How Does Sumitomo Corporation Excel in Media and Digital Businesses? History and Transformation Explained

Sumitomo Corporation launched its digital business in 1969, and its media business in 1983. At that time, none of the relevant technology or expertise was established in Japan, and these businesses were set in motion before their necessity was widely understood. Given the situation in the United States, where both technology and expertise were advanced, Sumitomo Corporation was convinced early on that a market for these businesses would eventually open up in Japan. Armed with little initial knowledge, we have worked patiently and persistently in developing our media and digital business. At the heart of the Sumitomo Corporation Group’s business lies Sumitomo’s Business Philosophy, which has been passed down through the generations for 400 years. This ability to anticipate change with an "enterprising spirit" has enabled Sumitomo Corporation to continue creating new businesses that meet the changing needs of the era.

In the late 1960s, when computers were still primarily regarded as accounting tools, Sumitomo Corporation was moving forward with the mechanization of internal accounting paperwork. In 1969, the company sent employees to the United States, the most advanced country in this regard at the time, to conduct a survey of the computer industry. Based on recommendations made there, the company decided it was imperative to establish a new company consisting of computer professionals. Sumisho Computer Service (SCS), launched the same year, became the cornerstone of Sumitomo Corporation's digital business.

Later in 1975, Sumisho Electronics (SSE) was established as an expansion of the computer maintenance-related services provided by the Electronics & Electrical Division at the head office. Through name changes and mergers, the company became SCSK, which it remains to this day. SCSK has evolved into a company that provides a full lineup of IT services necessary for conducting business.

In the intervening years, we established a series of operating companies that handle derivative businesses, including network security and semiconductor design, as we adapted to the trends of the times and technological innovation. We also injected corporate venture capital (CVC) in the U.S., Hong Kong and other countries, and have used the information and new technologies obtained locally at our respective operating companies. The DX Center was established in 2018 to promote DX throughout the Group. A series of operating companies responsible for data marketing and AI/DX development were also created around this time, resulting in a group of companies covering a broad range of digital domains.

The Information Industry Planning and Development Office, established in 1983, was the genesis of Sumitomo Corporation's media business. At the time, the so-called "new media" boom was underway, including personal computer communications, satellite broadcasting and cable television (CATV). In the U.S., the CATV business had already started generating significant profits, and in 1984, the company set its sights on this business model and entered the CATV market. This decision was partly influenced by the rapid appreciation of the yen. Sumitomo Corporation began developing a domestic demand-oriented business to replace the traditional external demand-oriented structure.

The company began by building experience in television station operation through investment in CATV stations in the Tokyo metropolitan area and the Kinki region, later expanding coverage to all parts of Japan. In 1995, Jupiter Telecommunications (J:COM) was established as Japan's first full-scale CATV operations and management company.

In 1996, Jupiter Shop Channel was established as a joint venture between Sumitomo Corporation, TCI (the largest cable TV company in the U.S.) and HSN (America's largest shopping channel operator). J:COM launched a TV shopping business as part of J:COM content. J:COM gradually increased the number of programs available and became a comprehensive media business covering everything from production and procurement to distribution of broadcast content. Film production and distribution company Asmik Ace also joined the Sumitomo Corporation Group to strengthen its video business.

Subsequently, the company greatly increased its subscriber base by selling packages of landline telephone and high-speed internet access services. Although the company was in the red for its first eight years of operation, it has grown to become the industry's top CATV company with 5.68 million household subscribers (as of March 2024).

Today, Green Transformation (GX) is in the spotlight as we seek to transition away from fossil fuel energy to clean energy and restructure society and industry. In March 2024, Sumitomo Corporation and ABeam Consulting, a global consulting firm originating in Japan, jointly established "GX Concierge," a company that supports client decarbonization management by offering a combination of digital solutions and consulting capabilities.

The service offers solutions that utilize existing Sumitomo Corporation assets. The sales representatives from SBUs familiar with the on-site situation may attend meetings with clients, and can offer appropriate Sumitomo Corporation Group solutions in response to specific issues faced by client companies. Other effective tools in our arsenal include services that leverage the strengths of Sumitomo Corporation’s digital business, which covers a wide range of areas, for example, the development of a system for monitoring energy consumption by SCSK.