TT-749 -- Japan's Internet Wild West, e-biz news from Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.
(http://www.terrie.com)

General Edition Sunday, Mar 23, 2014, Issue No. 749

+++ INDEX

- What's New -- Japan's Internet Wild West
- News -- FSA tells banks to ease up on SMEs
- Web Content/Tech Job Vacancies -- Sales Manager-cum-Country Manager
- Upcoming Events
- Corrections/Feedback
- Travel Picks -- Temples in Wakayama, Green Tea in Kyoto
- News Credits

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+++ WHAT'S NEW

A rather sad and shocking event happened this week that will add to
the calls for regulating business on the internet. An online
babysitting agency's freelance sitter managed to let a two-year old
toddler in his care die, claiming that medicine he'd (the sitter)
taken knocked him out for 24 hours and he didn't notice the kid in
trouble. The dead child's 22-year old mother apparently needed to do
something over the weekend and left her 2-year old and an 8-month old
baby in the care of a representative of the agency at her local train
station on Friday night. The agency representative then shuttled the
kids all the way to Saitama and left them with an unmarried 26-year
old male sitter -- the guy who got arrested.

This event boggles the mind in various ways. Firstly, what would
possess the mom to hand over her 8-month old baby and 2-year old
toddler to a complete stranger? The world is full of people doing ugly
things to others, and the capacity for child abuse, let alone murder,
is unlimited. Then there is the fact that this agency is just one of
dozens on the internet that does little more than match un-regulated
sitters with naive parents. Crowdsourcing is fine as a concept when
you are dealing with digital files, but another thing all together
when it comes to looking after helpless human beings.

The tragic outcome is one more reminder that the Internet is not some
magic panacea for the inconveniences of society. Rather, it is an open
market where the players are both good and bad and where those that
wish to prey on the vulnerable can do so with relative ease. The
Internet was originally supposed to be a medium protecting the freedom
of speech, and while we agree that this is still an important point to
protect, there are so many new questionable businesses that duck and
dive under the cover of that "freedom" we think it is only a matter of
time before the Japanese government decides to become much more
proactive in controlling such businesses.

This is a complicated topic and one that we have been thinking about a
lot recently. There are many interesting new services that would not
be possible if it wasn't for the protection of their existence by
virtue of their being on the Internet -- and developed countries such
as Japan do need the innovations the Internet makes possible in order
to build a knowledge economy in place of manufacturing and agrarian
ones. Nonetheless, among those innovations, some are highly likely to
come under scrutiny in the near future. They include: online
recruiting, online content, online currencies such as Bitcoin, online
travel businesses such as AirBnB, online gaming, and even just regular
sales of goods online. Let's look at a few of these, and how they
probably skirt the rules normally imposed on regulatory
bricks-and-mortar versions of the same thing.

[Continued below...]

---- Woodbridge Expands International Reach into Japan ----

Woodbridge International, a global mergers and acquisitions firm
specializing in middle-market companies, would like to announce our
office in Tokyo serving sell-side and buy-side clients in Japan. In
operation in the United States since 1993, we have 19 offices in
North America, Europe, Latin America, the Middle East and Asia.
Leveraging upon the strength of our global reach we identify the
right companies for your needs and negotiate the best terms for
success.

To hear more about our unique process please visit http://www.woodbridgegrp.jp.
-----------------------------------------------------------

[...Article continues]

1. Online recruiting.
We were involved in Japan's first online mid-career recruiting
service, www.daijob.com, and were confronted early on by claims from
our physical-world competitors that we surely needed a recruiting
licence. After all, we were providing advice in our newsletters, and
effectively the outcome of our online matching was the same as what a
licenced recruiter did -- the candidate would get a job. However,
after getting legal advice, we were surprised to find that we could use
the technicality that we were in fact a publisher and that our
marketplace was just a function of information the users decided to
share.

In the end we actually did get a recruiting licence, but the point is
that we didn't need one. It was almost as though our being on the
Internet helped to obfuscate our involvement in the recruiting
process, to the point that we were legally detached from the outcome.
We still think this is strange, because the outcome is the same, and
the intention of regulating recruiters is to keep the profession safe.
Now with online recruiting being expanded to crowdsourcing
(Crowdworks.jp is just a modern-day version of Daijob.com), the
matching of services by unqualified people means that probably the
whole sector is likely to become regulated.

