Rebirth Tokyo 1986

Chapter 458 Music Phones and Camera Phones

After discussing toys and games, Masato Takeshita then turned his attention to Seikai Entertainment's situation in the music industry.

"How are the plans to form boy and girl groups in Europe and America, and to develop youth music, progressing?"

"We are still in the preparation stage, and we expect to launch our groups and singers in Europe and America in the second half of this year."

Kalinsky naturally dared not neglect the instructions of his own chairman.

Early on, he instructed Matsuura Masato, the president of Seikai Music, to establish branch offices in Europe and America, and to invest in artists such as NSYNC and Britney Spears, in accordance with the young people's opinions.

Of course, the most important thing was poaching Max Martin, a producer who is the biggest contributor to the rise of teen music.

"Great, we'll allocate more budget for advertising to make it a resounding success."

"Yes, please rest assured."

Kalinsky is very confident in promoting his idol bands and singers.

In his view, idol groups and idol singers, although they mainly promote people, are not substantially different from the packaging and promotion of games and toys.

Indeed, for idol singers to achieve great success, the most important thing is advertising and promotion.

"OK, great. Don't forget to send me a copy of the single or album when it goes on sale."

"Yes, President!"

After discussing overseas groups, Masato Takeshita then talked about the development of similar music groups in China.

"You must have felt the power of boy groups during your trip to South Korea, right?"

"Yes, H.O.T., a South Korean band, has become a national group in South Korea."

When it comes to the hugely popular South Korean boy group H.O.T., Kalinsky has a lot of thoughts on it.

He also wanted his own boy band to be the object of countless teenage boys and girls' fantasies.

Unfortunately, this ecological position in Japan has now been occupied by Johnny's boy bands.

Xinghai Music intervened several times, but the results were not very good.

“Yes, very good. Then let’s increase the company’s investment in this area.”

"I hope that after the millennium, Xinghai Music's boy and girl groups can also rise to prominence."

Although Johnny's boy bands are at their peak in Japan, Seikai Music is not without its opportunities.

The development path taken by Xinghai Music is different from that of Johnny's boy groups.

Johnny's boy groups focus on growth. Members of these groups often start out as backup dancers for their seniors, giving the audience a sense of nurturing and development.

The group that Xinghai Music is preparing to launch needs to be a mature group from the moment they meet the audience.

Instead of playing the role of a character development master, they will pursue the path of a trainee.

At the same time, their styles are different. Johnny's takes a family-oriented approach, while Star Sea Music takes a stylish approach, requiring its members to be handsome and cool to attract the attention of teenage boys and girls.

Of course, compared to the boy groups that are heavily influenced by Johnny's, Star Sea Music is currently placing more emphasis on cultivating girl groups.

There is currently no company in Japan that monopolizes girl groups, which is perfect for the development and expansion of Seikai Music.

The only problem is that girl groups are far less profitable than boy groups.

Many top-tier South Korean girl groups in later generations only achieved revenue at the level of second-tier boy groups.

Unfortunately, most of the fans of boy groups are women, while most of the fans of girl groups are men. And female fans are far more enthusiastic than male fans and are more willing to spend money on their idols.

"All I can say is that we will continue to do it."

"Well, okay, let's just follow our plan. There shouldn't be any problem if we follow the training methods of Korean boy groups."

Takeshita Masato blinked, but said nothing about Kalinsky's conservative attitude.

The success of a group does indeed require a bit of luck.

But that's alright, Xinghai Music is a large and successful company now. As long as we keep going, we'll reap the rewards sooner or later.

We've talked about games, music, and toys, so it's only natural that we should also discuss Japanese animation, which would later have a global impact.

However, Xinghai Entertainment is already doing very well in this regard, so the young man didn't say much, only adding a small point.

"3D animation has begun to rise, and Xinghai Animation needs to increase its investment in training related teams. We don't aim to catch up with the United States, but we also can't afford to fall too far behind."

"Yes, I will arrange for personnel to strengthen this aspect of the plan when I get back tomorrow."

Kalinsky is also very optimistic about 3D animation.

Unfortunately, Xinghai Animation's headquarters are in Japan, making it difficult for them to compete with the United States in the field of 3D animated films.

It's not that Japan lacks technological capabilities, but rather that the market doesn't allow it.

