Continues licensing relationship with Nippon Television Network Corporation
Hulu started Japan operations on August 31, 2011, and less than three years later, CEO Mike Hopkins announced in his blog the sale of Japan operations to Nippon Television Network Corporation (日本テレビ放送網株式会社).
During this time, Hulu Japan had grown to 50 content partnerships, offering 13,000 TV drama, movie and anime titles: about 1000 movies and 12,000 TV episodes.
In March 2015 Hulu Japan, now under Nippon TV ownership, achieved 1 million subscriptions.
Hulu-CEO, Mike Hopkins, did not announce why Hulu sold Japan operations to Nippon TV. We assume that Hulu, owned by traditional large media corporations (NBC, Fox and Disney) saw the need to partner with a large established Japanese media company to achieve wide penetration and long term growth. Maybe Hulu had expected much more rapid growth in subscription numbers in Japan?
On April 12, 2012, Hulu Japan reduced the monthly subscription charge to YEN 980.
On February 27th, 2014 Hulu-CEO, Mike Hopkins, announced the sale of Hulu Japan to Nippon Television Network Corporation (not the Nippon Television Holding company).
Thus the company operating Hulu services in Japan is HJ Holdings, LLC (HJホールディングス合同会社), and is owned 100% by Nippon Television Network Corporation (日本テレビ放送網株式会社), a subsidiary of Nippon Television Holdings, Inc. (日本テレビホールディングス株式会社).
On March 23, 2015, Hulu Japan achieved 1 million subscriptions.
Hulu – “Anywhere, Anytime”
Hulu was founded in 2007 to offer streaming video on demand (VOD) over the internet, and is a joint venture between:
NBCUniversal Television Group (Comcast) (32%)
Fox Broadcasting Company (21st Century Fox) (36%)
Disney–ABC Television Group (The Walt Disney Company) (32%)
The name Hulu comes from two Mandarin Chinese words, húlú (葫芦/葫蘆), “calabash; bottle gourd”, and hùlù (互录/互錄), “interactive recording” (source: Wikipedia.org)
Japan’s media market
Hulu is not the only company offering Video-on-Demand (VOD) services, and is facing considerable competition.
Burberry Japan – the start of a relationship: Sanyo Shokai started importing Burberry coats to Japan in 1965, and in 1970 partnered with trading company Mitsui to design, make and sell apparel, coats, suits and other fashion items under the Burberry brand under license from the London based Burberry company. According to trade sources, Mitsui licensed the Burberry brand from Burberry, and Mitsui then sub-licensed to Sanyo Shokai.
Sanyo Shokai independently developed the Burberry brand business in Japan, creating many products under the Burberry brand in Japan which did not exist anywhere else in the world. In particular Sanyo Shokai created the Burberry Blue Label brand for young ladies and the Burberry Black Label for young men. These products were developed by Sanyo Shokai specially for the needs of Japanese customers, and marketed and sold under the Burberry brand locally in Japan, but were not officially exported to other countries. Of course, tourists coming to Japan could buy these Burberry-Japan products and take them home, and still today there is a secondary online market for these Japan-only Burberry products, including Blue Label and Black Label.
A brand-disconnect was created between Burberry-Japan and the rest of the world of Burberry, which by Burberry, and fashion world insiders was considered as the “Burberry Japan problem”. However, the “Japan problem” yielded excellent sales and profits for Sanyo Shokai, and excellent license/royalty fee payments from Sanyo Shokai to Burberry, which made it hard for Burberry to consider other options in Japan.
Starting with the appointment of Rose Marie Bravo in 1997, who hired creative director Roberto Menichetti, Burberry changed the brand strategy, aiming to transform Burberry from a premium apparel brand to a luxury brand. Burberry’s Japan business became a problem in this transformation, since Burberry’s Japan business was not Burberry’s business at all, but Sanyo Shokai’s, and therefore was independently run by Sanyo Shokai with its own Japan-only products and sub-brands Burberry Blue Label and Burberry Black Label.
