Nippon TV’s Yoshio Okubo

PREMIUM: Yoshio Okubo, the president and representative director of Nippon TV, tells TV Asia about his plans for revenue diversification, international expansion and keeping Nippon TV’s ratings ahead of the competition.

TV ASIA: What’s behind your ratings success?
OKUBO: We at Nippon TV have a programming strategy that we dubbed “viewers always come first,” whereby we relentlessly keep our viewers as our top priority. We aspire to become an indispensable part of their lifestyles, and, feeling the pulse of their ever-changing tastes and preferences for content, we take proactive measures and meet their needs.

TV ASIA: How are you driving innovation within your programming team to ensure you can stay ahead of the competition?
OKUBO: One of Nippon TV’s strengths is that viewers have given an incredible amount of support to our regular programs that we air every day, which we continue to actively improve and rebrand. In particular, the entertainment shows The Tetsuwan Dash, The Quest and Line Up Law Office, which air over the three hours of golden time (7 p.m. to 10 p.m.) on Sundays, have become a staple for many across Japan. All three shows have been going strong for over ten years and despite the success, their creators make sure they don’t become satisfied. Through constant innovation, they continuously evolve and rebrand the programs, enabling them to capture stellar ratings.

The Quest celebrated its tenth anniversary this year and is still breaking records, recently marking an all-time best monthly average viewer rating of over 20 percent (the annual average for Nippon TV golden-time shows is 12.2 percent).

TV ASIA: Tell us about JOCDN. Why is this an important initiative for Nippon TV?
OKUBO: JOCDN is a content delivery network (CDN) service that specializes in stable and efficient online-video distribution. It was formed through a joint venture between Nippon TV and Internet Initiative Japan. In April 2017, a total of 14 major TV broadcasters from Japan’s three largest metropolitan areas were added as third-party investors, making JOCDN the main service provider for their video-streaming businesses.

While there were no particular issues with the CDN that [we] were previously using, we felt there could be limitations to our business expansion endeavors as we were relying on an external entity for such a vital service. One such impediment was the lack of transparency with the tech­nology of a non-local CDN, and indeed there were instances when they were not able to fully meet the needs of a Japanese video-streaming service provider like Nippon TV.

Given that this market will continue to grow, we deemed it beneficial to establish a CDN service that is easy to use, transparent and operated by the broadcasters themselves. We understand what the video-streaming businesses of Japanese broadcasters need, and with our proximity to each other, we are able to quickly deliver unparalleled high-quality services.

Last April, Nippon TV’s catch-up service Nittele TADA! and 24-hour online news source Nippon TV News24 began utilizing JOCDN’s streaming service, while Hulu, a subsidiary of Nippon TV, is considering its use from 2018.

Indeed, JOCDN is quickly garnering momentum in providing streaming services to the online-video businesses of commercial broadcasters, with TVer—the catch-up viewing portal for eight commercial broadcasters—coming on board last June.

As the TV broadcasters, who are stakeholders themselves, increasingly utilize JOCDN for their video-streaming businesses, we expect equipment efficiency to improve. This results in excellent service at lower costs, but more importantly, our end users enjoy a superior, user-friendly viewing experience.

TV ASIA: How is Hulu Japan progressing?
OKUBO: Hulu is Japan’s top SVOD service, boasting the largest number of paying subscribers. This is a remarkable feat considering that Hulu entered the Japanese market only in September 2011, becoming the first in the country to provide a new method of entertainment for a flat monthly fee. After becoming a wholly-owned subsidiary of Nippon TV in April 2014, Hulu’s growth accelerated and by March 2017 had over 1.55 million subscribers.

Aspiring to become an SVOD service that can be enjoyed whenever and wherever, Hulu embarked on a large-scale system renewal in May 2017. We implemented new user profiling mechanisms that enable more detailed content genre categorizations and recommendations based on viewing history. The user interface was also improved. In addition to the movies and foreign dramas that our subscribers have been following, Nippon TV’s own dramas and entertainment shows are now available for catch-up viewing. The experience will only keep getting better for end users, as we continue to improve the platform to meet their needs.

Thanks to the latest technical enhancements, our subscribers can now enjoy live streaming on their smartphones and tablets. Nippon TV’s sports content, such as the games of the Yomiuri Giants professional baseball team, news from the BBC, CNN, and our 24-hour news source, Nippon TV News24, music from MTV and MIX, and many more shows are becoming available for live streaming.

Another exciting development is that we’re leveraging Nippon TV’s superb content-production capabilities to create original dramas, entertainment shows and anime for Hulu. In addition to our very own top-notch talent, we’re bringing in the finest creators from around the world to put together a world-class lineup of original content.

The recent overhaul also brought in the latest digital-rights-management technology to our platform, giving us the best content protection capability in the industry. Content providers from all over the world can rest assured that their programs are safe with us, allowing us to acquire a wider array of entertainment for our subscribers.

