The overseas content market has doubled in 10 years

 ■ The overseas content market has doubled in 10 years

HUMANMEDIA has published a database of the Japanese and global content market. Let’s take a look.

The overseas market for Japanese content has doubled in ten years to exceed ¥2 trillion in 2020. In 2011 this figure was ¥865.3 billion, but ballooned to ¥1.4124 trillion in 2016. By 2020, this figure is expected to reach ¥2.208 trillion. The so-called Cool Japan Policy aims to expand this market.

The anime sector represents the largest share of this overseas market. The sector accounted for ¥266.9 billion in 2011, but with the expansion of overseas streaming, this figure reached ¥767.6 billion in 2016. It is predicted to reach ¥1.702 trillion in 2020. The next fastest growing sector is online gaming apps for smartphones, followed by manga publication and distribution, which accounts for 80% of the overall publishing sector.

Despite a decline in the Japanese population and market size, these sectors have experienced an ongoing and slight increase to reach a scale of ¥13 trillion in 2020. In 2016 the sector reached ¥12.4898 trillion, representing an increase of ¥309 billion, or 2.5% from the previous year. In 2011, online media accounted for 13.9% of the overall market, reaching a scale of ¥1.6343 trillion. By 2020, it is expected that this will have grown by 34.2% to reach ¥4.4502 trillion. While there is great consternation at the decline of the domestic market, online content may be bucking the trend.

The largest global market sizes in 2016 were the United States, China, Japan, the United Kingdom, Germany and France, in that order. In 2016, the market size of 16 countries was ¥101.9 trillion, with the United States representing around 45%, China around 13.5% and Japan around 11%. The United States market was around ¥45 trillion, or about three times the size of China in second place. The United States and China dominate the market, with China experiencing growth.

The domestic media content market and its affiliated industries amount to ¥53 trillion, or 10% or GDP. This is almost as much as the amount invested in construction. The true value of HUMANMEDIA is its analyses that encompass these related industries. The content industry itself may not have such a large volume, but the size of its affiliated industries and the knock-on external effects that it has highlights the value of promoting this industry.

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The risks of cryptocurrencies and blockchain technology

 ■ The risks of cryptocurrencies and blockchain technology

The Digital Risk Association, of which I act as Chair, held the 2018 Cryptocurrency and Blockchain Forum. Discussions centered on extremely dry topics, such as the risks surrounding cryptocurrencies, blockchain technology and initial coin offerings (ICO). Nevertheless, the venue was instantly packed with 700 attendees, despite the fact we had not actively publicized the event. This illustrates the level of interest in this field. 

Let’s turn to cryptocurrencies first. Bitcoin has grown strongly, with ¥10 trillion traded in 2017. A regulatory system is now in place with the passing of the revised Financial Settlements Act. The closure of Mt. Gox spurred on discussion both of cryptocurrencies and exchanges that trade in them. This led to the establishment of a legal framework and a system for registering cryptocurrency exchanges. 

Japan is the only country to have such a system. Media coverage of the establishment of this legal framework led to much public interest and an increase in the number of accounts opened to trade in cryptocurrencies. This caused a concomitant rise in risks surrounding price volatility and fraud. The Financial Services Agency set up a monitoring team of 30 specialists in the field.

There is also a risk of losses at exchanges. With an increase in wallet applications, there is a tendency for people to have a sense of security once the money is inside their app. However, just as there is a big difference in putting one’s money into a bank (exchange) or putting it under one’s mattress, there is a debate about the security benefits and drawbacks of this method.

Japan is currently having a debate on initial coin offerings (ICO). These are initial public offerings of cryptocurrency (tokens) when establishing a business. This massive and rapid influx of high-risk investments has received much attention, reaching ¥450 billion globally.

However, the position of ICOs is still unclear in Japan and is up for debate. Rights are unclear and there is a high risk that investments will become worthless. It has also been pointed out that it entails risks around money laundering and fraud. Nevertheless, the number of ICOs has been increasing and more of them are good opportunities. Everyone agrees that continuing in this positive direction will require the establishment of clear rules and agreement on best practice.

There is much hope and scope for growth, but many issues remain. There are many things that businesspeople, lenders and borrowers need to be careful of. The Government is putting in effort and public-private collaboration will be vital. I was able to share this reality by participating in the debate.

