38 million users have paid for Mouse House content

TOKYO — The Japanese mobile communications market is big, sophisticated — and a world unto itself. But Disney has found that world to be one of laughter, not tears.

Instead of signing up for GMS international standards, Japan has been going its own proprietary way for more than a decade, with telecoms giant NTT and other major players developing technologies and services found nowhere in the world.

Since the launch of NTT DoCoMo’s i-mode wireless Internet service a decade ago, Japanese mobile subscribers have come to rely on their handsets for access to email and the Web. Today, of the 108 million mobile phones in use, 88% offer Internet connections, including high-speed 3G services. Also, 69.2% of all Japanese log onto the Internet from their mobiles, versus 66% who use computers.

Content providers have rushed to serve the millions of mobile users, building a $4 billion annual biz. Among the pioneers and leaders is Disney Japan’s Interactive Media Group, which first entered the mobile biz in 2000 and operates 35 subscription services through its Japanese mobile site, partnering with Japan’s three top carriers.

“One of Disney’s strengths is our ability to leverage our brand to reach consumers,” says Group managing director Duncan Orrell-Jones.

Disney operates similar services around the globe, but its Japanese biz stands out for its size — 38 million users have paid for Disney mobile content — and breadth. Users can decorate their emails and customize their cell phones with Disney characters, play more than 100 Disney-themed games and enjoy about 500 videos ranging from “Hannah Montana” to the “Stitch” toons that Disney makes in Japan with toon house Madhouse.

They can also subscribe to Disney Mobile, Disney’s mobile carrier service, or buy one of four Disney-branded handsets. Disney developed both the service and the handsets in partnership with Softbank, one of Japan’s largest mobile carriers.

The core target aud for Disney’s mobile services is women in their 20s and 30s — the demo that drives much of the growth in the entire mobile market.

“These women have an extremely close, personal relationship with their mobiles,” comments Orrell-Jones, noting that they use their cell phones to do most of their emailing, Web surfing and gameplaying.

Also, unlike Americans texting madly away in their cars (and risking a visit from the police), they can quietly lose themselves for hours in Web-based worlds on Japan’s vast public transportation system.

“Their cell phones have become indispensable tools,” Orrell-Jones says. And in contrast with the American tendency to download content in bits — a game here, a tune there — Japanese “are more inclined to subscribe to services,” Disney’s included.

But now that a great majority of Japanese own at least one handset and do nearly everything with it that consumers elsewhere do with a PC, notebook, smart phone or other devices, where is the growth going to come from? Disney is betting on content, from not only its enormous library, but also from social networking services.

Nearly 70% of Japanese women in their 20s have signed up for such a service, and 73% of the users of the biggest one, Mixi, access it from their cell phones.

For foreign content providers, Japan’s mobile biz — which Japanese often compare to the Galapagos Islands for its isolation from the rest of the world — can be hard to parse. Disney’s solution: develop most of its mobile contents, from games to toons, locally with Japanese partners.

“There’s a great deal of creativity here,” Orrell-Jones notes. In other words, in Japan, even mighty Disney has learned to go with the market flow.

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