My comments on COVID-19, Part 1:An Opportunity to Overturn 30 Years of Defeat

■My comments on COVID-19, Part 1:An Opportunity to Overturn 30 Years of Defeat

Earth is trapped. People die, they can't have funerals, and they cry. They have no one to take their anger out on. The economy collapses. People hang on to God. They sing. COVID-19 has spread to more areas than the plague in the 14th century and cholera in the 19th century. More areas are affected by the virus than those affected by the two world wars. Since the end of World War II, there have been nuclear threats, regional conflicts, terrorist attacks, earthquakes, and typhoons. After somehow coping with these crises, the human race has been faced with a plague.

How to suppress the invisible enemy? No, maybe it is not supposed to be the one we should fight against. Like a cold or the flu, it may be the one we have to come to terms with and live with. The plague epidemic killed 20% of the world's population at the time. I hope it doesn't come to that.

On the other hand, I wonder. If we assume that the coronavirus kills 20% of the economy. If we lost 20% of our current economy, would 20% of us die as well? That is definitely not going to happen. GDP is now 550 trillion yen, and 450 trillion yen, 20% less, was in 1990, during the bubble economy. At that time, we were happier than we thought we were. Weren’t we rich at that time? The bursting of the bubble didn't depress me too much. I think it would be good to prepare ourselves for such a fall.

Let's calm down for a moment.

But I never realized that the world was still so disconnected. I am not talking about a dispute where Trump used abusive languages against China and China fought back. I am talking about how each country works in their own system. China's dictatorial regime has imposed a thorough lockdown and introduced facial recognition technology to track people. France, with its presidential system, also has strict curfews. Even with the same presidential system, the United States of America has many regional differences. The United Kingdom, which has a parliamentary system of government like Japan, tried to take its own route by obtaining group immunity, but Prime Minister Johnson himself was hospitalized with the coronavirus infection. In India, police officers make people going outside do push-ups. I am not sure what is going on in Russia. 

We don’t know which mechanism works for the coronavirus. We don't know that yet. However, this is a global experiment in politics and crisis management in which many testbeds of success and failure are running simultaneously. We don't have time to wait for the results of other countries to respond. What will be the legacy of this multidimensional experiment in the coming global crisis?

For Japan, this is the first nationwide crisis since its defeat in World War II, surpassing that of 3.11 earthquake in Japan. It is still too early to evaluate, but I see that Japan is hanging in there. Whether it's the death toll, social turmoil, or economic decline, I think we can say that the situation in Japan is better than other countries. This country, which is a defeated nation and has not given much power to politics is not able to implement a lockdown fortunately or unfortunately. Convenience stores are open, and joggers are outside running.

How much we can contain the virus depends on self-restraint and surmising, meaning reading what someone is implying the effectiveness of such airy "requests" from the national and local governments depends on how much the people who accept those requests and how much they implement them and how much they discipline themselves. Self-restraint, self-restraint, self-restraint. surmising, surmising, surmising We have no choice but to rely on these two reading-the-room habits, the main culprits that have shrunk Japan in the Heisei era.

A timing of declaring a state of emergency is too late. The amount of fiscal spending in the emergency economic stimulus package which directly go to people is very small. Reduce the consumption tax to zero. Hand out face masks. Don't give out face masks, they're too expensive. The government and the Tokyo metropolitan government should have made proper arrangements in advance.

I hear the loud voices of the people. I hear it a lot. I guess everyone relies on their government. I guess everyone trusts them. I guess the government is doing a good job.

Now, the problem is digitalization.

The fact that we have managed to hold on to our system without collapsing is probably a result of our training in sharing information through SNS and the Internet. Both 9.11 attack and 3.11earhquake were local incidents. The coronavirus is the first global crisis since the spread of smartphones and social media. There are many fake news and disinformation in the information space, but I think the information space is filled with more counter-coronavirus operations than those. Digital wants to be useful for counter-coronavirus measures.

And this could be a good thing for Japan. Japan has been losing in IT field for 30 years. This may be an opportunity to overturn that. Rather than that, we have no choice but to take advantage of the coronavirus as a last chance. There are some sectors that will be directly affected, such as food service, tourism, and entertainment, and I am really concerned that industry and culture may be destroyed. On the other hand, there are industries such as e-commerce, video distribution, and online games that are booming with special demand for internet related consumption due to their stay home time. This is an opportunity to raise the B2C ratio of 6% in e-commerce to 20%, on par with China. This is also an opportunity to take a 5-billion-yen e-sports market and make it as popular as Korea's and grow it into a 70-billion-yen market.

