Lex: Japanese media

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Heizo Takenaka, having helped to turn Japan’s banking sector round and lay the groundwork for postal privatisation, is setting his sights on the media industry. It is not a moment too soon. As Mr Takenaka points out, Japan’s entire media industry generates less revenue than Time Warner.

Japan, which once led the world in technology, has been slow to embrace the convergence of television, the internet and telecoms. This reflects both vested interests – the commercial broadcasters are loath to give up their lucrative stranglehold on advertising dollars – and excessive regulation. Separate copyright protection, for example, must be obtained for the same content each time it is delivered through a different channel. Hence, although some 16 companies have registered as fixed-line broadcasters, few boast substantial audiences.

Another hurdle is content. Japan’s hundreds of anime studios may have creativity in spades, but they lack the marketing, sales and distribution muscle of Hollywood. Instead, the broadcasters control much of the content capability. Hence, there is a hefty premium for movies or sports shows. GyaO, a broadband broadcast service launched last April, is trailing its financial targets in part because of higher than expected content costs.

While there is plenty of scope to loosen regulations, it falls to the industry to develop and promote convergence. For sure, it will be harder for broadcasters to resist alliances with internet players – two such advances were rebuffed last year – as broadband penetration grows and telecoms operators become more active. Even so, Mr Takenaka is taking on another tough challenge.

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