November/December 2010
Volume 30 No. 7

January-February 2011 Cover
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Japan: From No-Glasses 3D to Holographic TV

In addition to revitalizing its stagnant economy, Japan has two additional challenges: High-definition three-dimensional TV without the need of special glasses, and holographic broadcasts.

Both projects have the same faithful deadline: December of this year. This month Toshiba will start marketing in Japan its 12 and 20-inch glasses-less stereoscopic (or 3-D) TV sets. Similarly, Nintendo plans to introduce a no-glasses 3-D version of its game console in February 2011.

Japan

Additionally, on December 2, 2010 FIFA will be awarding the 2022 World Cup games. If Japan wins the bid, the world could well be watching football matches as holographic broadcasts.
Basically, in addition to watching from living rooms and bars, fans can go to a nearby stadium and watch the game played out live as though the players were actually there. NHK, Japan’s public broadcaster, has committed to creating the first holo-TV by 2016, well ahead of the 2022 Cup.

Reportedly, NHK has earmarked the equivalent of U.S.$4.3 billion for development and is sponsoring research at companies such as Sony and Mitsubishi. It has also dispatched engineers to the U.S., where scientists have already generated basic holographic transmissions. Plus, Japan’s National Institute of Information and Communications Technologies demonstrated crude electronic holography at the NAB show last year.

Keio University’s Jun Murai, a scientist known as “the father of the Japanese Internet,” is advising NHK. Using holographic broadcasting over satellites, he’s quoted as saying, “football matches held in Tokyo could be relayed to any stadium in the world where full-sized players would appear so life-like that fans would believe they were at the match.” A Sony engineer explained that a football field would resemble a large book laid on the house floor. Lasers would then project the cloud into the middle of the room. With wires running under the carpet, you could fill the room with a football match.

But, so far, both technologies are still flawed. The no-glasses 3-D models produce out-of focus images from certain angles and distances, and holographic broadcast is still called “Star Wars technology,” after a scene in the 1977 movie where a holographic image of Princess Leia is projected from the robot R2-D2.

On the economic front, Japan’s “Great Deflation” still perseveres. In a recent New York Times article, a businessman is quoted as saying: “I’ve been waiting for 20 years for inflation to come back.” For nearly a generation now, the nation has been trapped in a downward spiral of prices, known as deflation. Consumers, especially young people, are reluctant to buy items like new cars or the latest television sets. Problems are more visible in areas like Osaka, the third-largest city, than in Tokyo, the country’s major city. It’s estimated that by the time this generation hits retirement age, its habits of frugality will have cost the Japanese economy the equivalent of U.S.$420 billion in lost consumption. “These guys think it’s stupid to spend,” a businessman stated in the Times’ report. And this could well represent a lesson to the world. Indeed, economists are now warning of “Japanification,” or a state in which consumers refuse to buy, corporations hold back on investments and banks sit on piles of cash.

As the Times stated, few nations in recent history have seen such a striking reversal of economic fortune as Japan. Indeed, in the 1980s and early 1990s the so-called Japan Inc. seemed ready to obliterate whole American industries, gobbling up Hollywood studios such as Columbia Pictures (purchased in 1989 by Sony) and Universal Studios (acquired by Matsushita in 1990 and subsequently sold to Canada’s Seagram in 1995) .

Today, China has overtaken Japan to become the world’s number two economy. Nonetheless, with a TV advertising market equivalent to U.S.$19 billion per year, Japan is still the world’s second largest television ad market, after the U.S. However, despite its size, Japan ranks sixth in the license fees paid for imported theatrical movies and seventh in the world for TV products.

Of the imported fare, broadcasters prefer U.S. studio movies for which they can pay up to $4 million for the free TV window (studios manage both the theatrical release and DVD sales themselves). In recent years, in order to lower that license fee, broadcasters have been negotiating lower numbers of runs. Besides theatrical movies, foreign TV programs acquired in Japan are mostly TV movies and footage to include in local productions.

In any case, because of abundance of local production (NHK alone invests $6 billion a year on production), demand for imported programs is very low; estimated at between three and five percent of the broadcast schedules. Cable and satellite TV present better opportunities for foreign product, but the license fee offered is relatively modest, in the order of $3,000 to $15,000 per hour. In addition, outside co-production deals it’s difficult to sell directly even to cable-satellite channels and most international sellers utilize local distributors like Tohokushinsha and Trans World Associates. But the major local program distributors are the broadcasters themselves (NHK, NTV, TBS, Fuji-TV, TV Asahi and TV Tokyo for broadcast television), while the pay-TV market is shared among Jupiter, Tohokushinsha and Wowow.
On the DVD front there are: Kadokawa, Pony Canyon, King Records and Geneon-Universal.
At times, Japanese distributors buy territorial rights that include Japan and South Korea. For this latter territory, rights are either re-sold to local distributors or sold directly by the same Japanese companies.

Drama, or dorama as they say in Japan, is a very popular TV genre. Dramas broadcast on Fuji-TV and TBS are usually the most popular. TV Asahi focuses on period drama and crime series. Recently, one of NHK’s dramas, Goldfish, won the Grand Prix award at Prix Italia, the Italian TV festival sponsored by RAI.

Television is very popular in the country, and 95 percent of Japanese people watch television every day. On average the Japanese watch more than three hours a day, mostly the six national terrestrial networks (two from public broadcaster NHK) and the local TV Tokyo. TV networks serve about 49 million TVHH for a population of 127 million people –– mainly concentrated within 13 key TV markets –– through station affiliates. With 30 TV stations, NTV has the largest number of affiliates. TBS and Fuji-TV have 28 TV affiliates each, all digital. All analog TV broadcasts are scheduled to end by July 2011

Ratings are measured in four time slots: All day (6 am-12 am), prime time (7 pm-11pm), golden time (7 pm -10 pm) and non-prime time.

NHK, which tends to reach older viewers, is financed with a mandatory TV license fee equivalent to U.S.$191 a year for the two terrestrial channels, and $314 for a package that includes NHK’s three satellite services. This license fee generates a steady revenue stream of close to $8.4 billion per year. In comparison, the commercial TV sector is struggling with lower income and even losses. Last year, revenues for TBS were $4.5 billion, NTV $4 billion, Fuji-TV $4 billion (Fuji-TV also operates three premium TV channels).

With its tightly-packed cities, Japan has among the highest penetration of fiber-optic connections in the world. Cable and satellite subscribers, together with those with broadband, are over 14.1 million TVHH, of which some six million are satellite TV subs. Of these, over 58.3 percent are Sky Perfect JSat (or simply Sky Perfect) subscribers. Other large satellite TV platforms include Wowow, Japan’s first private satellite pay-TV service with 2.5 million subs.

On the cable front, Jupiter Telecommunications (J:Com) –– the largest cable TV operator serving about 2.5 million TVHH with some 70 TV channels, including four pay-TV sports channels –– was recently acquired by KDDI, the nation’s second largest telecom operator that alone serves 5.8 million Japanese households and owns Cablenet, the country’s second largest cable TV service.

Japan doesn’t have an equivalent of the FCC, the US telecommunications authority. The task comes under the jurisdiction of Telecom Ministry, which cannot really deal with television, therefore consolidation and other standards are considered rather “loose.”

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