Hello Kitty: The Global Brand with Nine Lives by Ken Belson



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Learn more about IMA's Society of Asian Art
Learn more about the Indianapolis Museum of Art's Society of Asian Art...

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Learn more about the Japan America Society of Indiana
Check out more information about the Japan America Society of Indiana on their website...

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Who is Ken Belson?
Check out some of Ken Belson's other writings for the New York Times.

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Where is Hello Kitty from?
Everybody knows who she is, but where is Hello Kitty from, and who made her? Check out Sanrio, the home company of Hello Kitty.

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Where is Earlham College?
Find out instantly by visiting the website of Earlham College, in Richmond, Indiana (and of course, online).

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Learn something about Japan before you go!
Check out the english language tourism webpage of Japan, then plan your trip!

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Get smitten with Japanese culture!
Learn more about the customs and culture that Ken Belson fell in love with.

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All the Kitty your heart desires...
Look at this footage of the Sanrio store in the Ginza, a shopping district in Tokyo.

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Read Ken's book about Hello Kitty
Check out the end product of Ken and Brian's collaboration, Hello Kitty, the Remarkable Billion Dollar Phenomenon.

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Check out the other characters of Sanrio
There are 425 characters in the Sanrio Stable. Fall in love with all of them!

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People love Hello Kitty!
Read a blog about Hello Kitty, written by some of her biggest fans.

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Hello Kitty Ages Gracefully
Check out this video of Hello Kitty through the years!

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What is Anime?
Learn about the Japanese cartoon style of Anime and its worldwide popularity.

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Learn about the Japanese gift giving culture
The tradition of giving gifts is very different in Japan. Learn about the style and emphasis.

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Meet Licca-chan!
Japanese girls don't like Barbie. Who do they play with instead?

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Why do Japanese kids prefer Licca-chan to Barbie?
Learn about the non-threatening traits of Licca-chan and the Sanrio characters.

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The Cute Factor
Read the New York Times Article Ken is talking about and learn about what constitutes cuteness!

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Check out your Zodiac sign and what it means about you...
so you can buy your Hello Kitty zodiac necklace!

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Learn about the Hilton Company
More about the Hilton Hotels, and the famous family who runs them.

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What is Pokemon?
It's just one little mouse click away.

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What is a Japanese prefecture?
Learn about the districts of Japan, known as prefecture, and what is unique about each one.

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Wasabi is not a root...
it's actually a rhizome. Learn about it before the next time you get sushi.

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Not just a Hawaiian island!
Learn about the cute concept in Japanese culture.

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Who is the God of Kawaii?
Learn more about the founder of Sanrio, Shintaro Tsuji, and the empire he built around Hello Kitty.

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Read more about Asian Pop Culture
Check out this author's take on Asian Pop culture and Hello Kitty's role.

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Another view of Hello Kitty's popularity
An article from Pop Cult Magazine, discussing Hello Kitty and the book by Ken Belson.

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Want to learn more about Hello Kitty's gun?
Check out the stats of the AK-47 on wikipedia.

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Check out this Hello Kitty Parade
A daily Hello Kitty Parade in Disney Tokyo.

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Channels: Talks

The Asian Art Society and the Japan-America Society of Indiana invite you to view "Hello Kitty: The Global Brand with Nine Lives," a lecture and book-signing with author and The New York Times Business Reporter Ken Belson. Hello Kitty was Japan’s brilliant answer to Walt Disney’s Mickey Mouse. As author of "Hello Kitty; The Remarkable Story of Sanrio and the Billion Dollar Feline Phenomenon," Belson will discuss how Japan’s most famous cartoon kitten and other Sanrio characters have become a global cultural phenomenon. April 1, 2008.

the stars glow brightly keychains dangle a swift wind cuts through reeds the moon angles itself outwards irridescent, tiny, red tentative

i like hello kitty..its cute.

I have mixed feeling about hello kitty - it is such a cute and fun brand, which is loved by little girls and women a like. However one has find a child's brand which is promoted with beauty and fashion well beyond the means of any little girl a little unsettling.


Loved this lecture. I am fascinated with Japanese culture and Kitty is such a big part of it. It's very neat to see that IMA invites folks like Ken Belson to speak even thought Hello Kitty is not always considered art. Your open mindedness in selecting lectures is astounding in a city where, frankly, some are extremely closed to idea when it comes to art.