The highest-grossing Japanese film is only around one or two hundred million US dollars. The US film, on the other hand, earns more than three times that amount.

This means that for the same animated film, the United States can afford to produce three times the cost as Japan.

Besides, the United States has Hollywood, and its movies can be viewed all over the world.

Japanese films, at most, have some influence in East Asia and Southeast Asia.

This results in the maximum acceptable cost for both being far greater than the gap between the film markets of the United States and Japan.

The US can invest $100 million in a film, while Japan can only afford to invest 20 to 30 million at most.

Any more than that, and it would be a losing proposition for fans who just want to gain publicity.

For example, Studio Ghibli's previous film, *The Silent Princess Kaguya*, cost 50 billion yen. The investors never intended to recoup their costs, nor was it possible for them to do so.

However, the fact that Japan has had a difficult time in developing 3D animated films does not mean that other paths are not viable.

Xinghai Animation could absolutely pursue the path of 3D television animation.

In its previous life, China had already made great progress in this area.

If it weren't for rampant piracy and the immaturity of markets surrounding China...

Given China's expertise in 3D television animation, animation production companies have already made a fortune.

After discussing Xinghai Entertainment, Masato Takeshita turned his gaze to Kenji Ono.

"Ono-san, do you think it's appropriate for us to set up a telecommunications company now and lay fiber optic broadband and mobile base stations in Japan?"

"I don't think this is very appropriate. A lot of the base station equipment that the company currently produces is sold to NTT."

"Furthermore, Xinghai Technology's mobile phone business is heavily reliant on NTT."

Does Kenji Ono hope that Seikai Communications will expand into the telecommunications sector?

Naturally, I very much hope so.

After all, Starsea Communications doesn't get many base station orders in Japan. The only large-scale market it has is the PHS (Personal Handyphone System) base station market, which is difficult for other companies to enter.

But he didn't want his own company's development to offend his sister company.

It's important to understand that the Japanese telecommunications market is practically synonymous with NTT. This means that any mobile phone that wants to be sold in Japan cannot do without the support of NTT.

It is estimated that as soon as Xinghai Communications takes action, Xinghai Technology's mobile phones will be suppressed by NTT, thus losing its domestic market.

"Yes, the group has many business ties with NTT, so it's best to avoid the telecommunications sector."

Scully, the president of Xinghai Technology, also quickly joined in the persuasion. He didn't want to see his company's mobile phones, produced in their home base of Japan, become just another piece of statistical data.

"This is something I didn't consider properly."

"Given our company's situation, it is indeed not suitable to develop the telecommunications industry in the local market right now."

Since entering the telecommunications market failed, Masato Takeshita became too lazy to continue discussing this aspect of the business.

He quickly changed the subject, saying, "Let's all discuss which company we should acquire next, starting with Scarisan."

"As instructed by the chairman, I think it's time to launch the acquisition of Shin-Etsu Chemical. The company's controlling shareholder has suffered heavy losses and needs a large amount of cash to fill the gaps in its other businesses."

Since Masato Takeshita formulated a full-industry chain development plan for the various subsidiaries of the Xinghai Group, Scully has been thinking about this matter.

Right now, he feels it is the best time for Xinghai Technology to launch an attack on the upstream semiconductor materials field.

"The financial crisis hasn't had a significant impact on the semiconductor materials sector, has it? Are there any opportunities?"

The financial crisis did indeed severely impact Japanese semiconductor companies, with many even considering abandoning the semiconductor memory chip market.

However, Japan's failure in the semiconductor chip field has not affected the booming global chip market.

Putting aside everything else, the phenomenal global sales of computers alone are enough to demonstrate the world's current strong demand for chips.

The reason why chip sales have surged along with products such as computers and mobile phones, but related companies have suffered huge losses, is entirely due to the fierce competition among major semiconductor companies.

There are too many chip companies in the market, especially memory chip companies. The competition among them makes it difficult to sell at a good price, which affects the profits of semiconductor memory chip companies.

But just because chip companies are struggling doesn't mean that upstream semiconductor material companies are in the same boat.

There are far fewer semiconductor material companies than semiconductor chip companies of the same type.

Some materials are even made by only one or two companies.

With greater industry concentration, profits are naturally better guaranteed.

Therefore, regardless of whether the downstream chip market makes a profit or not, the materials company will not lose money.