Telework had been expected to be implemented for 30 years but had not progressed. It has finally become a reality. It will give a boost to the use of IT in industry. According to a survey by the Tokyo Chamber of Commerce and Industry, three quarters of companies are unable to implement telework. It just means that those companies have done almost nothing for a quarter of a century since the spread of IT. If you try, you can do it if you don't, you will die.

And it is time for the three areas that have lagged behind, government, healthcare, and education, to leap at the digital first bandwagon.

The government finally made up its mind to accept the challenge and began to hold meetings remotely. I've seen some scenes where the bureaucrats are sloppy with their controls, but it's just a trivial thing at which we can smile. They will be used to it soon. The super-hard bedrock of medical care also moved a bit, allowing for online initial consultations.

Above all, it is education that will make a breakthrough this time. The situation will change drastically since measures such as achieving 1 PC per person and facilitating the processing of copyrights for online educational materials are included in the emergency economic stimulus package. Up until six months ago, I had been lamenting that Japan's educational informatization was the lowest in the OECD and below that of developing countries. I want to say to myself at that time “There are bad things, but good things will also happen.”

Overcoming coronavirus predicament at the same time, let's use it as leverage to achieve the digital first, which we haven't been able to do for 30 years, and make it a legacy.

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Measures for distance education have been included in the government’s emergency economic stimulus package to cope with COVID-19.

■Measures for distance education have been included in the government’s emergency economic stimulus package to cope with COVID-19.

The government's emergency economic stimulus package is the largest economic stimulus package in history, with 108 trillion yen in projects and 40 trillion yen in fiscal expenditures. I believe that the government has done a rather good job of putting together in this short period of time working restlessly day and night. 

What I also appreciate about the stimulus package is that the government has decided to take measures including not only financial measures but also relaxation of regulations. Japan had been languishing as a developing country with slow progress in terms of IT in education. In such situation, children and students were forced to stay and study at home as schools were all closed. These measures have been taken in order to raise the level of educational informatization in Japan drastically. 

The economic package includes the following five measures for distance education.

・Prompt development of ICT environment: Providing one PC per person ahead of schedule

・Review of requirements for distance learning: elimination of simultaneous interactive requirements

・Relaxation of the limit on the number of credits for distance learning: Reviewing of the upper limit of 60 school credits for universities

・Development of online curriculum: Using of NHK programs

・Establish copyright requirements for online learning: no license required, providing compensation payment

We are aware that the government has responded almost fully to our request in the "All Classes Online - Online Education Promotion Statement," which our group including the Chouiku Kyoukai (Association for Super Education), and other groups have been asking the government for many years.

I would like to express my gratitude and respect to the Ministry of Education, Culture, Sports, Science and Technology (MEXT), the Ministry of Economy, Trade, and Industry (METI), and all others involved.

We have been advocating for 1 PC per person for the past 8 years. Various efforts have been made so that Japan would be able to get out of the disgrace of being the lowest in the OECD. The environment has improved. In the past two years, digital textbooks have been institutionalized, programming has been made compulsory, and the "School Education Informatization Promotion Act" has been passed by a bipartisan legislative body.

With the last supplementary budget, steps were taken toward realizing 1 PC per person, and we have the prospect of it being spread out over several years. And with this economic stimulus package, things will move forward furthermore ahead of schedule. From the perspective of six months ago, this is like a dream come true. I wish it had made it before COVID-19.

Looking back on my dreaming, when I first started to take the initiative for realizing 1 PC per person plus digital textbooks, I received objections and criticisms from researchers and academic heavyweights that it was premature. If these measures had been taken earlier, there would have been no confusion like this. I believe that those who opposed the project at the time should take responsibility and all of them should take this opportunity to leave.

The easing of restrictions on the number of school credits earned is likely to be implemented at first. The newly opened iU University has been offering remote classes since the beginning. I was hoping for the elimination of the upper limit of 60school credits.

It is not yet clear whether this will be a temporary measure or a permanent one. We will seek to make it permanent in order to realize the digital 1st in education.

Regarding the issue of copyright for online education, a revised law had passed the congress to make it license-free and compensatory after deliberations in the Cultural Council, however the law has not yet been enforced. The Chouiku Kyoukai (Association for Super Education) has also established a working group to coordinate the parties involved. The operation will be implemented at first. In the end, it is an economic issue of how to make compensation payment to rights holders, and this too needs to be addressed in the next fiscal year and beyond. We will continue to work on this.