I had a similar experience when hauling back anime, manga, and video games about ten years ago. :)

I LOVE Hello Kitty! It was sort of popular in America when I was younger, but not many people caught on to it. I lived in Japan for a year in 2002 and regained my Hello Kitty Facination. I came home with so many Hello Kitty things that people thought I was crazy. However, now that she is popular in America again, most people don't even know she is Japanese. I think the allure of having something from another country makes her so much more apealing!

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00:00:07 The Asian Art Society and The Japan American Society of Indiana are most happy to welcome Ken Belson to Indianapolis and the Indianapolis Museum of Art. May I introduce Mr. Ken Belson.

00:00:17 [Applause]

00:00:27 Thanks everyone. I'm astounded at how many people know Hello Kitty in Indiana and I'm pleased to know that.

00:00:36 I can't do the math in my head right here, but I think this tops the audience we had in New York a couple of years ago. It was interesting because there was a panic

00:00:45 because a lot of people showed up late and the room fit 125 and in the back was a whole row of West Point Cadets that had come down from West Point to New York,

00:00:54 were taking an international business class and their colonel who was teaching the class thought it would be really interesting to learn something fun about Japan and business. So, he brought in about a dozen cadets. They had run out of seats

00:01:05 and the colonel said, "Stand up." The twelve cadets stood at attention the entire lecture in the back and freed up twelve seats for everybody else,

00:01:15 and afterwards, they invited me to West Point. So...

00:01:22 this is my first time in Indiana. I spoke earlier at Earlham College and also I had a nice audience. So, thanks again for your hospitality.

00:01:32 It was a long introduction by my standards, but basically I lived twelve years in Japan. I knew nothing about Japan before I left. As Chip mentioned,

00:01:41 I went to school out in Oregon and, you know, there was Asian connections in Oregon and so I ended up leaving after a year of working to go to Japan in 1988

00:01:52 and sort of got smitten with the culture very quickly for no other reason that people were polite and not like New Yorkers, but I ended up coming back, getting a teaching degree,

00:02:03 going back again, then I became a freelance writer and then, as Chip mentioned, I came back to New York yet again and got a Journalism degree and then from 1996 to 2004, worked there full time,

00:02:14 and during that time, when I was at Business Week, I got a call; it must have been seven o'clock at night, rainy night, I was in the office and this guy calls and says, "Do you know anything about Hello Kitty?"

00:02:25 I don't know the guy, he's from Hong Kong, British accent, immediate alarm bells go off in my head and I said, "Who wants to know?" and he said, "Well I'm with this book publishing company

00:02:35 and we're really interested in somebody writing a book about Kitty." and I said, "Yeah, and so, who told you to come to me?" and anyway the short of it was that we had about a thirty-minute conversation where I started spouting on about Hello Kitty

00:02:47 that I knew from my youth. My sister is a couple of years younger, I used to buy her Hello Kitty with my baby sitting money, and I think she used to buy me G.I. Joe

00:02:58 and so, you know, we sort of laughed about it then and so forth and then in 1994, my sister came over to visit during my second stint in Japan,

00:03:06 and we were in a department store shopping one day and she discovered Hello Kitty again, it had been twenty years and she was in tears of laughter looking at all the different Hello Kitty stuff.

00:03:18 She still has the pen she bought where you click it and this little tulip opens and Hello Kitty's head comes out and actually it's not the same one

00:03:27 because it keeps breaking and I have to keep buying new ones for her on my trips back. Anyway, so this guy calls six or seven years later, and I said, "I don't really know anything about Hello Kitty." and we had this long talk

00:03:38 and he says, "Sounds like you know a lot about Hello Kitty." I went next door to Brian's office at Business Week and I said, "This guy called,

00:03:47 he said he wants a book about Hello Kitty," and I said, "I don't know how to write a book...and is it kind of weird for a guy to write about Hello Kitty?"

00:03:55 and he said, "You'll be great at it, jump at the chance, write the book," and the short of it was I said, "We've got to write it together." Brian had two girls, oh, still has two girls,

00:04:06 but at that time, they were about three and six years old and they couldn't walk down the street without stopping and pointing to a window and saying "I want that Hello Kitty" and so Brian was several thousand dollars deep into Hello Kitty

00:04:17 and was trying to figure out what synapse had turned on in these girls heads that said "I need it, I need it, I need it" and so Brian signed on.

