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HOME > 19th JAMCO Online International Symposium > The Structural Reasons for Japanese Reluctance Toward Overseas Activityand International Exchange in Drama Production – Japan’s Unique Broadcasting System and Its Development Process

JAMCO Online International Symposium

19th JAMCO Online International Symposium

February 1 to February 28, 2010

International Exchange in TV Drama Productions

The Structural Reasons for Japanese Reluctance Toward Overseas Activityand International Exchange in Drama Production
- Japan's Unique Broadcasting System and Its Development Process

Hajime Shigemura
Chairman, Nippon Broadcasting System, Inc.; Vice Chairman, All Nippon Producers Association

1. Introduction

In Japan, unfortunately, television producers and creators who wish to have their drama productions broadcast in overseas markets had been in the minority in the past and still are today. However, there are signs of change taking place, though at a very slow pace, in the past several years. Underlying the current state of non-exposure of Japanese productions in overseas markets are several factors, which will be examined herein. In examining this issue, however, the author must deviate slightly from the theme of international exchange in drama productions and begin the study from the peculiarly distinctive process of development that Japanese television programming underwent.

2. The Environment Surrounding Japanese Television Stations

When we look into the conditions that led to Japanese television drama creators and producers not developing interest in overseas expansion, we must start from the fact that the Japanese television industry — or more precisely, the Japanese television stations — had been blessed with a favorable business environment since its inception.
It was in 1953 that the state-run broadcasting body NHK and Japan’s first private broadcasting station Nippon Television started service. In the span of 56 years since then, not a single one of the 127 private television stations in operation today had gone under. Of the wide range of industries in Japan today, the television industry is very likely a rare exception in that, in more than 50 years, there had not been a single business enterprise had withdrawn from the market. On top of that, these stations never experienced the need to modify their established business model of relying on advertising for most of their business revenues. Sales continued to rise without interruption, and fluctuations in the domestic economy, though affecting profit growth to some measure on occasions, never acutely affected their business foundations.

The benchmark affecting advertising revenues is viewership ratings. This means that producers and directors of drama productions that garner high ratings in Japan are unquestionably guaranteed big production budgets and the promise of continuing to work under conditions in their favor, with possibilities of having their production plans being approved as they wish. This is possible because high viewing ratings match and satisfy the needs of the advertisers.

Under such conditions, it is quite natural to see that the number of drama creators who seriously wish to show their production overseas and win recognition is very small, though not necessarily nil. In addition, broadcasting stations do not feel the need to take risks and actively spend money and seek overseas exposure aggressively. Although there have been quite a few cases of programs being entered in international television program contests and festivals, these stations found such recognition important in only promoting their ability at program creation to the advertisers and viewing audience in Japan. In the early years, they never expected or considered adopting the strategy of linking their programming abilities to overseas sales of their productions and to international exchange. In fact, there is a surprisingly large number of people in the industry who are convinced that Japanese TV programs is not likely to have product value in international markets. To this day, people who think so still account for the majority in the Japanese television industry. In Japan, it is generally believed that productions that sell overseas, especially in Western nations, are single-episode drama productions that are recognized highly for their artistic quality. At the root of this conviction is the issue of the language barrier. Many industry insiders believe that there are racial and cultural barriers between Asia and the West that cannot be overcome.

3. The Environment Surrounding Japanese Drama Production

Ironically, Japanese television stations began to participate actively in international markets and fairs held overseas only when they began to expand into production of full-length films. It has only been the past several years that they began to promote their own television drama productions.

Notwithstanding these developments, a new problem requiring action has emerged in Japanese drama productions.
Until a certain period of time, Japanese television programming had been diverse in type of programming and planning in order to offer entertainment to every member of the family, from children to senior citizens, because television programs had been the greatest source of family entertainment in the country. If the environment had remained unchanged, drama producers may have had opportunities, however small, for creative work that communicate messages emerging their personal and social perspectives and awareness to the viewing audience in a wide variety of programs.
In fact, there had been many major TV productions in the past that became classics or wielded powerful influence on society, surpassing the quality of full-length films that suffered from a slump at that time. It must be admitted that there are quality works today that compare with the classics of the past. From the general perspective, however, Japanese TV dramas are unfortunately favoring use of fixed patterns within a narrow range of variety more strongly than ever and to focus on specific target segments. Thus, it is no exaggeration to say that many drama productions are look-alikes and lacking in scope of perspectives.

