Tokyo girls in knee-high boots and boys with spiky hair are often given credit for fueling the rise of Japan's multibillion dollar mobile content market. Many teens and twentysomethings here think nothing of spending $100 a month on cell phone extras, paying a dollar here and a quarter there to message friend and to download games, screensavers, concert schedules, ring tones and more. Analysts estimate that the Japanese spend $300 million a year on ring tones, and another $466 million a year on mobile games. In fact, Japanese youth spend so much time and money on wireless activities, many believe the precipitous drop in newspaper readership among the young might be partly due to the popularity of Internet-enabled cell phones, which give users access to thousands of Web sites built specifically for the smaller screens of mobile devices. "My two boys, who are 25 and 22, pay an unbelievable amount for their mobile phones, so they have no money to subscribe to newspapers," said Hirotsugu Koike, editor in chief of The Nikkei Weekly -- the English-language edition of Japan's largest business daily, Nikkei. "That trend worries a lot of newspaper editors here." As rabid as the young here have been for fun wireless content, industry analysts say the market they created is now saturated and sales are slowing. Incredible competition among vendors for the youth dollar -- and the fact that there are only so many youth dollars to go around -- have many wireless content providers looking around for new potential customers. "The market does not seem to grow at double digits anymore," says Arjen van Blokland, vice president of international business development at 104.com, a mobile-application service provider in Tokyo. "This is one reason why content providers are looking for market segmentation." The unlikely new market segment many have decided to try to go after is the antithesis of today's mobile user: Old People. Testing the Waters Targeting the over-40 crowd makes a certain amount of sense: Older people have more money than young people and so have more to spend on wireless products. According to a recent story from Bloomberg News, "Japan's 23 million retired people spend 25 trillion yen, $214 billion, a year." The dwindling birth rate means about half of the adults here are 50 or older -- so the untapped market is vast. The only problem is that old people don't like cell phones the way young people like them. The buttons are small and reading the tiny screens can be a strain on the eyes of even thirtysomethings. Another reason older people haven't spent much time or money on mobile content is that there isn't much out there for them to do or buy: Until now, most of the content on the wireless Web has been youth- and entertainment-oriented. A few of Japan's top mobile content vendors -- including Girls Walker, a mobile Web site that pushes some 75,000 youth-oriented e-mail "magazines" to more than 9 million mostly young subscribers -- are determined to change that. They've decided to try marketing "mature" content to see if they can get older people to pick up the mobile habit. "We will start a new shopping site which is targeting (people in their) 30s to 50s this fall," said Fumitaro Ohama, CEO and president of Xavel Inc, which operates Girls Walker. "We will select national brands like Gucci, Louis Vuitton, Hermes and so on," Ohama says. "In short, I can say that mobile commerce which is targeting people in their 30s, 40s and 50s has potential to be a big market in five years." Xavel makes money by advertising its shopping site on every e-mail magazine it distributes. The idea is that readers will click on the link and browse Xavel's online shopping boutique -- and many of the readers do just that. Ohama says the company posted sales of $21 million last year. Another major mobile content provider, Index Corp. -- known for its popular fortune-telling, ring tone and teenybopper sites like i LOVE Licca-chan on i-mode -- recently announced that it would also begin offering services for older users. "We are now working to offer health, financial and educational services through mobile phones," Index Corp. president Yoshimi Ogawa told Nikkei in September. Even Cybird -- which practically created the youth market in cool ring tones, games, screensavers and e-mail alerts -- is beginning to look for an older audience. CEO Robert Kazutomo Hori said in 2002 that his company would continue to concentrate on selling "ring tones and logos. Because we've been so closely involved in i-mode content production for so long now, we know what sells and what doesn't sell." Cybird's sales in the second quarter of 2003 jumped 17 percent to a robust $19.9 million, but their profit in the same quarter plunged 61 percent (compared to the previous quarter) to about $783,000. Profit has been much harder to come by for Cybird and other content providers because they're all spending more to compete in a saturated market, analysts say. Dwindling profits are now prompting the company that embodied the youthfulness of i-mode to consider targeting an older audience. "We are now thinking of doing so," says Cybird spokesperson Yuga Ejima. Planning is in the very early phases, Ejima said. If You Build It, Will They Come? Most older users today use cell phones mostly just to make phone calls, but non-teenyboppers are slowly figuring out other ways cell phones can fit into their lives. Some parents have recently realized that the best way to stay in touch with their keitai-crazy (cell phone-crazy) kids is via text messaging. Some businessmen with long commutes and long workdays are routinely using video-enabled phones to say goodnight to their kids. Increasingly, older users are signing up for e-mail alerts telling them the latest news, weather and sports results. "More and more people in the 30-plus age group are using wireless applications for organizing their lives better," says Chetan Sharma, who co-authored the book "Wireless Data Services: Technologies, Business Models and Global Markets" with NTT DoCoMo's Yasuhisa Nakamura. (The book was released by Cambridge University Press this fall.) Today, just 22 percent of the 40 million people signed up for NTT DoCoMo's i-mode service -- the most popular cell phone service provider in Japan -- are over 50. But analysts expect those numbers to increase over the next few years as more and more mobile companies look for ways to attract the older user. NTT DoCoMo has lured millions of new senior subscribers in recent years with the Raku Raku (easy easy) phone, which features bigger keyboards, larger text and simpler interfaces than most cell phones. The latest version of the Raku Raku phone comes equipped with a pedometer that measures how far the person carrying the phone walks each day, and sends regular e-mails letting subscribers know how far they walked and how many calories they burned. This senior-friendly function "is particularly relevant to users wishing to regularly update their doctors with this data," according to a DoCoMo press release. DoCoMo is even offering classes to seniors interested in learning how to use the phone to send e-mails and cruise the wireless Internet. The company, like many others, is aggressively pursuing the older customers because "for us to win new customers, the next and the only target we have left are the people of these age groups," company spokesman Takumi Suzuki told Bloomberg. As companies begin to think more creatively about how to attract more mature users to the mobile universe, pundits predict older users are likely to start using cell phones more -- and for more than just making phone calls. "In the long run, I think the content business for senior people will be a big success because those people have difficulties moving around," said Waichi Sekiguchi, a senior staff writer for the Nihon Keizai Shimbun and author of the "Pioneers of the Content Business" column in the paper's evening edition. "Many Japanese want to be connected with each other, so information sharing over handsets among older people will be a good business." Thanks to Craig Mod for the promo art.
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