Japan's largest trading house Mitsubishi Corp has joined forces with four corporate allies to enter the communications satellite (CS) broadcasting market, currently dominated by the Sky PerfecTV platform.

According to a basic agreement signed on September 28, Mitsubishi, Nippon Television Network, Japan Satellite Broadcasting, NTT DoCoMo and NTT Communications have launched a planning company charged with developing various digital broadcasting services, using the next-generation communications satellite set to orbit in the latter half of 2001.

The two NTT companies will take a joint 25% stake in the new venture with the other three partners each contributing a 25% share.

Prior to the start of broadcasts, the five partners plan to recruit other companies, including electronic machinery makers and broadcasters, to join the consortium. They face stiff competition in the digital broadcasting arena from Sky PerfecTV which has passed the 2.2 million subscriber mark, having vanquished Hughes Electronics-backed rival DirecTV in a three year-long battle for control of the Japanese CS market.

Mitsubishi is a minor shareholder in DirecTV, which will end broadcasts in December. Backed by such corporate powerhouses as Sony, Fuji TV, Itochu, Softbank and News Corp, Sky PerfecTV plans to go public in October, with the aim of raising at least $1bn.

Several other corporate alliances have formed to broadcast on the new CS bird:

  • Matsushita Electric, Sony and Toshiba plan to start a CS broadcasting company, using common standards for receivers and other equipment.
  • Leading TV network Tokyo Broadcasting System (TBS) has linked with Recruit (employment-related publications), Mitsui & Co (trading house) and Dentsu (advertising) to launch a CS planning company. TBS will be the leading shareholder, although percentages have not yet been decided.
  • Sumitomo Corp, yet another Big Five trading house, has linked with Nihon Keizai Shimbun (the "Nikkei" business newspaper publisher), Television Tokyo Channel 12 (the TV Tokyo network) and Sony. Sumitomo, TV Tokyo and the Nikkei are each expected to hold 42.5% of the new company's shares, while Sony may settle for a 15% stake.
  • But in the rush to enter the digital CS market, new players are running in the shadow of, not only now moribund DirecTV, but the pile of debt owed by Sky PerfecTV, a stark reminder that, even with a monopoly, turning a profit in the Japanese satellite TV market is still a hit-and-miss affair.