Why then did this happen? The recent dip in production quality of dramas is not totally unrelated to the fact that TV stations face a turning point in business management and performance.
With advances in market research, advertising officers at business enterprises became increasingly aware that the classification method for media effectiveness can be examined and verified in great detail and that, in face of the emergence of new media that threaten TV’s dominance, TV advertising falls short in product explanation capability compared to other media, despite the advantage it provides in boosting product recognition levels.
The financial latitude that rapid economic growth brought to Japanese consumers became an easy trigger for impulses to satisfy material want. In addition to this, there is strong desire among the people to keep in step with fashion. In such an age, television established overwhelmingly powerful presence as an advertising medium. However, its presence has started to shrink and wield limited influence with the decline in Japan’s economic might and tumultuous changes in the media environment. As the needs of advertisers became a controlling factor in the operating revenues for TV stations, marketing officers at these stations naturally begin to demand that this important factor be taken into consideration in TV programming. In response, program developers began to implement major changes in policy direction, aligning television timetables to suit marketing needs.
The change in direction means a shift in programming focus to productions that are likely to be favored by viewers found in marketing analysis to have a high level of sensitivity to television as an advertising vehicle, namely, people in their teens to their early 30s.
Hence, television productions catering primarily to the young viewers, known as F1 and M11 generations in industry jargon, grew to account for an overwhelming percentage of broadcast content by private TV stations. Television dramas were no exception.
Gifted producers (strictly from the perspective of the interests of the TV station) exert effort into creating popular TV programs that suit such needs. As a result, it is now said that television programming (excluding NHK) that draws the interest of adult viewership (middle-aged and older people) has become very few during the past 10-odd years.
This fact leads directly to the small number of Japanese programs that are marketable overseas.
The reason is that the quick solution to creating programs that draw the interest of Japanese youths is to place popular TV idols and celebrities in leading roles of such programs. These showbiz people (or, more precisely, their agents who manage their careers) seek exposure in programs that increase or enhance their charm as actors, rather than in productions of outstanding quality.
With programming now determined by production planning strength in creating scripts with plots and drama situations that satisfy the needs of these stars — even when the program content or plan seems to have been stretched a bit too far — the television stations and producers who are able to book these celebs become victorious in the media marketing race.
Of course, such productions have value in a limited number of the East Asian countries such as South Korea and Taiwan, where the people favored Japanese showbiz celebrities and have access to information on such stars through the Web, etc. Still, it is clear that the vast majority of nations with no knowledge of Japanese showbiz stars will find little value in broadcasting programs designed for marketing purposes.

Furthermore, a more serious problem lies in the fact that program planners, producers, directors, scriptwriters and all others involved in TV drama production are obsessed only in creating productions that appeal to the domestic market at that point in time, resulting in the proliferation of dramas of only transitory value, recognized only in Japan while the leading players of such programs are fashionable.
The continuity of this trend will clearly affect development and training of drama producers and creators.
There have been many instances of people who, dissatisfied with production centering around viewership ratings, seek to look into the state of man in earnest, explore social issues and create meaningful productions, in order to communicate messages with creative value in the true sense through programming, but are unable to capture such production opportunities in such an environment.
Many such creators were disappointed by the future of TV drama productions and left in search of other venues for creative activity. The state of television drama production in Japan during the past two decades shows the loss of potential talent in the industry and subsequent erosion of conditions that nurture creation of productions that win recognition both across national boundaries and over time.

4. The Changing Environment

Although this started with a pessimistic look into the state of the industry, it is also a fact that conditions are starting to change. Quite ironically, this is due to the aforementioned business model at Japanese TV stations beginning to fall apart, resulting in 3 of the 5 Tokyo stations — “network key stations”, of private television broadcast networks and supply programming that they have created to affiliated regional TV stations — reporting losses for the previous fiscal term.
They are no longer able to plan business growth strategies with management heavily dependent on advertising revenues. For this reason, these private “network key stations” are working to revamp their business structures, by seeking to boost their shares in non-broadcast business earnings and placing greater management priorities on business areas that make use of program production and planning capabilities adapted to the multimedia age.
This has led growing effort to transform themselves by reinforcing their strengths as production companies, rather than focusing strictly on TV broadcasting.
The change can be seen clearly in the developments in the Japanese movie industry during the past several years. The movie industry, where Western imports had long dominated box office performance, is seeing growth of Japanese films during the past several years, surpassing their Western rivals in earnings and widening the lead during the past two years. And, television stations have been involved in the creation of many of these hit movies.
At the start, these productions were regarded the product of the advertising prowess of these TV stations succeeding in drawing moviegoers. However, the recent successes show the TV stations themselves planning movies and manning the production staff, including the roles of producers and directors.