00:04:26 We divided the book into eight chapters. We each took four. Because I spoke more Japanese than Brian, I did most of the interviews of the company.

00:04:36 The book is sort of part corporate history, part marketing, and interesting, you know, why it has become a phenomenon, part social history, a little bit on design and what makes Hello Kitty and Sanrio unique.

00:04:49 So, it's a big mishmash of stuff and we sort of divided the book up into different things. I remember vividly the night that I finally said, "I am going to sign my life away for a year,"

00:04:59 because I worked on this book while I was at the New York Times and that meant, basically, not taking a vacation for a year and spending all my weekends buried in Kitty

00:05:09 and I remember laying on the bed, the lights were out, and I'm saying, "What did I just do?" But, anyway, after the book came out, it has been translated into five languages,

00:05:20 including Japanese, and my wife said, "Why don't you write to the translator and see what the translator thought of your book, and that will give you a sense of whether Japanese think the idea is interesting."

00:05:30 So, I wrote ten questions to Mr. Sakai, who is the translator. Number five was, "What were your expectations of this project before you started?" and here was his answer...

00:05:40 "To be very honest, I just thought something like, a book about Hello Kitty and it's written by American journalist working for the New York Times and Business Week? What kind of joke is this?"

00:05:52 Anyway, it's not a joke.

00:05:58 Hello Kitty is a kind of remarkable product. I will give you kind of the Post-it version.

00:06:04 Sanrio is about a billion dollars in sales. It has 425, give or take, characters in its stable of characters, you think, Mickey, Donald, you know, so on.

00:06:14 We have Keroppi and Bad Batsumaru, too. Hello Kitty accounts for half of the sales. So you have 400 characters, a half a billion dollar is one character.

00:06:23 So, something is unique about Hello Kitty. They spend almost nothing on advertising. If you told any executive in America,

00:06:31 "I can get you a half a billion dollars in sales without a cent of advertising," they'd say "What's wrong with this picture?" It's a very viral product meaning kids tell kids, who tell kids, who then tell adults

00:06:42 and become adults and buy the product. It's very unique in that way.

00:06:47 It's also very unique because it has no back story, very little back story.

00:06:52 Snoopy grew out of Charles Schultz's cartoon strips. Mickey Mouse and a bunch of Disney characters grew out of the animated films.

00:07:00 Hello Kitty had none of that and still pretty much has none of that. It basically is just an image put on stuff, okay!

00:07:10 Most people are also surprised, although these youngsters in the 3rd or 4th row here probably know all of this. It was born in 1974. So, it's over thirty years old now and I think what happens is

00:07:21 people grow up with it, forget it for twenty years and then remember, "Oh yeah, right! That thing, right!" Her original name was Kitty White.

00:07:30 Her birthday, mark this down, November 1st. Her mythical birth place suburban London, England and she weighs the same as three apples.

00:07:42 She has a wonderful twin sister named Mimi, some of you may know, and you can always tell Mimi because she has a bow on the right side of her head that's yellow, very simple story.

00:07:53 That's more or less the back story. So, they took this character and they basically plastered her on everything. Now, at the time that the character was developed in the 70s,

00:08:05 you had like the animal boom, you had the Snoopy was out and so forth, you had a lot of different characters that were being imported into Japan and the owner of the company, Mr. Tsuji, the founder, and still owner said,

00:08:17 "We need animals in our stable of characters." They had been adorning things with strawberries and you know cherries and stuff but they wanted to branch out into animals

00:08:27 and so the designers went and made a bunch of different animals and he didn't really like this. He thought, "Eh, let's just put it out." He put it out and everything went haywire.

00:08:38 You can see on this chart, as it starts to reveal, the sales immediately took off and doubled five years straight and then kept doubling

00:08:46 and you can see that this one character transformed the company from a, pretty much, very sleepy little design company into pretty much a global brand

00:08:56 and you can see, sort of around 1990 in the middle of the chart, there's a big dip and then a big spike, that was the end of the Bubble Economy in Japan

00:09:05 and then there was another recession, you can see another dip. The jumps after that, typically, are jumps because Hello Kitty expanded overseas.