We further sealed our commitment to take Hulu to the next level in July 2017 by welcoming new third-party shareholders: Hulu in the U.S.; Yahoo! Japan, which runs Japan’s largest internet portal; Toho Co., Japan’s largest motion picture producer and distributor; and Nippon TV affiliate stations Yomiuri Telecasting and Chukyo TV Broadcasting. This will allow Hulu to strengthen its business operations, produce and acquire even more entertaining content, and enhance promotional activities. Hulu, with the full support of Nippon TV and its new shareholders, will forge stronger partnerships with content providers in an effort to grow its subscriber base and become an indispensable part of their lives.

Our aggressive growth strategy with Hulu is a clear indication of Nippon TV’s overall commitment to lead the online-streaming business in Japan. We’ve produced various original drama series, tied up content with our linear platform and created events around several movies to substantially increase our new subscribers. Although we are traditionally a linear broadcaster, we must see the internet as a beneficial platform that we can leverage to our advantage.

Moreover, we are taking ardent strides towards bolstering the program selection of our catch-up services Nittele On Demand and Nittele TADA!

TV ASIA: Are you adjusting your linear programming strategy in response to how viewers watch content today?
OKUBO: We established the multiplatform programming department in June 2017 to plan and execute various strategies that will maximize the value of Nippon TV’s high-quality content through synergies with our linear, broadcasting satellite (BS), communications satellite (CS) and internet platforms.

For example, this new department enables us to broadcast news and sports—content that people prefer to watch live—on our linear channel, while also programming them in our BS and CS timetables. We further diversify our distribution routes by streaming those programs on Nittele TADA! and Hulu to reach a broader audience and yield higher revenues.

Another pillar that provides the multiplatform programming department with business opportunities is our stock content—a vast collection of dramas, movies, music and anime. The department is working tirelessly to take these long-standing revenue generators to the next level with new undertakings that lead to further optimization.

TV ASIA: What investments is Nippon TV making in 4K, UHD and VR?
OKUBO: Our BS channel operator, BS Nippon Corporation, is set to begin broadcasting in 4K in 2019, and the entire Nippon TV group is ramping up efforts to build expertise around the production and distribution of content in 4K and HDR. We are actively experimenting with the various techniques involved with 4K and are boosting our investments so that the entire group will be able to fully function in 4K.

We are also charging ahead in the VR field, with aggressive research and development on the filming and transmission of 360-degree high-definition footage. We have even translated these efforts into production, with the successful creation of a 360-degree VR drama, The Detective Invisible.

As for AI, we have taken the lead character from our latest drama series Overprotected Kahoko and created a cutting-edge AI version of her for followers to interact with through [social media]. Our proactive research, development and utilization of new technology has yielded great results and we certainly won’t be holding back going forward.

TV ASIA: Tell us about the gains seen by your international division, both program sales and your channel endeavors.
OKUBO: With the success of Dragons’ Den in the U.K. and Shark Tank in the U.S., which originated from a Nippon TV format, and the acclaim that our drama Mother enjoys in Turkey, it became clear to us that our strength lies in international format sales. As such, we will continue focusing our efforts on this business.

In 2012, the Nippon TV group announced its medium-term management plan, in which one of the goals outlined was to gain a solid presence in overseas markets. Launching the channel GEM in Southeast Asia was one of the greatest challenges we undertook to achieve that goal. The new channel required us to sell our content in volumes we’d never experienced previously, and this revealed to us a problem we needed to overcome. Obtaining the rights to Japanese content is quite difficult. Nippon TV, therefore, came up with a new and improved system of clearing rights smoothly. First, in order to simplify the process for music rights, we decided to produce our own original music. Next, we entered a comprehensive agreement with a stock photo company, which significantly reduced the work involved with getting the rights to each borrowed image used very often in our shows. We realized that building a stock of content, with all the music and image rights already cleared, is vital to the growth of our business. This was perhaps the most noteworthy outcome of launching GEM. Our smoother rights-clearance process will increase the volume of content that we can distribute internationally, either simultaneous to or not long after their Japanese broadcast.

TV ASIA: How has the advertising market in Japan held up?
OKUBO: Over the years, Nippon TV has consistently proven to be the best in the industry when it comes to sailing against the headwinds of Japan’s economy, and we plan to forge ahead with even greater success. For the second half of 2017 and heading into 2018, we expect an increase in general consumption driven by the rise in new hires and wages throughout the country. Ahead of the 2020 Tokyo Olympics and Paralympics, our clients from all over the country will be boosting their marketing and advertising. Nippon TV is positioned to capitalize on these trends better than the other major broadcasters in Japan.

TV ASIA: What initiatives are you employing to increase your non-advertising revenues?
OKUBO: We are once again allocating ¥50 billion ($460 million) for new business ventures, including strategic investments, in order to further diversify our business portfolio. Nippon TV’s life-and-health-related business segment is the pillar of our non-advertising revenues and we are actively seeking ways to drive synergy within the entire Nippon TV group of companies to create fresh and innovative services for our customers.

TV ASIA: What are the greatest challenges for Nippon TV and the Japanese broadcasting business in the year ahead?
OKUBO: The greatest challenge is the shrinkage of the Japanese economy, caused by a population that is declining and aging. We are also concerned by the number of Japanese firms transferring their ad expenditures overseas, as well as the changing demands of sponsors. With the growth of the “internet first” demographic, we are making sure our linear broadcasting business evolves and accommodates the spread of smartphones and online video-streaming services.