Even though it was the result of a super-crisis of COVID-19, I highly appreciate the measures taken to transform the educational environment that forms the foundation of Japan.

Schools and local governments that implement this measure will have to work very hard, but they must recognize that this change, the measures to be taken for ICT are not a temporary one-time thing, but a permanent and irreversible shift.

I hope that COVID-19’s legacy will be the future of education.

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This is how to build a smart city: the Takeshiba CiP endeavor

 ■This is how to build a smart city: the Takeshiba CiP endeavor

The City & Tech symposium is a technology showcase which was held at Keio University.

CiP is creating a special tech-pop district. Robots, telexistence, drones, 4K8K, 5G, AI, mobility—we are advancing City & Tech’s concept of a supercity which equips an entire city with technology.

The symposium is a place to meet and give status updates.

Kawahara from University of Tokyo, Ikegai from Toyo University, Yonazu from Tokyo Metropolitan Government, Seki from Softbank, Nakagawa from RIKEN, Ochiai from Data Trading Alliance, Tanaka from Tokyu Land, Yasukura from Tanico, and Ishido and me from CiP.

We represented Takeshiba CiP, now under construction. Takeda from Tokyo Land, which is constructing the central 40-storey Tokyo Port City Takeshiba, is working to develop a smart city with Softbank, who will also be tenants of the building. Additionally, he is also building a MaaS society test model and developing the digital signage for the pedestrian deck from Hamamatsucho Station. Keep up the good work!

Professor Kawahara from the University of Tokyo introduced Poimo, a vehicle which is inflated with air like Hoi Poi Capsules. They’re soft, safe, and portable.

He also proposed installing free charging all across the city and a personal mobility share service. 

Let’s install it!

Talk then turned to a data trading infrastructure and data banks.

Associate Professor Ikegai from Toyo University pointed out that “Google’s idea for Toronto and the state of Takeshiba are similar.”

As referred to EU data portability, we posed problems about how to gather data from an entire society and design a smart city.

Professor Ikegai suggested a Takeshiba CiP Data Bank based on the concept of reciprocity.

Participating businesses could digitally provide personal information to the data bank in accordance with the wishes of the owner of that data.

The personal data aggregated by the data bank could be used by the owner and participating businesses through APIs under certain conditions. That was the basic structure.

Seki from Softbank, which will move its main headquarters to Takeshiba, declared that they would use various data from the city.

They would move forward by co-creating with companies and local governments to achieve a smart city.

He said that they would gather, analyze, and use the data gathered in the Takeshiba area and provide a platform for the partners who would gather in Takeshiba.

A key person for the Tokyo Supercity, Yonazu from the Metropolitan Government of Tokyo said, “Nowhere in the world has someone achieved a ‘Fully Future City’, which implements cutting edge technology in all aspects of daily life and accelerates us toward a future society not from the perspective of technological development and supply, but from the viewpoint of the residents. Japan also has all the necessary technology but nowhere to put it to practical use.”

He said that the city also has policy in place for an accelerated timeline to achieve a future society lifestyle by 2030, which offers wide coverage of areas such as transportation, logistics, healthcare, education, energy, and crime-prevention.

They are progressing with the designation of a TOKYO .AI District and the installation of the TOKYO Data Highway (5G). How encouraging.

However, as we discussed smart cities, it still wasn’t clear exactly what a smart city is. “Many countries are still competing over fully using data to provide services.” (Ikegai) “Helsinki and Shanghai have autonomous vehicles.” (Nakagawa from RIKEN) There’s still no definitive model.

“The main body of a smart city is data, and physical elements are overlaid on top.” (Ikegai)

That image is easier to understand. In other words, it’s a data-driven city. What kind of data is used is a key point.

“Rules need to be set in place for using data. Convenience must be shown first.” (Yonazu)

Which field’s data should we start with?

“We should start with solving overall issues which don’t link to individuals, such as where they’re walking or areas of congestion.” (Ikegai)

“Depending on the area, various data and players will gather. They should obtain consent for using each type of data and link them together.” (Ochiai)

“We can’t lock up data. Data will continue multiplying. But, when we die our data will stop growing. What do we do with data after someone dies? Do we use it? Do we simply destroy it?” (Nakagawa)

Such problems were also posed.

As we try to be the first to implement things, we draw out some difficult topics. I ask for your encouragement.

