Discussion in the House of Representatives Regarding Deliberation on the Broadcast Act - Part 1

 ■Discussion in the House of Representatives Regarding Deliberation on the Broadcast Act - Part 1

Having been invited as a witness to the House of Representatives’ Committee on Internal Affairs and Communications regarding the revised Broadcast Act that would clear the path for NHK to simultaneously transmit their regular programming on the internet, I received questions regarding all aspects from Diet members from all parties.

○Why regular simultaneous transmission?

・As the internet becomes infrastructure, being able to receive signals at anytime from anywhere without additional costs strengthens the right to knowledge.

・As normal simultaneous transmission takes place in the United Kingdom, France, Germany, and South Korea, as well as for the 4 major networks in the United States, it must be discussed why normal simultaneous transmission is not allowed in Japan.

・This is a policy decision on whether or not the internet is seen as infrastructure. I believe that it became infrastructure 12 years ago.

○Squeezing the private sector

・I understand concerns from commercial broadcasting. However, I cannot believe that there is a national basis for 2.5%.

・Looking beyond simultaneous transmission, it is important to consider the perspectives of how much investment is necessary to improve utility of IT utilization and use of data and AI for citizens, and how a new media environment will be built out in conjunction with commercial broadcasting.

・Under the circumstances of a changing global media environment, including IT, and expansion of foreign businesses into Japan, it is important to consider the perspective of what kind of media foundation and business environment should be prepared.

・Investment by and business costs for NHK should be set while considering these perspectives.

○NHK must not become bloated

・Citizens are unlikely to be understanding if NHK becomes bloated without reviewing its overall business and license fees.

・I would like NHK to thoroughly fulfill its role as a public media outlet of universally good broadcasting and cutting-edge development.

・I would like business expansion to be considered together with the revision of its overall business and license fees, as well as disclosure of information and revised governance.

○The state of license fees

・For the time being, it is appropriate to reach out to non-subscribers through the message screen.

・Considering cord-cutting and internet diffusion trends moving forward, there is a need to revise the license fee system.

・The method of collecting fees and charges regardless of whether or not people watch TV, which is utilized in the United Kingdom and Germany, is also worth referencing.

・Although it is not a tax, it is close to a tax. The understanding of citizens as a whole is a major prerequisite.

○The negative impact of the internet

・The internet is essentially infrastructure now, 10 years on from the introduction of the smartphone.

・While fake news becomes prevalent, communication opportunities and communities that were previously unavailable have been created through social networking services. There is an element in which democracy has been strengthened.

・In order to enrich this culture, education to utilize information is important.

○Regulation of content through fusion of communication and broadcasting

・Japanese broadcasting programs are involved in a system that gives autonomy to the program council at each station and the BPO.

・This system functions effectively and maintains the binary system of NHK and commercial broadcasting, as well as a rich broadcasting culture.

・The internet and content represent the third element in this system. Japan is fine, as it is autonomous and free, but the information literacy of its citizens is important.

○Would it be all right to abolish NHK?

・Europe is transitioning from public broadcasting to commercial broadcasting, while the United States is transitioning from commercial to public. However, Japan has a special binary system.

・Since Japanese TV builds a rich culture, the binary system is functioning. This pillar does not need to be changed.

・How can the internet, which is the third element, be enriched? How to educate these users is worth discussing.

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Revisions Enacted to the Broadcast Act with Approval of Simultaneous Transmission by NHK - Part 3

 ■Revisions Enacted to the Broadcast Act with Approval of Simultaneous Transmission by NHK - Part 3

Now I would like to touch on this revision to the law.

I do not have much of an opinion on the enhancement of governance over NHK, duty of loyalty for executives, and the disclosure of information because they are a matter of course, but there is hope that NHK will finally be able to carry out simultaneous transmission.

In addition to the approval of standards for execution and checks in the form of the requirement to submit plans, NHK will be asked to cooperate with commercial broadcasting for their online business.

Attention is being focused on how this cooperation will go.

