Two of Japan’s leading video streaming services are to merge, it was announced late last week, creating the largest local company in the market.
Current number two player U-Next is to absorb Premium Platform Japan, a company which operates the Paravi streaming platform.
The combined company is estimated to have some 3.7 million subscribers and revenues exceeding JPY800 billion ($594 million) per year.
Integration of the two operations could begin as soon as July, local media reported. That would allow U-Next subscribers to access Paravi’s content, much of which is re-runs from conventional TV broadcasters. Premium Platform Japan is substantially owned by TBS Holdings and TV Tokyo.
Paravi subscribers will, in turn, be able to access a large portion of U-Next’s content.
The move would allow the enlarged company to remain competitive in a market that is led by Amazon and Netflix.
Subscription video streaming services in Japan counted 48.4 million subscribers at the end of the first quarter of 2022, Amazon Prime Video (34% of premium video subscriptions) and Netflix (14%) accounting for nearly half of the market.
“Acquired and largely non-exclusive anime remains a massive driver of online video demand across platforms, exceeding 50% of total measured demand [in Japan], with titles from 10 animation studios capturing 45% of anime demand. Live action dramas are particularly important for platforms like Hulu Japan which leverages content from parent Nippon TV and others,” said research firm Media Partners Asia in May last year.
Its report showed Japanese anime to account for 51% of consumption (i.e. time spent viewing) on SVOD platforms, followed by Japanese live action content at 18%. U.S. series accounted for 10%, while U.S. movies and Korean series accounted for 7% each.