2. Online content.
While online publishing is protected by the concept of freedom of
speech, if you try to monetize that speech as an e-book and sell it
online, then be careful. The Japanese publishing industry is both
strong and influential, perhaps because it is so entwined with the
ruling elite. So, woebegone any upstart entrepreneur who thinks he/she
can circumvent the industry online, such as Hiroshi Mikitani of
Rakuten tried to do when he took over Kobo of Canada and start selling
Japanese titles from that country as a means of eliminating
consumption tax for customers.

The government quickly decided that this was going too far, and they
passed legislation which will take effect in 2015, and which will
bring e-books and other content (but not physical products, which
already get checked at Customs) under a self-reporting tax requirement
for foreign vendors selling to Japanese consumers. We bring this
example up because it shows that the government can and will take
quick action on internationally-related Internet businesses when they
want to. Now, just how they will enforce this tax regime for the
millions of small sellers outside Japan and for "reluctant-to-report"
industries such as porn is going to be interesting. But for a major
Japan-based player like Rakuten, the writing is on the wall -- they
are right in the crosshairs of the tax authorities.

3. Online gaming.
Another form of content that is hard to control is online gaming. In
the physical world, the rules are simple: no gaming or gambling for
money, except for government-permitted concessions that in any case
feed one or other government departments. OK, sure, there is a huge
under-the-radar world of pachinko parlors, but even these are under
the control of retired police officers and so is allowed. Another
possible exception will be if Kasumigaseki permits Tokyo to start
Japan's first legalized casino, something that is expected to pass
parliament this year.

In the meantime, online, gaming and outright gambling is rampant. In
2012, the whole concept of "kompu gatcha" games by Gree, DeNA, and
others came under scrutiny and the Japanese authorities called a foul
-- the concept is online gambling pure and simple. As a result, the
industry was given six weeks to kill off the games or be fined, and
all the top players took the games down -- well, modified them at
least, and took a major financial hit as well.

But even as Gree and others have pulled back (a little) from the grey
zone, Japanese consumers continue with their love affair of online
casinos (abroad, but where everything is in Japanese) whose servers
are outside the reach of Japanese laws and law enforcement. Given that
the betting amounts are in the billions, we feel that it is only a
matter of time before the government starts monitoring internet usage
much the same as the Chinese do. No doubt they will use a socially
acceptable reason for doing so, such the need to track down illegal
casino operations, but given the rightist swing of government, it will
be very tempting for them to insert a Japanese great firewall to limit
other activities as well.

There are plenty of other examples of unlicenced web businesses that
couldn't exist in the physical space, such as in travel, education,
health, and even in selling second-hand goods (yes, you need a licence
from your local police to do this -- we have one). The fact that they
are allowed to exist is a mystery probably best explained by the
phobia older regulators have with technology, especially if that
technology comes from and is allowed by your favorite big brother, the
USA. Still, in years to come, we expect more incidents such as the
babysitter manslaughter case will force action, and we will look back
on this era as a kind of Wild West that offered both opportunity and
threats in equal measures.

****************

Lastly, we would like to remind readers that with last week's passing
of the third anniversary of the Tohoku earthquake, the resulting
Fukushima nuclear disaster is by no means over. Kids are being
diagnosed with thyroid cancer at an accelerated rate and a whole
generation of toddlers don't play outside any more. About 18 months
after the disaster, locally-based author, Larry Knipfing, released a
novel called "Horace" which has the Fukushima disaster as its setting
and creates an alternative future for those kids. Perhaps those
parents who feel trapped by their childrens' vulnerability to lies and
cover-ups of the nuclear industry will want to read this novel and
wish that they took the actions Larry's protagonist did. It's a good
read and available from Amazon.com, at http://amzn.to/1geRO8n.

...The information janitors/

***------------------------****-------------------------***

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www.japantravel.com
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***------------------------****-------------------------***

+++ NEWS

- Ermmm, we found some of those missing Bitcoins...
- Car sales expected to drop 16% after consumption tax rise
- FSA tells banks to ease up on SMEs
- Animator DLE gets ready for March IPO

=> Ermmm, we found some of those missing Bitcoins...

