 Hello, everyone. And thank you very much for joining us here today for this talk with Yuki as we are today. Yuki is from AET Fund and of course doing some wonderful work in the space of media content entertainment. And particularly today, I think one of the topics which he is really passionate about is something that we are going to discuss on this platform, which is really to do with how kids would look at content going forward and therefore how it presents a very big opportunity. Largely, you know, the content today would be very highly focused on the how what kind of startup opportunities today exists in content that today exists in media and entertainment and particularly from a kids point of view. So thank you, Yuki for joining us. And I know that you've done a lot of work and a lot of investments in India as well through the AET Fund, which is actually based in Japan and we're delighted to have you here today. Let me start off with a question which I'm sure you're answering a lot, but I think in view of the pandemic and the shift on the mindset that everybody has had right from startups to investors. Is that today what kind of trend is it that you are seeing happening in these three spaces, the MND space particularly and from a content perspective, how are things changing? First of all, thank you, Ritu, for having me today. I'm really excited to share my experience in India and also share what we've learned in these specific domains we are focusing on. So answering to your question. So because we focus on these content media and entertainment space and we do investment and also we just started our actual content business in India and from that perspective, what we've seen so far is that with this COVID pandemic, we are seeing a huge hell wind in our business and also to our portfolio companies, especially in the gaming and also the video space, online video, we are seeing huge spike and we are seeing the spike being consistently growing. So like overall, we are seeing really positive impact from this pandemic so far. So you mentioned gaming being a big opportunity. So particularly within gaming, what trends is it that you've noticed both in Japan or probably India as well as Silicon Valley that you think and I understand that gaming has seen a huge spike particularly during the lockdown period as well as now when we're still working from home. So how do you see the trends to continue and you know particularly what kind of new investments it is on investment opportunities are likely to emerge from it. So gaming itself is not just a standalone gaming anymore. So gaming becomes a new, the next generation social network, social media. So people use like Fortnite, especially in US and Japan as a way of hang out with your friends, engage with your family and so forth. For instance, in Japan, like younger generation, don't use Instagram or Facebook anymore, but just use Fortnite and then they exchange ideas and just play with their friends online. So that's like the huge shift we are seeing in the gaming space. And I think this trend will continue to accelerate especially in the younger generation like teens and below. So that's the one of the trend we are seeing. Particularly for kids, what is it that you've seen in terms of content. I mean, you know, obviously the pandemic has sort of put a huge markup for the tech space because you know, entire education went online and record time in India. So what is it that you see from a entertainment perspective content perspective becoming an extremely lucrative from a demand side of for kids content. What trends are you seeing over there in gamification and content in entertainment. How do you see things changing. So I think that's a really good question. So I think that a tech education space and this entertainment space are emerging right now. That's the trend I'm seeing. And what I mean by that is many like a tech companies including the ones in India are trying to have this gamification factor inside their product and for instance do the ranking or give the points if you answer the question correctly and so forth. And why they put these gamification to their system is because one it will increase the engagement level of users a lot. And engagement level means like the time you spend with that. So that's really important to actually grow the user base and also to the future monetization. So that's why we are seeing a lot of this gamification element inside kids kids education app today. Yeah. So do you think even in the core education space which is like school education which has gone online. Do you think going forward maybe you know maybe a year or two years down the line. A lot of content that would be played out in the school just to keep children more hooked. And we've already seen something like that happening in early learning space but not so much in the K-12 space. But do you think that this is something that may we may see emerging in the coming time where in children are taught basic concepts you know math English science. Yeah. I think so especially the preschoolers and those for the elementary school students I think having that like fun element is really important. Middle school high school students I think they should focus more on the actual work. Maybe a different story. Yeah. Yeah. Yeah. Yeah. That's that's our pieces right now. Yeah. Sure. And have you already made some investments or are you looking at investments in such areas. Yes. We haven't made specific investments in like preschooler preschool area or the elementary school segment. But we are having multiple