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AlphaTheta hitting all the right beats

Interview - March 19, 2023

AlphaTheta strives to create innovative products and services focused on digital transformation to support the development of music culture, and the next generation of DJs

YOSHINORI KATAOKA, PRESIDENT & CEO OF ALPHATHETA CORPORATION
YOSHINORI KATAOKA | PRESIDENT & CEO OF ALPHATHETA CORPORATION

Over the last 25-30 years, Japan has seen the rise of regional manufacturing competitors who have replicated Japanese monozukuri processes, but at a cheaper labor cost, pushing Japan out of mass consumer markets. However, we still see that many Japanese firms are leaders in certain fields. How have Japanese firms been able to maintain this leadership despite the stiff price competition?

The 1990s and 2000s for Japan were known as the lost decades, and even to this day, there are Japanese firms that do not seem to be able to get over that. That risk and frustration are still out there, and Japanese firms have lost large chunks of the market due to cheaper labor elsewhere. Despite this, there are success stories, and big companies like Sony, Toyota, and Nintendo are out there listening to customer voices and responding with products that customers truly appreciate. These are the kind of simple goals that AlphaTheta also has prided itself on since its establishment. There is not a secret sauce to capture the market, realistically it just comes down to hard work and listening to your customers. We have done this over the past decades, and we are not looking to give that up.

It might be considered both a strong point and a weak point at the same time. Japanese firms pursue high standards, but at the same time that can put a lot of unnecessary pressure on employees.

Last year saw a lot of fluctuations with the JPY against the USD. We saw unprecedented levels of JPY weakening, and it has made the situation for some Japanese companies even worse because it has stifled their ability to expose themselves more to the outside world. With all being said, with the economic situation it is becoming more problematic for Japanese companies to take on the world, but nevertheless, if you keep following good practices and take good care of your loyal customers there will always be a market to go to. At AlphaTheta we like to think that we conduct our business in that way.

 

Japan is the oldest society in the world and has a rapidly shrinking population, resulting in a labor crisis and a smaller domestic market. What are some of the challenges and opportunities this demographic shift is presenting to AlphaTheta?

Actually, to answer your question, our overall annual sales turnover is partially captured here in Japan, but the larger part is overseas. A solution in our minds is to expose ourselves overseas and shift to foreign markets rather than staying here. It makes clear sense from a financial standpoint to branch out beyond Japan and capture more markets.

We have tried many approaches to do so. First of all, we have been investing in our overseas workforce, and have employed more English literate people so that they may understand the needs of our clients in overseas markets. An elderly society is nothing new to our company and being a Japanese firm, we do have employees over the age of 60. We try to give a bit of flexibility to those that are reaching retirement age, so someone over 65 might transition from full-time to part-time. Other things we might do is reduce the number of days an elderly employee works or change the location to be more relaxing. Sustaining those employees may contribute to the company on a longer scale than just pushing those over 60 to retire.

Japan has been widely known as a country that has high wages for labor, but this situation is changing recently in China which is actually becoming more expensive than Japan for manufacturing. Despite this, Japan is still known as a country with higher production fees and wages.

 

The major industry you cater to is music and DJ equipment, and with the COVID-19 pandemic, we saw many live venues and performances shut down, but people had extra free time and many decided to learn a new hobby. A very popular choice in fact was DJing and google searches on how to DJ actually quadrupled at a certain point during the pandemic. With so many amateurs starting to DJ during this time, how were you catering to this new market?

We definitely saw that phenomenon happening during the pandemic, and more people started discovering themselves through new hobbies such as DJing. Coming up with new products and solutions is not something new to us. Last year we released a new product known as the DDJ-FLX4 which is designed as an entry-level DJ controller.



While it may look like a conventional modern DJ controller, we have added a bunch of new functions inside the interface and the controller itself. We have received some fantastic responses from the market, and even the most experienced DJs are always looking for new features. We want to be the ones that introduce those features and we are always willing to walk the extra mile to satisfy customer needs.

We also understood during the pandemic the power of live streaming, and it has become crucial for us in order to receive customer feedback straight away. A small improvement we made for this was the introduction of a microphone built into the audio interface itself so that a DJ may talk during a session to hype up an audience. By capturing more needs of the customers, we are able to continually improve upon what has existed before in a way that makes sense to our customers and in a way that brings out the best features of our products. It is the company’s philosophy to always go beyond what is expected and push our own limits.

