June 9, 2015 12:45 am JST
Video streaming

Netflix to finance original programming for Japan launch

Netflix, known for its original series like "House of Cards" and "Orange Is the New Black," will finally break into the Japanese market with its own original Japanese programs.

TOKYO -- Netflix, which will bring its online video-streaming service to Japan this fall, plans to provide money to Japanese production companies to create original programming.

     Yoshimoto Kogyo, an Osaka-based talent agency with about 6,000 entertainers on its roster, is first on the list.

     Yoshimoto plans to produce variety shows and dramas for Netflix and is considering leading off with a series starring popular comedian Sanma Akashiya. The U.S. company will bankroll this undertaking and the money it provides may even go beyond production costs, depending on the content.

     Netflix is also in negotiations with TV channels, movie companies and publishers to make more original programming. Some of Japan's major TV channels will likely come on board.

     Netflix will shoulder a portion of production costs for a program in exchange for the right to stream it exclusively for a set period of time. After this period is over, the original creator will hold the rights to offer the program to other streaming services, TV channels, or to sell DVDs of it. This setup, likely a sweet deal for production companies, has the potential to change the way Japanese programming is done.

     When it comes to quality programming, Netflix has shown that it is willing to spare no expense. It typically costs 10 million yen to 30 million yen ($79,000 to $237,000) to produce an episode for a TV drama series. Production companies often face a series of constraints since they produce shows at the behest of TV channels, which are the ones bringing in sponsors.

     Producers of animated programming, when they offer their own content to a video-streaming service, usually receive only hundreds of thousands of yen per episode. According to one animation company, however, Netflix will be offering a whopping 10 million yen per episode in exchange for exclusive streaming rights over a certain period.

     Big-name content providers in Japan are watching Netflix's foray into their market very closely. "If viewers have more chances to choose what they watch, that's a welcome development for content makers," said Fuji Television Network President Chihiro Kameyama.

     The market for online video streaming is expected to keep growing. Twenty-nine companies, including movie studios Toho and Toei, have created the Japan Contents Group, which plans to offer pay-per-view video services this fall.

(Nikkei)

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