Japan's TV Revival

Japan’s advertising market, caught in a deep funk for so long with more than 15% contraction over the past three years, is showing clear signs of recovery.

TV in particular is benefiting, with spot ad sales for terrestrial broadcasters growing by 12% in May, the first double-digit increase since January 2005. Ad sales across all media fell by 3% year-on-year in the first quarter of 2010, though TV advertising increased by 2%.

According to Media Partners Asia, publisher of The Asia Media Journal, advertising in Japan will grow by 1.3% this year and by 2.4% next year, with positive growth in TV and online offsetting declines in other main media.

Broad-based ad improvement will provide a major boost to broadcast media, driving earnings growth and investment in non-advertising dependent businesses that are starting to make money.

Fuji Media in particular will likely benefit, from a recovery in TV ad spend (especially as its target groups, women aged 20-34 and teenagers, are the main targets for advertisers) and as well as from returns on its movie investments.

Specifically, movies such as Bayside Shakedown: The Movie 3 (July 3 opening) and The Last Message: Umizaru (September 18) are attracting attention as potential blockbusters. From July onwards, the company will also be showing some of its own productions.

Fuji Media is also eager to expand investments in new emerging businesses such as video-on-demand, games and social media.

TV becomes social
Developing content for casual-oriented social games is increasingly a focus for broadcasters. TV Asahi, for instance, supplies content for CyberAgent community service Ameba Pigg, while Fuji Media has launched its own community game site, Kimifuji.

TV Asahi runs TV Asahi Land on Ameba Pigg while providing links to its drama and sports programs, generating revenues by selling virtual goods and actions for avatars. Asahi management say both subscriber numbers and TV Asahi content revenue will increase as awareness of Ameba Pigg grows.

Fuji-owned online game site Kimifuji, where users can play mini-games and enjoy events linked to Fuji TV quiz programs, debuted in April. Fuji Media is aiming for four million members and profits after three to four years.

Online video revenue
Japan’s broadcasters are also starting to make money from their online video sites. Dai 2 NTV, backed by Nippon TV, broadcasts original content online while integrating with services such as Twitter.

The company, operating on an advertising-based model (driven by the auto sector in particular), started making money this year and says will start generating significant profits after 2011.

This is an edited extract from a feature published in the Q2 2010 edition of The Asia Media Journal. The latest issue of The Asia Media Journal is available in full here.