Nippon TV’s Yoshikuni Sugiyama

Japanese media giant Nippon TV has long been a supporter of anime luminary Hayao Miyazaki. Nausicaä of the Valley of the Wind, which would kick off a string of feature film successes for the famed animator, aired on the broadcaster shortly after its theatrical release. Nippon TV also contributed to the financing of the 1989 release Kiki’s Delivery Service and supported the establishment of the Ghibli Museum. This year, the longstanding relationship between Nippon TV and Miyazaki was formalized when the group acquired a majority holding in Studio Ghibli. For Yoshikuni Sugiyama, representative director and chairman of Nippon TV, the transaction forms part of the media group’s efforts to expand its influence and reach in Japan and globally. International expansion has certainly been vital for the group as it rides the wave of success it has seen with scripted and non-scripted remakes and tape sales. World Screen caught up with Sugiyama to hear more about Nippon TV’s expansion efforts and its continued ratings success in Japan as it marks its 70th anniversary this year.

WS: What’s driving Nippon TV’s continued ratings momentum as it marks its 70th anniversary?
SUGIYAMA: I believe the support we receive from our viewers is driven by the stellar in-house production expertise of Nippon TV’s creators, who produce approximately 90 percent of our titles. What sets Nippon TV apart is that we have numerous long-running hit shows that have had success for over 10 to 20 years, some even 30 years, like Old Enough! However, it is worth pointing out that these shows have not stayed the same throughout. As times change, so does what viewers want to see, and our creators have constantly sought to address this. They have a relentless desire to evolve, which could mean that even for the same show, there might be a drastic change in the cast and what is presented in it. Our content creators are tremendously creative and brilliant in promoting their works—a talent continuously passed down from the veterans to the young creators to the point that it has become a part of our DNA. It is what has compelled our viewers to keep supporting Nippon TV over many years, which is something that I am immensely proud of.

WS: You restructured this year to accelerate your digital transformation. Tell us about the thinking behind the restructure and how you plan to boost your streaming and international businesses.
SUGIYAMA: In May 2022, Nippon TV announced its Medium-Term Management Plan 2022-2024, in which one of the goals stated was to emphasize the content-oriented approach. Specifically, we established a content strategy headquarters to achieve that objective. During the company reorganization in June of this year, we distributed our digital-related human resources and functions across the departments to enable the entire organization to tackle digital initiatives. The way content is consumed is diversifying, and we are advancing our digital transformation so that Nippon TV works can be enjoyed not only on the linear platform but also on various media. In addition to our linear broadcast, we are optimizing our AVOD, SVOD and TVOD businesses to formulate a comprehensive broadcasting and streaming strategy. Not to be left out are the various platforms, such as YouTube and TikTok, on which we will proactively seek to roll out our content to capture new users and opportunities to expand into related businesses. Another aim of the last company reorganization was to bolster our international businesses. Within the content strategy headquarters is the global business division, which oversees the new studio strategy arm. It is responsible for producing drama series, anime and films with both owned and external platforms in mind from the get-go. One of Nippon TV’s assets is its superb creativity and armed with this, we challenge ourselves every day to expand the international fan base for our content.

The team specializing in global business strategically attends various content markets worldwide to network and negotiate with international clients and analyze the latest trends. This enables them to construct sales strategies tailored to the global market where streaming has become mainstream.
Of late, in particular, Nippon TV has invested great efforts in co-developments with overseas partners, and at MIPCOM 2023, we unveiled Koso Koso, a format we co-developed with BBC Studios and Empire of Arkadia. The hilarious game show was received with huge applause, and we aim to realize a global version in 2024.

WS: The ad market globally is under pressure. How is the situation in Japan, and how is Nippon TV positioned in this landscape?
SUGIYAMA: With digital transformation affecting various aspects of our daily lives, we have seen a diversification of how people spend their spare time. Even in Japan, we are witnessing a trend of decreasing real-time television viewing, although not as drastic as abroad. Consequently, television ad expenditures are in a downward [trend], but thankfully, out of the five commercial broadcasters in Japan, Nippon TV has captured the most viewership from our core target, who are viewers in their mid-teens to 40s—those who the sponsors of television commercials place substantial importance on for their purchasing power. We have accomplished this feat consecutively for the last 12 years, and as a result, we have posted the highest broadcasting revenue out of all our competitors for nine years running. We indeed enjoy an overwhelming presence in the industry.