Japan should take a similar approach to the United Kingdom and implement strategies based on a foundation that connects NHK and commercial broadcasting.

A simultaneous transmission platform, akin to the TV version of radiko, should be created.

A foundation that connects NHK and commercial broadcasting should be built out to promote IP cloud support and data usage.

A shared platform for broadcast stations should be formed to support promotion.

An IP cloud base should be prepared for delivery to various devices through various transmission paths while also significantly reducing costs.

Viewership activity should be solicited using AI to handle big data on viewership history.

It would be beneficial to create this foundation while cooperating.

In addition, the facilitation of copyright processing is presented as an issue to promote online transmission.

Copyright processing is complicated because the positioning of copyrights differs for broadcasting and communication.

There may be a need to revise the system to improve this matter, but efforts between private companies are the first priority.

It is thought that the role that NHK will play here is significant.

The reason that I personally believe this is happening late is because online support is NHK’s obligation in my mind.

Under the Broadcast Act, the objective for NHK is to provide universally good programming, or in other words secure the national minimum and take a lead in making progress on an international scale.

The reason that the Japanese government is involved in designating NHK as a special public corporation is because it must lead Japan while developing and introducing technology.

On a side note, NTT has been designated as a special public corporation in order to provide reliable service and conduct technological research.

However, NHK has fallen behind in introducing new technologies.

Given its relationship with commercial broadcasting, it is rumored that there is a cap of 2.5% of license fees for NHK in order to avoid squeezing the private sector.

There is no special basis behind this figure from a national perspective.

The total is just short of 20 billion yen, but this is not a scale that requires adjustment on a national scale.

I would like there to be an evaluation on how to invest in this field in the 100 billion to 1 trillion yen scale as a national strategy.

What I would like NHK and the Japanese government to do is to improve utility for citizens.

I would like for it to be possible to watch on multiple networks on multiple devices anywhere at any time.

Next is to flesh out support for commercial broadcasting.

Regarding the aforementioned issue, I would like for a next-generation environment to be developed, even if it means using a larger portion of the license fees and cooperating with commercial broadcasting.

It is not time for petty domestic quarreling, as we must pursue policies from the perspective of how the Japanese media industry can survive on the global scale.

There are major tasks associated with this bill.

A discussion from a long-term perspective is now required.

Various themes come to mind, such as systems specific to broadcasting, such as prefectural and regional licensing and the removal of mass media concentration, the objectives and management style of NHK, and the research and development capabilities for communication and broadcasting.

I believe it would be best to carry out major discussions regarding the future of media.

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Revisions Enacted to the Broadcast Act with Approval of Simultaneous Transmission by NHK - Part 2

 ■Revisions Enacted to the Broadcast Act with Approval of Simultaneous Transmission by NHK - Part 2

To summarize the issues for broadcasting succinctly, it is the lack of growth.

Communication has developed significantly through the internet and smartphones over the 27 years since the fusion theory was put forth.

The internet is also catching up to TV in terms of scope of advertising.

TV is doing well to endure while stagnating.

However, there is a significant discrepancy in terms of strength.

The total aggregate market value of the flagship TV stations in Tokyo is just short of 1.4 trillion yen.

NTT’s operating profit for last fiscal year was just short of 1.7 trillion yen.

All stations could be bought out with the profit from 1 year.

Growth strategies cannot be drawn up with broadcasting alone with such a discrepancy in investment capabilities.

The strategies of the broadcasting and video industry in Japan, including NHK and commercial broadcasting, are in question.

The next wave came long ago.

Around 2010, Google and Apple deployed a strategy called smart TV to turn TV into an online device.

Since then, Netflix, Amazon, and other companies have fleshed out video transmission, and the next wave is crashing in from the United States.

We are in a situation where we must figure out what to do.

There are countries that serve as reference.

An example would be the United Kingdom.

Their industry makeup is similar, as they have the BBC and commercial broadcasting.

They are also being attacked by the United States through Netflix, as they are also an English-speaking country.

