Nikkei Report: Kadokawa and Dwango Merge to Become an International Content Competitor

On May 14th, Kadokawa Publishing Company and Dwango, parent company of Japan’s most popular video streaming site “Niconico”, announced that they would merge and become “Kadokawa – Dwango” in October 2014 – becoming one of Japan’s first streaming media content companies aiming to compete in the global online content market.

For the past few years, Japanese broadcasting companies and record labels have failed to compete with the online business platforms of companies such as Apple, Google, and Amazon. Tsuguhiko Kadokawa, CEO of Kadokawa Publishing Company, stated that the new company would create copyright policies that will rival those of Google. Google who owns YouTube, has faced increased criticism from users for their automated “ContentID” notices which are automatically generated notices citing copyright infringement resulting in the removal of content.

Kaodkawa – Dwango believes that with the current system, the online content industry will lose its sustainability. The company aims to create a secure content distribution platform that would appeal to content providers that are dissatisfied with the heavy losses that result from the current distribution method. This includes individuals who must invest significant time in defending legitimate uses of copyrighted material, or false positives from automatic takedown notices.

Kadokawa is one of the largest publishing companies in Japan but has rose to recent prominence through acquisitions that expanded its services to included games and movies. The company hopes to leverage Dwango’s established content and media distribution technologies to create new trends in online content.

Last Word:
The merger has been headline news in many Japanese news sources, eliciting a largely positive reaction from the business community. The newly formed company represents a broader trend of expansion by Japanese IT services which includes NTT’s cloud service endeavors, Softbank’s expansion into the U.S. mobile market, and Sony’s restructuring. Kadokawa – Dwango represents a surprising new effort to build upon Japan’s existing infrastructure expertise by highlighting differences in content policy as value for consumers rather than hardware or software features alone.

Source: Nikkei Shimbun (Japanese)
Image Source: ITPro