Japan’s Lute, Instagram Stories-based video media startup, secures $710K seed funding


See the original story in Japanese.

Tokyo-based Lute, which operates the Instagram Stories-based video media Lute, announced last week that it has raised 80 million yen (about $710K US) in the seed round. Gumi Ventures, Candee (video production), Allfuz (ad production) and one individual investor all participated in this round.

Lute CEO Hirohiko Igarashi

The company proposes to use the funds raised to promote Lute’s video content production and media operations.

Hirohiko Igarashi (current CEO), who was previously involved in editing and translating the online media Lifehacker, launched Lute in 2016 as a media label of Avex Digital’s internal venture. On August 15th of this year, Lute was established as a spinoff and independent startup.

The Board of Directors includes Kurando Furuya (video director known for the movie yearbook “Eizou Sakka 100 nin, literally meaning 100 videographers), Shun Takeda (media producer who has served as Editor in Chief of the Roomie online magazine), and Kazuki Kogishi (CEO of Candee).

During his time at Avex Digital, Igarashi hinted at his future plans with projects like Vice Plus and other video media, and with the cooperation of various artists established Lute.

Igarashi explained:

Millennials, generation X, that’s our target. Since they have smartphones they don’t connect to WiFi at home and they don’t watch YouTube or music videos. To target this generation you use media distribution, Snapchat in the US, Instagram Stories in Japan, and so on.

There is no web portal on Lute; it is distributed media specialized in Instagram Stories. The company’s approach is similar to that of Firebug’s Thirty, which was discussed previously, and while keeping in mind the spare moments users have while completing other tasks, Lute is producing mobile optimized vertical short videos. For video production, it is common to use something like a storyboard or cue sheet in the pre-production process, but with Lute, one section is as short as 15 seconds or so, and it is done with the sense of putting together a magazine layout. In fact, many magazine and media editors can be named among the directors and staff.

Program examples: My Best (left), Artist Interview (right)
Image credit: Lute

Lute’s business model is roughly divided into two: the management business and the commission production business.

The management business includes the management of artists. According to Igarashi, as mobile media and influencer marketing advances, for example,  there are an increasing number of cases where people who use the title of “model” also work like musicians, it calls for a different way of managing artists. Lute rents office space in Shibuya, Tokyo nearby the NHK broadcasting center, so when artists stop by for a moment the company can shoot and produce videos on the spot multiple times throughout the day.

For the production of commissioned work, Lute does casting, consulting etc. for the content creation of other companies. Using Igarashi’s personal network, the company seems to be good at casting people who fit in with the Millennials, such as a remarkable indie artist or up and coming rapper who are not with conventional production companies.

Igarashi continued:

Various data, like audience ratings, can be taken with Lute. It’s possible in the future something like advertisements might come along, but we’re not thinking about it for now. First of all, we want to build a user base, and in the medium to long term, we will start with music, and want to achieve multi-channelization to subculture media and culture media.

Originally Candee’s Kogishi wanted to invite Igarashi to Candee to launch this project, but since Igarashi was willing to start his own business himself, he abandoned the invitation and instead of giving up Lute he decided to invest and take office as a director. Thus, the business synergy between Candee and Lute is likely to rise.

Kogishi added:

Products for kids is becoming a subculture. For now, Lute’s management and commission businesses will grow bigger, but I expect that it will grow in the media business too. […]

(As a means of promoting music artists) Up until now, you make a music video, release it to the media thereby launching one big firework. But from now on, rather than launching one big firework, it is important to keep launching many small fireworks.

But, it’s hard to do. (For productions and artists) I think that Lute should be used as such a place (one where a lot of small fireworks can be launched).

Translated by Amanda Imasaka
Edited by Masaru Ikeda