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Japan’s NHK cracks down on scofflaws

Pubcaster takes viewers to court for non-payment

Japan’s giant pubcaster NHK is getting serious about forcing scofflaws to pay TV license fees.

As in the U.K. and Germany, all Japanese homes with a TV must pay to receive the pubcaster’s two free-to-air channels, three satcasters and three radio networks.

But an estimated million viewers or more are withholding the bi-monthly $32.21 fee — unusual in the normally law-abiding country.

Under Japanese law, TV households must sign receiving fee contracts with NHK and pay stipulated fees, but penalties for non-compliance are not spelled out.

NHK has tried to persuade delinquents to come up with the cash but after hitting brick walls of refusal, its patience has worn out.

On Dec. 1 it notified two Tokyo households that it would institute civil proceedings to force them to sign contracts and pony up back payments.

The same day, it filed papers with district courts for permission to seize the assets of 24 individuals in 14 cities and prefectures who had signed contracts but had not paid for periods of between a few months and years. They owe a total of $32,350.

The pubcaster sent similar warnings to eight deadbeats in May, of whom seven reached settlements and one has since had assets seized.

Although NHK is making an example of a few of the worst offenders, rather than going after thousands of scofflaws, it hopes its assets-seizure strategy will persuade others to cough up.

“We consider this the method of last resort to ensure that everyone bears the burden of the receiving fees equally,” the broadcaster said in a statement.

There are a number of factors motivating viewers’ resistance to pay.

Commentators cite a spate of scandals at the 60-year-old pubcaster, including arrests of employees for embezzlement and insider trading.

This has irked viewers already suffering in the economic recession.

More significant, however, has been the pubcaster’s long reluctance to address the payment issue, fearing that forcible measures might spur even more resistance.

Now, however, NHK can’t afford that luxury.

It estimates it will take in $80.7 billion in the 2010 fiscal year, which ends in March, but its operating expenses are expected to hit $81.5 billion, leaving a deficit. NHK may use its reported $1.5 billion in reserves to make up the shortfall or its subsids may be asked to kick in part of their profits.

And its financial situation looks set to get worse.

According to NHK projections, license fee income, which accounts for nearly 95% of its revenues, will decline as much as 10% or $798 million following the switch to digital on July 24, as more viewers gamble on NHK’s inability to track them down.

There are an estimated 40 million households in Japan and NHK had contracts with 37.2 million in the previous fiscal year. It has no way of knowing how many more households have been set up since then.

Non-payment has long been a problem at the pubcaster, even when NHK fee collectors went from door-to-door, signing up families and collecting the fees — a practice that ended in fiscal 2008 in a cost-cutting drive.

Now NHK is relying on the courts to bring deadbeats into line.

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