WS: What motivated the acquisition of Studio Ghibli, and what does that deal bring to Nippon TV?
SUGIYAMA: Ever since Nippon TV aired Nausicaä of the Valley of the Wind (1984, directed by Hayao Miyazaki) on television in 1985, we have shown Studio Ghibli works on our weekly program Friday Road Show. Nippon TV has a long history of partnership with Studio Ghibli, starting from when it provided funding to produce the film Kiki’s Delivery Service (1989, directed by Miyazaki) and including its support for the opening of the Ghibli Museum, Mitaka. Studio Ghibli has spawned works loved by people from Japan and the world over. Nippon TV decided to acquire the shares of Studio Ghibli due to its conviction that supporting this world-class studio to a greater extent than ever before will contribute to the corporate value enhancement of the entire Nippon TV group. In so doing, we expect synergies that will come in two forms. First, the share acquisition allows us to provide management support, which enables Studio Ghibli to exert unprecedented efforts in the creative process. Second, as a partner who has always respected Studio Ghibli’s belief in cherishing its works, Nippon TV is well-positioned to provide lasting protection to the studio’s brand value.

WS: There is stiff competition in the Japanese streaming sector. How is Hulu Japan positioned?
SUGIYAMA: As you pointed out, streaming platforms in Japan indeed face fierce competition, with Netflix, Prime Video and Disney+ on the foreign-owned side, going against domestic players like U-NEXT and our very own Hulu. Meanwhile, users are not limiting themselves to single subscriptions. There is a tendency for them to choose a streaming platform depending on the title and genre they want to watch, and they consume that content at the time that is right for them. In actuality, users are subscribed to about three streaming platforms.
Netflix, with its abundance of original content, and Prime Video, which comes as an ancillary service to its e-commerce subscription, have large subscriber bases. The way we need to compete is to get users to choose us along with our competitors. We launched a Hulu and Disney+ bundle plan and are bolstering our original content lineup to distinguish ourselves from our competitors and emerge victorious.

WS: Tell us about the Disney+ bundle partnership for Hulu. What are the benefits?
SUGIYAMA: The Hulu Disney+ bundle we launched in July leverages both platforms to deliver exceptional works from Japan and the world to more users in Japan. This bundle plan is available for a monthly cost of 1,490 yen ($9.80) and is cheaper than subscribing separately to both services. It expands the SVOD options that are currently available, which we expect will translate to growth in our subscriber base. Nippon TV and The Walt Disney Company (Japan) entered a strategic collaboration in 2022, and this is one of the fruits of that effort.

WS: What’s driving the gains in your international business division across formats and tape sales? What are your overall goals for Nippon TV’s international business in the challenging year ahead?
SUGIYAMA: Nippon TV’s very own Shark Tank (Dragons’ Den in the U.K.), our iconic format, and Mother, the most internationally adapted scripted format from Asia, continue to go strong throughout the world. In addition, Old Enough!, Masquerade and Silent Library, poster formats that have attained success in Japan, have been receiving numerous localization requests from various countries. What we are seeing might be a trend where well-known titles garner more attention as the global market becomes challenging. That said, new works are also enjoying remarkable success, like Rebooting, the drama series and scripted format that Nippon TV debuted in 2023 that received high acclaim in Japan and abroad, ultimately winning numerous awards. It features an elaborately constructed story that has captivated audiences not only in Asia but also in Europe and North America. Indeed, unique ideas such as this one boost Nippon TV’s international formats and tape sales.

Going forward, I hope to see more collaborations between creators and be more proactive about co-developing with overseas partners to create content for Japan and the world. The process might be different depending on the idea and project, but we at Nippon TV have a track record of flexibly adjusting to our partners, and we look forward to hearing from interested companies. Of course, we are not limited to content creation—whether it be merchandising or event businesses, we welcome the challenge across various realms.

WS: Beyond the Studio Ghibli deal, are you looking at other M&A opportunities to grow Nippon TV’s business?
SUGIYAMA: We announced our strategic investment policy in May 2022 through our Medium-Term Management Plan 2022-2024. It lays out the four areas where we are looking to make investments—media content businesses, new businesses, life and health-related businesses and sustainable investments.