Major Television Stations in Japan on Death's Doorstep

The major terrestrial TV stations in Japan are in big trouble. On July 24, 2011, they will stop broadcasting analogue and start digital broadcasting. On that day they will lose at least 30% of their viewing audience. If they are losing money now, what will they do when the estimated 30% of the people who do not own a digital tuner drop off?

I have written extensively, during 2010, about the coming collapse of TV Tokyo, TBS TV and TV Asahi in Japan before. Read those articles here, here and here.

Now, after spending five days at my in-laws house this New Year's I can definitely attest to the coming demise with anecdotal evidence.

Booooooooring

My father in-law is 72-years-old. My mother-in-law is 68. These folks are typical prime target audience for a station like TV Tokyo.

These are folks who have seen TV all their lives. The Internet is still a new thing to them. My in-laws are the kinds of folks who turn on the TV when they wake up in the morning and leave it on all day whether they are watching it or not. They are terrestrial TV's prime audience.

Why are these people the typical prime target for a station like TV Tokyo or TBS? Think about it.

Who has the time to sit around and really watch TV for 2 or 3 hours a day, everyday (like people did 30 years ago)? Well, the only people who do have the time to do so are either:

1) Inactive
2) Poor
3) Retired or aged
4) Handicapped or ill

Think about that. Now, if you were a sponsor, would you spend money on TV advertising for people who fit any of the descriptions above? No. You wouldn't.

That's one huge problem for these dinosaur TV stations that have thousands of employees and a dropping revenue base.

In fact, I was told that, in TV Tokyo's case, their sales are dropping by 5% a month and they are losing more than one million dollars a month.

But there's another, more subtle problem that I have discovered during this New Year's visit that makes me want to share it with you; it used to be, that coming to the in-laws house drove me crazy as they, like I mentioned, would watch TV all the time.

At my house, we do not have a TV and I do not want my 7-year-old son watching it. So, it would pain me whenever we visited the in-laws as the TV was on constantly....

Not this year. We have been here for 5 days now and they only turned on the TV 3 times that I saw, and each time was just for 10 or 15 minutes. Then they'd turn it off. After coming here annually for the last 15 years or so, this recent behavior had me curious so I asked my father-in-law what was going on. I asked him why they hadn't been watching TV like they did before. I was wondering if they were being kind to us as they know we don't watch TV and don't approve of our son watching it either...

Well, it wasn't anything like I was expecting. My father-in-law told me that they didn't watch TV like before because he said, "The Internet is more interesting."

I was so surprised. Of course, I'd agree. Yesterday, when my family and in-laws all went outside for a few hours, I grew curious. I mean, they have this expensive new-fangled system, yet they don't watch as much as they used to? Hmm....I sat here doing some work and then I watched TV for 20 minutes or so to see what the new system was like.

My in-laws have a brand new plasma TV and they get all the analogue channels and Chidigi (the analogue stations on digital) and both BS and CS digital. I flipped through the stations for a while and thought (as I usually do with TV) "Who'd watch this crap?"

I think the BS and CS stations have a chance to survive as most of these stations are small and have staffs that number under 100 people. But the Chidigi stations, like TV Tokyo or TBS, that have well over 1,000 employees are dead.

Just because their signal is digital, people are not going to watch the same old crap. Hello TV Tokyo, TBS and TV Asahi! The problem is not your platform, the problem is your content; it sucks and is boring.

On top of that, some of the channels asked for "pay per view" yet they were showing movie like "Kramer vs. Kramer." No joke! No one is going to pay for that! Why not rent it or watch it on Youtube? At with those you can watch it when you want - with no commercials!

I did watch a bit of some other movie about the CIA but gave up after 20 minutes because of commercials.

After flipping through the channels a while and seeing lots of Shopping TV and commercials, I turned the TV off. Not only was the content the same old boring stuff, but, the tuning system is confusing... Instead of one block of channels to pick from, you now have three...

It's not convenient at all.

If older folks like my in-laws have turned away from TV; if 30% of the TV audience is dropping off this July; if the content is going to be the same old thing; and Japan's economy stays in the doldrums - which it will. Then I stick by my predictions:

TV Tokyo, TBS and TV Asahi will not survive 2015 in their current configuration. Expect TV Tokyo and TBS to go bankrupt first.

What happened?

1) No one has time to sit around and watch TV anymore.
2) TV demands that you adjust your schedule to fit theirs. That doesn't work anymore.
3) Minor stations only have to support 40 ~ 80 workers. Big stations need to support thousands. There is no revenue base for that anymore.
4) Other forms of entertainment are much more satisfying and time-flexible.

Considering the above and now, throw in the older folks coming to the conclusions that TV isn't interesting anymore then, there you have it.

Are there any stations that will do well? Yep. I predict that Cartoon Network will always do well.

Cable TV Stations Lose Over 500,000 Subscribers

This article is not about Japan, but I think it points to what is going to happen here very shortly concerning major television stations .

I have written extensively about how the digital conversion in Japan on July 24, 2011 is going to destroy TV Tokyo, TBS, and then TV Asahi. In that order. This is because these stations are last in ratings and losing money now. When the digital conversion happens, they will lose another 30% of their audience.

They aren't making ends meet today. It is inconceivable that they will do better when their audience shrinks by 30% overnight. I wrote about that here and here.