The reason why these developments had to be explained here is found in the peculiarity of the form of development that the Japanese broadcasting industry underwent.
When the television industry was born in Japan, its film industry enjoyed its all-time peak. At that time, there were five major film production companies. These film companies were critical of television, calling it “electric picture-story show” — quite similar to the discriminatory attitude TV stations had for some time towards digital content distribution on the Web. At that time, movie actors were bound by contract to appear in films created by their employers, and these film companies concluded an agreement to prohibit TV appearances of their actors.
For this reason, TV stations were compelled to create their own production organizations and to hire actors from fields other than moviemaking. In retrospect, this proved to be beneficial for growth of TV stations. Supported by the theatrical sector that had actors who were refined and talented but financially impoverished and by people who left the movie industry because of dissatisfaction with the state of moviemaking at that time, these people were assigned to train new production personnel and actors.
Vis-à-vis the state of program broadcasting and production in Western nations and other nations of Asia where the broadcasting station and program production companies are separate entities, Japan created, over its history of 50-some years, a structure where TV program production and broadcasting were integrated in the TV station. Notwithstanding some ups and downs in the course of its history, the structure has been maintained to this day.
Additionally, it is more accurate to say that the TV stations may subcontract program production to a production company but grant such a company only partial copyright to the program, founded on the claim that the TV station bears the cost of production. It must also be added that this scheme was adopted because it was common practice for TV stations to hold exclusive program marketing & distribution rights for overseas markets.
This problem had caused major disputes between TV stations and production companies over the years.
However, the dominance of the TV station remained unchanged to this day because of the small number of production companies that wield strong influence both economically and in production capability to vie competitively against the TV stations that hold decision-making power on program contracts.
If the program production companies were able to hold ownership of copyrights and other rights regarding program marketing, overseas program sales and joint productions with overseas companies may have been fostered further than it is today.
From the Western standpoint, it may be puzzling why film production companies that possessed production capabilities did not change its policy toward TV stations, even when they began to wield strong social influence.
In Japan, film companies began to lose its production capabilities in inverse proportion to growth of the television. TV stations saw that they are able to produce productions that earn higher viewership ratings and cater to the needs of their clients in a more satisfying way than when subcontracting program production to a film company. For this reason, TV stations did not commission film companies to create highly popular serial dramas, although they sporadically subcontracted production of single-episode, two-hour dramas.
The only areas where TV stations depended on film companies are period dramas and animations that they were unable to create within their production structures.
It must be noted here that, because TV stations did not hold copyrights to animations created under contract with film companies, the film companies actively marketed these animation productions. This resulted in Japanese animation gaining a major share of the global market. However, this development took place because of the peculiar business relationship between TV stations and animation production companies.
Until Japanese society entered the age of dwindling birthrate, animation had been the leading program content earning higher ratings on TV. However, it was not a welcome category in terms of advertisement sales, because the target audience was children.
For this reason, the production scheme for animation very often consisted of the TV station paying only for broadcast rights and the production cost covered not only by the film company but also by advertising agencies and toy manufacturers, hoping to create business with character merchandising rights and toys.
Because this scheme made recovery of investment difficult if relying only on domestic broadcasts, it is believed to have prompted these companies do seek opportunities outside Japan. The situation demonstrates that contrasting conditions prompted action opposed to that of TV stations that were able to generate adequate profits with domestic advertising revenues and failed to look at overseas markets.