Maybe the Mt. Gox team got threatened by the Yakuza or something,
because they just happened to "find" 200,000 missing coins in a wallet
thought to be empty. This at least reduces the initial suspected theft
of coins from 850,000 to 75% of that number. The re-discovered
Bitcoins are worth about US$116m. Mt. Gox is embroiled in a range of
online accusations, including a March claim by hackers that the
company itself stole the Bitcoins it originally claimed missing in
fraudulent withdrawals. (Source: TT commentary from time.com, Mar 21,
2014)

http://ti.me/1eADshw

=> Car sales expected to drop 16% after consumption tax rise

Recognizing that the current 15% year-on-year surge (in February) in
auto sales is being stimulated by the looming consumption tax
increase, the Japan Automobile Manufacturers Association says that
they are expecting sales to plummet 16% in FY2014, starting April 1st.
Thus the number of cars expected to be shipped this coming year is
likely to drop to 4.75m units. Even so, Japan is still the world's
third-largest auto market. (Source: TT commentary from
japantimes.co.jp, Mar 22, 2014)

http://bit.ly/1oO9t8U

=> FSA tells banks to ease up on SMEs

After the Kamei Moratorium on bank loan repayments by small companies
ended in 2013, we predicted a rash of bankruptcies due to the fact
that more than 300,000 companies were struggling just to pay interest
on their loans, let alone the loans themselves. However, we were
proven wrong by virtue of the fact that the FSA issued banks with
instructions of a defacto continuation of the moratorium. That will
change come April, where the FSA is now saying that the banks should
actively help those companies that can be revived, while on the other
hand "encourage" those that can't to shut down. What's interesting is
the wording in the Nikkei where it says that the company founders will
"...not be held accountable too severely." Sounds to us like the FSA
is going to let a bunch of companies go under without dragging the
owners down as well. If so, this will be a very significant move
towards normalizing bankruptcy in Japan. Right now going bankrupt as a
company means the owner has to go under with it and lose everything in
the process. (Source: TT commentary from asia.nikkei.com, Mar 19,
2014)

http://bit.ly/1jhVdXe

=> Animator DLE gets ready for March IPO

If you like Japanese anime, you may be familiar with the Secret
Society Eagle Talon. The company behind this hit series, DLE, is about
to list on the Mothers market of the Tokyo Stock Exchange. The company
is listing with sales of JPY1.6bn and JPY328m in Net Profit -- proving
that media companies have a lower hurdle to hit to list on Mothers
than do most other industry sectors. DLE is saying that they expect to
use the listing cash to make a push overseas, particularly in Asia.
(Source: TT commentary from asia.nikkei.com, Mar 18, 2014)

http://bit.ly/NFBOk9

NOTE: Broken links
Some online news sources remove their articles after just a few days
of posting them, thus breaking our links -- we apologize for the
inconvenience.

***------------------------****-------------------------***

--------- Japan Travel 2014 Intern Program Begins ---------

Following on from our inaugural photojournalism internship in 2013,
JapanTravel KK is pleased to announce the launch of its 2014 program.
We are looking for foreign students and recent graduates of
photojournalism and videography courses to live and work in Japan for
6-8 weeks this year.
* If you are a photojournalist you will be photographing an assigned
area of Japan and writing short stories about your experiences. Our
expectation is 1-2 articles a day, and you can be a native in either
English, French, Indonesian, Thai, Malaysian, Korean, or Chinese.
* If you are a video journalist, then you will also be assigned a
region to cover and will be expected to produce an edited 2-3 minute
clip every two days.

For more information, go to: http://en.japantravel.com/interning.
---------------------------------------------------------------

+++ WEB CONTENT/TECH VACANCIES

=> Are you in web content, sales, or engineering? If so, this section
is for you.

** HIGHLIGHTED POSITION

- Web marketing/technology Sales Manager-cum-Country Manager position

If you are working in a web marketing or web technology company, and
have a strong sales record and excellent Japanese and English (this is
compulsory), we have a client looking for a person to manage their
Japan start-up operation and who on showing reasonable performance
will become the country manager of a team of professionals here.
Unlike most start-ups entering Japan, this one already has clients and
is winning recognition in the market for their technology. The
position requires a strong knowledge of who the main market players
are, and thus a strong personal network, and if not a native Japanese
speaker, then you will need to demonstrate a strong track record of
previous successful appointments. This is not a Country Manager role
right out of the box, and so a flexible, sales-oriented personality is
essential. Salary is JPY10m base and JPY3-4m on achievement of very
reasonable sales targets. Please send your resume to
info@japaninc.com.