discussions with potential companies. So yeah. And we so we've invested in this tech company called doubt not a couple years back and they are growing really well. So that's why we are also bullish in this like online education space and this trend should follow by more younger generations. So yeah. Sure. And also you mentioned earlier about small video space being very interesting for you where in you know these small style videos which of course has been popularized by TikTok initially. And now we find that a lot of other startups are also coming in fact in India we have our own startup which is doing it they're doing making shots. But I mean do you feel that they become more younger related instead of being more generic and only fun and entertainment. Do you feel that this is in fact going forward might be a huge lot of big different opportunity coming from that space. I think so. I don't have clear view on the short video yet. But but looking at how people spend like so much time on that showing this creativity online and also having this freedom on creativity. I think there should be potential. And I think that's the global phenomenon not just India. But our focus is more on this more quality content. And when we say quality content we want to have this animation content more relevant for Indian kids. And that's one of the focus we are having right now in terms of the actual operating business we are planning to launch in India soon. Okay. That's pretty interesting. In fact we already have a lot of Indian logical characters which India has seen you know whether it's Krishna or whether it's Ganesha. So these logical characters have already had animation content. But of course you know they've just only touched sort of the tip of the iceberg and there's like massive opportunity and we have like Exactly. The like our view is that animation medium compared to live action medium for kids it's much more engaging it's much more fun it's much easier to digest the context story. So that's why we want to like expand this animation market more in India so that Indian kids can like learn their culture more. So that's the one one of the ambition we are having in the market. And I think that's something India understands how to do quite well because you know when we saw the early days of a character like Chhota being becoming so popular and then movies and being made out of little thing home and you know. I think we've been able to capture the spirit of India very well in animation and I think it's just a lot more fun in that direction. Before. So like like before joining 80 fun. But I was at Netflix. I did the Japan launch of Netflix like five years ago and I was looking at like all the numbers including India. So I was really surprised to see how Indian like users consume kids content especially the animation side. So I do understand there's a huge potential growth potential but at the same time what I was shocked was that most of those Indian users consume either like British content or American content. And the reason behind is that it's just a supply shortage issue. Not I think still the Indian animation industry is still in the early stage. So people are trying to develop more content by text time so. And what I learned is that because Japan has a lot of expertise in that animation space. Like is there any way we can bridge that like bringing Japanese animation expertise to India to Indian creators and Indian creators can create their own story through animation medium. So that's like the thing we want to establish in next couple years. Yeah. Sure. Yeah. And I think that's a very big market. Another thing which we have noticed globally. Yuki is that the VR market particularly the virtual reality market is the sort of transforming into entertainment very fast. Do you have some thoughts in in terms of how particularly in India we can do a lot more with VR and entertainment. So from my experience I'm still skeptical on consumer VR market. We do have multiple investments in Japan and the U.S. regarding that space. But because of the penetration of this device. Yeah. It's not that popular yet. And also the quality wise it's still not meeting the people's expectation. So the penetration speed is really slow. It's still expensive. The content is not there yet. Really limited. So I still think that consumer VR especially for the entertainment usage it takes another five to ten years to become become a mass product. So that that's my personal view. Sure. And I mean you know particularly from a content startup perspective getting closer to consumers engaging more with consumers or just getting more consumers on board is really the game. And I mean particularly the space that you're talking about which is to do with the animation content being seen by consumers. Now what are your advice to startups who are doing this animation content. How can they get closer to the consumers quickly. They can on board more consumers and therefore able to create a much more healthier connection with them and fast. So yeah I think that's a good question and that's one thing we are also trying to unlock. Our approach is basically to test and learn quickly on content. So today we have this excellent platform called YouTube where you can upload your video and get that traction next day. So we are like developing like two to three minute footage on our ideas on animation and put it on YouTube and see the result. And then if the traction is good then we keep continue developing such content. So that's the approach we are taking for the animation content. Sure so I mean