Marketing Japan: Yahoo Japan Starts Long Decline...

By Mike in Tokyo Rogers

What did I tell you? When those fools at Yahoo Japan decided to throw in the towel to Google and start using Google's search engine, I said it was the beginning of Yahoo Japan becoming an "also-ran." Now we have Yahoo Japan making excuses, sputtering out "spin"by making statements claiming that they are going to remain "competitive."

Yahoo Japan is following Myspace... You'll see.

From the Japan Times article "Yahoo Japans Vows to Stay Competitive":

Yahoo Japan Corp. will remain competitive with Google Inc. even after adopting Google's Internet search engine and online ad technology, because the two firms will use their own editing and advertising policies, Yahoo Japan President Masahiro Inoue said. "We will operate the search engine under an editing policy that is independent (of Google's) and also have different screening criteria when it comes to advertising," Inoue told reporters, dismissing criticism by Microsoft Corp. that the Yahoo Japan-Google tieup is anticompetitive.

Forget about what Microsoft is saying. Read in between the lines. Microsoft doesn't give a hoot about Yahoo Japan anymore, they are a lost cause, Microsoft only cares about Google's rapidly growing dominant position in Japan. A dominant position that, I might add, has quickly become irresistible.

By the way Microsoft owns Yahoo Inc. (USA) and Yahoo Inc. owns 37% of Yahoo Japan. So Microsoft must be be really steamed about this Japan deal!)

I suggest this for Yahoo Japan's new logo: A long decline.

You can also disregard what Yahoo Japan president Masahiro Inoue says too... This nonsense about remaining competitive due to a difference in Yahoo Japan having an "editing policy" different than Google is just that; nonsense.

A different "editing policy"? Right. When ad revenues are hard to come by, and you have voluntarily become second rate, you are going to start denying people who walk into your doors with money to spend?

Guffaw! 

If Yahoo Japan is going to use Google's search engine, then Google will always at least a one step advantage on Yahoo Japan. If you are an advertiser, why go for the second choice unless you don't have money for the first choice?

This means that Google will get the first tier sponsors and Yahoo Japan will get second tier or less.

When any media stops getting the best advertisers, look at what happens to them, especially in Japan. For evidence of this, one need look no further than the television examples of TV Tokyo or TBS TV. The number one TV station in Japan, Fuji TV has ads for Toyota, Nissan, Canon cameras and copiers, high end household goods like Panasonic refrigerators and HD TVs... TV Tokyo has ads for discount car insurance, pachinko parlors and local businesses like Parrot Cage Emporium.

It's rare to see high end goods advertised on TV Tokyo. 

When Yahoo Japan switches to the competitor's search engine, it's game over for them... Regardless of how they try to spin it.

See original Japan Times article here.

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Keywords: Google, Yahoo Japan, Microsoft, Japan, Tokyo, Panasonic, Mike in Tokyo Rogers, Marketing Japan, Mike Rogers, Nissan, Tokyo, Canon, TV Tokyo, Fuji TV, TBS, television, Yahoo Japan President Masahiro Inoue

Why the Digital Conversion Will Destroy TV Tokyo and TBS

Yesterday I wrote about why the conversion in Japan by television stations from analogue to digital is going to wipe out a bunch of FM radio stations. Today I will write about why this will also kill off some of the poorly rated TV stations too (good riddance!).

The digital conversion that is scheduled to occur on July 24, 2011, is going to kill off a bunch of FM radio stations in this country (especially Tokyo) because you will no longer be able to hear FM radio in your Toyota or Nissan without special equipment. The digital sets are not compatible with analogue.

Also, the economic consideration that analogue equipment is not manufactured in Japan anymore plays a big part. It may not be so much a matter of what the consumer wants, but what the manufacturer wants.

From that blog:

After July 2011, on your dashboard, you will have a digital GPS, Internet, digital TV and digital radio. Want to do Social Media, YouTube, Twitter, U-Stream, blog? Got you covered. Need to Google or Yahoo search? Sure. When you need traffic conditions, just a click on your GPS will give you up to the minute details on traffic and road conditions. All the TV channels? No problem. Throw on top of that 6 digital radio channels and, of course, a CD player and probably an iPod connection, and you have the next generation of car entertainment system. 

Read that entire blog here.

Today's blog will show you why I think this digital conversion is going to kill off TV stations like TV Tokyo and TBS who are consistently last in ratings.