In order to resist this attack, the BBC and commercial broadcasting are creating a common platform.

Personnel involved all state that this is a countermeasure against the United States.

In the United Kingdom, hardware and software are separated, and the BBC outsources transmission through radio waves and cables.

Red Bee, the hardware operation company, has introduced a system to manage the content of all broadcast stations on an IP basis, or in other words using software on a cloud environment for transmission.

Content is sent to the cloud and sent to TVs, smartphones, computers, and various devices through radio waves, cables, and various networks.

This is likely the future state of the fusion of communication and broadcasting.

There is also a rumor circulating that the BBC will give up radio waves in 10 years.

There is also the issue of data.

Internet advertising is also nearing TV advertising in Japan, and targeted advertising accounts for 1 trillion yen, which comprises 80% of internet advertising.

The access histories and spending habits of users are analyzed. Advertising became a data-driven business.

Instead of differences in the transmission path, whether it is communication or broadcasting, what is perhaps more decisive these days is whether or not viewer data is used.

However, data is not being used in broadcasting.

In the United Kingdom, an NPO has made it possible for broadcast stations to use data by creating a community of broadcast stations and device manufacturers.

It is said that this is also a plan to counteract the United States.

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Revisions Enacted to the Broadcast Act with Approval of Simultaneous Transmission by NHK - Part 1

 ■Revisions Enacted to the Broadcast Act with Approval of Simultaneous Transmission by NHK - Part 1

Revisions were enacted to the Broadcast Act, clearing the path for NHK to simultaneously transmit their regular programming on the internet.

I was invited to the House of Representatives’ Committee on Internal Affairs and Communications to present my opinion as a witness.

This revision is help up by 3 pillars, but the simultaneous transmission by NHK is attracting attention in particular.

I presented my opinion from a standpoint of agreement, or rather that it should have been enacted even sooner.

Simultaneous transmission on the internet promotes the fusion of communication and broadcasting.

However, the term “fusion of communication and broadcasting” was first introduced in 1992 in a report by the Ministry of Posts and Telecommunications Council on Telecommunication, and this discussion has existed since 27 years ago.

The IT companies Livedoor and Rakuten purchased broadcast stations in 2005, but no special changes took place until now.

Meanwhile, on the global stage, IT companies fired shots in January 2006 by declaring that they would transmit videos, with a focus on content and broadcast stations from Hollywood, to the global market at an event called CES in Las Vegas in the United States.

Broadcast stations in the United States cooperated with IT companies and began transmitting content one after another.

In Europe, public enterprises like the BBC and Orange S.A. (France Telecom at the time) took a leading role in enhancing transmission.

Since NHK On Demand began in late 2008, Japan lagged behind by 3 years.

The BBC also began simultaneous transmission that year.

Even with NHK’s efforts, there was a delay of 12 years.

A big part of this is that there were no incentives to change because the TV business in Japan, including commercial broadcasting, had been steady.

However, preparations continued to put a system in place.

In the past, there were roughly 10 vertically and horizontally tangled regulatory laws in the field of communication and broadcasting. These laws were consolidated to 4 by loosening the vertical divisions in communication and broadcasting, and the system was revised to make it easier to provide services that run across communication and broadcasting, such as by preparing licenses for radio waves that can be used for both communication and broadcasting.

After 5 years of adjustments, this change was enacted in 2011, and Japan prepared a legal system that was a step ahead of the world.

However, few broadcast stations would go on to utilize this system for business, and NHK’s actions were restricted.

At this time, broadcast stations in Japan were busy preparing for terrestrial digital broadcasting. Terrestrial digital broadcasting succeeded in switching from SD to HD to provide cleaner high-resolution pictures but has failed to use computers for convenience, which is the more important feature of digitalization.

The convenient, fun features have been taken by the internet and smartphones.

In terms of the radio, radiko provides simultaneous transmission, but the introduction of ICT for TV, including NHK, is just getting serious, although on demand transmission for commercial broadcasting is being advanced by TVer and other services.

