Profits fall as nets tough it out

Territory report: Japan

TOKYO – Fierce competition among Japan’s leading commercial networks is taking a back seat this year to the double whammy of chronically weak ad sales and the huge investment necessary for the start of digital terrestrial broadcasting in Tokyo, Nagoya and Osaka.

All four major nets — Fuji, NTV, TBS and TV Asahi — saw net profits fall during the last financial year.

Fuji TV got away with a loss of 14%, while TV Asahi’s profits dove 68%, with the others hovering in between. The outlook for this year doesn’t look any more promising.

One victim of the unavoidable belt-tightening has been Japan’s most popular news anchor, Hiroshi Kume, whose daily “News Station” on TV Asahi has revolutionized Japan’s originally staid newscasts since bowing 18 years ago.

Although ratings of the show remain strong, Kume was unceremoniously terminated as anchor. The reason given was cost-cutting: Kume was the country’s most expensive anchor, with an annual salary of $6 million.

“It’s a crazy time for television in Japan,” says one exec at a major cable operator. “With so many new services hitting the market, an eventual shakeout is inevitable.”

Currently, two analog and digital sat platforms compete with the commercial broadcast TV biz. But with the latter switching to digital nationwide and being active in satellite and broadband deliveries as well, Japan’s 45 million TV households are already swamped with options.

The next phase could mean real trouble for all existing services.

In March, BB Cable started its service via asymmetric digital subscriber line broadband Internet connections, delivering the world’s first commercial video-on-demand service in high quality and at a low cost.

Pundits already predict the demise of satellite TV and traditional cable in Japan, sending billions of dollars in investment to the dustbin.

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