It is important that you good folks have an understanding of the Long Tail to fully grasp this. For a brief explanation of what the Long Tail is, read here and here.

When the digital conversion happens in July of 2011, suddenly there is going to be massive choice on your television. The playing field will be evened quite a bit. Instead of being able to receive just 4 ~ 6 channels like today's analogue TV does, your system will be able to receive hundreds of TV channels.

Now, what happens to people when they are given a choice? Do they stick with watching the same 4 channels, or do they TV zap and try many channels?

History shows us that when people are offered a choice, they will let their own personal tastes dictate what they decide to consume whether we are talking about TV programs, restaurants, clothes, or even  jams and jellies for toast.

Let's use jam and jelly for our example.

Go to any convenience store where shelf space is limited. How many jams and jellies do they offer? 4? 5? Go to any grocery store. How many jams and jellies do they offer? 18? 20? Go to Amazon.com, how many jams and jellies do they offer? Over 1,300.

Now it makes sense that if Joe-blow is buying the lemon-tangerine marmalade made in Holland, that is one less purchase of the generic brand "STRAWBERRY JAM" that he is going to make, right?

Get it? Having more choice doesn't mean that people will buy more jam; it means that people will diversify their tastes. The more people are offered, the more wide-spread their choice becomes, the more dispersed their spending will be. More choices will result in a displacement of time and money from the old choices that were dictated simply due to lack of choice (caused by limitations due to time, money and space).

When people have wide choices they will exercise more discretion 

and more personal taste and freedom of choice

It is the same with TV.

When there are 300 TV channels competing for your attention and sponsor's money - both of these critical factors to the survival of TV (audience and money) will be more widely dispersed.

Think of it this way: You are the maker of, say, outdoor goods like tents, bicycles and barbeques. Say, the price for 25 TV ads on a TV station like TV Tokyo is about $150,000 (USD). The price of 35 TV ads on the sports channel is $14,000. Sure there are more viewers on TV Tokyo, but Sports TV offers a targeted audience of men who like sports (and, by the way, many are probably are married, have families, and like the outdoors).... TV Tokyo's audience ranges from 10-year-olds to 80-year-olds; Sports TV target audience is mainly 30 ~ 50-year-old men.

Now, where would you spend the money if you were the sponsor?

It is obvious that you would go for the Sports TV. It will be the same for all manufacturers whether they make diapers or women's fashion brand shoes. The diaspora of audience will make targeting even more important as time goes by.

But there will still be a place for the catch-all, wide audience accepted platform to advertise hit products; say the new Hollywood Blockbuster or the new Disney Park attraction that appeals to the entire family. Those will still be handled by the old style TV stations. The old style TV station thats target a wide audience will be amply served by today's #1 rated (by far) TV stations: Fuji TV and Nihon TV (at #2)... The stations like TV Tokyo and TBS, who fight it out for last place, will find it more and more difficult to find buyers for their ad space and are headed for very tough times and difficult decisions.

Sports TV can sell TV ads for 1/10th the price of TV Tokyo because they only have about 60 employees... TV Tokyo has over 700! TV Tokyo group has over 1,000!

Guess what? When the playing field is evened, then everyone will have to tighten their belts, but guess who is going to have to fire 50 ~ 70% of their employees and probably merge with another company? TBS and TV Tokyo.

While today, the stations like TV Tokyo and TBS are all crowing about their new digital channel... The content is still the same. Only the broadcasting platform has changed. What makes them think that just by changing platforms that their ratings and income are going to increase? Good question. If anything, their viewership is going to decline due to more choices being offered and some people opting out of buying an expensive new TV (at my home, we opted out of TV over seven years ago and haven't missed it once. I wrote about not having a TV and the benefits of that here and here.)

Today, TV Tokyo's ratings are dead last and they are losing millions of dollars a year and having to borrow massive amounts of money from banks to stay afloat. How long will banks keep lending them money? (Their FM radio subsidiary, InterFM alone is losing somewhere in the neighborhood of one million dollars a year!) What makes TV Tokyo management think that, when digital goes online, and the competition increases one-hundred fold, that their fortunes will get better?

Fuji TV consistently #1 in ratings by far.  

Strong on branding and image and logo is the same each and every time.

I think that they are in for a quite rude awakening, in spite of their current bravado and high hopes that digital is going to save them from their current conundrum... (I've mentioned before that "hope" is a very poor business plan).

