TOKYO -- Six major Japanese media companies together will enter the growing yet crowded domestic market for video streaming, preparing a wide variety of content including dramas, talk shows and economic news.
The partners -- Nikkei Inc., TV Tokyo Holdings, Tokyo Broadcasting System Holdings, Wowow, Dentsu and Hakuhodo DY Media Partners -- announced their foray into the business Tuesday. They will create a 4 billion yen ($35.8 million) joint venture in July. Limited service begins in the fall, followed by a full-blown flat-rate streaming service in April 2018.
The videos will be available for viewing not only on television sets but also smartphones and other digital devices. Nikkei and TV Tokyo will contribute economic news, while TBS offers dramas and films. Wowow will provide its original dramas and other content.
Original programming and ultrahigh-definition 4K videos likely will be produced collaboratively. The partners also intend to seek content from other media companies in and outside Japan to enrich the lineup. New technologies such as artificial intelligence may be used to analyze viewing data for programming, marketing and new business creation.
TBS will take a 31.5% stake in the new business, followed by Nikkei at 16.6%. TV Tokyo and Wowow each will hold a 14.9% interest, while Dentsu and the Hakuhodo DY Holdings unit control 14.8% and 7.3%, respectively.
Yasuhiro Takatsuna, head of information systems at TBS, will be the venture's president. Takashi Funaki, a director of TV Tokyo unit BS Japan, will become a managing director with representative rights.
Put in context
The Japanese market for video streaming is projected to grow more than 20% from roughly 180 billion yen in fiscal 2017 to reach 220 billion yen in fiscal 2022, according to the Nomura Research Institute.
Many companies from Japan and abroad have launched streaming platform businesses in response to the rising demand. Nippon Television Network in 2014 bought the Japanese operations of U.S. company Hulu. Netflix, Amazon.com and other online video-on-demand service providers from the U.S. and elsewhere have arrived in Japan since 2015. Furthermore, key private-sector TV stations in Tokyo together launched the TVer streaming service, offering aired programs for viewing on smartphones, televisions and other devices.
As competition gains steam, a continuous flow of unique content is crucial to winning consumer hearts. Platform operators are grappling with the challenge of enhancing both the quality and quantity of content. Netflix plans to increase its original content for streaming by more than 60% from 2016 to at least 1,000 hours this year.
The venture announced Tuesday will capitalize on the varying strengths among the six stakeholders to offer dramas, talk shows, live music and business news, among other content. TBS will use the new service as the sole online streaming channel for its latest content.