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Content Promotion Measures with the Liberal Democratic Party - Part 2

 ■Content Promotion Measures with the Liberal Democratic Party - Part 2

What is important is that the stage after the internet and smartphones has also arrived for content.

Distribution has transitioned to 5G and the cloud, and there are varied environments in terms of devices and usage, such as IoT and VR.

It is expected for AI- and data-driven advertising and sales strategies to become mainstream in the content business and for management through blockchain to grow.

Online advertising has already grown to a scale that exceeds TV advertising, and 80% of online advertisements are targeted.

In other words, this is a world that is managed by AI using user data. We have already entered the world of AI and data.

Measures to prepare environments for 5G and public viewing and run demonstration experiments for AI and blockchain will also be needed.

I have also been involved in antipiracy measures, and it is essential to find a balance between intellectual property strategies (copyrights) and IT strategies (secrecy of communication) for pirated versions, as each are rights that are guaranteed by the Law of Japan.

This is also an issue that spans multiple government agencies. At the same time, the number of policies regarding intellectual property, content, IT, and technology is expected to increase.

The Federation of Economic Organizations has proposed Ministry of Information Economy Society in order to advance the digital transformation, and I believe that we are approaching the time to reassess the state of institutional frameworks.

I would like to introduce a project called CiP as an example of an ongoing private project.

The idea is to create a base to accumulate content in Takeshiba, Minato, Tokyo.

This town is scheduled to open ahead of the Tokyo Olympics in summer 2020 after redeveloping land owned by the Tokyo Metropolis.

50 companies, organizations, and universities involved in content, broadcasting, communications, and IT will gather here.

There are plans for deregulation regarding matters such as radio waves and robots through designation as a national strategic special zone.

Keio University, Stanford University, and other institutions will be present to advance the connection between industry and academia and nurture human resources.

Although the town will open next year, it has already started working on content and technology projects.

CiP may be the precedent, but there are similar ideas in Haneda, Osaka, and other regions, and the intention is to establish hubs that advance regional connections.

In South Korea, there is a base to accumulate content in Seoul that is prepared and operated through government funding, but this is being advanced privately in Japan.

We would like to take advantage of the opportunities presented by the Olympics, Paralympics, and World Expo.

This concludes my report.

I received questions from the Diet members about esports, pilgrimage tours, piracy, CiP, iU, archives, and platform policies.

They reported that they will put together content strategies as a party.

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Content Promotion Measures with the Liberal Democratic Party - Part 1

 ■Content Promotion Measures with the Liberal Democratic Party - Part 1

I was invited by the Liberal Democratic Party Intellectual Property Investigation Committee to speak on the theme of “The Current State and Tasks for Content Promotion.”

Content policies, which began in the 1990s, saw an upsurge in the 2000s. In the past, they were focused on domestic matters and promoting industry, but they are now transitioning to an emphasis on global and online development based on the declining birth rate in Japan and the global advancement of IT. However, the domestic content market has been stagnant despite our hopes.

The Cool Japan Fund was established in 2013 for global development, demonstrating an enhancement of policy tools in terms of funding along with the J-LOP subsidy. There used to be no interest in expanding overseas in the content market, excluding games and anime, since the domestic market had been sufficient, but a lot of change has been seen during this administration.

The overseas market expanded by 26% in 5 years. It is expected to surpass 2 trillion yen by 2020.

In terms of video content, 500 businesses newly engaged in overseas expansion in 5 years, and overseas sales by companies supported by the government have increased by nearly 200 billion yen.

Looking at the 5 years starting around 2011, anime has grown by a factor of 2.9 times, and games have grown by a factor of 3.6 times.

Movies have grown by a factor of 2.8 times, although their scale is not large. TV and broadcasting have grown by a factor of 4.4 times. Overseas sales have increased.

This is a significant change, and it can be said that the policies have had an impact.

However, there is still room for growth, as Japanese content sales only account for 2.5% of the global market.