I also think that their poorly designed Digital 7 TV logo is a sign of things to come for them. Of course my opinion here is very subjective but I think this logo looks old-fashioned, cheaply designed and not "cool" at all. It looks old-fashioned but not "retro" and looks like a design that wasn't made by a world-class professional. Like I said, it looks very poorly thought out and very cheap. Also, in typical TV Tokyo fashion, every time you see it it is a bit different.... Why don't these guys take classes in Marketing and Branding 101?

This is TV Tokyo's Digital Logo. 

Sorry, guys but this looks really cheap. 

How about some shadows or gradation? 

Why don't you hire a professional designer?

Let me get cute here and say that, I think, in this case, "7", for TV Tokyo is not lucky. In this case, 7 is their second number (on analogue they were channel 12) and if you've ever played Craps, you know that 7 on your second number means, "Loser."

This is why I say that the times they are a changin'... Look for no TV Tokyo and no TBS TV by 2030!

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Keywords:

Social Media, FM radio, FM, blogs, Yahoo, U-Stream, AM radio, Nissan, Tokyo, Pick, Twitter, Toyota, TV, YouTube, AM, blog,  Internet, Japan, digital TV, digital radio, Japan, TV Tokyo, TBS TV, 

One More Phase in the Shattering of Mainstream Media

By Mike in Tokyo Rogers

I rode the Tokyo subway today and saw a sign inside the car that notified the passengers that as of July 24, 2011, terrestrial television stations will no longer broadcast analogue signals in Japan and will finally make the switch to digital.

This signals what could be the final nail in the coffin of many of the FM radio stations in this country and the collapse of TV Tokyo and TBS.

I predict that InterFM will either be bankrupt or sold to a new owner by 2014 and TV Tokyo will be in the same situation: insolvent or absorbed by another company by 2016.

I'd like to explain why in this post but first let me give you some important details involving the background of broadcast signals so that you may have a better understanding and why I think this way. Let's see if you come to the same conclusions that I have.

Let's start with AM and FM radio.

AM is called "Amplitude Modulation" and its signal is wavy. When an AM signal comes to an obstacle like a mountain or a tall building, it bounces off of it in many directions and continues going. This is why, in many areas of the United States, there are some AM stations whose broadcasts can be heard over 600 miles (1,000 kilometers) away. The AM signal is like an ocean wave so, if there are no mountains to make the signal deflect into the heavens, the signals will bounce along the earth's surface.

This makes AM radio great for talk and the friend of people who drive long-distance trucks.

FM is called "Frequency Modulation" and it goes in a straight line. When an FM signal hits a mountain, tall building or other obstacle, it stops. We've all had the experience that our favorite FM station drops off when we go through a tunnel or through a valley. That's the shortcoming of FM radio.

What many people do not know is that terrestrial TV uses the same FM frequency for its broadcasts too.

People who were brought up in Japan may remember from their childhood small portable transistor radio that had the AM / FM band on them but also played TV channels NHK and NHK Educational (1 & 3).  If you understand that analogue TV uses FM frequency to broadcast, then you now understand why those old transistor radio's had TV channels on them.

This is important so keep this in mind.

On July 24, 2011, the TV channels will stop broadcasting analogue signals. What this really means is that they will stop using the FM band for transmitting their services and go to terrestrial digital.

FM, Frequency Modulation, is a broadcast wave. Digital broadcasting is not a wave at all. Digital broadcasting is a completely different technology. Digital broadcasting is not a wave, it is binary data.

I suppose that some of you have seen binary data before. It's a series of zero's and one's and looks something like this:

00110010111100101101001110100010000100001000001

00110001000011101110001010101001001000100111000

01011110111101111011011111110010001000001101010

That is binary data. The reason why digital broadcasting is so clear and high quality is that, with binary data, it is either "on" or "off" unlike an AM or FM signal that can be blocked or deflected by tall buildings, mountains or even trees. Binary Data is crystal clear.

Now, how does this spell the end of FM radio? Bear with me here, cause now we're getting to the nitty gritty.

The future of FM radio doesn't lay in what they broadcast or how they up the ante of quality of content (but, of course, it will always be a competition between stations for dwindling audience and sponsorship dollars)...

The future of FM radio depends on what Toyota does.

