The Development of the OTT Video Service and Its Impact on the Traditional Media in Japan

TitleThe Development of the OTT Video Service and Its Impact on the Traditional Media in Japan
Publication TypeConference Paper
Author(s)Sugaya, M.
Affiliation (1st Author)Keio University
Section or WGCommunication Policy and Technology
DateSat 29 June
Slot CodeCPTS1b
Slot Code (Keyword)CPTS1b
Time of Session9:00-10:30
RoomQ121
Session TitlePANEL:The Impact of the Emerging OTT Video Services on the Users, the Content Providers and the Existing Media Platforms in Asian Countries
Submission ID5794
Abstract

Panel Title: The Impact of the Emerging OTT Video Services on the Users, the Content Providers and the Existing Media Platforms in Asian Countries   The Development of the OTT Video Service and Its Impact on the Traditional Media in Japan   Minoru Sugaya, Professor, Keio University, Japan  sugaya@mediacom.keio.ac.jp     Abstract     According to the OECD statistics in 2011, Japan has the highest percentage of fiber connections which is 62.8 percent out the total broadband subscribers. Second is Korea: it is 58.23 percent. It means that both countries have already matured distribution market for promoting over the-Top TV (OTT) services.   There are some ISPs providing popular OTT services, but they are not major media services like terrestrial TV in Japan. Terrestrial TV stations themselves provide VOD services in their websites which are categorized as an OTT. Some of them are becoming popular, but they are supplemental services rather than competitive services against traditional TV services like terrestrial TV and satellite TV.  In other words, terrestrial TV platform still has an enormous market power in Japan.   Dwango is one of the most popular ISP providing OTT service called ‘Niconico’ which is a kind of Consumer Generated Media. It also provides several video, music and entertainment services. According to its company report, the number of premium member of ‘Niconico’ was over 1.5 million in January, 2012.  The growth rate of pay OTT service members has been smoothly developed. However, in terms of revenue scale, it is still small. The revenue in FY2011 was only 34 billion yen. So among major media companies in Japan, OTT providers are still minor players.   Why is Japanese OTT service still in the development stage? It can be explained by the uniqueness of the Japanese Media market. First, the package media like DVD is still popular in Japan. The largest rental video shop called ‘Tsutaya’ has promoted on-line rental services called ‘Tsutaya Discas’. It is easy to use. Rental CD is delivered to home and then it can be returned by postal mail.  Second, as mentioned above, powerful terrestrial free TV services have tried to control the distribution channels of their popular programs. If the OTT distribution is adopted by them, the OTT market may be expanded more rapidly. But so far it has not been adopted as new distribution platform. Third, Japanese audiences have paid around 20 US dollars every month for a license fee for terrestrial and satellite public TV services. Pubic licensing fees are not unique only in Japan, however, it is relatively expensive comparing other public TV systems in which commercials revenues are allowed.   However, several smart devices like smart phone, smart TV, and portable PC are ideal devices for OTT. They provide many occasions to watch video programs, not only at home but also in office and on the train and bus. OTT is one of ideal services to be provided by such new devices.   OTT platform can be used not only by entertainment services, but also by more educated or locally oriented content. Currently, even though commercial OTT service is not mature in Japan, it still has potential to grow as a new platform. Therefore, this paper aims at analyzing the development of the OTT video service and its impact on the traditional media.

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