Moreover, since many foreign visitors come to Japan with hopes of experiencing pop culture, it is also important to enhance in-bound support (for example, offering multilingual support and increasing the number of pilgrimage tours) in addition to out-bound efforts.

It cannot be said that online development, which is the other pillar, has been a success.

Japan as a whole lost to the United States in IT support. The same holds true for content.

Although network transmission has increased from 9.5% in 2008 to 26.0%, there are wide discrepancies across genres, as the rates are 40% for manga, 15% for anime, 8% for music, and 4% for videos.

Businesses running pirated versions and online giants from overseas are becoming a threat in manga, anime, games, and music. Pirated versions are still a headache for manga.

Although anime had been a TV-oriented business, Netflix and Amazon are attempting to dominate the global video market.

Games had also been a TV-oriented business in Japan, but games have transitioned to an online business in the rest of the world. It has been decided that 5G radio waves would also be transmitted in Japan, but there is a possibility of a structural change, as Google is working on the transition to the cloud on 5G.

Japan is like the Galapagos Islands in terms of music, as CDs make up 70% of revenue, while the structure is completely different in the rest of the world, where subscription services already make up near 50% of revenue.

Although Netflix provides opportunities, such as the provision of funds for content creation and expansion of overseas channels, they take over the business foundation and could take all user data.

In response to this, there are individual measures across the genres.

For manga, there are antipiracy measures.

For anime, there are strategies that combine TV and the internet.

For games, there are measures to expand new industries, such as esports.

For music, there is the facilitation of copyright processing for online transmission.

At the same time, there is also a need to carry out measures that cut across genres, such as when demonstrating bargaining power with Apple or Google for all content, and expand business while working with other fields, such as fashion and food.

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Establishment of the Act to Promote the Computerization of Education

 ■Establishment of the Act to Promote the Computerization of Education

　The Diet established the “Act to Promote the Computerization of School Education.”

1 year prior to this, systemization of “digital textbooks” was achieved through the revisions to the School Education Act and other laws presented by the government.

　This law is the other engine to significantly advance the computerization of school education through comprehensive measures for municipalities to formulate and execute plans for promotion.

　However, digital textbooks and programming are not possible without computers and the internet. We want to enter EdTech as soon as possible but we are still far away. Although the government has established an annual budget of 180 billion yen, municipalities are using this budget for other purposes through the local subsidy tax measure. The engine to divert these funds to the field of education had been weak.

　This law was drafted by the nonpartisan “Parliamentary Association Aiming to Promote ICT Usage for Education.” It began in February 2015, and 83 members, including former ministers from all parties. Nongovernment advisors like myself also participated in the process to submit a bill that we drafted to the Diet, resulting in the establishment of this law.

Originally, the Digital Textbook and Teaching Association (DiTT, currently the Learning of Tomorrow Association) suggested the “establishment of the Act to Promote the Computerization of Education” in 2015, and a policy to assign a caucus of the Diet to establish this law was put in place in 2016.

　There were troublesome issues also. At the beginning, members of the caucus of the Diet, including myself, were blacklisted by the Ministry of Education, Culture, Sports, Science, and Technology, perhaps because our political activity was frowned upon, and members of the industry hesitated to cooperate.  Given that government officials change every 1-2 years while we had not changed for 20 years, and that we are used to bans, we ignored this and carried on.

　When I was asked for my opinion during the caucus of the Diet, I pointed out that the rest of the world was 2 laps ahead of us in terms of advancing education in the age of AI. Therefore, I established the nongovernment Learning of Tomorrow Association and advocate for a system of cooperation between industry and academia. I stated that preparing infrastructure, such as for bring your own device (BYOD) and the cloud, and developing the latest technologies, such as AI and blockchain, are both important.

　The Ministry of Education, Culture, Sports, Science, and Technology became more forward-thinking, given that the departments and managers had also changed, and began to promote usage of the cloud. A path was also cleared for BYOD, in which students bring their own device to study. They are also showing a proactive stance toward the use of data and AI in education. This can be considered a policy shift that has never been seen before.

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