OTT Landscape in Japan

OTT Landscape in Japan
Kazu Shimura
Sunday, January 19 2014, 13:30-15:00
PTC 2014, Honolulu Hawaii
Managing Over-the-top Content
(OTT) and Sharing Universal Service Obligation in Telecommunications: How the Traditional
Players are Able to Compete with OTT?
@ Kazu Shimura
1
Summary
∗ More than 50% households has broadband connection and more
than 60% mobile phones sold in 2013 is smartphone.
∗ Japanese digital market is highly advanced and there should be a
big opportunity for OTT players.
∗ It, however, seems that the OTT business have not achieved huge
success yet.
∗ One of the reason for that is the main contents providers are the
TV networks and they don’t want to open their contents on line.
∗ The year of 2013, the trend is changing. The TV networks have
started to provide their contents to OTT players.
@ Kazu Shimura
2
Japan.. Advanced Infrastructure for
OTT Business
The Number of Mobile Subscribers and The
Volume of Data Traffico n the Internet in Japan 140,000
2500
Mobile
120,000
2000
100,000
1500
80,000
Data Traffic（Gbps） Internet Subscribers(Million)
60,000
1000
Mobile Subscribers(Million)
40,000
500
20,000
0
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
@ Kazu Shimura
Source: MIC(Ministry of Internal Affairs and Communications)
3
∗ Broadband
penetration is more
than 50%.
∗ 3G and LTE has 131
million subscribers,
including LTE has 14
millions subscribers
Digital Devices with WiFi Connections
Anywhere
∗ 60% of mobile phone sold in 2013
are the smartphone.
∗ iPhone? …. FREE ☺ with two years
mobile plan contracts.
∗ Subway, Starbucks, lots of WiFi café
in town.
@ Kazu Shimura
4
No OTT players has not taken
advantage of it yet…
Why ?
@ Kazu Shimura
5
High Quality Original Contents on TV
for FREE
∗ Fifty eight original dramas in December 2013 are now on air on the
free TV.
∗ Five large TV networks provides high quality original contents for
free (ad supported) with 24/7 broadcasting.
∗ The annual cumulative program production budget of the five TV
networks is over five billion US dollars.
TV Dramas now on air
TV
@ Kazu Shimura
6
TV is still Dominant for Media
Consumption
∗ People spend more
than three hours a
day to watch
television.
∗ 99.8% of
households has TV
at home.
TV
Source: Hakuhodo
@ Kazu Shimura
7
Satellite and Cable Operators are
Struggling…
∗ Multichannel TV services has been matured for ten years.
The Name of The Number
Multichannel of
TV Operator Subscribers
Cable +
Satellite
Around 20%
Sky
PerfecTV!
(Satellite)
J:COM
(Cable)
Source: MIC and IR Data
@ Kazu Shimura
8
ARPU(US$)
3,742,178
(October,
2013)
32
3,121,500
(May, 2013)
N/A
NHK as the largest paid TV Operator
∗ NHK is a public broadcasting service.
∗ The annual fee costs US$136. Half of households pay the fee…
∗ Two terrestrial TV broadcasting channels and Two satellite channels
∗ 24/7 broadcasting. News, original dramas, major sports, documentary,
educations..
∗ More than US$50 billion for the annual production budget.
Revenue
Fewer
people
pay the
fee..
The Number of
workers
US$64.8 million
13,092
US$136 only for
terrestrial subscription
Annual fee costs
US$240 for both
terrestrial and satellite
subscriptions
@ Kazu Shimura
9
Source: MIC, NHK
Contents Market from the
Consumers Viewpoint
∗ We enjoy 16 free TV channels already.
Money
Time
No more time to spend
for watching contents…
TV
3 hours a day
16 channels
@ Kazu Shimura
US$300 For Cable
US$320 For Satellite
US dramas,
cinemas,
sports..
FREE for TV Networks
(6 terrestrial channels and 8
satellite channels)
US$136 For NHK
(2 terrestrial channels)
10
News,
Original
dramas,
Major sports
Contents Market from the Business
Side
∗ The largest contents providers are TV networks in Japan.
∗ They think that the OTT cannibalizes their advertising business.
∗ Thus, they don’t distribute their contents on line.
Major Contents
Providers
(TV Networks)
US movies, dramas,
animations..
