Bad and Incompetent Management? It's Everywhere!

You've got to wonder how people, who are so clueless to even their own industry, get into management positions. 

Bored

But, come to think of it, actually, you and I don't have to wonder; someone wondered about it long ago and wrote a book on it in the 1970s. It was all explained in the seminal book, The Peter Principle. That book explained the phenomenon of how, in a hierarchy, everyone rises to their top level of incompetence. Then because they are incompetent, they remain in that position, unable to advance or, because of politics, be demoted.

Wikipedia says:

The Peter Principle is a belief that, in an organization where promotion is based on achievement, success, and merit, that organization's members will eventually be promoted beyond their level of ability. The principle is commonly phrased, "Employees tend to rise to their level of incompetence." In more formal parlance, the effect could be stated as: employees tend to be given more authority until they cannot continue to work competently.

Yep. That's it. 

Regular readers of this blog will know that I have railed on incompetent management at broadcasting stations for years. Just to prove that even a broken clock is right twice a day, almost 4 years ago, I wrote (on July 24, 2010) in One More Phase in the Shattering of Mainstream Media:

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 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 *****FM 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 picked the first one correctly (polite applause here). The FM station was sold to another company in the summer of 2012. My prediction came true two years ahead of schedule. 

I've got a few more years left on my TV Tokyo prediction and I'm feeling very good about that. Especially since TV Tokyo is unable to payback a $5 billion dollar loan from Mizuho bank they made in Feb. of 2010 and keeps rolling that loan over every year... I wonder how long the rollover will be allowed by Mizuho bank especially since the new Japanese government has publicly stated a policy of 2% inflation which will lead to much higher interest rates.

(TV Tokyo share price was around ¥4,400 at that time. Today, TV Tokyo Holdings shares run at ¥1768 - a rise of over ¥800 from the 2011 lows - due to Abenomics?)

I haven't been writing about these stations recently, but a while ago I had a meeting with management at a broadcasting station that just made my head spin. The boss of the station said to me in an incredulous manner,

"Mike! We have to do something to get people back to listening to the car radio... Did you know that Toyota stopped putting radios in cars? Did you know that??"

Simply astounding! Doesn't this manager read business publications at all? 

It was in 2007 that Toyota had publicly announced that they were phasing out analogue radio in the automobiles within three years and that they would no longer be standard equipment in 2011 (that was two years ago!) Taking that obvious clue, I even blogged three years ago that the future of radio lay in the hands of, not the stations, but Toyota. How could a station manager, almost seven years later, just be finding this out? 

Please refer once again to July 24, 2010: One More Phase in the Shattering of Mainstream Media

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. 

Now where does that leave radio in the equation? Especially when you consider the fact that radio, unlike TV and the Internet, cannot give data on exactly how many users it has and cannot give ratings... 

Why does it matter that radio cannot give ratings? Well, because any advertising campaign expenditures from sponsors must be justified at accounting at the sponsor company. How can one justify a radio campaign in Japan when clients cannot be told how many people listen and who is listening? They can, though, get data on viewers for TV and Internet and numbers for print media.

That upper management at a station can be serious and tell me in an incredulous tone, a full seven years after Toyota's announcement, that they just found out that the world's largest car maker stopped making radios for their cars shows just how completely out of touch with reality some people are with what's going on with people's lives and the world and society they live in.

But, gee, far be it from me to tell people what to do, but I think it is the duty of management to keep apace with the market and conditions. Anything less is gross negligence. The shareholders should be, and will be, furious. It's a simple matter of time.

You be the judge! Do you think people like that, who are so unaware of the market - and even their own business merits and demerits - who seem to not read business publications on market trends - can run a successful business? They should be fired! There are employees working under them who have families to support; management has a responsibility! 

Of course, if the guilty parties ever read this, they would probably be angry at me for stating the obvious... I don't know why. I am doing them a favor.... 

But, as you know, when the tyrant king doesn't like the message, they will not consider where they went wrong, they will just kill the messenger boy... 

What was I saying about the Peter Principle?

Toyota No Longer #1 Drops to #3

Yep, it's true, after three years as #1, Toyota drops to #3.


Carscoop has the story: 

"Well, it was almost certain to happen after the March 11 earthquake and Tsunami hit Japan causing multiple problems to the country's automotive industry. Toyota, the world’s largest carmaker, saw its production drop by 23% to 3.37 million units for the first half of the year - and includes sales of Lexus, Daihatsu and Hino vehicles. 

As a result, the Japanese company lost the title of the world’s largest automaker that it held since 2008 to General Motors, which saw its sales rise by 8.9% to 4.536 million units for the first six months of 2011. For the time being, second place goes to the Volkswagen Group which sold 4.13 million units worldwide." 


I wonder what the odds UK bookies are giving for Toyota to return to #2 in 2012? It might be hard to conceive, but with the German economy steaming right along and the Japanese economy mired in the doldrums and our debt at 200%+ of GDP, it's hard to imagine that Japan can get back on top anytime soon.


Monday's Nikkei stock market opening, after the USA credit rating getting cut, should be an interesting fireworks display to watch.