Shin-Etsu Chemical, a semiconductor materials company that ranks among the top three in the world, is certainly not short of money right now.

"I'm just giving it a try. What if the shareholders behind the scenes can't hold on and it succeeds?"

Scully wasn't entirely confident either; he just wanted to test the waters.

And it's not just Shin-Etsu Chemical; he'll try out all the other semiconductor material companies, since there's no loss if he fails.

“Okay, that’s fine. We can also try other semiconductor material companies.”

"Yes, understand."

Having understood Scully's mindset, Masato Takeshita decisively chose to agree.

That makes perfect sense. Businesses that don't suffer much loss if they fail but make a fortune if they succeed are always worth trying.

The chances of success for semiconductor material companies are very low, and Masato Takeshita didn't want to say too much.

He quickly followed up with, "Scalizan, what do you think about our current move into the semiconductor memory chip field?"

"Memory chip?"

Scully thought about it carefully for a moment, then looked up and responded seriously.

"President, I think this is a very good opportunity."

"The current memory chip market is not profitable, which is entirely due to the intense competition."

"It is estimated that after a period of time, when some companies can no longer withstand such fierce competition and choose to withdraw and admit defeat, the price of memory chips will return to normal."

Sculley is optimistic about the long-term market for memory chips because their prices are currently very unreasonable.

The only question is how long this competition will take to determine a winner, and whether Xinghai Technology will suffer a great loss if it enters too early.

However, considering the damage the Asian financial crisis caused to Japanese and South Korean memory chip companies, Sculley believes that some companies will soon succumb to the pressure.

Entering now will indeed result in losses for some time, but it is also the best time to seize market share.

"Alright, then next, let Tarui help us probe the various companies."

"Let's see which company wants to exit the memory chip business, and then we'll take over."

Takeshita Masato nodded, then turned to look at his senior, Tarui Yasuo.

It would be better for this kind of thing to be done by the father of Japanese semiconductors, so that companies like Fujitsu are less likely to refuse.

When called upon by the chairman, Yasuo Tarui waved his hand.

"President, I don't think the chances of success are very high."

"Currently, companies in the memory chip industry are indeed suffering heavy losses, but everyone believes that as long as they can get through this cycle, memory chips will soon be able to return to profitability."

The semiconductor industry is highly cyclical, especially the memory chip sector. Therefore, even during periods of downturn in the memory chip market, most semiconductor companies choose to persevere.

A prime example is South Korea's Samsung, which built factories on a massive scale during its downturn, then reaped huge profits during its boom. It then used these profits to weather the next downturn.

"Let's give it a try, just in case some companies choose to withdraw."

In the previous wave of competition in the semiconductor memory chip field, the first to choose to withdraw were American companies.

The latter two of the three founding companies that pioneered the semiconductor memory chip market, Texas Instruments and IBM, will announce their withdrawal this year and next, respectively.

As for Japan, they held on until the Nasdaq bubble burst, at which point they could no longer sustain themselves and chose to withdraw.

Ultimately, South Korean companies emerged victorious, virtually monopolizing the memory chip market.

When a company is short of money, it just makes up some excuse to announce a price increase.

The whole world, especially China, has suffered greatly from it.

Masato Takeshita was also unsure whether the Japanese memory chip giant had long harbored the idea of ​​withdrawing its investment.

Therefore, he wanted to try it out in advance and get the group in control of this key semiconductor link as soon as possible.

"That's it, I understand."

Since absolute success wasn't the goal, Yasuo Tarui immediately breathed a sigh of relief.

If you take your time to find a target, you should be able to find a suitable one, but it may take a long time.

After discussing upstream materials and midstream chip manufacturing, the young man turned his attention to the downstream consumer electronics market.

"Scalizan, what do you think about integrating MP3 functionality into a mobile phone and producing a phone that can play music?"

"Music phone? I think that's a really good idea, and I reckon it could sell like hotcakes."

Scully's eyes lit up at the thought of listening to music on his phone.

He felt that such a phone would definitely become popular very quickly.

Because people can use one mobile phone to make calls and listen to music, without having to buy a separate Sony Walkman.

"Hmm, what if we produced a phone that could take pictures, or a phone that combined photography and music?"

"The camera's resolution will probably be very low, right?"

Scully was not optimistic about the phone's camera function, feeling it was completely unnecessary.

(End of this chapter)