Japan Plans Digital Satellite Television Service

[Dave Farber <farber () central cis upenn edu>]

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       ASIAN TECHNOLOGY INFORMATION PROGRAM (ATIP)


REPORT:  ATIP95.35 : Japan Plans Digital Satellite Television Service
To: Distribution
From: Simon Mansfield [mansfield () atip or jp]
Date: 07/05/95 [MM/DD/YY]
This is file name "atip95.35"


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======================start report ATIP95.35============================


Date:    July 5, 1995
Report:  ATIP95.35
Title:   Japan Plans Digital Satellite Television Service
Author:  Simon Mansfield, Technology Analyst, ATIP Tokyo.
         [simon () atip or jp]


ABSTRACT: A new era in commercial television broadcasting is expected to be
launched in Japan from Summer 1996, when Direct To the Home (DTH) digital
television broadcasting will start operating.




JAPAN PLANS DIGITAL SATELLITE TELEVISION MARKET




On August 29, Japan Satellite Corp. (JSAT), will launch its third
communications satellite, JCSAT-3, from Cape Canaveral using Lockheed
Martin's Atlas launch vehicle. The satellite is expected to be fully
operational in geo-stationary orbit at 128 degrees East, by October 10, 1995.


Manufactured by Hughes Space and Communications Co., JCSAT-3 is an advanced
telecommunications satellite equipped with 40 transponders, including 12
C-band and 28 Ku-band transponders.


Digital Multi-Channel Planning Co., Ltd. (DMC), capitalized at 200 million
yen, was established by JSAT Corp. and its four investors, Itochu Corp.,
Mitsui & Co., Ltd., Nissho Iwai Corp. and Sumitomo Corp., to develop and
promote digital television broadcasting in Japan. JSAT and its four partners
will each hold a 20% stake in DMC and all six companies are based in Tokyo.


Currently, JSAT, through its subsidiary, DMC, will be the only provider of
satellite transponders for digital television broadcasting in Japan. An
official with Space Communications Corp. (SCC), the other leading satellite
telecommunications provider in Japan, said, "at this stage SCC has no plans
to enter the digital television satellite broadcasting industry."


On JCSAT-3, there will be 8 transponders available from 1996 for use by
digital television broadcasters. Each Ku-band transponder has a maximum
transmission rate of 24 Mega bits per second, and can be configured as
either 4, 6 or 8 channels, depending on the quality of transmission
required. Additional transponders will be made available in the future
depending on demand.


DMC, vice president, Ko Cyuriki, told ATIP in an interview July 4, in Tokyo,
"DMC will act as the coordinator for JSAT in marketing transponders to
potential broadcasters.


"At this stage, DMC expects that about 50 channels will be available to
customers in Japan by the time services begin from Spring 1996.


"The reason for the delay between the time the satellite is operational in
October this year and when digital television broadcasts will begin, is due
to the need to develop low cost receiver terminals for the Japanese market.


"Currently in the U.S., receiver terminals for DirecTV are on sale for
between $700 and $1000, and we want to see this type of price point in Japan
before services start," said Cyuriki.


According to a survey prepared for JSAT in August 1994, the number of
potential customers willing to take up a subscription was 1.2 million the
first year, rising to 3.8 million in the second year, and 8 million by the
third year. This survey was based upon hardware costs of less than 100,000
yen ($1,150) and a basic package of 10 channels for 3,000-5,000 yen ($35-60)
per month.


Cyuriki said, DMC has made it quite clear to potential broadcasters that
pricing will need to be as low as possible with a maximum of 5,000 yen per
month for a basic subscription of at least ten channels.


According to an official with Space Communication Corp, the success of
multi-channel digital broadcasting in Japan could be hampered by the lack of
quality programming material in Japanese.


However, DMC's Cyuriki said, "We don't expect language to be a problem, as
for example, CNN is already very popular in Japan though only 10-20% of its
broadcasts in Japan are in Japanese. There are also a variety of foreign
language programs on the analog satellite television channels available
through NHK (Japan Broadcasting Corp.)."


Furthermore, there are a large number of foreign nationals in Japan,
including Koreans, Chinese, and South Americans of Japanese decent, who
desire foreign language broadcasts, said Cyuriki.


To facilitate the development of foreign language broadcasts, DMC is working
with broadcasters in Korea and Taiwan to rebroadcast their program material
via JCSAT-3 into Japan. While in Hong Kong, DMC is in discussions with
StarTV, to bring its four channels of Japanese language programs back to
Japan, said Cyuriki.


"The biggest problem we face is not language, but the pricing of services
and the long-term viability of the broadcasters using JCSAT-3, as once they
start services we want them to continue operations long into the future,"
said Cyuriki.


DMC is hoping to sign up potential broadcasters for a ten year contract by
offering low introductory charges in the first two years. For a basic,
single channel, operating at 6 Mbps (one quarter of a KU transponder), the
cost will be 50 million yen ($588,000) the first year, 70 million yen the
second year, and 90 million yen annually thereafter. However, if a
broadcaster prefers to buy a slot on a year to year basis, a flat rate of
110 million yen ($1.3 million) per year will be charged.


Cyuriki said, "By offering low charges in the first couple of years, we hope
to reduce the start-up costs for potential broadcasters. This will enable
subscription costs to be kept as low as possible. In addition, we would like
to see a situation where different broadcasters work together to offer
customers a basic package of at least ten channels comprised of movie,
sport, news and cartoon channels."


Longer term, DMC is looking at introducing a pay-per-view system that would
enable near video on demand services to be offered. However, unlike in the
U.S., DMC would like to use, from the outset, a new charging system called
"impulse pay-per-view". With this system, a customer's satellite terminal is
directly linked via  telephone network to the program provider. When a
customer wishes to view a movie at a scheduled time, they simply request it
on their remote control and the request is stored for downloading to the
program provider who then automatically bills the customer on a periodic basis.


At this stage, DMC has not yet signed any contracts with program providers.
However, Cyuriki said DMC has received expressions of interest from many
companies, and once the satellite is operational, DMC expects that all
channels on the eight transponders will be leased by program providers.


To help customers navigate their way through the multiple channels
available, DMC will operate its own program-guide channel featuring previews
and highlights of the various programs available on JCSAT-3.


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Note to readers:


This report was prepared on spec to gauge interest among ATIP subscribers to
issues relating to space development, including both services and hardware.
If readers are interested in receiving more information on the Japanese
space industry please let us know, by contacting Simon Mansfield at ATIP
Tokyo [simon () atip or jp].


=====================END OF REPORT ATIP95.35===========================