Japan Still Makes the Best Cars in the World

The verdict is in! Japan still makes the best cars in the world! Japan! Cars! Quality!

GARY NUMAN - CARS

In spite of all the problems reported in the main stream US-based mass media with Japanese cars being recalled and other alleged problems with accelerators and mechanical parts, Consumer Reports shows that Japanese cars, using a 10-year scale measuring reliability, beat out all the competition.


Well, I thought Japan still meant "quality." I'm glad to see my suspicions confirmed. 


Before anyone wants to jump on me about accelerator problems in Toyotas, let me show you evidence that this was not true at all and a US Transportation Department 10-month study showed that there were no problems at all with electronics or mechanical parts in Toyota's. It was all media hype.

My 2004 Toyota. Driven everyday for the last 7

years and never been in the shop for repairs even once.

Well, the alleged problems were media hype. The results finding no problems with Toyota's was barely reported in the main stream mass media. Associated Press carried the story, but many major news outlets didn't. The AP reported:


The Obama administration's investigation into Toyota safety problems found no electronic flaws to account for reports of sudden, unintentional acceleration and other safety problems.


Anyway, reports of alleged problems are just that: supposed; accused but not proven. 


The test of time is the best judge, in my opinion, and the results of this 10-year survey are in: Toyota and Honda are the best cars made in the world.


Yahoo! Autos reports:

The Best of the best list guides you to the 2001 to 2010 models that scored well in our road tests when new and have been consistently reliable over time. Each has achieved multiple years of above-average used-car verdicts (available to subscribers), indicating that owners have had relatively few problems.

Models built by Toyota and Honda dominate the list once again, and many of the best used vehicles are from Asian manufacturers. But high-quality vehicles are available from domestic and European automakers as well.

The Worst of the worst list shows models that have had multiple years of below-average reliability in our survey. It is dominated by vehicles from domestic and European manufacturers, primarily General Motors, which had 16 of the 29 models listed.

Actually, it doesn't surprise me that there are no Japanese cars on the Worst of the worst list. I am, though, a bit surprised that there are so many lousy GM cars (Lousy? GM? Oh, but I repeat myself). And I am quite surprised to see that there are no Fords on the list.

I suppose the reason there are no Fords could be because they don't live past three years old. As they say, "F-O-R-D stands for 'Found on the roadside, dead."

Congratulations to Japan for still leading the world in building quality cars.

The proof is in the pudding. Japan may be the #3 world economy in 2010, but we're still #1, by far, for quality assurance and superior automobile manufacturing.

Thanks to Philip Oshiro

Japan's Toyota Still Shines in Local Dealerships

With all the problems that Japan is currently experiencing with the Chinese, the economy, the rising yen, there are still some things that, right in my own backyard, make me glad to live in Japan and make me never want to leave.

They also make me believe that Japan, with all its warts, still is a great country and, while our economic problems are huge, there's still a good chance for this country to rise and shine again.

Take my trip to the Toyota dealer today.

Toyota Corolla Dealership in Yoga, Setagaya, Tokyo

My automobile's right rear lock has been acting up recently so I've decided to get it fixed. What a world of difference it is going to a Japanese car dealer as opposed to a dealer in the USA.

The Japanese dealerships are all spotless and clean. There is a placard at the front that shows you the names and faces of every single staff member working at that dealership.

I drove into the parking lot of the Toyota dealer in Yoga in Setagaya and within 15 seconds, there were two cleanly uniformed Toyota representatives bowing to me as I got out of my car. I explained the situation to them and they told me to have a seat in the main showroom.

There, at the showroom, I was given a refreshment menu and asked what kind of drink I'd like. I ordered coffee and was given a hot cup of coffee and two small sweet cookies compliments of the dealership.

Don't tell my wife this, but he toilets are probably cleaner than the toilet at home! And there are places for young children to play while mom and dad talk to the servicemen or the salesmen.

Spotless

From the prompt, courteous service you receive upon immediately entering the premises, to the hospitality and amenities, you can tell that these people take pride in their work and their company.

Play area for tykes

This sort of thing is what made Japan great. The Japanese take pride in what they do. They take so much pride in it that they put their family names on their companies! That's why I think for now, and for the future, names like Toyota, Honda, Sony, Mitsubishi and many more - the family names - will fairly represent the best of Japan - the pride of Japan - and that is a pride and a best that has much more to come!

Facebook is sidelined in Japan as social network battle heats up

By AKKY AKIMOTO / Japan Times

In July, the number of active users on social networking site Facebook worldwide surpassed 500 million. More than 60 percent of Internet users in the United States have signed up with the site, and its presence has reached into almost every country on Earth. You might think that Facebook is taking over the world . . . if you speak English.

There are, however, a few regions where Facebook has not been able to penetrate the market as it has in the West. China, Russia and South Korea have all developed their own popular variants of the idea. Japan also has its own social networking sites and the top three: Gree, Mixi and Mobage Town, are currently in a battle that has become so fierce that Facebook might not even stand a chance.

