Nippon TV’s Akira Ishizawa on Japan’s Broadcast & Streaming Economy

At a time of eroding viewership for broadcast groups across the globe, Japan’s Nippon TV remains the country’s “triple crown” winner and has led ratings in the core 13-to-49 demo every year for more than a decade. The group, which marks its 70th anniversary this year, is serving audiences and advertisers across its broad suite of linear and digital assets, producing a wealth of content and diversifying its activities with new ways to reach young audiences.

The company’s restructuring efforts have paid off—its Q1 2024 financials released this summer saw revenues rise by 8 percent, driven by improved ad results and content sales, as well as contributions from Studio Ghibli; Hayao Miyazaki’s famed animation studio became part of Nippon TV in 2023. Boosted by the continued local and global demand for anime, Nippon TV has seen gains in that segment of the business, and it is continuing to attract interest in its slate of finished programs and formats from broadcasters and platforms around the world.

Under a guiding mantra of “Lasting Creations for Our Hearts and Future,” Nippon TV is driving connections with audiences off-screen with various live events and, tapping into evolving viewership trends, catering to SVOD audiences with Hulu Japan and AVOD viewers with the TVer joint venture.

Firmly focused on staying ahead of the curve, the Japanese media giant has invested in the AI space and is driving new content formats with its investment in GOKKO, a producer of vertical short-form drama series, and through its ClaN Entertainment venture, which targets the VTuber (avatar-based YouTuber) market.

Akira Ishizawa, the president and CEO of Nippon TV, shares with World Screen the company’s overall strategy for navigating the Japanese broadcast and streaming economy and bringing its top-rating content to viewers in markets around the world.

WS: You delivered improved financial results this year. Tell us about what drove those gains.
ISHIZAWA: The fiscal year 2023 (ended March 31, 2024) saw the effects of Covid-19 almost completely taper off, but factors such as inflation, higher prices for raw materials, a weaker yen and a shortage of human resources created an environment that made it difficult for sponsors to advertise. As a result, ad revenue from our linear broadcasting, the core business of the Nippon TV group, struggled to grow. Meanwhile, Nippon TV’s events, anime, intellectual property and international businesses trended favorably. Moreover, many group companies enjoyed increased sales and profits, mainly for businesses that needed to attract customers as the movement of people and consumption became more active post-Covid.

As for the financial results of the fourth quarter, the consolidation of Studio Ghibli after the acquisition was a significant positive contribution to sales and operating profit. Putting extra effort into growth areas such as our anime and international business helped drive Nippon TV to strong results.

For fiscal year 2024, we are planning on making more improvements not only to our digital advertising business, which continues to deliver ad revenue at high growth, but also to our spot and time ad sales on our linear platform, which are showing signs of recovery. Of course, it goes without saying that we will continue to focus our efforts on expanding our anime and international businesses.

WS: We’ve seen a challenging advertising market globally. How has the market been in Japan this year? Are you seeing signs of a recovery?
ISHIZAWA: Expenditure for spot ads on linear television for the Tokyo metropolitan area decreased for two consecutive years due to the effects of Covid. The first half of fiscal year 2024 (April to September), however, saw an increase versus the same period in the previous year, offering signs that the market is transitioning to recovery after bottoming out.

WS: Digital advertising was one of your bright spots this year. How are you looking to bring more ad revenues from linear to digital?
ISHIZAWA: As the video advertising market continues to expand, we at Nippon TV are aiming for more growth. We are selling video ads as a set with linear ads, which are the largest products for television broadcasters. What’s more, we propose measures that take into account the unique benefits of digital ads, like changing the advertising material according to the region and offering our content IP for use in our sponsors’ digital ads to contribute directly to their revenue growth. Sure enough, such measures are yielding results. In other words, our goal is not to transition from linear to digital but to discover and expand advertising profits.

WS: What’s driving your ratings gains? What do audiences look to from Nippon TV? How are you retaining and driving viewers across all of your time slots?
ISHIZAWA: Achieving our KPI of capturing the viewership of our core target (viewers aged 13 to 49) means we are successful in offering content that the entire family, parents and children alike, want to watch together. This is a major factor behind the support Nippon TV enjoys, and I believe our viewers expect nothing less from us. In addition, our content provides experiences and emotions not available in ordinary day-to-day life—they carry a sense of festivity, and these are the keys to remaining on top of the viewer ratings. We are in the process of spawning the next hits like The Quest and Monday Late Show, as well as new festive content like anime films by Studio Ghibli, sports content like the Rugby World Cup and programs similar to 24-Hour Television—a large-scale charity show that has been going strong for almost half a century.

WS: We hear from broadcasters around the world about eroding linear viewership. How is linear holding up in Japan, especially among the younger demographics?
ISHIZAWA: Linear platforms have won the support of people by blending into their lifestyle habits with visual content. But as platforms and devices diversify, consumers are able to watch what they want, when they want. Japan also faces the severe problem of declining viewership, especially from the younger generations. It is estimated that prime time (7 p.m. to 11 p.m.) viewing by audiences in their 10s to 40s is approximately half of what it was in 2000. As I mentioned, we need to develop and offer content that exudes a sense of festivity to entice real-time viewing. If we do not succeed in doing this, I believe linear television will not be able to avoid losing more of the younger generations.

WS: How is Hulu Japan faring in Japan’s competitive streaming landscape? How does it benefit from its relationship with Nippon TV? How are you using your free-to-air assets to drive viewers to Hulu and vice versa?
ISHIZAWA: Hulu in Japan continues to be in the top position among SVOD services operated by broadcasters. As the platforms we compete with aggressively implement strategies on both the content and service fronts, Hulu in Japan continues to generate synergistic effects by co-developing with Nippon TV, as can be seen in our large-scale mystery drama The Decagon House Murders and hit entertainment shows such as The Quest and Monday Late Show. Additionally, live streaming the home games of the Yomiuri Giants professional baseball team contributes substantially to capturing new subscribers. We have subscribers who come to enjoy the content that we acquire externally (films, foreign dramas, anime, etc.), and as a broadcaster, I believe we have a major advantage in introducing them to and increasing their awareness of original Nippon TV content.