Burberry decided to carry out the transformation from the indirect license model, to the direct business model in Japan. Burberry’s license to Sanyo Shokai was meant to expire in 2020, but Burberry brought the termination of the license contract forward to June 2015.
Burberry’s challenge is now to build a different luxury Burberry business in Japan under the same brand name, while Sanyo Shokai’s challenge is to manage the pivot from the Burberry brand to the Mackintosh London brand as smoothly as possible: to move as many customers directly over from the Burberry brand to the Mackintosh brand and other brands used by Sanyo Shokai. Sanyo Shokai has the advantage that Sanyo Shokai keep almost all the former Burberry store locations and refurbishes them over summer 2015 into Macintosh and other Sanyo Shokai stores.
Burberry had to give up the 300-500 Burberry branded stores in Japan which it had no direct control over, most of which Sanyo Shokai will now transform into Mackintosh London and Mackintosh Philosophy stores. In addition, Sanyo Shokai will develop two sub-brands following on from Burberry Blue Label and Burberry Black Label, now under the “Crestbridge” brand:
With the expiry of the license agreement with Sanyo Shokai and Mitsui Trading company, Burberry operates the Burberry business in Japan direct. There is an approx. 1 year transition period where Sanyo Shokai seems to be permitted to sell remaining stocks which are still left from the validity period of the license.
Burberry is now building business in Japan both via its new flagship store in Tokyo Omotesando, other direct stores and indirect stores, and Burberry is also building direct online business via the internet and mobile phones/smartphones.
Burberry Japan luxury non-apparel joint venture
While the apparel license was terminated in June 2015, on 18 November 2008, Burberry, Sanyo Shokai and Mitsui entered into a luxury non-apparel joint venture for Japan operational for the Spring/Summer season 2010.
Burberry was founded by Thomas Burberry, designer of the famous Burberry trench coat in 1856 in London.
Burberry Blue Label was a sub-brand developed by Sanyo Shokai for women. Currently Burberry Blue Label products are traded online second-hand in Japan, and Sanyo Shokai is continuing the Blue Label Brand without the “Burberry” brand.
Burberry Black Label was a sub-brand developed by Sanyo Shokai for men. Currently Burberry Black Label products are traded online second-hand in Japan, and Sanyo Shokai is continuing the Black Label Brand without the “Burberry” brand.
The Mackintosh is a waterproof raincoat made of rubberized fabric invented by Charles Macintosh and first sold in 1824 (note that the inventor is named Macintosh, while his invention is today known as Mackintosh, with an added “k”).
The company was founded in Glasgow, Scotland around 1846. The company went through ups and downs, management buy-outs, and in the 1970s was mainly producing uniforms for British Rail and the London Metropolitan Police. British Rail and the Police procurement were looking for cheaper options, so Mackintosh had to reinvent its business leading to the reinvention of Mackintosh as a fashion brand.
In 2007 the Osaka firm Yagi Tsusho (八木通商株式会社) acquired the company and the brand Mackintosh, and created a new flagship store in Mount Street in London’s Mayfair.
Sanyo Shokai reached a licensing and business development partnership with Yaki Tusho regarding the Mackintosh London brand.
Sanyo Shokai’s strategy is to replace the lost Burberry license by the Mackintosh London brand. Sanyo Shokai opened the first Mackintosh London store in Yokohama in July 2015, and plans to open 263 Mackintosh London stores in Japan.
Sanyo Shokai plans a price range of YEN 120,000 – 160,000 for coats and suits. Most Mackintosh London stores will be Sanyo Shokai stores, which were operating under the Burberry brand previously, continuing business at the same locations with the same staff, converting from the Burberry to the Mackintosh brand identity, including the luxury floors in the main Japanese department stores. Sanyo Shokai plans to have converted approx. 170 stores in summer 2015.