Both Mixi and Gree began in February 2004, when tech-savvy Japanese were discovering social networking site Orkut. Both Mixi and Gree aimed to come up with a Japanese version of the popular social networks sweeping the West.

Mixi was thought of as Japan's response to Friendster. It came about when Web startup E-Mercury took one of its engineers off their employment- search service Find Job and assigned him to creating Mixi. To everyone's amazement, the site grew quickly and now boasts 21 million users in its network. Also similar to Facebook, Mixi depends on advertising sales for profit — while its main competitors do not.

Mixi continues to be innovative. Last week, the company announced two new features: Mixi Check and Mixi Check-In. Mixi Check is similar to Facebook's Share feature, while Check-In is similar to Foursquare, geo-tagging a user's physical location on the site.

For five years, Mixi sat comfortably at the top of the social networking tree, but last month Gree announced it had 21.25 million registered users. That number made Gree Japan's No. 1 social network.

Gree's success indicates a particular quality of Japan's market. Mixi was the only site among the top three to have established its fame on PCs. But in July 2007, the number of page views on cell phones topped those coming from PCs, essentially moving the battlefield for social network supremacy. Gree's success on a mobile platform is seen as one of the reasons it topped Mixi. After losing to Mixi initially in 2004, many had thought Gree would disappear. Its comeback started in late 2006 after the site pretty much abandoned its unpopular PC version (it still exists but traffic is at 1 percent of its mobile version). Gree inked a deal with Japan's No. 2 cell-phone carrier, KDDI au, and created a mobile version of the site complete with what the Japanese call kajuaru gemu (casual games), simple games for cell phones, and avatars.

Gree CEO Yoshikazu Tanaka said he studied Hangame, a South Korean online game portal, for inspiration when designing Gree's mobile reincarnation. The new Gree has been hooking new users with games such as fishing and virtual pets, all of which can be played for free (but which also have content available for sale to expand the scope of the games). The gaming strategy (and a TV ad campaign) resonated with Web surfers pushed Gree to the top. Recently, the site has started adding third-party social games in addition to expanding its long list of casual games.

The game strategy is being used by Japan's No. 3 social networking site Mobage Town. The site is run by DeNA, who also run successful online auction service Bidders, and was started up in 2006. DeNA also looked to Hangame as a model for Mobage Town. Despite its late start, Mobage Town has increased its user base to 20.48 million. One key factor in its success was enabling users to earn virtual money if they clicked on advertisers' websites. The social networking service provides their own casual games as well as third-party games. The most popular game it has at the moment, "Kaitou Royal," is similar to Facebook's popular "Mafia Wars."

Similar to the characters in "Mafia Wars," Japan's social networking sites are in a fierce competition for turf. DeNA is working with Japan's biggest website, Yahoo! Japan, to open Yahoo! Mobage, which is set to bring Mobage Town to Yahoo! Japan users. Both Mobage Town and Gree are spending copious amounts of money on TV advertising, even outdoing Toyota and Coca-Cola. The companies behind the two sites are also involved in a hiring competition, providing some workers with a maximum ¥2 million one-time bonus.

Where is all this cash coming from? While Mixi's prime source of income is advertising revenues, Gree and Mobage Town directly sell virtual items to their users. Their way of selling such items is different to the way Apple's App Store works. When purchasing something for the iPhone, customers are billed separately, which means they are able to see the charges on their credit card bill. With Gree and Mobage Town, most purchases made are folded into the user's telephone bills — essentially making them less noticeable. This approach has paid off, literally, for both companies and they have been able to lower their advertising prices in response, putting more pressure on Mixi.

However, a DeNA employee appeared at a Mixi conference last week saying Mobage Town and Mixi's services don't overlap and that some cooperation is possible. DeNA CEO Tomoko Namba has also set her target on Sony and Nintendo, hinting that they were old news. DeNA seems to be adapting a line of "you're with us or you're against us," and has reportedly told video-game developers that if they want to sell on Mobage Town, they shouldn't try to sell on Gree as well. The company has not confirmed this.

At its conference, Mixi also announced a partnership with China's Renren and South Korea's Cyworld. Initially, the three will standardize their platforms to allow third-party application providers (which Mixi calls SAPs) to run on the three social networking sites. This strategy is primarily against Facebook. It would be surprising if something big, such as a merger or an inter-platform networking feature, comes of it. This kind of thing, though, does appeal to domestic users. Facebook's global reach has been impressive, but its localization (especially in Asian countries) has been subpar. If Asia's social networking sites can step in and give the image of being able to network internationally, that could be enough to get users interested. However, seeing the approaching ceiling of the Japanese market must have Mixi, DeNA and Gree looking to expand. Indeed, DeNA and Gree could use their profits to grow overseas. With Facebook retaining a possible monopoly in the West, it could be that Japan's social networks see Asia as their best bet to form a challenge against the online behemoth.

Akky Akimoto writes for Asiajin.com, which is planning readers meetups in Singapore on Sept. 25, and Tokyo on Oct. 9. For details, visit asiajin.com. A Japanese version of this article is available on Akky Akimoto's blog at akimoto.jp


From Japan Times

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!

-------

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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