that time, Softbank had managed to become Japan’s leading ADSL broadband Internet access service provider under the Yahoo! BB brand in less than 18 months. By now, Yahoo! BB boasts more than three million subscribers, with between 100,000 and 200,000 new ones joining during any given month.

“The potential is enormous,” says Yanagida. “We estimate that about 65% of Yahoo! BB users might want to subscribe to BB Cable TV.”

This target might still be somewhat far off. For now, the more realistic 10% should be reached within two years. At this early stage, only 1,000 subscribe to this new form of television.

But this will change quickly. BB Cable TV plans a major marketing campaign this month, while prices are kept temptingly low. Including the set-top box rental and 17 channels, a subscription to BB Cable TV costs a one-off $87 registration fee and a monthly $22, with VOD being offered at prices ranging from $2 to $4.50 depending on the pic.

While competitors, foremost Japan’s telecom giant NTT, have concentrated on offering content via their broadband services for the PC screen, Softbank has from the beginning set its eyes on the good old TV set.

Between Yahoo! BB and BB Cable TV, the officially stated mission of “integrating broadcasting and telecommunications services over broadband subscriber lines” has been pretty much accomplished.

What’s still missing is a wider selection of content, and BB Cable TV is working on it. It pacted with Universal earlier this year and with 20th Century Fox in late August, covering VOD use of major films. Another deal with a major Hollywood studio is in the works.

In Japan, local distributors Shochiku, Toho and Toei are reluctant to get into business with BB Cable TV, mostly because of copyright issues that need clarification.

But others, like Gaga Communications, are happy to cooperate. By the end of September, 900 VOD titles had become available.

As a plethora of new companies intending to offer similar services from next year appear on the horizon, some of them backed by cash-rich enterprises such as the world’s largest utility Tokyo Electric, BB Cable TV is rushing to establish itself as an early market leader. As VOD is up and running, the next step will follow soon: interactive games and other entertainment.

To that end, Softbank acquired the Finnish interactive entertainment developer G-cluster in July. The company will develop interactive content for the BB Cable platform that will also become part of the growing service available on TV.

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