you're right absolutely that YouTube is a great platform today and you know one day and get millions of views over there. But I mean honestly I mean even today's kid doesn't open YouTube as I mean frequently as probably his parents open you know the mother or the father. So I mean now if you have to get closer to the kid because if the content that you're talking about is very close it has to be closer to the kid. So how do you think you're going to become closer to your true customer. I mean honestly I can tell you an Indian kid without parental supervision doesn't open YouTube in India. Sorry I was breaking up. Could you repeat the question again. Yeah so I was saying that in India particularly without parental supervision a kid does not use YouTube. So the animation content that you're talking about has to go if it has to go on YouTube it's quite likely that the viewer of that content might get missed. So I mean let's say a television which a kid just picks up the remote and put on you know whatever it is that they want to see. So do you think that in fact in India the content has been made for television more than it was ever made for YouTube. So do you think for startups the opportunity is more to put this content out on television or do it more on YouTube or some other you know on a Netflix or some other place. Yep so once you test your content and verify on YouTube then I would suggest to go to other OTT platforms like GeoTV, Netflix, Amazon Prime and those guys and not the TV because if so this content business is a long term business. You can't really monetize in first one to years. It has to be like 10 15 years horizon and if you target kids especially right now they are growing up with these digital devices just watching YouTube not some prime for instance. So you have to target their behaviors and to do that I think going to OTT is more promising than going to the legacy media if you start to start up today. So that's my view. Sure. So in India you've already done a lot of investments which were primarily through a co-investment model. You know you've sort of invested your partner with other funds in India in order to make investments. And going forward now that you want to see Indian animation growing and you want to make investments in startups for making this. So how do you, first of all how have you seen the co-investment modern world for you so far and now do you plan to set up an office in India or close me the startups yourself. Yeah that's a good question again. So so far this co-investment scheme is working really well. So we've entered the Indian market two years ago 2018. At that time we didn't know anything about India. So having this strong partners to co-invest and learn the market from themselves, their selves and also get the start-ups introduced helped us to quickly adopt to the market. So that was really a good approach. And in terms of whether we will have the actual office there. The answer is yes. This pandemic co-build on changed the timeline a bit but because we are starting our content business like bringing Japanese animation to India. This business soon we have to have a branch there. So yeah we are looking forward to have the actual office there on top of the investment we are doing today. So you know we just want a question from Facebook where Asha is asking that is Fortnite the new VChat in Japan? It's becoming yeah. So what kind of road trade is it seen there? Sorry? I said what kind of road trade is it seen there? What kind of road trade of Fortnite in Japan? What has been the adoption of Fortnite in Japan? Got it. So it's really high especially for the elementary school students. It's a bit of surprise but like first grade, second grade students are actually playing Fortnite online and that's the whole thing they do so. And do you also feel that particularly in gaming in virtual avatar games like Roblox or Minecraft, is it something that are going to be the next kind of gaming revolution which will take place? So we might see a lot more such games being done specifically regionally now? I strongly think so. So Minecraft, Roblox including also the Fortnite it's a global phenomenon. It's not just a trend in India but we are seeing exact same trend in Japan, the US and Europe and other markets. So yeah I think that kind of socialness will be the driver for the gaming itself I think yeah. So you already have made a lot of investments in India through the co-investment model and today I'm sure the startups are facing some issues because of the pandemic. So what kind of changes have you seen with your own portfolio startups since the pandemic took off I think in a big way in March 2020. And what has been your advice to startups to hold on, stay strong, still be able to capture the market. Of course for digital startups it's still been a much easier ride than let's say somebody who was actually in a physical space doing their business. So I mean what changes have you brought together for your startups? Sure so because most of our portfolio companies are in digital and online spaces we don't see much negative impact from this pandemic. But for instance those guys doing the monetization based on the ad model they are seeing some decrease in their revenue because of this ad cost decline. So what they are trying to do is to pivot their monetization model from not just doing the ad but do more from the in-app purchase. Or get more of the subscription based fee model so that we get the direct revenue from the users not the ad. So that kind of trials and tests we are seeing in some of our portfolio