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Entertainment Strategies Amid the Coronavirus Pandemic

■Entertainment Strategies Amid the Coronavirus Pandemic

The Intellectual Property Strategy Headquarters of the Japanese government held online meetings for the Cool Japan working group, content working group, and Conception Committee one after another.

I was the only committee member from the private sector involved with all 3 meetings, and although the meetings were closed, I would like to share as much as I can, given that entertainment measures during the state of emergency caused by the coronavirus pandemic are very important.

Of these 3, the content working group is a new organization.

In the past, the Intellectual Property Committee had discussed content and industrial property rights separately, but these elements were streamlined into the current Conception Committee because AI + data has become a major issue.

However, since content exists as an independent field, we set up a working group to do a deep dive. I am serving as the Chairman.

During these 3 meetings, I started off by emphasizing the importance of measures to support live events and entertainment.

Contribution deductions and other measures were incorporated into the emergency economic stimulus package, as restaurants, tourism, and content were considered fields that were directly impacted by the coronavirus pandemic.

However, I expect concert venues, promoters, and other small- to medium-sized enterprises to collapse one after another.

It is impossible to support these forms of culture through economic policy in ordinary times.

There is a need to come up with brand new measures as part of cultural policy. We must first stop the bleeding.

Measures related to the coronavirus pandemic have been drafted as short-term measures of the Cool Japan Policy.

Content and Cool Japan policies should focus on this immediate coronavirus pandemic for some time to come.

All other policies should be considered later as measures for a post-coronavirus world.

There will be no post-coronavirus world if we cannot survive the coronavirus pandemic.

Interested parties with a sense of danger are drafting an emergency statement regarding the fields of restaurants, entertainment, and hotels.

There are 4 suggestions that will likely be published soon: 1. Support to revive excellent content and put it back on a path of growth, 2. creation of new business models, 3. acceleration of the digital shift, and 4. preparations for the development of luxury travel.

I emphasized technology in these suggestions.

Entertainment after the coronavirus pandemic will likely take a different form compared to entertainment in the past. There may also be limitations regarding how much can be expected of inbound tourism.

However, I expect technology to be used more than ever.

There is a rush to prepare environments and foundations to use technology, such as live shows using 5G and VR, as well as copyright management using blockchain technology.

On this point, there are many small- to medium-sized enterprises in the content industry, which has a weak financial foundation. Support measures will be needed to promote the adoption of technology.

However, there are also limits on how much national policy can be relied upon. Things that the private sector can do should also be done in parallel.

For example, a charity can be set up to collect private funds to be used in this field, while the government sets up tax measures for it. I think it will be necessary to be clever in this way.

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Holding a pop-tech signing ceremony with the Minister of Culture in Barcelona, Catalonia, Spain.

 ■Holding a pop-tech signing ceremony with the Minister of Culture in Barcelona, Catalonia, Spain.

An event centered on Japanese manga: Manga Barcelona.

With a history of 25 years, it draws 50,000 people.

There we held the Otaku Summit.

We even had the Minister of Culture of Catalonia, Mariàngela Vilallonga Vives, in attendance.

It was a joint effort between the World Otaku Institute (WOI), established by CiP, and the International Otaku Expo Association (IOEA). WOI creates a network of leading otaku researchers and has established its research base at Takeshiba CiP, which was completed in 2020.

It was conceived as a research institute which would bring joy to many researchers and fans across five continents, and the Otaku Summit is one part of its activities.

The speakers at the summit were Professor Ian Condry of MIT, Professor Paola Scrolavezza of the University of Bologna, Associate Professor Masako Furuichi of Peking University, and me.

It was the leading researchers from the US, Europe, and China, and an activist from Japan.

What is an otaku? What are the issues and outlook?

Professor Condry spoke about creation and collaboration, underpinned by the power of the dojin community and the stimulation of otaku expression.

Professor Scrolavezza explained how Japan’s culture is spreading throughout the world through anime, novels, and movies.

I was surprised by how acute the observations of Japan were from the American and European perspectives.

Professor Furuichi is a career academic of Peking University and a rare Japanese full member of the faculty.

“Chinese anime holds an important strategic position in China and is being supported through policy.”

“However, the position of otaku depends on the approach of the country, and the outlook is unknown.”

A very Chinese cultural position, not seen in other countries.

Do otaku not have a bad image in China?

Professor Furuichi: “University is the gateway to otaku culture in China. It spread from clever students who found a way to connect to other countries and they know how to behave. So there is no negative image of otaku.”