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Taking broadcasting reform from debate to action

 ■ Taking broadcasting reform from debate to action

The Regulatory Reform Council submitted 120 recommendations in 7 fields to Prime Minister Abe, including in the field of reform of the broadcasting system. The central pillars of these recommendations are constructing a new platform, encouraging the entry of new players and laying the foundations for local bureau operations. Subsequently, the MIC compiled reports from the Broadcasting Issues Investigatory Panel and the Future of Broadcasting Subcommittee. These engaged in a deeper consideration of matters alongside the Regulatory Reform Council. I was involved in both bodies, and submitted my opinions mainly on the outlook for and policies related to the convergence of broadcasting and telecommunications. I believe the debate moved in a positive direction as a result.

This was the first time in 14 years that I have been engaged with broadcasting policy, since my previous involvement with DTTV issues and in a MIC conference that debated fundamental revisions to the legal framework underpinning the telecommunications and broadcasting sector. However there hasn’t been a great change in policy themes since then. That is a problem.

The MIC report lists the following policies:

1. Technological measures for the effective utilization of bandwidth.

2. Network reform

3. Diversification and enhancement of services, net connectedness

　・ Revitalization of the content industry (fostering human resources, systemic support, support for overseas expansion, streamlining of rights processing)

　・ Promoting combined services (using viewer data, realizing new video streaming)

4. Setting up a framework for providing information

　・ Investigating how to strengthen the foundations of local bureau operations, etc.

On the whole, these are appropriate points.

I made three comments on the compiled reports.

1) The two priority areas going forward are the full-scale roll-out of combined telecommunications and broadcasting services as well as the expansion of content overseas.

　　These are developments in services and businesses, so are issues for private enterprise. I believe that the role of policy is to put pressure on business to proactively pursue these matters.

2) In terms of promoting combined services, I agree with viewer data and video delivery being raised.

　　Data is becoming the key difference between telecommunications and broadcasting. With telecommunications, the accumulation of AI learning through use of data will affect competitiveness. On the other hand, while the whole country uses broadcasting, data is not harnessed. As the structure of all industries shifts toward centering upon data, the use of data within broadcasting will become a key theme.

3) KDDI and Netflix have recently announced cooperation on a package price

　　However, this did not involve the introduction of unlimited data plans in the way that T-Mobile has done in the United States. It is said that the President of KDDI believes this is because net neutrality in Japan is a gray zone. If this is the case, and President Trump’s abolition of net neutrality has knock-on effects in Japan, then this may lead to massive advances in video streaming by the telecommunications system. Telecommunications policy will largely determine the shape of broadcasting.

　　When thinking of the convergence of telecommunications and broadcasting, it will be very important to consider broadcasting policy and telecommunications policy in a unified manner. The same goes for content policy and ICT policy.

　　I hope Government thinking is along these lines.

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Learning of Tomorrow has begun

 ■ Learning of Tomorrow has begun

A symposium was held at Keio University on the establishment of the “Learning of Tomorrow” association.

While teaching digital education and programming is now part of the curriculum at elementary school, there is a growing and serious shortage of human resources in IT and AI. This is an effort to construct a private collaborative framework that combines education and technology to provide recurrent training for preschool aged children to adults and those who wish to brush up their skills. 

Its purpose is to create next-generation education by conducting research, testing, awareness raising and policy proposals on IT and technology in education — be it through policies to foster IT human resources, or policies on introducing education on AI, big data and blockchain technology. 

All staff come from over 30 peak bodies in the digital sector, including IT, software and content production. There are 8,000 member companies under its umbrella. The Keidanren, the Intellectual Property Strategy Headquarters at the Prime Ministers Office and the Cabinet Secretariat IT Strategy Office participate as observers.

Now that the School Education Act and the Copyright  Act have been amended, we have seen great progress on matters such as the creation of a system for digital textbooks and other areas that we have been working on and making recommendations about. Now is the time to move toward 2020, such as by setting up the new framework of the Japan Electronics College and establishing the Digital National Strategic Special Zone CiP. This impetus will feed into the association. 

The symposium was a place for leaders of industry and academia to make commitments to progressing technology-centered and private-enterprise-led educational reforms. The Main Hall at Keio was full to overflowing (for the first time since its opening according to the caretaker.) This very motivated sector is forging a path forward. 