companies. And they seem to be having good evolution change and there's a positive impact so yeah I think they will pursue that path. Sure and you know I mean for you just said that for animation companies and content companies the period for monetization is very long. So one thing is of course you know you can monetize through the ad model which you just mentioned that again in a crisis situation it becomes concrete or you never know how it will go forward. But my question is that what other monetization or what are the branches of monetization today exist for content startup for entertainment startup. Sorry I lost you for like 30 seconds. Sorry my lines quite bad today. So I think that you know one thing of course for any kind of content is the ad model which you just mentioned which can sometimes become unstable because of a crisis. What are the monetization models today you see are something that you know startups particularly in media entertainment content space should rely on. So the for example the animation space we are doing ad is one of the revenue source that that's for sure but the others are one trying to get direct revenue from the users meaning. So selling these digital merchandising. So when you play PUBG or Fortnite you can buy skins right for your avatar. So such kind of revenue so this we call it as digital digital merchandising. So that's one and also because content is has good fit with the offline merchandising. For instance selling toys selling t-shirts actual like physical goods. So that's the other thing on we are working on right now. So nothing rocket science but just to do the incumbent like merchandising business is a really key key to have the profit in content business. And do you think that in app purchases we often see that you know apps they have their own in app purchases you know so whether if it's particularly if it's the game one can buy so many things. Do you think that becoming a big source of revenue particularly for gaming companies going forward. I think so. So we are our parent company Akatsuki is a mobile game developer. And right now we have top line of around 300 million US dollars per year. Most of them are coming from the in-app purchase through this mobile game. So in app purchases in gaming is really popular method in like Japan US already. So this trend should follow by India soon. I don't think this will happen next year but on the king like three to four year horizon it should come. And that's why we are heavily investing in gaming companies in India as well so that we can be ready in that timeline. Yeah. Sure yeah I particularly believe that could be a big potential opportunity for everyone and particularly you know going from content to gaming animation to gaming is certainly something that hooks the viewer and I mean the absorber of content a lot more. You know finally there is something which I've always you know overall if I see the startup landscape in some sense there is a large consolidation which is happening. So businesses which will be to see today are also finding a more product based approach. They're trying to sort of see whether they can collaborate with other startups and you know therefore be able to do a lot more together instead of trying to do it. And I feel that that's also happening in media globally. And you know there is a lot more content consolidation happening today people are aggregating content but overall if you see the content production is so much. It's just that sometimes we were even if you're looking for content don't know how to reach that content. So do you see this is something in India. How are you seeing this trend turning out in terms of consolidation of content and you know some platforms trying to own most of this content and therefore being able to reach out to the right user volume. I think so. So what's happening in US Europe is that so platforms. So telecom other large conglomerates are acquiring these content companies. So for instance AT&T in US bought Warner Brothers. And looking at India I think we should see the same trend but the unique unique thing about India is that already for instance reliance has everything already right so they have geo. They also have other entertainment business so they already have key elements in their internal portfolio so yeah. But I think India should follow the same trend. That's my view. Sure. So you just got a question from Abhishek Yadav who's actually at the IIT Varanasi and he's asking that you're talking about video content. What is the future of writing content in social media for kids in India. What's your take. Writing content. And that's what it says. Writing content. So I guess. Which is probably something to do with the I think. Leading or writing content which would lead them to other content in India or maybe I don't know book or just digital book. So it's a book or like text content. I guess. Yeah. Yeah. Possibly that. Got it. So I think. Like from 1000 years ago people are reading books and novels and everything right. And most of the stories are coming from these literatures. So I don't think it will disappear. And what we are seeing in other markets is everyone is using Kindle to read books. Spending so much time on that device. So. But the thing is that. Like video consumption is much easier. It's more. Like. It's just kind of monologue versus. Digesting the text so. The market size should be smaller than video but I think there should be some. Some size of the market. In the future as well. Yeah. I think. Another reference that I can take from what he's asked is that you know today