I see. It rings true as a method for transmitting culture.

Professors Condry and Scrolavezza both agreed that the image of otaku in their countries had taken a positive turn.

Also, they said that what was once a niche area had become mainstream.

Not a subculture but a main culture.

I think that in Japan it was never a subculture but a main one from the start.

I don’t like the word “subculture”.

They emphasized that “otaku overcome barriers.”

Otaku has spread worldwide.

It overcomes borders, systems, and religions.

What can otaku do against protectionism and the rightward trend?

What can otaku do that the government and Keidanren can’t?

How can we use that power of reconciliation?

Can we strategically use the soft power of otaku?

I don’t know, but the headquarters of otaku researchers from all over the world, the World Otaku Institute, will take on that topic.

Next summer, we will fly our flag at the special pop-tech district, CiP.

CiP is a combination of Silicon Valley and Hollywood. We want to make it a city only possible in Japan, where creators, users, gamers, otaku, YouTubers, and cosplayers can all gather together.

And, just like Barcelona, it’s on the sea.

I want to design pop which uses the sea.

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Farewell, Sadahiko Hirose

 ■Farewell, Sadahiko Hirose

Sadahiko Hirose has passed away. He was 76 years old.

He made PC’s as a senior executive manager at IBM; he made games as senior managing director at ASCII; he made the Dreamcast as vice president of Sega; he made an online business as the president of @NetHome (now J:COM); and he got Columbia Records back on its feet. He was an incredible person.

In September 1997, the government’s administrative reform council presented an interim report on the dissolution of the Ministry of Posts and Telecommunications. As the one in charge of the ministry, I led an opposition movement, and as a result I was able to slip into the Ministry of Internal Affairs and Communications. It all worked out but I had to write my letter of resignation. I had intended to climb my way up to the position of undersecretary. What was I going to do?

As I was worrying about the future, I was contacted by ASCII’s president, Kazuhiko Nishi, and senior managing director, Sadahiko Hirose, asking for a meeting. We met in the lobby of Hotel Okura. Despite it being our first time meeting in person, Mr. Hirose suddenly said “You should go into the private sector. You should be the head of the ASCII’s game department.” At the time, that department was big business, with sales of tens of billions of yen from games like Derby Stallion, moon, and RPG Maker. While the prospect didn’t click with me right away, it was truly comforting to know there were people in the private sector who would take me on.

Across the lobby we saw Yoko Ono. “I’ve never seen her in person before,” I said. To which Mr. Hirose responded, “Yoko Ono was my tutor.” I thought this was some sort of complex joke that you had to laugh at in the private sector, and I struggled to put on a smile. I learned later that when Mr. Hirose was in elementary school, she really had taught him English. Mr. Hirose, you mustn’t leave this world before your teacher.

1998 began and when I resolved to leave public service, Misters Nishi and Hirose brought me a different offer. “Talk to Chairman Isao Okawa of Sega/CSK,” they said. I did as I was told and went for a drink with Mr. Okawa in Nishiazabu. I guzzled down (probably) very expensive wine by the glassful.

Mr. Okawa said, “I’m donating 3.5 billion yen of my personal funds to MIT to make a research center for media and children. Would you be the visiting professor in charge?” “That’s my job. It sounds real. I’ll do it,” I answered. When I reported to Mr. Hirose, saying, “I think Mr. Okawa took a shine to me,” he guffawed and responded, “Not many people have the guts to guzzle wine in front of Mr. Okawa.”

After entering the private sector, I learned a lot about business, the US, and many other things. I hadn’t learned much at university, and I had been forced to learn a lot in the public service, but I learned even more after going private and moving to the US. Mr. Hirose was my mentor.

At the same time as I went to the US, Mr. Hirose became the vice president of Sega and was pushing ahead with the Dreamcast. I was made an advisor to Sega and joined the team, getting a firsthand view of the development and sales process. I was amazed by Mr. Hirose’s business practice. You can’t supervise unless you’re well versed in chips, OS, signals (the Dreamcast was the world’s first game system with communications functionality), game software, image, sound, design, production line, sales channels, and everything else. In order to finish on a tight schedule, you need to make instantaneous decisions every day. I was barely able to keep up.