The business of the the association

1　Proposals

　◯ Policy proposals, collaboration with the cross-party Diet Members’ League for ICT in Education

2 Establishing a new environment for learning and fostering human resources 

　◯ Designing and testing future learning environments that surpass the bounds of the school

3 Promoting the use of cutting-edge technology in education

　◯ Introducing cutting-edge technology, such as AI, IoT, big data and blockchain technology, into education.

4　Promoting ICT education in ICT

　◯ Advancing education in programming, embedding information into education, and literacy education.

5　Supporting EdTech businesses

6 Fostering and securing ICT, AI and IoT professionals.

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Yoshimoto Kogyo announces its vision for an Asian Entertainment Platform

 ■ Yoshimoto Kogyo announces its vision for an Asian Entertainment Platform

Yoshimoto Kogyo used the Okinawa International Movie Festival as a stage to announce the establishment of its vision for the Okinawa Asian Entertainment Platform.

In the preamble of the concept paper, it announced that “This Japan-made platform will allow expansion into Asia. It will introduce Asia to what Japan’s regions have to offer, and vice-versa. We aim to construct a platform to connect Asia with Okinawa, Japan through entertainment content.” 

This will become a source of creators and performers across Asia. It will be a place to unearth, foster and provide a workspace for a whole range of creators, including game creators, gamers, manga artists, animators, illustrators, composers, performers, trend creators and secondary creators. Being based in Okinawa, they are aiming to create a local entertainment industry as well as employment opportunities.

With its 108-year history, Yoshimoto Kogyo is pinning its next 100 years on a future that is regional, Asian and digital. The Okinawa International Movie Festival, which has reached its 10th anniversary, has been working consistently to ensure that Okinawa, Japan and Asia as a whole all become a content hub. They are doing this through running events, live concerts and workshops across Okinawa, including on outlying islands throughout the year. 

This press conference also launched the “Laugh and Peace Entertainment School Okinawa,” which is a school that aims to train entertainers. They hope to foster creators and performers to create local Okinawan content that can take on the world. 

They also established the “Yunus Yoshimoto Social Action Co. Ltd.” in collaboration with Nobel Peace Prize winner Dr Muhammad Yunus. They have begun by dispatching comedians to live embedded in local communities in all of Japan’s 47 prefectures, where they can experience social issues for themselves, and try to solve them by encouraging collaboration between the technological power of start-ups and the power of entertainment.

The concept for this platform is an extension of their larger business strategy. Their slogan is “Everything is entertainment. Everyone makes it entertaining.” Their expressive tools are film, manga, anime, AR/VR, games, social media and live concerts. Equally, they are dealing with issues that include education, the regions, tourism, local issues, health and sport. This all seems very compatible with the schools and social action.

I was sitting in the section set aside for reporters during the press conference when a microphone was thrust in my direction. I commented that the Okinawa International Movie Festival has both films and laughs. It is a unique event that is difficult to pin down and can be enjoyed in cities and towns across Okinawa. This school and the platform are both outcomes of the festival having continued for ten years. It provides both an entry point to train people as well as a way for output to be shared overseas. Two of the main themes of Government content policy are fostering human resources and overseas expansion. It really should be the Government that is doing this work. But it is a single company, Yoshimoto Kogyo, that is trying to pull this off. It is really quite impressive. 

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Yunus Yoshimoto Social Action gets underway

 ■ Yunus Yoshimoto Social Action gets underway

Yoshimoto Kogyo and Nobel Peace Prize winner Professor Muhammad Yunus have together established Yunus Yoshimoto Social Action Co., Ltd.

This is an attempt to solve social issues by means of business using the ‘social business’ model, of which Professor Yunus is a great proponent. They hope to solve issues and create employment by starting businesses which can solve social issues such as poverty, unemployment and environmental destruction.

Yunus’ Grameen Bank provides small loans on trust alone, without any collateral. This brings out the entrepreneurial potential of poor borrowers. $2.5 billion is loaned to 9 million poor women each year, with a repayment rate of 99%. While the rate of profit for social businesses is all but zero, the social return is significant and allows people to become economically independent.

This is not just a system for developing nations. Grameen America has lent 86,000 people $590 million and boasts a repayment rate in excess of 99%.