 

Digital technologies have allowed producers to record, produce, and compose high-quality music, all from a digital workstation. If we look at AlphaTheta, you have developed rekordbox, a DJ software that integrates everything from music management using the cloud to creating DJ performances. What are some of the unique strengths of rekordbox?

rekordbox is a key product for us and we are not really thinking of it as a piece of software or hardware, rather we think of it as a communication platform. The platform gives DJs access to a wealth of information to help them during their performances. The appeal is the consolidated experience you can have from both supported hardware and the software itself. That is something that AlphaTheta as a company would like to push forward, the combination of both excellent hardware manufacturing with integrated in-house developed special software. This perfect blend of having both hardware and software is creating a strong advantage for us. Nobody in the industry other than us is able to create this blend and we would like to continue to be the number one integrator of software and hardware for audio technologies.



How do you believe digital technologies will change DJing, and by extension, the music industry, in the next 5-10 years?

DJs themselves are a special audience in that perspective, and they are unique when compared to more traditional musicians such as pianists or drummers. With all respect to those traditional instruments, DJing is more demanding in a way because, over the flow of time, musicians need to adapt to new technologies. Yes, it is true that conventional instruments have been digitized, but none have felt more of a change from digitalization than DJs. It started with vinyl, then to CDs, and USB sticks, and now you are seeing DJs doing live streaming. It is a huge amount of change over a short period of time. All DJ equipment then has to adapt to all of these changes in technology.

Of course, AlphaTheta is not just a manufacturer, but we also operate as a service vendor, and we work very closely, hand-in-hand with our customers to create products that are truly needed. We carefully listen to the customers and try to develop features that cater to those customers’ needs. It is important to be that close to the customers because we see the way the industry is evolving, and in many ways, we have been lucky in the fact that the improvements we have made to our products have been the fuel for the industry’s growth. One that can be mentioned here is Virtual Reality, which has recently been adopted and demanded by many customers.



We see this as a tendency of the industry and over the next few years I think we are going to see more of these kinds of needs rise up from the DJing community. Virtual Reality allows those seeking features and equipment to try it out and then give feedback on the equipment in real-time.

 

The Big Jog is a jog wheel that allows users to use a wide variety of DJ techniques and could be considered AlphaTheta’s core technology. The interface wheel allows DJs to adjust playback speeds, mix points, head starts, and scratching, all with smooth operation. Could you tell us more about your Big Jog UI technology?

The CDJ player was first introduced by our company back in 1994, and the very first product in that series was called the CDJ-500. It provided a lot of excitement to customers at the time because they had never seen a product like it. In 2001 the CDJ-1000 came out, and with each new model, we tried to capture more of the needs of customers. That particular model enabled users to scratch using CDs. The most recent model is the CDJ-3000 which features a 9-inch, full-color HD LCD touchscreen. With its newly developed mechanical structure, you can feel ultimately smooth rotation and the lowest touch latency at the same time.

The DDJ-REV7 has a really beautiful-looking display on the rotating platter, that is called “Vinylized Jog Wheel”, which could be a culmination of our history with the Big Jog wheel.

 

Could you elaborate more on your R&D strategy and are there any new products or technologies that you are working on that you would like to showcase for us?

There are several examples that I could outline today. I think it is best if I first talk about the company’s larger focus, which is user interfaces. In fact, I think that user interfaces have always been the focus of the company. We strive to create more flexible, approachable, and easy-to-use interfaces that decrease the gap between users and great music. The crossfader is something that I would like to mention here and it is something that we develop in-house. Our crossfaders are robust when compared to some others in the market, and that is a necessity considering how often they are used during a performance. The reason for the long lifespan is that it is based on a magnetic detection which allows precise adjustment of sound output. while allowing the DJ to make detailed adjustments.

Another enhancement can be seen in the brains of the CDJs and Mixers, which we call digital signal analysis. This is also developed in-house and what it does is analyze the beats per minute (BPM) from the tracks being played as well as the key the track is in. When you really think about it, we are covering the entire equipment, from the faders and the jog wheel to the CPU, all the way to the software.

The sound quality itself is also important to mention here because it combines fundamental studies of what is happening inside a club. We have had close relationships with DJs for 25-30 years now and we are analyzing all sorts of data such as sound vibrations along with many others. If you are an expert, you will probably feel a difference thanks to the equipment we provide. Speakers for example have been fine-tuned to make sure that the crowd inside a club does not feel tired when dancing and listening to the music. These types of speakers have been proven to be the best fit for the DJ equipment that we have introduced. At the end of the day, it all comes down to creating a better experience for the customer, not only for the DJ but also for the listener.

