Development of the Japanese Broadband Market 7

Last time I wrote why VOD services are not so popular in Japan despite a high penetration rate of optical fibres. This time I will write about opportunities for VOD services in Japan.

First, NHK, Japan’s public broadcaster, offered a new VOD service called NHK on demand last December. The service is available from the next day after NHK has broadcasted its programmes, people can watch them for one week through broadband services. They can also choose programmes from its archived programmes. It costs from 300 yen (£1.5) to 1470 yen (£12) per month.

In reaction to NHK’s movement to offer their programmes with VOD services, other commercial broadcasters have gradually started to offer VOD services. Therefore, the reluctance from broadcast stations to offer VOD services of their programmes is diminishing.

Second, as you know there are many free VOD service providers such as YouTube. However, it is said that from an advertisers’ point of view, they are worried about placing their ads on such kinds of VOD services because they are not sure about what kinds of VOD services their ads are placed on.

On the other hand, we also have another type of VOD services where VOD service providers offer particular films or other programmes for free. In that case, advertisers can get to know which films (or programmes) their ads are placed on. However, so far one of the problems about those kinds of VOD services has been that we don’t know how many people actually watch the VOD service. So, those VOD services haven’t succeeded as well. But, last year major VOD service providers decided to make criteria about audience rates and viewership and have been making systems for them. So, it is said that if they can offer such kinds of data to advertisers, they will be get more advertising revenue.

A survey shows that people want to watch VOD services with ads rather than pay ones. (65% of them prefer VOD services with ads. N=2,087) Therefore, I think the second generation of VOD services have a certain likelihood of success.