But he always seemed lighthearted. While chatting in the vice president’s office at Haneda, Tetsuya Mizuguchi came in and began a meandering explanation of a game in the planning stage accompanied by large gestures of his lanky frame. “You shoot the gun like this and the aliens squeak like this.” Mr. Hirose smiled as he fired off one question after another about characters, reaction speed, and development cost. Mr. Mizuguchi answered rapidly. “Hmm, I guess that’s how games are made,” I thought to myself as I listened intently. That was the moment of Space Channel 5’s inception.

At the time, Sega America was located on a quiet lakeshore in Silicon Valley. Mr. Hirose was making fun of the leaders in American game production in English. They were economizing their workplaces from the perspective of production management. Conversely, Derby Stallion was about to go on sale, and Mr. Hirose anticipated that more weight would be placed on software, so he planned to move the company. “Creators can’t stay in Silicon Valley. They can’t be in the countryside. They need food and clubs. They need culture. They need to be in an urban setting.” So saying, he moved Sega America to San Francisco’s warehouse district. The engineers may have been dissatisfied, but the creators were over the moon.

At the time he was a rare person who had a strong grasp on both technology and content, digital and analog.

After returning from MIT, which was establishing a research center for children and media, and launching CANVAS, a Japanese NPO for children’s creativity and expression, Mr. Hirose was kind enough to host the inaugural workshop in Okayama City. The activity was to create a picture for yourself using any materials you liked, such as fallen leaves or tape. Mr. Hirose himself acted as the facilitator. Thereafter, CANVAS grew to become the host of one of the largest children’s creative events in the world, “Workshop Collection”, and contributed to making programming part of the core curriculum. Mr. Hirose sat on the board of directors throughout.

My contract at Stanford ended in 2006. “What should I do now?” I wondered. “Mr. Hirose, what should I do?” “Go into the media and take every job that comes your way. Once you have too many jobs, then think about it,” he opined bluntly at a Roppongi drinking establishment.

I signed a contract with Horipro as a cultural personality and appeared on quiz shows and shows targeted at housewives. At the same time I was picked up by Keio University and took every opportunity that came my way, until even I was confused about who on earth I was. Whether the mask I had been wearing fell off, or the gilding I had worn had started to strip away, I think I became true to my nature at that time. In other words, Mr. Hirose had been saying, “Stop pretending and move!”

That’s how I became the person I am today.

Government office; MIT, Stanford, Keio; and soon I will be opening the venture university iU, which will bring me into the third chapter of my life. This time I wish for careful guidance focused on the startup. From the beginning of iU’s conception, I had asked Mr. Hirose to be a visiting professor. Before I could thoroughly ask him about it, he continued on his journey. He was 76—too young. He will be missed.

At my age, Mr. Hirose was driving a used Porsche in Tokyo, dancing in New York clubs until morning, and eating eggs Benedict for breakfast in San Francisco. I will remember those images of him as I move on to my next job.

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Dumbfounded by Shanghai Media City

 ■Dumbfounded by Shanghai Media City

The sound of hammering echoes.

Clang, clang.

Like a young bamboo grove, a gathering of buildings reaches toward the sky.

It grows and grows.

Is this Tokyo in 1964?

No, it’s Shanghai in 2020.

Walking around the city, I feel as though it has already surpassed Tokyo for sophisticated food, fashion, and shopping malls.

From on top looking down, the difference can be seen, but below looking up, one can’t see how large the gap is.

The city is drawing ever farther away.

However, despite developing so much already, Shanghai continues to grow.

While I was nearly falling over looking up at the group of buildings, I was led to the top floor of the building CMG plans to open next year. As I looked down at the city, I was dumbfounded.

I was looking at the International Media Port, in Xuhui District, Shanghai: a media city of 1 million square meters under construction.

Apparently, CMG is building one quarter of that, or 260,000 square meters.

CMG: China Media Group.

China’s largest media conglomerate was formed in 2018 by combining national TV broadcaster CCTV, national radio broadcaster CRI, and others.

Together with the people of Yoshimoto Kogyo, I met with the representative from Beijing and learned a little bit about Media City’s composition.

I will share some of the things which I don’t think are secrets.

“CMG is putting 8 buildings on 260,000 square meters.

Two towers will be technology facilities, two will be 5-star hotels, and one will be an enormous cinema.

The ground and basement floors will be entirely commercial facilities.”

What? You’re going to make a 260,000m2, or 500m x 500m, underground shopping center?

“Yes. It’s almost complete.”

Wow.

“Huawei is going in that skyscraper.

Xiaomi in the one behind it.

Tencent and Alibaba will have offices as well.

It will be the world’s largest media base.”

