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Japan,Home Shopping

J:Com Bets On Home Shopping Returns

Japanese MSO J:Com has become the latest pay-TV company in Asia to invest in a home shopping business, after agreeing to buy 50% of domestic market leader, Jupiter Shop.

With immediate ties to ecommerce, home shopping offers relatively dependable growth for media companies navigating changes in the TV landscape, encouraging bets in recent years by Astro in Malaysia, MNC Group in Indonesia and True in Thailand.

The sector is well established in East and North Asia. Jupiter Shop, marketed as Shop Channel, was an early entrant in Japan, launching in November 1996, almost 20 years ago.

The channel, now present in ~20 million cable and satellite homes, has enjoyed steady growth since its inception, recording ¥136.5 billion (US$1.2 billion) revenue and ¥14.5 billion (US$123 million) net profit for FY2014.

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Jupiter Shop is currently half-owned by trading firm Sumitomo and half-owned by private equity firm Bain Capital, which is selling its stake after first investing in the channel in 2012.

Sumitomo also has a 50% stake in J:Com, alongside JV owner KDDI, one of Japan’s biggest telecom companies, which is actively seeking synergies between its media and mobile assets.

In a related move, KDDI is also buying 5% of Jupiter Shop from Sumitomo, giving the telco a 30% stake in the home shopping channel, including J:Com’s share.

Sumitomo will end up with an effective 70% share, including its ownership via J:Com.

The deals are scheduled to complete at the end of March.

Revenues from home shopping overall have surpassed US$4.5 billion in Japan, where the sector is experiencing low, single-digit growth.

Japan’s second-placed home shopping channel, QVC Japan, is majority owned by global video and ecommerce investor Liberty Interactive.

KDDI rival NTT Docomo also runs a successful home shopping business Oak Lawn Marketing, promoted as Shop Japan.

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