00:09:13 First into places like Taiwan and Singapore and then into America in the last few years. Hello Kitty was around in America,

00:09:20 but in a very sort of sleepy way and then really took off in a concerted effort in the last, sort of, seven or eight years.

00:09:27 As a part of the book, by the way I was in San Francisco and South San Francisco right near the Airport is the Hello Kitty Warehouse, it's a Sanrio Warehouse

00:09:36 and if you ever drive from the SFO and you drive up to San Francisco, on the right hand side there is a hill and it says South San Francisco, looks like that Hollywood sign in LA,

00:09:46 and the warehouse is right there and so, I was there on business and I said, "For the book, let me go, see this place." If you're an addict, you can't go in there because you can't get out of there

00:09:56 and I was walking around with the manager and the floor manager in the warehouse and I said, "Oh...and then there's a box and can I have one of those?" and he said, "Are you here on business or you just like infiltrating, you know, the kingdom?"

00:10:10 So, anyway, instant success! The success interestingly, I think, most people will tell you it's very hard to predict what will be a success,

00:10:20 but the key with Sanrio was realizing that once you had the success how to manage the brand and Mr. Tsuji, I mentioned earlier, doesn't spend any money on advertising. His theory is that it's like a balloon.

00:10:31 If you blow it up too quickly, it's going to pop. If you advertise too much, it'll turn into a fad and in a year, nobody will want to have it anymore, kind of like the pet rock.

00:10:42 He didn't want to be the pet rock of character goods.

00:10:46 He has expanded overseas, this is a smattering, I don't think I have every single country represented. Its now in Russia, which is not there, and Australia or New Zealand.

00:10:55 It's popular in Western Europe now. There's a lot of animated cartoons on TV in Germany and Italy, England and Hello Kitty is not an animated cartoon in many cases,

00:11:06 but the association is there, if kids are watching Japanese cartoons or getting into Japanese cartoons. Latin America is a big area and of course

00:11:14 in many parts of Asia, kids look up to Japan, the cultural imports are quite strong in many countries, movies, food, and so forth.

00:11:23 I mentioned earlier Mr. Tsuji was looking for animals and he told his designers to go out and find some animals or write some up and the designer,

00:11:33 who ultimately made Hello Kitty, loved Lewis Carroll stories and that's why I think why she is born in suburban England because she associated with England

00:11:43 and took away from that this idea from Lewis Carroll stories.

00:11:50 This was product number one, a little coin purse that kids would take and put in their pocket book. It's about 240 yen, about a dollar, give or take at that time.

00:12:02 I don't know what it is with inflation, but in any event, this was product number one. Now, what's interesting about this was Mr. Tsuji tapped into something that is a little bit alien for us,

00:12:11 the gift giving culture in Japan. In Japan, people give gifts for everything, it's very elaborate. There are ways of giving gifts that are very predictable, are done with a certain style and emphasis but also understatement. They are also given among kids,

00:12:29 I think something a little bit less common here in the States. I mean, of course, if your kid has a friend's birthday party, you give the box to the kid and the kid gives it to the other kid.

00:12:38 But in Japan, lots of kids have pocket money and in the States, usually you go to your dad or mom and say, "Mommy, I want this." In Japan, kids have pocket money so they will often have just enough money to buy their own gifts

00:12:49 to give to their friends and so he purposely designed things that kids could buy for themselves and also they had to be cheap enough. So, he designed a whole list of products

00:13:00 that young kids could buy for themselves and that's what this came out of.

00:13:06 Now, "Why Kitty?" the magic question. I mentioned earlier the animal boom, Snoopy. Interestingly with Snoopy in 1966

00:13:16 Sanrio won one of the three licenses to import Snoopy. So, he already knew about this. He also imported Barbie, was a miserable failure

00:13:26 because there was another doll called "licca-chan-ningyo" which came out and took all the sales. He also was a good friend with JC Hall of Hallmark

00:13:35 and imported Hallmark cards, except Japanese don't give cards the way we give cards. They give cards attached to gifts, not just cards thrown in the mail, and there was another problem.

