DoCoMo's I-mode might begin charging content providers

Sunday May 27 2001

NTT DoCoMo's I-mode, the wildly successful Japanese wireless content service, might begin charging content providers that wish to be carried on its service, a senior DoCoMo official revealed on Monday.


Kiyoyuki Tsujimura, managing director of NTT DoCoMo's global business department, acknowledged in a speech that DoCoMo is considering charging I-mode content providers, which it has not done during the past several years while it built a customer base of some 23 million users.

Tsujimura and many analysts agree that allowing content providers to put their material – from horoscopes to news updates to daily online soap operas – on I-mode for free has been a critical factor in the service's success.

The only charge that a company providing content to I-mode absorbs is for billing – typically 9 percent of the transaction. Thus, if a content company such as Bloomberg charges users 100 yen per month, Bloomberg will receive 91 yen.

Compared with widespread practice in the U.S. and Europe, where content companies have sometimes gone bankrupt paying network providers to carry their material, I-mode's policy has been quite generous. As a result, traditional and startup content firms have been eager to work with DoCoMo.

According to Tsujimura, about 1,600 sites now provide some material exclusively through I-mode, and at least 30 percent of those sites charge customers for access. Tsujimura also says that half of I-mode's 23 million users pay for at least one content site, making I-mode's paying customer base as large as some of the world's biggest ISPs.

Tsujimura acknowledged that his company is "still nervous, still cautious about our relationship with content providers," and that forcing them to pay "might hurt our relationship."

The possibility of charging content companies also has implications for I-mode's attempts to bring its services into the U.S. and Europe.

Still, he insisted that I-mode has now grown so powerful that it can afford to assert itself.

"You should stay quiet regarding content providers until you have 20 million customers," he said in response to a question from TheStandard.com. "It's a negotiation power game."

Tsujimura made his comments at a conference on the wireless Internet hosted by the Economist

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See i-mode main page


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