Japan is a developed nation with a plethora of social issues, including aging, a lack of workers, depopulation, disparities and nuclear power plant problems. Now Yoshimoto Kogyo, a 108 year-old company that employs 6000 comedians has decided to put its shoulder to the wheel. This is a singularly unexpected development.

Yoshimoto Kogyo has dispatched “live-in comedians” to each of Japan’s 47 prefectures. These community-based comedians throw light on their local issues and try to find solutions through laughter. Social issues are often thought of as something to be discussed earnestly and seriously, but perhaps they can be tackled in an enjoyable way. Perhaps comedians will be able to get to the root of these problems in a way that politicians, public servants and academics cannot. IT professionals, entrepreneurs, creators and students can come together to tackle the problem and create a business. One of Yoshimoto Kogyo’s strengths is its ability to bring people together in a relaxed manner.

The whole thing was launched at the Tokyo Peninsula Hotel at a “Yunus Family Conference.” I was the compere. The project aims to bring social businesses to fruition by taking actions that include functionality as a fund.

These activities are directly related to the 17 SDGs adopted by the UN, which aim to reduce poverty and promote general health and welfare. Yoshimoto Kogyo is taking steps to highlight the SDGs, including through promoting them on the red carpet at the Okinawa International Movie Festival. These are but targets and goals, but according to Dr Yunus, this project represents real action and is a “path to lead us to our goals.”

These comedians act as issue-detectors, smoking them out through humor. I wonder what results we will see from matching IT professions and others to the task at hand. It’s very serious yet very fun. What an ambitious project! 

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A strategic vision and plan for intellectual property

 ■ A strategic vision and plan for intellectual property

The Prime Minister’s office has an Intellectual Property Strategy Headquarters, whose members are the Prime Minister and his ministers. This body, in which I participated as chair, set out both a strategic vision and a concrete plan for intellectual property.

The main thrust is as follows:

1. Fostering human resources

Fostering human resources for intellectual property and Cool Japan

2. Promoting prospective creation

A content-creation ecosystem.

Strengthening anti-piracy measures

3. Design of new fields

Strengthening the strategy for new information materials such as data and AI

Constructing a copyright system

The four points that I think need to be reviewed are as follows:

1) The use of the Professional University System was raised as part of “Fostering human resources for intellectual property and Cool Japan.”

The Professional University System, which places importance on collaboration with the private sector, is about to begin. The Japan Electronics College, which I set up, is part of this. Let’s make use of these institutions.

2) Creating an environment for the development of E-sports was raised as part of  establishing “a content-creation ecosystem.”

The Government has recognized the meaning of E-sports, just as the sector is finally reaching lift-off velocity in Japan. It is significant that it has situated the sector as a target for development. 

3) A clear statement of policy to prevent pirating sites

We are considering anti-piracy measures in a comprehensive manner. The Government decided upon emergency measures for blocking sites as part of anti-piracy measures, but this has stirred up a debate into the pros and cons. The situation has moved on significantly in that there have been advances in preventing ad revenues as a result of problematic sites not being visible any more. As such, blocking of the problem has not proceeded. This has led to a situation where things have advanced to the next stage of countermeasures.

4) It was noted that there would be consideration of how to construct a framework for the management of copyright and the allocation of profits through the use of blockchain technology. Policy on the distribution and use of copyright materials has been overly reliant on the Copyright Act, but there may be a shift to a technology-led stance. This is an important milestone.

I made three comments at the meeting.

1) There have been moves to put the intellectual property plan into action now that this Diet has passed partial amendments to the Copyright Act (to bring it into line with the internet age) and the School Education Act (to create a system for digital textbooks). There have also been results in the global expansion of content.

2) After the decision on emergency measures against piracy websites in April, we have seen such problematic sites disappear and a commensurate increase in general awareness of  the problem. I think we should quickly set up a task force and work towards additional countermeasures.

3) However, new issues such as Society 5.0 and the SDGs call for changes to the intellectual property strategy. Coordination between intellectual property policy and IT policy is also becoming more important. I look forward to these policies being refined based upon the vision we have set out on this occasion.

Attending ministers made some important points about creating a data distribution environment, strengthening anti-piracy measures and implementation of the new legal framework for copyright. Data distribution and anti-piracy measures are amongst the many intellectual property issues that must be tackled across the boundaries of Government departments. I look forward to seeing concerted efforts by the cabinet.

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