Japanese Public Broadcaster-NHK - Research Paper Example

NHK NHK is a Japanese public broadcaster that once had a monopoly over the public airwaves. It broadcasts to tens of millions of Japanese and has a long and storied history. But recent years have found NHK in serious trouble. An embezzlement scandal on 2004, led to a massive financial blow as more than a million Japanese cancelled or refused to pay the licensing fee after it was discovered top executives were defrauding the company. Today’s media world is increasingly competitive and with the recent economic downturn all news organizations are struggling to cut losses and maintain some sort of revenue stream. NHK is no different. All told, NHK has probably never been in such difficulties at any other point in its history. To begin with it is useful to examine the recent scandal that so dented the reputation of NHK. In late 2004, NHK employed more than 10,000 people and had revenue from a viewing fee that came to almost $5 billion. But then all hell broke loose. Top executives were accused of embezzling funds, and the popular company chairman was forced to step down. NHK came under increased governmental and legal scrutiny, and competitors revved up their engines. This report neatly summarizes the situation: In Japan, the NHK viewing fee (which is something that akin to BBC’s license fee) is mandatory under the country’s broadcasting law. Although there is no penalty for those who fail to pay, almost 80% of about 46 million Japanese TV households make monthly payments of about US$12. The 2004 scandal, however, triggered waves of consumer discontent, resulting in about 1,280,000 refusals to pay. This translates into a total revenue loss of some US$42 million, or 7.4% of NHK’s gross revenue for the fiscal year 2005 which ended in March 2006. The percentage of fee-paying consumers dropped by almost 10%.1 That marked only the beginnings of NHK’s financial woes. Two twin problems were approaching on the horizon that will affect NHK’s bottom line for years to come: the financial crisis and recession of 2008-09 and the huge changes in the media world brought about by the Internet. Like everyone else NHK is finding that serious journalism is in trouble. Laborious and expensive, news stories and investigative reports that reflect a passionate commitment to the public interest are being squeezed out of our media by new economic realities. Faced with decreasing advertising revenue, media companies have been consolidating rapidly in recent years, in part to take advantage of economies of scale. Newsrooms are shrinking and circulations are decreasing. Diverse and independent voices, dedicated to informing citizens about their communities and scrutinizing public institutions, have given way in many markets to wire copy and entertainment gossip. Money for quality journalism is drying up. In 2007, newspaper advertising revenue in the United States dropped by nearly 10 per cent, the largest amount in the more than 50 years since statistics have been kept.2 There have been similar reductions in media companies in Japan as well. What can be done to improve this situation for NHK? If serious journalism that serves the public interest is no longer profitable, what recourse do citizens have? We might spend all day blaming “profit hungry” corporations, but the truth is media convergence and newsroom cutbacks are a symptom of the disease, not the disease itself. The media climate is changing not because capitalism is running amok, but because of deep technological, cultural, and demographic changes. What is important is to adapt to this new climate in a way that will preserve the best traditions of journalism: investigative reporting, bringing important stories to public attention, and challenging common prejudice. Part of NHK’s problem is that it is too big and unwieldy. In order to compete into today’s segmented market, it should divide itself up into a number of subsidiary companies that focus on different aspects of media and take different approaches. This will also allow NHK to experiment and see what works in today’s rapidly changing marketplace. One potential bright side is the expansion of NHK broadcasting internationally. Last year, NHK began a satellite service in English to European markets.3 While this may be good for branding purposes, some might question the wisdom of such a massive expansion into foreign markets at a time of economic turmoil. However, if NHK is to maintain its hold on the Japanese market is should have to prove that it is competitive wherever it wants to be. The European market is a curious choice, however, as it is already saturated. What might have made more sense would be to try to establish a presence in rapidly growing markets such as Korea, China and Vietnam. Admittedly colonial history might cause a problem with these markets. However, there are tens of millions of people who have limited access to media there and who hunger for more. NHK also needs new ways of making revenue. Perhaps it could seek online ad revenue. Perhaps it can find traction by using an online subscription model that would allow it to make money the same way their pre-Internet newsprint ancestors once did. But seriousness of purpose and in-depth, original coverage of an increasingly complicated world will require more than minor profits to sustain. It will require long term funding free from the vicissitudes of business cycles. NHK needs to think carefully about its place in the world and the marketplace. Things have changed and it can no longer rely on its near monopoly and the goodwill of the Japanese people. Like all media companies it has taken a huge revenue hit in recent years. This should be a wake up call which it must take very seriously. The world is changing. If NHK doesn’t change with it, it will cease to exist. References Johnston, Eric. “NHK a fount of info, a lot of it from the government.” Japan Times. July 7, 2009 Krauss, Ellis S. Broadcasting politics in Japan: NHK and television news. Cornell: Cornell University Press, 2000. Osaki, Tad. “NHK: Public Broadcaster Under Siege.” On Screen Asia. 1 June 2006. http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1003781895 Saba, Jennifer. “NAA Reveals Biggest Ad Revenue Plunge in More Than 50 Years.” Editor and Publisher. March 28, 2007. http://www.onscreenasia.com/article-203-mobilecontentnhkpublicbroadcasterundersiege-onscreenasia.html Seidensticker, Edward. “Tokyo Rising: The City Since the Great Earthquake.’’ New York: Knopf, 1990. Sennitt, Andy. “Japan: NHK World TV to broadcast free-to-air in Europe.” Media Network website. August 20th, 2008. http://blogs.rnw.nl/medianetwork/japan-nhk-world-tv-to-broadcast-free-to-air-in-europe “NHKs Revenue Getting Slammed.” Sake-Drenched Postcard Blog. http://www.bigempire.com/sake/nhk_revenue.html Read More