TOKYO -- Japan's public broadcaster NHK won approval Friday to stream all its TV programming online, but the government demanded it not squelch competition and urged it to lower the fees central to its business model.
Japanese law bars NHK from streaming its content at the same time it is broadcast on TV. The company, which hopes to reach an increasingly smartphone-using customer base, aims to have the law changed in time to launch streaming in fiscal 2019.
"There is some rationality and validity" to NHK's plan, assuming it can win the understanding of the Japanese public, an expert council on broadcasting issues under the Ministry of Internal Affairs and Communications said in a draft report Friday.
But the report also demanded that NHK -- which is funded largely by fees required of any Japanese resident with a TV set up to receive the broadcaster's programming -- overhaul corporate governance to regain its viewers' trust after a string of embezzlement and other scandals. Besides pressuring the broadcaster to lower those fees, it named specific measures such as clarifying officials' responsibilities and keeping thorough records of executive board meetings.
The report also said NHK must cooperate with other businesses on services and infrastructure required for its streaming plans, and not impede market competition. The steady income the broadcaster derives from legally mandated reception fees, plus its access to more broadcast frequencies than other businesses, make it difficult to achieve a level playing field. This is among the reasons why the law blocks it from expanding into streaming.
The council appears inclined to wait and see how the network responds before proceeding. The report made no mention of the broadcaster's target of a fiscal 2019 rollout.
The previous communications minister, Sanae Takaichi, said simultaneous streaming should only be supplementary to TV broadcasting, and successor Seiko Noda has suggested the broadcaster's fees should be lower.
This summer's World Cup in Russia provided a glimpse into streaming's rise. Japanese viewers flocked to NHK's smartphone app and a website where private TV broadcasters stream matches live.
In closing remarks at Friday's council meeting, Noda urged the network to "listen thoroughly to the opinions of viewers and affiliated businesses," as well as "quickly proceed with a groupwide overhaul and a review of all its functions."
An official from the Japan Commercial Broadcasters Association who attended Friday's meeting praised the report, saying it "made our demands concrete."
An NHK executive director, Tadanobu Sakamoto, said only that "we will discuss specific responses" regarding lowering fees and other demands.