 

In March 2020 AlphaTheta Corporation’s parent company changed from Pioneer to Noritsu Koki, which also has other companies under its umbrella such as JLab which produces headphones, and Teibow. What synergies can your company take advantage of now that you are under the Noritsu Koki umbrella?

We are actually going to see the synergistic results this financial year because unfortunately when that shift first happened, it was right in the middle of the COVID-19 pandemic. During that time, there were not many opportunities to use this synergetic advantage. One advantage we have seen is cross-communication, and companies like JLab and Teibow are related to the type of business we do here at AlphaTheta.

The supply chain also helps and as you know when the pandemic struck the supply chain for electrical components struggled and it became increasingly difficult to procure. We used JLab’s supply chain to overcome this issue and procure electrical components on time.

We have not seen any results yet in terms of synergies with Teibow, but I think that is because the development of building a relationship is a little bit slower in regard to the company. 2023 will be an important year for the group and a lot of key decisions need to be made with these two companies. I think this year will see a lot more synergestic results coming from our cooperation with the group companies.

 

Could you elaborate more on the role that collaboration and co-creation play in your business model, and are you looking for any co-creation partners in overseas markets?

First of all, any change is a good change, so thinking ahead of time and going to places that lack an understanding of our industry basically would mean collaboration in some form or another. Cooperating with companies that are dealing in different industries is always creating good vibes, and in that sense, it is creating good results for ourselves. We are looking to go into the unknown, and perhaps areas where other companies have a strong hold on the market.

Off White is an apparel company and in 2021, we released a special collaboration with them known as the DDJ-1000-OW. This is a foreign designer collaborating with our engineers to create a flashy designer product that also features the best aspects of our cutting-edge controllers. I think this is a good example of how we are able to work with foreign companies in a whole range of different industries. I would also say that we are looking forward to similar collaborations in the future.



We have also collaborated with a company called Tribe XR which is creating DJ workstations and turntables in Virtual Reality so that anyone can experience what it is like to use our equipment without having to prepare actual gear. Additionally, anyone with a headset and an internet connection can join the session both as an audience member in a virtual concert as well as a collaborator in a virtual mixing session. Basically, Tribe XR is creating the virtual space and we are providing the software, and once combined this creates a truly unique virtual experience. I would say that this is another type of collaboration we are keenly looking forward to in the future.

 

Are there any new countries or regions that you have identified for further expansion into? What strategies will you look to employ to achieve that?

Obviously, the markets that have been a great success for us have been the US and Europe. I would like to sustain these markets and even go into these in more depth. Expansion into China is forecast for the near future, and we actually established a sales office there back in 2018. The growth rate in 2020-2022 after COVID-19 was not so bad, only the last year of 2022 was a bit worse because of a lockdown. We are hoping that once the after-effects of COVID-19 pass we can get back on track in the region.

APEC countries and South America are seen as potential areas to go to because they are showing good signs; there is increased demand coming from DJs in those regions. Each country and region has its own specifics, so for that reason, it is important for us to communicate and learn alongside our customers. No matter where the products are sold, it is crucially important to listen and meet the needs of those wanting our products. Analyzing each market enables us to forecast and meet the needs of a region in the most effective way.

 

AlphaTheta is a world leader when it comes to DJ equipment, so what is your favorite AlphaTheta product?

I think to answer the first question, I really like the CDJ-1000, because it really marked the company’s biggest changing point. It really was a product of the moment. Of course, from a technical point of view, I love my CDJ-3000, but from a historical point of view, the CDJ-1000 really created a big milestone for the company.

 

Imagine that we come back six years from now and have this interview all over again. What goals and dreams would you like to have achieved by then?

Ideally, I would like to just continue to contribute to DJs all around the world and help those performers excel and create live performances that truly move people. Enhancing the creative potential of music is embedded into the company’s philosophy and through that, we are able to enable a world filled with joy. By sustaining the number one position in the segment we are able to keep up those promises with our customers and users.

Obviously, I do have financial targets, but beyond that, I would like to make more meaningful contributions to society. That aspect is more important for us.

 

Interview conducted by Karune Walker & Sasha Lauture

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