“It’s just like a video rental shop on the Internet,” touted a man in charge of the TVs.
An official of a leading electronics maker said, “Online video streaming services have been rapidly spreading in the United States, so naturally we have to make it possible for consumers here to enjoy them.”
Hulu offers more than 20,000 video titles, including Japanese TV drama series from various commercial telecasters as well as original videos from abroad. The monthly flat-fee service costs ¥933 excluding tax.
A female Hulu subscriber, 28, who said she often uses the streaming service while waiting for appointments, seemed satisfied, saying, “It has plenty of domestically produced videos.”
Masashi Funakoshi, 53, president of HJ Holdings LLC., which runs Hulu, said: “We’re enjoying high popularity for a wide range of video titles we’re streaming, including original drama content produced overseas and old anime titles such as ‘Soreyuke! Anpanman’ (Let’s go, Anpanman). That we have maintained a broad and balanced variety of video programs is an advantage.”
In anticipation of the ever-expanding market, more than 10 major online video streaming businesses have been vying for larger market shares.
Three mobile phone giants have developed strategies for taking advantage of their high-speed telecommunication networks. The number of subscribers to dTV, a streaming service provider affiliated with NTT Docomo and others, stands at 4.76 million, the largest among domestic video streaming sites. From late November, dTV embarked on video streaming services for 4K ultra-high-definition TVs.
Another online streaming company, Uula, established by a group of companies including SoftBank Corp., has been focusing on music video content.
Sense of urgency
The online video streaming service market, valued at ¥134.6 billion in fisca1 2014, is expected to expand to ¥201.5 billion by fiscal 2020, according to Nomura Research Institute (NRI). These figures, however, are still far smaller than the commercial TV broadcast market, currently estimated at ¥2 trillion.
Hiroshi Inoue, the chairman of both the Japan Commercial Broadcasters Association and TBS, told a general meeting of the association in early November, “There are no signs right now of online video screaming services taking the place of mainstream TV broadcasting, but the time has ended when programs from commercial TV companies could monopolize TV screens,” indicating a sense of urgency over the future expansion of online video streaming services.
At a study meeting held in early November by the Internal Affairs and Communications Ministry, Prof. Hitoshi Mitomo of Waseda University said, “A new wave has come from abroad, and Japan’s broadcasting world can be said to have opened up something like Pandora’s box.”
The business structure of broadcasters, who earn revenue through advertisements under the protection of the Broadcast Law, seems on the brink of a significant shake-up.
What will the broadcasting industry do to cope with the emerging streaming trend that is prodding it to put into force some form of “structural reform”? In 2014, NTV acquired the Japan arm of Hulu, while TV Asahi teamed up in August this year with KDDI Corp., which operates the Videopass online video streaming service. Other broadcasters have been probing the prospects for online video streaming businesses.
More than 60 years have passed since the commencement of TV broadcasting in Japan, and the practice of family members gathering in living rooms to watch programs together has become a thing of the past.
Particularly conspicuous is the trend away from television among young people, which coincides with the spread of smartphones. According to a survey in March this year by the Cabinet Office, about 15 percent of households whose oldest member is 29 years old did not own a TV. An increasing number of young people feel smartphones are sufficient for enjoying videos while they are on the move.
Age of mega-competition
In the United States, many households subscribe to cable television networks, meaning it was relatively easy for them to shift to online video streaming services. There can be no telling whether online video streaming services can become prevalent in Japan, where commercial TV programs are available for free.
The strength of online video streaming services lies in their ability to produce original content that is free from the constraints of the Broadcast Law.
Amazon has built its own studio in the United States and streams its own content.
Jasper Chyeung, president of Amazon Japan, stressed in a news conference last month, “We’re going to offer 40 new videos next year, including 20 original Japanese ones.”
NRI senior consultant Yoichiro Miyake said: “Nobody will watch videos they deem boring. Producing videos that viewers want to watch is key.”
Which camp will be successful in capturing the rapidly diversifying preferences of viewers? An age of mega-competition has just begun in the online video streaming service industry.
Background of high-speed services
Question: How are video streaming services run online?
Answer: Users can access dramas and movies using a TV, PC, smartphone or other such devices whenever they want. They can subscribe to a streaming service by signing up with an e-mail address, password, credit card number and other related information.
Q: What kinds of programs are available?
A: Although the latest content is scant, a wide range of Japanese and foreign TV dramas, movies and anime are available. Accessing programs you want to watch is quite simple and some people prefer to watch a number of videos in a row in their free time.
Q: Why is the spread of online video streaming services so intense?
A: Mainly because Internet speeds have become extremely rapid, making it easy for people to watch videos. Since 2000, fiber-optic networks have been available, while about 50 percent of cellular phones are now LET (Long-Term Evolution) format-capable, making it even easier to use online video streaming services. Speech