00:13:44 All the Hallmark cards had blonde-haired, blue-eyed kids on them; that didn't work either. Snoopy worked though, and this is Miffy, by the way.

00:13:53 There is also the design and here I'm partly stepping out of my boundaries, but Hello Kitty is an amazing study in Japanese simplicity.

00:14:04 It's also, I don't know much about how kids are marketed to, but I have learned a couple of things. One is she is very nonthreatening, right? She has got no teeth,

00:14:17 she doesn't seem to have a mouth.

00:14:19 Now, there are various theories on this. One theory is that she knows all the dark secrets of the Sanrio Corporation and they've zipped her shut.

00:14:28 I asked the designer, Ms. Yamaguchi, why she had no mouth and she insisted, "Oh, she has a mouth, but it's buried below the fur."

00:14:36 Her eyes are spread far apart. Now, if you think of a mouse or a rat has very beady eyes, her eyes are nonthreatening, simple primary colors, big round face.

00:14:47 Now, I found an article in the New York Times not long ago, I will see if I can pull it out here, the title of the article was "The Cute Factor"

00:14:57 and what it did was it took, so why is it that pandas are so cute, why does everybody think pandas were cute and you know the panda really doesn't look that much different

00:15:09 and it talked about how babies react to these kinds of faces as opposed to Mickey Mouse, well, not Mickey Mouse now, but when Mickey first came out,

00:15:18 Mickey had a snout and it scared kids, it was threatening and so Walt Disney had to go back and redesign Mickey several years later or over the first several years.

00:15:29 So, the design is really very nonthreatening.

00:15:37 This is taken out of somebody else's book but what you can see here is sort of the evolution of Kitty as Sanrio has continued to redevelop her over time

00:15:48 and it's interesting because you know again all they have really is the brand image, right. They have Hello Kitty and then have all the products it stuck on which, you know,

00:15:58 you depend on other people to make that. But, so every year, they kind of renew the brand and they try and keep her as current as they can

00:16:05 whether it's the color design, whether it's polka dots, whether they did a little anniversary shot, there's a 1988 or '89, you can't see here,

00:16:14 they did an experiment with a black and white Kitty, monochrome Kitty; she got pink and turned into a princess in the 90s.

00:16:21 So, they are constantly trying to renew the brand and yet in all of these pictures, her face is the same. So, it's always the trappings around her that's different, and I think,

00:16:30 that's a testament to trying to keep the brand alive thirty years.

00:16:39 Yeah! You guys have to come up to the screen to see all these.

00:16:42 You see here at the top baby, child, teen, adult, and again Mr. Tsuji figured out very quickly that these six-year-old girls that bought that coin purse, were going to grow up and be sixteen-year-old girls

00:16:54 and buy notebooks and school thermoses, and whatever, and then turn into teenagers and then get married and have their own kids and in some cases,

00:17:03 they are going to buy some stuff that I found in the mail from Neiman Marcus, a set of twelve Zodiac symbols encrusted with diamonds.

00:17:13 Hello Kitty, so like the Hello Kitty in Leo is a $900 necklace.

00:17:18 Name your Zodiac sign, I will tell you how much it costs, $957 for Sagittarius, $700 and so on.

00:17:24 So, they've really gone high end too, there is actually platinum Kitties that came out during the 30th anniversary. So, it's really remarkable how they have gone through the whole demographic chain here

00:17:35 and developed products for all ages. Also, 22,000 is an astounding number when you think about it, it's a lot of brand management, a lot of product management, and a lot of inventory,

00:17:46 but what is interesting is how much is churned, 600 products a month are taken off the market and 600 new products are put on the market,

00:17:56 okay and some of that's seasonal, you'll have summer sandals come on in July and then you'll have, you know, notebooks for back to school season, that is a tremendous amount of product development

00:18:06 that is constantly going on. In other words, Sanrio is constantly looking for new things to stick Kitty on and if you've got a good idea, I'm sure they would like to hear it.

00:18:16 There's also license. Most of these products by the way are licensed. So, companies approach Sanrio and say we want to make a futon with Hello Kitty's head on it.

00:18:24 What's the deal with that, right? Mitsubishi used to make a Hello Kitty car, champagne pink, Hello Kitty seats, Hello Kitty steering wheels...