In an article that came across my desk today, I see that Cable TV stations in the USA lost over 500,000 subscribers in the 3rd quarter of 2010. They, too, cannot survive this kind of bleeding of audience.

The Daily Tech reports:

Cable companies have traditionally increased the cost of their TV services each year, often with no improvement in the offerings. As people start looking to save money, many are leaving cable providers. Gigaom reports that it has cobbled together the number of cable subscribers lost for four of the top five cable companies around the country for Q3 2010 and the number of folks leaving cable is growing.

However, Gigaom reports that over the last few quarters the number of subscribers lost from cable and gained at satellite and IPTV firms is not matching up. Many people are just walking away from paying for TV. This is getting easier to do with most major networks offering their programs online free and services like Hulu offering old shows for fans to watch.

What is written here is true but I think the writer is missing out on something else that is going on. There are now services popping up all over the world that offer satellite TV for a one time fee. Here's one called Satellite Direct.

How does that song go? "3,500 channels and nothing on..."

Satellite Direct sells their service for a one-time fee of $49.95 (Ask for a discount and they'll sell it to you for $24).... These sorts of services offer you a download to your computer and give you thousands of channels. Of course, I am not selling this to you. I think TV is brain damage and a complete waste of time, so I don't recommend it. My point here is to illustrate how these pay TV services have a business model that is now broken.

The moral of the story is that this is what is going on now and this also shows why these huge TV stations like TV Tokyo with over 1,000 employees (and the overhead that goes with that) are dead.... How in the world will they compete with a music only - or a fashion channel, sports channel, etc, TV stations that only have 20 ~ 40 employees?

They won't. They are dead.

Read more at Daily Tech.

Thanks to What Really Happened.

Marketing Japan: No Medium Can Survive the Indifference of 25-year-olds...

By Mike Rogers
After talking to a very interesting fellow named Roger Marshall from Odgers Berndtson on the phone this morning, and after reading the article I want to introduce today, I was inspired to quickly write up this short blog. Hope you find it interesting and useful.

There is a great article in the Guardian UK today. It is mostly about online newspapers charging for services in a scheme called, Paywall, that Internet Guru Clay Shirky says is doomed to fail (You won't find me disagreeing with him). It's an excellent article and I strongly suggest that any read it.

Most people will not have heard of Clay Shirky but he is recognized as one of the world's top experts of Social Media.

But there is one part in the article that struck a chord with me. This one part should strike fear in the hearts of anyone who is working in the old media. It says;

...if you are 25 or younger, you're probably already reading this (article) on your computer screen. "And to put it in one bleak sentence, no medium has ever survived the indifference of 25-year-olds."

I found this particular point quite useful and timely as, if you read my last blog about the Long Tail, you'd know that I am now in discussions with one of the larger satellite TV stations as to what to do about their admittedly bleak future.

In the case of this music TV channel even they know that 20-year-olds today;

1) Do not pay for subscription TV (their parents do - and it's probably part of a package anyway). The 20-year-olds do not have the habit or thinking that they need to pay for music TV.

2) When 20-year-olds want to see their favorite new band's video, they won't wait through 20 other videos that they don't like in the slim hopes to see the one that they do like. They will just click on YouTube and see what they want, for free, right now.

The TV station people understand this. Yet they are stuck in a sort of denial and they hope that things will get better... 

Sorry folks, but I have found that "hope" is usually not a very good business plan.  Funny that.

The other interesting thing the TV station people have all said to me when I asked them, "Why do young people watch your TV channel?" They almost all invariably answered, "I think they search the Internet using Google Search or Yahoo for an artist that they like, then they turn on our TV channel..."

So, dear reader, bear with me for a second as I get this straight in my own head... 

Let's see.......A guy or girl goes on the Internet to find the music that they like... They do! Then the TV station people think that the young person, after finding what they like on the Internet, is going to turn off the Internet and turn on the TV and watch their channel!?.... 

What in the world are these people thinking!?

Yes. I found their thought processes quite amusing also. But it just goes to show the depths of denial that some of our good friends are in. And, don't forget, most of these kind people that we must convince are coming from a far different point-of-view than we are. They come from inside their companies, we come from outside...

It is often far easier to understand something like, say, one's own country when they are on the outside looking in. 

We need to convince our friends in old media, and in other businesses in general, how they can increase their business and protect their jobs (families too!) by opening up their minds to the possibilities that the Internet can offer them. We need to show them that the Internet is not a threat.

Clay Shirky Cognitive Surplus

In Japan, the opportunities are everywhere. Most companies seem to be running their web pages as a sort of company directory instead of a branch of a business that turns a profit by itself. From what I see today, 92% of the corporate web pages are still Web 1.0. So, opportunities abound!  

The companies that do embrace this new way of thinking will have a much better chance of survival and could even prosper.

I won't go into more about the article in the Guardian, but will say that I think you should read it. If you need ammo in convincing someone that they need to wake up and start acting, then it could help. 

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Keywords: Guardian, old media, Odgers Berndtson, Clay Shirky, Satellite TV, Internet, Google Search, Mike in Tokyo Rogers, Paywall, Social Media, Japan, business, music TV, Yahoo, Google, online, newspapers, Roger Marshall,