Yahoo Japan[J] announced Tuesday it would buy 51% stake in Gyao[J] which is the free broadband video streaming service and has been wholly owned by Japan’s largest cable music broadcaster USEN. Yahoo Japan will buy Gyao’s 4,998 shares for USD5.3M, and merge Gyao and Yahoo Douga (Yahoo Japan’s free video streaming service) together this coming fall.
According to the briefing made by the two heads of Yahoo Japan and USEN, both video services stuck on the problem of requiring complicated tasks and high costs to clear copyright issues before having the contents published on their sites, in contrast to the high rise of CGM (consumer generated media) or UGC (user generated contents) based video sharing sites like YouTube and Nico Nico Douga[J] where the engaged users may upload videos without copyright consciousness. By merging their background systems as well as the service brand, their new system is expected to require lower operation cost than ever.
Yahoo Japan also announced Monday to have set up its new portal entrance especially designed for the TV sets having the Internet connectivity. The company’s CEO Masahiro Inoue expected the video service to gain revenue in the synergy with such new service lineups.
On the other hand, the broadband video service ShowTime[J], providing PPV and paid subscription based viewing, was a 50-50 joint venture co-found by USEN and Rakuten in 2001. At the end of last February, USEN sold their shares of ShowTime to the other partner for USD17.8M, now it’s fully owned by Rakuten. ShowTime has 60,000 titles and 1.1M users as of this writing.
Since USEN declared the deficit of USD538M in the business year ending last August, and it has been expected to announce more restructuring plans to improve the business.
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