IIJ-Oracle-Cisco venture gives up profit plans

A joint venture formed by Internet Initiative Japan Inc., Oracle Corp. and Cisco Systems Inc. to deliver multimedia content to high-speed Internet subscribers on Japanese ADSL (asynchronous digital subscriber line) and cable networks has quietly dropped plans of making any money.

CDN Japan was formed by the three companies in late March and had been planning a full-scale commercial launch in April 2002, but now is described by the partners as a "non-profit consortium."

The idea behind the venture was simple: By combining IIJ's network and data center infrastructure, Cisco networking gear and Oracle databases, the joint venture would team with content providers to offer a video streaming and on-demand service that could be sold to service providers to be offered to their end users. CDN Japan officially began service on Nov. 13 when it launched a Web site offering a selection of content including music videos, short movies, animation and travel films. The service is offered free of charge to subscribers of IIJ's ADSL service and the cable Internet services of affiliated cable networks.

"In March we had a plan to commercialize the consortium itself, but at that point only IIJ, Cisco and Oracle were members," said Junko Higasa, a spokeswoman for CDN Japan and partner IIJ, which is one of Japan's largest business Internet service providers and backbone operators.

"After that we expanded the membership to other vendors and ISPs," she said. The new partners that joined after the March announcement of the venture were EMC Japan K.K., Itochu Techno-Science Corp., Sun Microsystems K.K., Sony Communication Network Corp. and Hewlett-Packard Japan Ltd.

"We now primarily see the most feasible business model could be a commercial launch for each company itself," she said. Each company could use the experience gained from membership in the consortium in forming its own venture or alliance with other partners.

For IIJ, the move away from establishing CDN Japan as a commercial service takes the company back almost a year to when it was pushing its own content delivery platform, High Speed Media Network (HSMN). CDN Japan was promoted as a more advanced content delivery platform than HSMN, which was announced in October 2000. Currently, HSMN has links with 65 cable TV networks in Japan, giving it a market share of more than 50 percent, according to Higasa, and distributes some content from CDN Japan and online game content from Konami Co. Ltd.

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