00:18:34 they sold 600 of them a year for about eight years running. I found on eBay a Hello Kitty Airstream trailer, $40,000 was the bid.

00:18:45 Do I hear forty-five? So, they really, you know, it's everywhere. I went to a party a couple years ago, a UNICEF party,

00:18:54 and Paris Hilton's father was there. I'm not name-dropping for any other reason to say that he ended up buttonholing me at this meeting and saying, or at this event,

00:19:05 and said, "Nicky needs something to do," and I said, "Yeah...okay, I could have a couple of ideas," but he said,

00:19:14 "I think she wants to start her own clothing line with Hello Kitty in it. What are the royalty systems with paying, you know, Sanrio. How much is the licensing fee and blah, blah, blah..."

00:19:24 So it was actually a very purposeful discussion. I didn't meet Paris or Nicky.

00:19:28 The other thing they tapped into was the collectability. Now, you know this growing up with baseball cards or, you know, anything...dolls, we live in an eBay culture now right, everything is collectible.

00:19:40 Most recently, the Pokemon cards, the Yu-Gi-Oh cards. So they've realized that if you price it cheap enough, but you have a series of them, people will try and buy the series.

00:19:50 So, instead of selling something for twenty-five bucks, sell it for five bucks, but make fifty of them and then people will sort of chase after them. Now, what's interesting here is they created a different Hello Kitty for every prefecture in Japan

00:20:03 and some of them are historical. You see the one at the very top on Sadogashima, the Kitty is dressed like in a happi coat,

00:20:11 below she is dressed like a crab because I think you know crab must be big in that part of the country. My favorite is actually not on this map and she is Woka, the Wasabi Kitty.

00:20:23 My sister has the key chain, she won't give it back to me...but people collect these and the other thing that's great is that again sort of counterintuitive to American culture,

00:20:33 American culture businesses say okay, we wanna have a car. Well let's have a bunch of focus groups and figure out what people think of the design and then, you know after we do a ten of these focus groups,

00:20:43 we will figure out okay Product A is the best. In Japan, it is sort of the opposite. They put out a lot of stuff. They put out a cell phone in seven colors,

00:20:52 four of them won't sell well, they will drop those quickly and then market the three that did sell well. So, they do very limited small amounts of production at the outset and then when they, sort of, really road test it,

00:21:03 then they'll go with it. They don't really rely on market research and you know again for Sanrio to make you know lozenges or god knows what, it's not very expensive at the outset,

00:21:13 I mean the design is expensive, but then they will put it out in dribs and drabs.

00:21:18 The other thing is I've had several people mention to me Sanrio characters that I didn't know, I mean, I don't know all 400 of them and what happens, of course, is they put some of their characters in,

00:21:27 ten years later they'll put that character back on the market, it'll look fresh to a new generation. So, there is a lot of sort of mixing and matching.

00:21:37 This is a close up of a key chain, just to give you an example and

00:21:47 it says Hello Kitty, it's a limited edition from Yamanashi prefecture which is famous for its samurai and there is Kitty on the key chain

00:21:56 and there is a full-size Kitty and on this side, this is Hello Kitty on top of Mount Fuji and you can see Fuji here

00:22:07 and Hello Kitty, Mount Fuji 3,776 meters. Now, you'll notice that neither of these have been opened up.

00:22:13 The woman who made this PowerPoint, Oikawa-san, collects these key chains and she has like every prefecture key chain and she doesn't use them,

00:22:22 she holds them in perfect condition. So, she let me borrow it for this presentation.

00:22:29 This was like, you know like, $2 a piece.

00:22:36 Everybody know kawaii, kawaii is the word for cute, but kawaii is a much broader word. It really sort of means "Oh, that's so cute" and "Oh, that's really cute."

00:22:49 You know it's a whole sort of way of thinking

00:22:54 and Mr. Tsuji, I call him the god of cute. He is a really interesting business story as executives go. You don't find many of these guys in Japan.

00:23:05 He was an orphan, he grew up, sort of came of age during World War II, contracted tuberculosis.