WS: How is your content faring on TVer? How important is this joint platform in your overall efforts to best serve Japanese viewers?
ISHIZAWA: Almost all of Nippon TV’s content is available on TVer; many of [our shows are] getting high views, and our digital ad sales are growing year after year. Today, TVer has grown into a video platform that boasts over 40 million unique browsers a month, and one can say that it serves as a “market” for TV content. We can expect a virtuous circle of viewers going from TVer to linear and vice versa. Seeing TVer as a vital platform from the content strategy and sales standpoints, Nippon TV is forging strategies that integrate linear with streaming.

WS: It’s been a year since the Studio Ghibli acquisition. What has that business brought to Nippon TV? How have you integrated it, and what are your goals for that business in the year ahead?
ISHIZAWA: Throughout the years, Nippon TV has supported Studio Ghibli on various fronts. Welcoming Studio Ghibli into the group means we can provide it with management support so it is free to focus on the creative process, and indeed, this is exactly what is happening. Much loved the world over, Studio Ghibli’s presence offers Nippon TV’s international business with several important [benefits]. Going forward, Nippon TV’s role is to back Studio Ghibli so it can continue creating in the way that it always has.

WS: What prompted the investment in GOKKO? What growth do you expect from this vertical shorts business?
ISHIZAWA: Vertical short videos are growing in popularity, primarily among the youth, and this is one realm that Nippon TV’s content strategy is focusing on. Mainichi Hanikamu Boku Tachi Wa (We Are Coy Every Day) is a vertical short drama that we started with GOKKO in 2023. Viewed by approximately one out of four Gen Zers, it has grown into a hit account whose monetization is increasing. Encouraged by this success, we have entered a capital and business alliance with GOKKO to further strengthen our position in the vertical short drama space. The future will see us creating media mix content for Gen Z that blends linear and streaming dramas and nurturing it into a business that will become one of the profit pillars of our digital arm.

WS: And on that same front, tell us about the importance of ClaN Entertainment for Nippon TV’s outreach to younger audiences.
ISHIZAWA: ClaN Entertainment is an entertainment company that specializes in expanding the social media activities of VTubers and other influencers. Many VTuber fans are from the younger generations who are passionate about YouTube, TikTok and other social media platforms. ClaN’s unique strength that distinguishes it from other companies is its ability to take VTubers and spawn in-person events, music and streaming content for social media platforms, as well as produce and manage our very own in-house VTubers and their content through and through. This is a company that will play a tremendously important role for Nippon TV in the future, with its ability to create new entertainment by leveraging its distinct strengths and reaching out to younger audiences.

WS: Are you exploring other M&A opportunities? If so, in what verticals?
ISHIZAWA: Nippon TV is focusing on making investments in the following four verticals: media and content businesses (strengthen IP and content creation capabilities); new businesses (extended reality, metaverse and other growth technology); life and health-related businesses (partnering with a company that owns data to build customer information systems and bring to reality our wellness economic zone concept); and sustainable investments (proactively investing in businesses that contribute to society).

WS: How are you positioning Nippon TV’s international content production and distribution business? What’s driving your gains there across anime, drama and formats?
ISHIZAWA: Nippon TV’s management strategy states that it will strongly advance international expansion. At the core of this endeavor is global content creation and sales—currently the most important business in the company’s international segment.

With regards to anime, most adaptations stay true to the original work, so the ability to discern which Japanese original story will win the hearts of fans worldwide is crucial and the biggest factor to growth. Nippon TV is confident in its ability to discern, right from the start of the selection process, which titles to choose while simultaneously taking into account domestic and global rollouts.

Formats, on the other hand, are aired or streamed as localized versions, so the key to success is incorporating the overseas buyer’s perspectives right when the title’s development begins. As such, we are dedicating substantial efforts to co-development projects with international partners.

Furthermore, Nippon TV is actively pursuing new initiatives that go beyond the traditional style of creating remakes and formats from content that has been broadcast. In 2022, we established a new studio strategy department for the development and production of original projects. A writers’ base consisting mainly of young scriptwriters is developing original dramas and films. Similar to our anime, our live-action content has begun entering the international market through global platforms and other means.

WS: What other areas are you pursuing for international growth?
ISHIZAWA: We will strengthen the global rollouts not only of our anime, dramas, entertainment and other video content but also their derivative events, merchandise production and sales. This IP-based diversified business development has already generated significant earnings in Japan, and we will leverage this expertise to expand overseas. In June 2024, we established a new department, Global Strategy Headquarters, to strongly promote this type of IP-leveraging diversified business development, as well as explore markets throughout the world.

WS: What are your goals for Nippon TV in the 12 to 18 months ahead?
ISHIZAWA: One of our goals is to strengthen our content creation expertise up another notch and have a multifaceted approach when offering [our content] on various platforms. With regards to our international sales, we are aiming to at least double our overseas revenue for the entire current fiscal year versus last year. To bring this to fruition, we will invest in M&A and flexibly allocate managerial resources to bolster both content creation and distribution. For linear advertising, which is Nippon TV’s main business, we are planning to implement a new platform named ARM (Ad Reach Max) as we challenge ourselves to innovate sales channels—a 70-year-long tradition that con­tinues from when we first hit the airwaves. ARM is an unprecedented initiative that incorporates digital ad technology with linear ads, and I am confident it will be a great asset in maximizing the value of Nippon TV’s content.