Looking at this with a touch of cynicism, it seems that the Japanese broadcasting industry, particularly private broadcasting, failed to see their programs and productions as products from the standpoint of business management and to think of marketing them by adding extra value. To them, the fountainhead of their profits was time slots backed by viewer ratings.
The material that raises viewer ratings during a single time slot is the program, such as drama. Their sales personnel conducted marketing to clients by promoting the high viewership ratings and the viewing audience that matches the target consumer base and are glued to the TV set in that time frame. Seen objectively, this is the nature of free TV broadcasts with expenses covered by advertising.
In this respect, the history of development and policy perspectives of TV broadcasters and programming creators are different in the United States and other countries that saw cable TV programming develop many years earlier and multichannel hardware infrastructure advanced rapidly, with the vast majority of the public watching terrestrial TV broadcasts via cable.
It has been only a little more than 10 years that pay TV culture took root in Japan. If enterprises similar to HBO and MTV with programming production capabilities exceeding that of the network majors had existed earlier in Japan, the approach to the value of TV programs would have changed drastically, and developments regarding their secondary use and content distribution would have differed markedly.

5. International Exchange in Drama Productions

Departing from this nihilistic perspective on the state of the industry, let us turn our attention to international exchange and distribution of drama productions founded on the aforementioned conditions in Japan.
When looking into promotion of international exchange and distribution of broadcast content, not only drama productions but other works as well, we need to examine this from two perspectives. One is “overseas communication of one’s own culture and international understanding among nations resulting from communication”. The other is “the trade perspective of this activity as an export industry marketing domestic contents in overseas markets”.

In autumn of 2007, the Japan International Contents Festival was established under the initiative of the Ministry of Economy, Trade and Industry, in the hope of realigning the inefficiency of overseas communication of Japanese contents in the fields of movies, animations, games, character brands, comics, music, fashion, TV programming, etc., presently conducted separately in an uncoordinated manner. It was organized to become a trade fair for Japanese cultural and other contents held every autumn through joint cooperation among these industries. In other words, the Festival was organized as a large-scale drive to promote Japan’s “soft power,” while at the same time consolidating the Tokyo International Film Festival, Tokyo Game Show and Tokyo International Anime Fair held separately in the past to be held at a fixed time of the year, in order to make foreign buyers easier to participate.
As part of this effort, the International Drama Festival in Tokyo started this year. Its objective is “to create a cooperative partnership between private broadcasters seeking to shed their advertising-oriented business model and NHK, which is being pressed strongly by the national government to boost international communication of Japanese culture, by eradicating industry barriers and to foster greater overseas distribution of Japanese drama productions”. Furthermore, it is hoped that the festival helps create friendly relations and partnerships with China’s Shanghai Television Festival and South Korea’s Seoul Drama Award that had been established earlier for international communication of their own drama productions, as well as international exchange in the area, and also to cooperate in building market competitiveness of Asian drama productions in Western and Middle Eastern markets.
I would now like to present my personal opinion and experiences I have had as producer of the International Drama Festival since its establishment three years ago.

As mentioned earlier, Japanese TV stations showed little interest in overseas program distribution. Still, these stations had overseas program marketing sections in their international departments for more than 20 years and had engaged in minor sales transactions. In the case of NHK, it had its own program marketing company named Media International Corporation (MICO) established as a joint venture with trading companies, etc. Through this company, it had been aggressively promoting overseas sales of programs chiefly produced by NHK. As a result, drama series such as Oshin had been aired not only in Asia and Western nations but also in the Middle East and Africa.
Notwithstanding such diligent efforts, overseas sales of private-sector program productions averaged only around ¥10 billion a year for the past several years. Of this average amount, dramas accounted for roughly ¥3 billion. The reason for this is very often attributed to the “international price divide” that stems from the difference in economic power between Japan and other Asian nations.
To give a specific sample, ongoing price negotiations between a Tokyo broadcaster and a Southeast Asian nation over a drama series had stalled because the difference of US$700 per episode could not be filled. This gap could not be filled by efforts on the Japanese side to cut down profits to the lowest possible, setting a sales price that is only manageable enough to cover cost and the value of rights involved, and the buyer side offering the highest possible price. Because the series has 12 episodes, this will result in loss of 8000 to 9000 dollars for the seller.
In terms of business, the case shows that this problem will not be resolved for some time, even when both sides engage in the negotiations in good faith. However, we will eventually see Asian nations gaining more economic power and being able to conclude business with Japan. From the Japanese perspective, making inroads to these markets should be perceived as a necessary step for future growth in these markets. Considering this, we believe there should be a solution for the problem now, when examined from the perspective of international exchange and mutual benefit among nations.

