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Disney Begins Broadband Service in Japan

Posted on: Wednesday, 16 July 2003, 06:00 CDT

By YURI KAGEYAMA

URAYASU, Japan (AP) -- Mickey Mouse and other Disney characters are about to make their debut in Japanese homes via broadband internet, a rapidly growing market where competition to woo users is heating up.

"Disney BB," Walt Disney Co.'s first broadband entertainment service in Asia, will go online July 22 and be carried by Japan's No. 1 telecom provider, Nippon Telegraph and Telephone Corp.

In a nation famous for its adoration of Mickey and friends, signing Disney was a coup for NTT and underscored its determination to win subscribers at a time when it is running neck and neck against a competing broadband service by Softbank Corp.

Samples of Disney BB, which features games, educational videos and music, were shown to reporters Tuesday at a hotel near Tokyo. Broadband allows for complex, interactive games that can be played in real time.

Softbank's Yahoo BB had a head start in broadband in Japan. But NTT, a former government monopoly, has been capitalizing on its past domination of the nation's telecom sector to catch up.

Each now controls about 30 percent of the broadband market, although Yahoo BB has more than 90 percent of the Internet telephone market, according to a recent study by Impress Corp., a Tokyo publishing company.

Japan's broadband population, estimated at more than 15 million people, is believed to be growing rapidly. Not to be outdone by NTT, Yahoo BB is starting an online game portal, BB Games, on July 25.

NTT has an advantage in the long run over Yahoo BB because it has a larger optical fiber network and enjoys a credible image among conservative Japanese consumers, said Jun Hasebe, analyst with Daiwa Institute of Research in Tokyo.

"Gamers in Japan already use video game machines, and it's questionable whether they will move over to online PC games," Hasebe said. "Softbank is in a hurry to win over the market before NTT's broadband really gets off the ground."

Mark Handler, Walt Disney Internet Group executive vice president, refused to disclose terms of the deal with NTT, but he said revenue is being split.

The agreement is not exclusive, but Handler said Disney had no plans to offer similar services on Yahoo BB or elsewhere in Japan. The service will not include downloads of Disney movies or animation, he said.

Although some Disney BB offerings are free to those signed on to NTT's broadband service, a game called "Disney Wonderland" requires a 9,800 yen (US$83) starter kit, including a controller, and a monthly 1,200 yen (US$10) fee.

Pricing is still undecided for an online game called "Toontown," set to begin in January next year.

"Japan is a very exciting market to launch Disney BB," Handler said. "We have embraced the Internet as a medium to interact with and entertain our guests."

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