you think a lot of these content. We actually say that you know you can read a book and then you know you can buy a chapter and another chapter and another chapter of the same book. Yeah. Do you think there is more viability in that or do you think eventually it's going to tire the customers out and they might not want to do this. I don't think anyone has cracked that. Thank you. I think everyone's trying to test that. But I think we are seeing some companies doing. That method well in Japan. Yeah. There might be a gen. And also like party leapy. Those guys are growing really well and because they are targeting these particular like local Indian languages. Right. So. Yeah. Because of the supply shortage issue I mentioned earlier this is also applied to this the text space text audio video space. So yeah there should be a huge demand there. Yeah. English I don't know well but like Hindi and other vernacular languages there should be. Sure. And I mean do you think for the moment of your portfolio start up particularly from India going to Japan. I mean I know you told me about you know you're looking to get a lot of infrastructure which could help production from Japan to India which could help in making animation. We also see some Indian startups going to Japan or to Silicon Valley and particularly is the fund facilitating that in any way. So the answer is no at this moment because we are having this unique thesis that we only invest in those startups trying to solve the unique issues happening in India or trying to cater towards these unique demand happening in India. So that's why our startups are like first just focusing on the market and penetrate the market. Then maybe after that they could consider going global. But because we only invest in our research startups most of the companies are not yet in that stage. So right now we are not facilitating companies to go global but like trying to bring all of the expertise we have from Japan and the US to Indian companies so that they can grow in this market. So that's the thesis we are having. Sure. So just one other question that you know given the current times are you looking at virtual pitches for investment from for startups and how do you just start up in a virtual pitch? Sorry virtual pitch. So I mean you know if they are for you over. We do take on virtual pitch. Our prerequisite pre-COVID was that I have to visit the office to see the actual office and feel the atmosphere. But I can't really do that anymore. So yeah anyway we have to do the virtual pitch and yeah trying to build that trust through these screens. So I mean versus what you looked at a startup in a real world I mean in a physical world are you looking at things differently now in the startup now that everything is almost virtual. But how do you sort of evaluate the startup differently now? The criteria haven't been changed it's the same. Yeah. Sure. And are you I mean I know while you know AET fund is an early stage fund but I know and given the fact that the pandemic today is putting off putting a lot of pressures on your portfolio startups also like on all other startups. Are you engaging in some other or let's say extended rounds with them in order to make sure that they are able to get out of the crisis and able to find scale in the coming months? Of course. We do have follow on investment budget. So if the portfolio companies are having struggle we are more than happy to support both financially and other way. And also we can bring other Japanese investors to support them. So yeah that's that's the thing we are doing. Sure. And you know finally let me ask you this. I know it's a question is rhetorical but I mean what are the top qualities that you look for in founders? I mean particularly in media and entertainment space so you know how do you evaluate a founder before his idea alongside his idea I would say when you actually choose to invest in them? So I think the most important factor we look at is this like cultural fit with our fund and also myself because most of the companies we engage are really early stage. So sometimes they don't have product they don't like no one is making money yet. So it's more about the passion and what they want to achieve by doing this business so like vision. So I want to align on that vision layer first and I think that's the most important thing for us to make the decision. Yeah. Sure. So you know on that note I want to thank you so much Yuki. Thank you very much for joining us here today for this talk and you know I think going forward we are looking forward to a lot of investments coming from your side and you know particularly yourself and the fund looking to identify great promising Indian startups who are going to do really well and we want to see in India a lot more animation content and great gaming companies coming from here and of course with your support and your vision of the fund it's going to be much easier. So thank you for joining us today and also to our viewers who are watching us across social media and over here on Zoom. Thank you for joining us here for this talk. If you have more questions for you please keep on posting them on our Facebook link so that we can actually forward them to UP and the team and they could evaluate your pictures or you know the questions that you would particularly have for it. Thank you once again for joining you. It was a pleasure talking to you. Great. Pleasure again and happy to have the follow up questions from the audiences today. So yeah please send me emails. Thank you. Sure. Thank you. Great. Thank you. Thank you.