In Japan, cable TV and satellite are still small markets. Japanese audiences watch the big five networks en masse, rented more than 25 million DVDs last year (the preferred way to watch US TV shows such as 24) and go to the cinema - in that order. The VoD market, such as it is, is dominated by non-feature-film content such as music videos, trailers and promos, sports and adult content.

Paying to view movies on computer has not caught on in the way it has in other territories. The Japan branch of closed in December, with online users more interested in free and interactive video, such as YouTube and other services.

The two main players in free broadband internet VoD services (no additional hardware) continue to be conglomerate-backed Yahoo! Doga and Gaga Communications' GyaO. They generate income through banner ads and tie-up campaigns while promoting their respective ISP products. Movies are licensed under 'internet free VoD' rights.

GyaO boasts 17.86 million subscribers, though less than 50% are regular users. On GyaO, Korean TV dramas trump features, but older releases such as Clint Eastwood's True Crime and French thriller The Crimson Rivers have proven popular. GyaO also offers pay content through its ShowTime portal, with more recent titles such as Gangs Of New York and TV series 24 and Lost. Yahoo! Doga offers mainly older Japanese films and short clips, but recently added French hit Amelie, viewable in 15-minute chapters. This month Sony Pictures announced it would licence titles to Yahoo! Doga's Online Theatre pay portal, including Men In Black II and Once Upon A Time In Mexico. A back catalogue of 100 titles is expected to become available this year as part of an all-you-can-watch monthly plan.

Both GyaO's and Yahoo!'s portals leave Apple users out in the cold due to DRM protocols.

There are also Iptv services that employ set-top boxes to deliver VoD direct to TVs. One of the few successful operators is On Demand TV. A subsidiary of NTT Communications, On Demand delivers contents through NTT phone lines. It has licensing deals with majors such as Warner Bros, and has a library of 8,000 titles, including 1,000 in HD quality. Recent titles include Grindhouse and Ratatouille.

Japan's largest video chain, Tsutaya, is set to launch its Iptv VoD service, acTVila, in March, with movies slated to become available this summer.

Novel approach

In Japan, keitai shosetsu - novels published via mobile phone - have exploded in popularity, with many going on to be released in book form and later adapted into movies such as Closed Note and Sky Of Love, the latter grossing $36.6m in 2007.

Last year saw feature films become available on mobile-phones through services such as Kadokawa's iMovie Gate. So now movies based on mobile phone novels are streaming on the devices that spawned them.

Established by Shochiku and Mitsui & Co in mid-2006 at a cost of $4.5m, PC and mobile content service Dogado offered simultaneous preview screenings of new feature Clearness via mobile phones and broadband internet prior to its theatrical release - a first in the industry.The drama began life as a keitai shosetsu on the Magic i-Land website. With a predominantly young female demographic, 500 winners selected by lottery could watch Clearness via mobile and a further 300 through Yahoo! Doga.