00:23:16 After the war ended, he went to college and he got sick. Then, he started making alcohol, illegal alcohol to make money

00:23:25 and then he got a job; it was kind of a big break. He is from Yamanashi prefecture outside of Tokyo. He got a job at the prefectural government and that's, you know,

00:23:34 considered a really stable prestigious job to work in this local government especially right after World War II when jobs were hard enough to find

00:23:43 and he worked there for thirteen years. He actually was in the actuarial department and he hated it. He hated it so much that he actually got thrown out of there after a year,

00:23:51 but his boss thought he was so talented that he persuaded him to come back and one of the things that he did while he was there for those thirteen years was he developed what are sort of now called prefectural shops.

00:24:02 He said, "Let me start a store in Tokyo that sells goods from Yamanashi," the equivalent of an Indiana Store in New York selling your local produce or stuff like that

00:24:12 and it was a very big hit and Yamanashi is famous for silk, among other things, also very nice melons and other kinds of fruits, grapes.

00:24:21 So, he had a kind of business acumen even though he was in government, but he got tired of that too, and so in 1960, he said "I am going to quit."

00:24:31 The head of the prefecture and several of the vice prefectural chiefs all invested in his company which ended up to be called Yamanashi Silk Center

00:24:41 and the head of the prefecture was running for re-election, he says "I have one more task for you before you quit. You have to rent a plane,

00:24:50 fly it around Yamanashi Prefecture on Election Day and drop these leaflets that slander my opponent," and he was getting paid a years salary for doing this,

00:25:01 to walk away. Sort of his severance pay, I guess. So, apparently he called from the airport before he was about to take off and they said, "Don't worry I am going to win the election anyway, burn the leaflets." So, he never followed through on it.

00:25:11 It's in his autobiography, great little story. From this, came Hello Kitty.

00:25:17 The company, when it started, was doing much what I was telling you, basically, selling products from Yamanashi Prefecture, and it was doing okay,

00:25:25 but he almost went bankrupt as a lot of new businesses do and he was actually selling these kinds of things in front of the Sento which is the sort of communal neighborhood bath

00:25:36 just to get money and stay afloat. He was stiffed on a five-million yen payment. So, for the first couple of years, kind of precarious, but he always had in his mind that

00:25:47 character goods had extra value and the reason is he was selling beach sandals and they were just beach sandals, they were plain colored beach sandals

00:25:56 and then he got this bright idea, to let me put strawberries on them, and all of a sudden they became special beach sandals and he charged more for them and then he realized

00:26:05 it's the brand, it's the image that counts as much as the actual product itself, and we all know this from the Louis Vuitton and everything else, it's the same handbag but it says Louis Vuitton on it.

00:26:16 So he started Sanrio. He renamed the company in the 70s. The name Sanrio comes from the number three, San, in Japanese and Rio, which is Spanish for river

00:26:26 and his grand thought was that Sanrio would be a company that would expand across the world and of course the three great rivers would symbolize that and of course it was easy for Japanese to pronounce.

00:26:37 So, Sanrio became around 1969, 1970 and then Hello Kitty was discovered a couple of years later.

00:26:44 Now, this is the fun part of the book.

00:26:48 We found out a lot of people hate Hello Kitty.

00:26:55 We were intrigued,

00:27:00 it's often visceral, it's often angry, these are adults. Kids are not part of this group.

00:27:09 We put them in three broad categories.

00:27:13 We found performance artists in Los Angeles who do a complete performance badmouthing Hello Kitty, and I think, the broad point that these artists are trying to get across is that

00:27:27 they are feminists basically, and they think that Hello Kitty is an attempt by this company to make women remain juvenile.

00:27:35 That's their thought, not mine.

00:27:38 The second group what we broadly call Anti-Consumer Critics, basically people who think Hello Kitty is just a bunch of junk, we don't need it.

00:27:47 Given that Hello Kitty is on cars, toasters, airstream trailers, it's a pretty broad statement. I think they are really just against toys for what it's worth

00:28:00 and the third group are Nationalists. In Asia, particularly and particularly in countries that were occupied by Japan before and during World War II,

00:28:09 there still is a lingering resentment against things Japanese, particularly in places like Taiwan, Korea. Until the late '90s, there was a ban on cultural imports in Korea.

00:28:19 You could not find a Japanese movie in the theater, you could find Japanese food, but you couldn't find things like Hello Kitty, and I know this partly from experience

00:28:28 because my office, when I was at Business Week, was only a couple of blocks from one of the Hello Kitty stores in Ginza and it was filled with Korean teenagers who were all buying bags and bags of Hello Kitty

00:28:38 to bring back to Korea on the black market.

