Hakuhodo, Toyota Form Digital Content JV

Japanese advertising agency Hakuhodo Inc. and
Toyota group trading company Toyota Tsusho Corp. have set up a joint venture to sell and distribute digital entertainment content via the Internet.

Hakuhodo, Japan’s second-largest advertising firm, owns a 66 percent
controlling stake in the new company, Indivisio Inc.

Nagoya-based Toyota Tsusho, an industrial products broker and global
exporter of Toyota vehicles, holds the remaining 34 percent.

Indivisio, which opened for business on July 1 with a staff of eight,
has taken over management of the “Franken entertainment download”
Web site that Hakuhodo and Toyota Tsusho had been operating jointly on a
test basis since late last year.

“Since Franken was first opened to the public in November 1998, the
market response has been tremendous,” said Hiroshi Kobata, president and
CEO of e-Parcel LLC.

Kobata, who is an Indivisio board member, added that, “With Indivisio’s
new-found independence, flexibility, and speed, we can better serve this
market.”

U.S.-based e-Parcel, originally funded in 1996 as a division of Mitsubishi
but spun off in April 1998, specializes in customized software solutions
for mission critical deployment of data over the Internet.

Toyota Tsusho, which in addition to its other business endeavors also
provides information technology services in Japan, is an e-Parcel
investor and the main distributor of e-Parcel software products in
Japan.

e-Parcel supplies the Internet data delivery technology, know-how, and
expertise that form the core of Indivisio’s operations.

“e-Parcel’s technology and leadership has spearheaded our business
success into the Internet market,” said Yojiro Shirakawa, CEO of
Indivisio. Shirakawa had previously led the Franken Web site as manager
of Hakuhodo’s Multi-Media Advertising Division.

Franken currently carries about 300 items, ranging from digitized comics
from publishers Kodansha and Shueisha to animations, illustrations, and
music.

Indivisio said it will eventually offer more than 1,000 items through
Franken, which is already one of Japan’s most popular digital
entertainment sites, reportedly logging a daily high of nearly 600,000
page views.

To purchase an item from Franken, customers must first download and
install e-Parcel’s electronic delivery and copyright protection software
from the site.

e-Parcel’s data delivery, e-commerce, and e-logistics service monitors
Franken transactions in real-time, enabling Indivisio to determine, for
example, the date and time each recipient was authenticated, when
downloading of data began and ended, and even whether the data was
opened or moved after delivery.

“By outsourcing the critical areas of content management and
distribution, billing, and payment collection [to e-Parcel], we can be
assured that the technology providing all of these transactions will be
kept up to date,” said Indivisio’s Shirakawa.

In addition managing Franken, Indivisio plans to distribute electronic
catalogs, cooperate with Hakuhodo on the planning, creation, and
placement of Internet advertising, and offer Web site management
services.

“Through Indivisio, we will expand the e-commerce and e-publishing
business to many areas of business in Japan [including] manufacturing,
finance, insurance, publishing, printing, trading, and others,” said
Indivisio board member Nobuhiro Watanabe, director of Toyota Tsusho.

Indivisio has set an annual sales target of 6 billion yen (US$49
million) within five years.

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