--To use Japan as an example, it would be like NHK and the 5 major broadcasters, Sony and Rakuten all gathering together.—

“We will use infrastructure to help produce complete content.

We will advance the fusion of internet and TV.

We will focus on 4K8K, VR, and 5G.

We will also create an AI laboratory.

We will also build an e-sports city.

We will also put our efforts into anime and manga.”

--That’s pretty much everything. Everything we want to do at CiP, a special pop-tech district, they’re going to do at ten times the scale.

“We tried doing project mapping art throughout the city.

A cinematic show over the entire 260,000 m2.

We want to make an art space.

We want to make it the venue for an endless media festival.”

--I’m jealous. We could never pull that off in Japan because of outdoor display regulations and rights holders regulations.—

“But we still have a long way to go. We need Japan’s cooperation.”

--What is this frightening humility?—

“We are also building a multilingual content production center.

CMG will sponsor film festivals in Shanghai, Beijing, and the South China Sea Islands, and we want to make further connections.

We are also advancing industry-academic cooperation with Shanghai Jiao Tong University.

We want to encourage exchange between our youth.

Do you have any suggestions?”

“Xuhui District is the center of Shanghai’s culture.

We will develop the culture industry.

We will also develop a media city of similar size in Shenzhen.”

--What? You’re going to build more!? I was shocked awake once again.

“Recently, President Macron of France also came to visit, and I gave him the same tour.”

--China and France have a unique relationship, yet the head of state came all the way here to see this. Does anyone in the Japanese government even know about this construction?

Gao Yunfei, director and president of Shanghai Media Group (SMG), a Shanghai media giant: “40 years after Deng Xiaoping visited Japan in 1978 and began China’s economic reform. China learned from Matsushita’s technology and developed it. At the time, engineers were truly open and highly respected. I am grateful.”

--Most Japanese people are not aware of his gratitude.

President Gao: “I graduated university around 1988. I participated in the Nakasone administration’s youth exchange program and did a homestay in Kyoto and Osaka. I am grateful. I want to visit the family I stayed with at that time.”

--The government did a good job. However, the government seems unaware that that generation has grown to become China’s core.

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"Otaku Economic Zone Genesis"

 ■ "Otaku Economic Zone Genesis"

It has been a long time since the term "otaku" has taken root. At first, it gave people a strong negative impression, but it turned into a positive image, a fan base that supports pop culture. It also means that the otaku territory has grown from a niche subculture to a mass mainstream culture, and the hobby territory has transformed into a power to form business and industry. 

This book, by an author who has worked for DeNA and Bandai Namco, and is an executive officer of Bushiroad, describes how the production and consumption of otaku culture has expanded, changed and become globalized, from manga, anime and games to music and professional wrestling, unraveling abundant cases and data. It suggests that a successful strategy has a common principle that can be applied not only to the otaku industry but also to other industries, such as the manufacturing industry. The content industry is a market of more than 10 trillion yen, but it hopes to spread to a GDP of 500 trillion yen. 

○ 2.5-dimensional expansion

The development of the "2.5 Dimension" is emphasized as a successful example of the otaku industry. 2D means content and characters such as virtual animations and games, and 3D means a strategy that involves multiple media such as live performances by real talent simultaneously. Pokemon, Dragon Ball, and New Japan Pro-Wrestling. All of the otaku culture products that have built a market in the United States, given as an example in this book, are a combination of digital content and live performance, and have been expanded globally. 

The content industry has grown steadily. Industrialization of Japanese animation from the 1960s, a global oligopoly of games from the 1980s, animation event development in the 90s, pirated manga and anime penetration in the 2000s, and video distribution businesses in the 2010s. 

This added to socialization in the 2010s. In other words, it can be said that its popularity has expanded and become established by passing into "an era in which friends who have become a community through events and social networks share trends through video distribution, and share them through e-commerce development of character products". 

○ Background of industrial growth

The book examines the otaku industry growth due to multiple factors. Firstly, the cost structure. Manga had an overwhelming price advantage and production system that offered products at a price one tenth cheaper, three times faster than in the United States. Japanese-style production equipment that provides high-quality industrial products at low prices has also been applied to content. 

However, unlike industries such as that of home appliances, it is important to emphasize that it was a niche industry that started up from a venture that stands opposite of state and industrial groups. 

A large amount of advanced human resources were put into it. "Before 2000, most entrepreneurial talent became novelists, cartoonists, movie and animation directors, and game creators." Manga magazines, TV anime, and console games were the recipients of their content. 