00:28:41 [Laughter]

00:28:48 Then there's people who like to have fun.

00:28:51 Somebody sent me this, is a good friend of mine, I don't know where he found it, but there is people who just think attaching Hello Kitty to something to

00:29:02 juxtapose her were something that obviously is very un-Kitty like gets a laugh and so somebody took Hello Kitty and stood her next to this AK-47,

00:29:11 the company does not endorse this, nor does it sell it. This is a funny little piece of art I found; an artist in Portland, Oregon had a whole exhibit of,

00:29:23 this is only one pose by the way, there is about a dozen and a half of these poses,

00:29:26 Hello Kitty and what she would look like as a skeleton and he signed it Hello Kitty at the bottom, it's a very amusing thing,

00:29:34 again just the sense of irony in all of this is just really fun and so people like to have fun with her. I actually was forwarded a picture, it has been, it died with my last laptop,

00:29:46 a picture of a...imagine a plane flying around just the ocean and it's a picture of an oil slick, so some tanker had spilled some oil in the water and somebody had taken Hello Kitty's head and kind of superimposed it on the water.

00:30:00 Was it a green peace activist? I don't know, but...

00:30:05 then there's the Hello Kitty vibrator.

00:30:07 [Laughter]

00:30:14 Now, when we had this talk in Tokyo, when the book first came out, I invited people from Sanrio to come to the talk and the story of this vibrator thing is mentioned in the book, but the people from Sanrio had not yet read the book

00:30:26 to know the full story, of at least my interpretation, and they said, "Ken-san, Ken-san, its not a vibrator, it's a personal massager,"

00:30:35 and sure enough it says massager here and it's really meant as you can tell by the cuddly teddy bear and everything,

00:30:43 it is really meant to, you know, put on your shoulder, your stiff elbow that kind of stuff, it's not anything more devious than that, until of course it gets on the internet

00:30:52 and now it's sold as a pop cultural icon and you can actually find them on eBay.

00:30:57 I have a friend who goes back to Japan and buys ten of these at a time and gives them out as gifts because they are just hilarious.

00:31:07 Updated, this was 2004 in stock and ready for shipping.

00:31:18 Okay, this is sort of serious.

00:31:21 Like anything, you know, look thirty-four years of a brand of Hello Kitty of anything, brand fatigue, it's hard to keep the thing going, how do you keep it going?

00:31:31 These are just sort of broad points that I mention about, what's the future hold for Kitty?

00:31:37 Product piracy is a big deal. In our book, we mention that the company lawyers told us that they lose the equivalent of $800 million in sales a year; that's almost the equivalent of the entire company sales

00:31:50 with people ripping them off. Now if you've been to any Chinatown in America, just take a look at the tchotchke stores and forget what you see in China itself.

00:31:58 Its an easy face to rip off, right. It is just the circle with the nose and yet it is very difficult to rip off and you can spot a fake very quickly either two whiskers instead of three,

00:32:08 the nose is not yellow, its red. You know, there is a lot of ways you can spot a fake, and yet the company spends a lot of time running uphill trying to chase people

00:32:18 and then there is a social backlash as I mentioned in some of the earlier points and then there is another big point.

00:32:24 Japanese population is shrinking.

00:32:30 Since 1990, there is about 25 percent fewer high school kids in Japan, that's a lot fewer Sanrio customers and there is also deflation.

00:32:40 Prices have been declining in Japan which hurts profits and then there is an issue of Sanrio itself.

00:32:47 Mr. Tsuji, I pointed him out earlier, is approaching eighty years old. In any company where the founder has been there that long and has been such a strong force, there are questions about

00:32:55 what happens when he dies. His son, thankfully, is still being groomed, I guess, and there's also managing the brand we mentioned

00:33:05 and also what happens to character goods, they are doing very well now in America. There is a nice synergy between what's on TV, what you find in the toy store, what's with collecting cards,

00:33:16 and so forth, but who knows the internet may blow all that up.

00:33:22 Those are my prepared remarks, but I really want to hear from you. So, thank you very much.

00:33:26 [Applause]