Streaming revenues in Japan are set to far outstrip the country’s combined theatrical and home video markets by 2026. And U-Next, the third-ranked streamer in the country and Japan’s biggest local player, is determined to have a bigger share of it.
That message was conveyed loud and clear by Tsutsumi Tenshin, CEO of U-Next, at a presentation made Wednesday at the online edition of the TIFFCOM market. The company currently lies behind Amazon Prime and Netflix, with a roughly 10% share of the Japanese streaming market and 2.65 million paying subscribers
As of 2019, he noted, streaming revenues at JPY461 billion had surpassed theatrical’s JPY261 billion ($1.78 billion at current exchange rates) and home video’s JPY272 billion ($1.85 billion). By 2026, streaming service earnings are expected to grow to more than JPY700 billion ($4.76 billion). “We firmly believe this can happen,” Tsutsumi said.
The potential for growth is certainly there: Some 64% of Japanese consumers do not subscribe to any streaming service, while those who do pay for an average of 1.7 services, compared to three per household in the U.S. in 2020.
U-Next, which currently offers its package of services for JPY2,189 ($14.89) per month, plains to recruit and keep subscribers with “three core strategies.”
Its ‘All in One’ approach intends to meet users’ every need and preference on one app. Its ‘Only One’ strategy is about offering a wealth of exclusive content. ‘Total Coverage,’ is a reference to U-Next’s huge inventory of content, including 14,000 Hollywood and Japanese film titles.
Tsutumi’s ultimate goal is to become a one-stop app for every sort of entertainment content: from movies to the manga, books and webtoons that are the source material for so many films in Japan.
In its movie business, the streamer intends to maintain each release window to maximize viewership and revenue, instead of collapsing them as some of its competition are doing. In addition to TVOD and SVOD windows, U-Next offers a premium window that opens just after theatrical release and costs somewhat less than a standard movie ticket.
The company promotes theatrical releases on its services and provides users with discounts on film tickets. Said Tsutsumi: “We want to integrate movies into users’ lifestyles and expand the appreciation and consumption of cinema.”
Meanwhile, the streamer plans to build on its reputation among local cinephiles and create “a platform that has everything,” from blockbusters to arthouse fare. In addition to an inventory of acquired content, U-Next is actively entering into film production from the planning stage, as well as funding projects through film production committees.