The International Drama Festival features a contest named Tokyo Drama Award to recognize productions showing commercial promise and marketability in Japan and other countries. Of course, production quality is a major factor as well.
In the past three years, recognition has been awarded not only to programs from China and South Korea but also those from Vietnam, Thailand, Indonesia, Malaysia, India and other countries.
Screening of programs begins with recommendation of around 3 productions recognized as outstanding by national drama contest and award committees of various countries. These programs are screened by the Japanese committee, which select productions considered the best from the Japanese viewpoint. The production staff and cast of such films are invited to Japan and are asked to participate in film showings and in presentations on production and planning of these films. These works have been of very high quality, surpassing our expectations.
Top management officials of private TV networks who had seen these films have shown great surprise over the outstanding quality of these programs. These officials are not specialists in program production. Most likely, they had experienced enjoyment strictly as viewers. They must also have believed, until actually seeing them, that other countries are inferior in program production capabilities.
Without such opportunities, the people in Japan do not have any access to drama series produced in other Asian countries.
Furthermore, TV dramas of other countries strongly reflect their respective cultures, religion, social issues and other contemporary phenomena with an approach different to that of documentaries. A number of productions created in countries other than those of the West and of South Korea and China are broadcast in Japan on occasions. However, nearly all of them are documentaries. I believe that drama productions are more effective in showing the realities, the way of thinking and the style of everyday living of the people in such countries, and they are more clearly shown in drama series than in single-episode productions.

I personally believe that the “international price divide” in programming can be utilized in late-night broadcasting on terrestrial wave and satellite wave broadcasts. Through aggressive purchase of Asian drama series for such time slots, which in turn provide financial resources to the seller to buy Japanese drama, I believe that greater vitality will be introduced in international exchange.
At any rate, focusing strictly on selling is not recommended in promoting overseas distribution of Japanese drama productions, since it will eventually lead to friction on the other side and will obstruct longstanding relations. In order to sell, we must work hard to create an environment favorable to Asian programming and be active in buying the productions of our partners.
The “Hallyu (Korean drama)” boom was ignited by satellite broadcasting on NHK. However, popularity of these drama series had already been growing quietly on pay TV channels of private satellite broadcasters. Chinese drama, which is growing in strength in the Japanese market, is slowly building a fixed fan base chiefly among the youths in Chinese-language channel of private satellite broadcasting. It is likely that this genre will eventually gain popularity in Japan, at a level similar to Korean drama.

Notwithstanding, it must be noted from the Japanese perspective that broadcast of Japanese productions on terrestrial waved stations is still prohibited in South Korea, although they are aired in cable TV channels, in contrast to the exposure Korean drama productions enjoy in Japan. Acknowledging fully the historical background underlying relations between the two countries and the need to protect South Korea’s drama production industry, we look forward to gradual deregulation. I must also asked that China, which is imposing a ban for different reasons, move slowly toward deregulation of program exchange for mutual self-interest.
The fact is that the spread of the Internet is actually vitalizing international exchange of productions and is diminishing the barrier in gaining access to overseas productions.
In the field of broadcasting, barriers, no matter how many are created, are not effective. In the age of multichannel broadcasting, we must recognize that granting the viewing public the right to choose programs to be viewed will lead to mutual understanding among peoples and to creation of an environment of mutual respect.

I regret that I am now running out of space to state my opinion on production collaboration on the international scale and bilateral production cooperation, as well as on television dramas from Indonesia, Vietnam, Malaysia and the Middle East that I had the opportunity to view during the past three years. I extend my apologies to the parties involved for having to conclude my presentation.


1. M1 refers to men (male) in the 20-34 age group, and F1 to women (female) in the same age group

Hajime Shigemura

Chairman, Nippon Broadcasting System, Inc.; Vice Chairman, All Nippon Producers Association

After graduating from the School of Political Science and Economics at Waseda University, he joined Fuji Television Network in 1968. After working in the fields of news and programming/planning, he has served as the head of its programming and production department and as director. He later joined SKY Perfect Communications (former JskyB) in 1997 to serve as vice president and became its president in 2002. He is chairman of Nippon Broadcasting System since 2006. He also holds the office of director at Toei Animation Co., Ltd.

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