** OTHER MEDIA POSITIONS VACANT

- Bilingual account manager for major tourism portal
(www.japantourist.jp), JPY3M - JPY5M
- Bilingual sales trainee for web media properties, JPY2.5M-JPY3M +
10% commission
- English-only experienced PHP Zend software developer, 5 years
experience, JPY3.5M - JPY5M

Interested individuals may e-mail resumes to: jobs@metroworks.co.jp.

-----------------------------------------------------------

***------------------------****-------------------------***

+++ UPCOMING EVENTS/ANNOUNCEMENTS

------------------ ICA Event - April 17th -----------------

Speaker: James Santagata, Founder and Managing Director of Career
OverDrive! and SiliconEdge.
Title: "Sick & Tired of Resume-Collecting Recruiters? Fire Your
Recruiter & Take Control"

Details: Complete event details at http://www.icajapan.jp/

Date: Thursday, April 17th, 2014
Time: 6:30 Doors open, Buffet Dinner included and cash bar
Cost: 4,000 yen (members), 6,000 yen (non-members) Open to all. No
sign ups at the door!!!!!!!
RSVP: By 4pm on Friday 11th April 2014. Venue is The Foreign
Correspondents' Club of Japan.

http://www.fccj.or.jp/about/access.html
-----------------------------------------------------------

-------- Business Start-up Seminar by Terrie Lloyd --------

Have you ever thought about setting up your own company in Japan? Or,
are you already running one and wondering how to move up to the next
level?

Local Australian/Kiwi entrepreneur Terrie Lloyd, is running a seminar
for people who want to form their own companies, on May 10th, 2014.
Terrie has established 17 companies in Japan over the last 30 years,
and has a lot of experience to share about how to structure and run
your business when first starting up.

Details: http://www.japaninc.com/entrepreneur_handbook_seminar
***********************************************************

----- Tell Your Friends Abroad About TPO's World Tour -----

More than 100 members of the Tokyo Philharmonic Orchestra will be in
Singapore soon, the next stop on their 100th anniversary world tour.
Wish them well by liking and sharing the TPO page on Facebook!
https://www.facebook.com/TokyoPhilharmonic

Tell friends in Madrid, Paris, London, Singapore, and Bangkok that
tickets are still available!

https://www.facebook.com/TokyoPhilharmonic
-----------------------------------------------------------

***------------------------****-------------------------***

+++ CORRECTIONS/FEEDBACK

=> No corrections or feedback this week.

***------------------------****-------------------------***

+++ TRAVEL DESTINATIONS PICKS

=> Koyasan Temple Lodging, Wakayama
Shojoshin-in Temple

Everyone has their own goals and agenda for a vacation in Japan. But
if you really want to experience something different from what you've
ever experienced culturally or visually, I would find some time to
visit Koyasan and stay in a Buddhist Temple. In 2004 Mt. Koya was
designated as a World Heritage Site. Reading other's comments on-line
about their experience at Koyasan, for many it was the highlight of
their trip to Japan. I took some relatives there on their first full
day in Japan. Coming from Milwaukee Wisconsin one day, and then
Koyasan the next is quite a cultural change.

http://bit.ly/OKctqq

=> Japanese Tea Tour in Wazuka, Kyoto
Immersing yourself into Japanese tea culture

Wazuka, a small farming town with the population of less than 5,000
people, lies in the south of Kyoto Prefecture. Surrounded by mountains
and crossed by a river, it is not only a place of picturesque scenery,
but is also renowned as a premium region for producing Japanese green
tea. The area was selected for tea production in the Kamakura period
(1192 -1333) and has enjoyed an 800-year history as one of the main
producers of Ujicha, the best and most respected tea in Japan.
Nowadays, the "tea from Uji" is famous, but, in fact, more than half
of this type of tea is grown in Wazuka.

Akihiro Kita, or Akky-san, as called by friends, the president and
lead farmer of Obubu Tea, came to Wazuka for a part-time job as a
farmhand during his college break nearly 20 years ago. He was so
astonished with the taste of tea on the tea farm that he decided to
leave college and devote his time to mastering the art of tea farming.
A few years later Akky-san met a like minded tea enthusiast and
current vice president Matsu-san, who himself had thoughts about
leaving construction industry at that time. Soon the two got an idea
to start Obubu Tea and in 2004 a unique agricultural social venture
was born.

http://bit.ly/1f5OZlH

***------------------------****-------------------------***

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END

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+++ ABOUT US

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Written by: Terrie Lloyd (terrie.lloyd@japaninc.com)

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