Japanese old movies.
OTT Platforms
Smart TV
TV
@ Kazu Shimura
11
Digital Device
OTT in Japan is not huge..
∗ Subscription VOD service is not popular in Japan.
∗ Problems: Contents on each OTT platform are almost the
same, such as CSI, HEROES, LOST and old Japanese movies.
The Name
of OTT
Players
The Number of
titles
Monthly
Fee
The Fee of the
Pay Per View
for Brand-new
Cinema
@ Kazu Shimura
TSUTAYA
TV
U-NEXT
T’s TV
40,000
81,000
N/A
20 titles
for US$10
US$19
Pay Per
View Only
US$4
US$4
US$5
12
US OTT Players has come..
∗ (Caution, unofficial information) hulu Japan has 0.5 million
subscribers.
∗ Launched September 2011.
∗ Monthly fee costs US$10.
∗ They expand their titles to provide such as local Japanese dramas
and movies.
@ Kazu Shimura
13
niconico – Japanese YouTube
∗
∗
∗
∗
“niconico(ni-ko-ni-ko)” is the Japanese YouTube.
10 billion UGC videos are uploaded.
Young and men, so-called OTAKU, skewed community.
More than US$10 million monthly revenue.
@ Kazu Shimura
14
The number of
registered
members
36.26 million,
including 2.11
million paid service
The monthly fee of
Premium Service
$5
User Demographic
Age 0-19:16%, 20-29
40.9%, 30-39:23.1%
Gender: Men 67%.
Telecom Careers started VOD platforms.
∗ NTT Docomo, KDDI and Softbank have their own contents
distribution platform.
∗ In March 2013, three of them launched smart TV service
which enabled users to watch their contents on TV screen
with the USB stick.
dMarket
(NTT
Docomo)
Smart Pass
(KDDI)
UULA
(Softbank)
7.01 million
The Number
(video
of
subscriber
Subscribers
4.46 million)
7.99 million
(including
N/A
music, video
and books)
Monthly Fee US$4
US$6 for
SVOD
US$4
N/A
60,000
Titles
@ Kazu Shimura
N/A
15
The TV Networks VOD Platform
∗ NHK and TV Networks launched their own OTT platform.
The name of
TV networks
OTT platform
NHK
OnDemand
NTV
Ondemand
TBS
Ondemand
FujiTV
Ondemand
fee
• US$10 for
catch-up
service.
• US$10 for
archives
• US$1-3 for
pay per
view
• US$3 for
pay per
view.
• US$10 for
Season
Pack(13
episodes)
• US$3 for
pay per
view
• US$15 for
Season
Pack(13
episodes)
• US$10 for
monthly
• US$15 for
season
pack(13
episodes)
others
Annual
revenue is
US$10 million
N/A
N/A
N/A
@ Kazu Shimura
16
Now the time for online.
∗ One year ago, the TV Networks delivered their contents directly
to the consumers.
∗ October 2013, YouTube Japan launched to deliver the popular TV
dramas.
∗ November 2013, amazon Japan launched the TV drama streaming
service.
NHK On
demand
No
middle
man
The TV Networks on demand Service, i.e., TBS
on demand, FujiTV on demand…
OTT Platform: hulu, YouTube, amazon,
TSUTAYA TV, T’s TV….
Consumers
@ Kazu Shimura
17
Current Landscape in the Japanese
OTT Market
∗ It’s complex.. partners or competitors?
TV Networks VOD platform
DIRECT DELIVERY TO CONSUMERS
OTT Platform for Premium Contents
Telecom
OTT platform for
Foreign OTT
Careers VOD
premium contents
platform
platform
PREMIUM PAID CONTENTS
Consumers
@ Kazu Shimura
18
OTT Platform for UGC
OTT platform
for both UGC
and premiums
OTT platform
for UGC
FREE UGC CONTENTS
Key Takeaways
∗ Japanese OTT market would grow because the TV networks
provide their contents with OTT platform.
∗ YouTube and amazon streaming services will give huge
impact not only on the OTT market but also on the whole
media market in Japan.
@ Kazu Shimura
19
Thank you !
∗
∗
∗
∗
@ Kazu Shimura
Kazu Shimura, senior analyst, InfoCom Research
[email protected]
Twitter : zutaka
Facebook: Kazu Shimura
20