That's right. Toyota is the one who decides what is going to happen. In my opinion, it is obvious that FM  is is serious trouble and that we are now witnessing the end of an era; and it's happening, in slow motion, right in front of our eyes.

But, don't take my word for it, decide for yourself. Let me explain further...

Think about this: Where do most people listen to FM radio? In cars, right?

The Japanese government and all the big manufacturers in this country, Sony, Panasonic, etc. (who, by the way, all have an incestuous relationship with each other and Toyota in stock holdings) are pushing for the digital conversion big time. These manufacturers need their flagging fortunes to get an injection of sales and profits that new broadcasting and new equipment will generate. Digital equipment costs anywhere from $500 - $2,000 (USD) a set. The Japanese manufacturers want and need for the Japanese public to go whole-hog into digital broadcasting. They need the public to dispose of their analogue equipment and buy the new digital equipment... (By the way, a cursory check of analogue equipment at Bic Camera the other day - what little I could find - showed that all the analogue products were all manufactured outside of Japan).

If digital broadcasting is a failure in this country, then it's going to hurt Japanese manufacturing for a very long time... The analogue equipment I saw was all manufactured in Malaysia, Indonesia, and I found some from Taiwan (which was surprising).

Now, how does Toyota fit into this equation?

Imagine your car dashboard. It has a GPS, CD player, and television/radio set all built together. Most people have an analogue device (with terrible TV reception!) From July 2011 there will be no cars that come with that device. They will all be digital.

After July 2011, on your dashboard, you will have a digital GPS, Internet, digital TV and digital radio. Want to do Social Media, YouTube, Twitter, U-Stream, blog? Got you covered. Need to Google or Yahoo search? Sure. When you need traffic conditions, just a click on your GPS will give you up to the minute details on traffic and road conditions. All the TV channels? No problem. Throw on top of that 6 digital radio channels and, of course, a CD player and probably an iPod connection, and you have the next generation of car entertainment system. (In Japan, as of now, there are 6 digital radio channels that are shown on CS or BS television. These channels broadcast soft jazz and classical music).

Toyota HD Digital Screen. 

All sorts of fun things like iPod, digital TV and digital radio... 

Do you see FM or AM radio? I don't

Remember I wrote that digital signals are binary data and analogue is a broadcasting wave? This is important now.

I ask you, dear reader, to consider; Since Sony, Panasonic, etc. and companies like Toyota and Nissan all have an incestuous relationship as to stock holdings and company ownership, and they desperately need to have the Japanese public buy their digital devices that cost at least $500 each... And digital devices receive binary data and are not analogue compatible... Do you think that Toyota will cut a hole in your dashboard, just under your $500 digital GPS, TV, Internet, radio device in order to install a $1 dollar made in Indonesia FM tuner?

I don't, and I think it is insane to think otherwise. Actually, the notion is laughable, isn't it?

So, if people can no longer hear FM radio in their cars, then where are they going to listen to it? In the subways with their white earplugs through their iPods and iPhones?... Get serious. Nobody does that now!

If there are any folks reading this who remember how popular short wave was way back when compared to what it is today, then they have a good idea what I think the future of FM radio in Japan looks like....

No FM radio in the car spells doom for the FM stations because if no one can listen in their car, then FM will have no listeners at all... No listeners means no sponsors. No sponsors means no money. No money means no FM...

I cannot imagine how they will survive the next 5 ~ 10 years.

If I were a station like J-Wave - that still has good ratings and high listenership - I'd get into negotiations real soon for an open digital radio channel... And, no, the license and digital conversion are not cheap. We're talking hundreds of millions of dollars. The smaller stations will never afford it, so they are dead.

And that's why July 2011 is the last nail in the coffin of FM radio in Japan.

But what about AM radio you say? Ah, that's the interesting contradiction. AM radio will probably survive. Because AM car radio is the bottom of the pit for basic car equipment (besides nothing at all)... Almost every Tokyo Taxi has an AM radio in it. Few have FM radios.

Tomorrow I will explain why this entire situation bodes ill for TV Tokyo and TBS TV.

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Keywords:
Nissan, Tokyo, Pick, Twitter, FM, Toyota, FM radio, Yahoo, U-Stream, J-Wave, Social Media, TV, YouTube, AM, AM radio, blog, blogs, Internet, Japan, digital TV, Panasonic, digital radio, Japan, TV Tokyo, TBS TV, iPod, iPhone, Sony, Google, Tokyo subway