Cooperation is also a point. Unlike content production with capital power by media giants such as Disney and Time Warner, companies that do not have a capital relationship will work together in a bottom-up manner with an emphasis on the field. 

And freedom. As it was perceived overseas, anime had no restrictions on expressiveness. "It was freely developed as an underground culture."

The consumption structure is also important. With the loosening of the cultural line between adults and children, and a large number of magazines distributed, an invention called "animation for adults" was born and consumed by adults and children. 

I agree with the author's cross-cut view that such a special production and consumption structure has made Japan the home of the otaku industry. 

○ Business changes since 1995

This book sees the content industry as having collapsed since 1995. Domestic trends have been declining. 1995 was the peak of disposable income, that is, the time when the Japanese economy reached its peak, and it may have been inevitable that it would contract. 

However, at the same time, 1995 was the year of full-scale takeoff of digitization such as PCs and the Internet, and also the beginning of the global expansion of contents. Since then, manga, anime, and games have become popular digitally and overseas. Since 2010, smartphones have become the main device for most people. Smartphones take up more than half of the information consumption time of 7-9 hours a day for most people. In mobile content, games far surpass manga, video, and music, and overall consumption. It accounts for 70% of the total. While the overseas market for video games is shrinking, the online gaming industry will grow to be worth 2000 billion yen, and anime will triple to 50 billion yen in seven years. Overseas otaku also grew up using the net and watching pirated editions. Hundreds of thousands of people participate in the Japan Expo in France and the Anime Expo in the United States. 

The core is the rights business. Money is earned from secondary use after primary distribution of television and movie broadcasts. Character development happens in VHS, music CDs, toys and food. Proceeds of animation production number around 734.4 billion yen, and the rights business after that is 2.1 trillion yen. A single digit difference. Pokemon is said to have had cumulative sales of 10 trillion yen in 20 years. One type of content has created a huge industry. Moreover, Japan needs to take a more strategic view of the meaning that "almost all characters are born from the United States and Japan". 

○ Live + Social

"Frozen" has been seen by 15 million people and had a revenue of 5 billion yen, while "Love Live!" has been seen by three to four million people and had a revenue of 44 billion yen. Even though the number of users is 5 to 1 between them, sales for the latter are nearly 10 times higher. The book's author says, "the nerd was taken out of the room. An active nerd who goes to live concerts has been created". Moreover, otaku are highly loyal and spend three times as much as ordinary customers. 

It is said that the live music market suddenly tripled in 2010-15. "No industry embodies the shift from packaging to internet and location as much as music does." It seems that in this case, the community features of social media and sharing services are working together. It is transforming its business model into an interactive model that forms a user community and keeps updating content. The author sees this as a "change from content making to service providing". The success of "Pokemon GO" is also linked to this. This is an important example of paving a path between the two-dimensional world and the three-dimensional world. 

Furthermore, this book emphasizes the success of "New Japan Pro-Wrestling". "Dropping out from television has led to its globalization," the author considers. "In Japan, the closer the content is to TV, the slower it is to catch up with new movements such as overseas and distribution, and as with the package business, its decline began in 1995."Will this trend accelerate with 5G starting this year? 

　

○ On the winning patterns of Japanese companies

In conclusion, this book is not mistaken about the old-fashioned cooperative line of Japanese companies; it preaches that the winning patterns may exist in creating high-quality characters and stories made of works by collaborative groups, as well as forming a global market. The hegemony is shifting from the top-down view centered on the TV to the bottom-up one centered on Internet and community. It is important to combine 2D (animation / game) and 3D (talent) to develop as a live content service business. The business structure of a live content maker becomes the main body of the Japanese character economic zone. In contrast to North America's formation of a huge organization as a media consortium, Japanese companies are trying to maximize the assets of old companies in a loose modular alliance in which multiple communities coexist as a cultural consortium. 

Shouldn't hardware and other equipment industries form groups with the software culture industry in order to set up different cultures? 

This is the author's claim. I think it's a view that isn't heard of at American business schools, but is worthy of listening, and backed by history, data, and a sense of the field. Manga, anime, games and professional wrestling were all imported from the United States and underwent a special evolution in Japan, and are now being exported overseas. Cool Japan refers to the products produced overseas that have evolved into an export industry. 

Convenience stores, uniform fashion, ramen. There are various cases other than content. Just as professional wrestling has become part of Cool Japan, there are still other things that can be discovered. This book gives hints which may exist in many industries. 

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