Why “Over-The-Top” Adoption will be Slow in Japan
The term “over-the-top” has recently become industry lingo that essentially means getting your favorite content delivered to your television through an Internet connected device rather than through a cable line or satellite dish. In most cases, this doesn’t mean free television per se, but the content available is on demand and very often a la carte. Shows and movies can be watched at any time and may be sold per movie, per episode or per season.
Last January, ad consulting firm Hill Holliday conducted a study in which five families were asked to get rid of their cable boxes and use one of five “over-the-top” devices. Each of the families was given either a Roku box, Boxee box, Apple TV, Xbox360 or Google TV (Lotech Revue) to use instead of their traditional cable for a one week period. The cable box was also removed from their homes to avoid any temptation.
After the one week, all five families were just shy of experiencing a recovering crack addict’s withdrawal symptoms. Lack of programming, a confusing interface and the absence of a passive television experience were all reasons the five Boston area families cited as why they wanted to go back to cable.
If a similar experiment were carried out in Japan, what would result? I’m willing to bet that the reaction would be even worse than what came from the five Bostonian families. Here’s why:
The elderly are resistant to change.
There is a large elderly population in Japan that is unwilling or uninterested in shaking things up by adopting this new and seemingly unnecessary technology. With about 22% of the population over the age of 65, this demographic will only increase over the next few decades. As we’ve seen with the switch from analog to digital broadcasts, with only 6 months remaining until the deadline, there’s still around 10% of the population who have televisions that will go dark when the change goes into effect on July 24 of this year. Even with forced implementation and a determined cut off date, adoption has taken around 8 years and is still incomplete.
There isn’t much on-demand video available online.
Unlike the US market where services like Netflix or Hulu make available thousands of TV shows and movies, there aren’t any real counterparts in Japan. Sure there are services that offer the “through the post” rental system that Netflix pioneered many years ago, but there are very few locations online to find large catalogs of streaming content. Those sites that do offer such content do not make it available on devices besides the computer and are forced to adhere to the Japanese release schedule. This means that the latest season of LOST that was released 4 months ago on DVD in the US may still not be available in Japan… anywhere. Even when it does become available, the DVD rental release window is often long before it becomes available on any streaming site.
Brick and mortar rental shops are still ubiquitous.
Not to say that they’re breaking revenue records with their current business model, but unlike the decimated Blockbuster in the US, the video rental business in Japan is still alive and doing relatively well. While there are clear signs that the Japanese market will follow the US and move toward online content eventually, I believe we’re still at least five years from that day. Just like with CDs, despite the availability of music online, it’s easy to find rental shops in Japan that stock thousands of albums and support an active customer base willing to pay to rent (and copy) those CDs. The attachment of rental companies to their physical shops will make the transition an even slower process.
Pervasive access to broadcast TV programming on a multitude of devices.
Unlike the millions of square miles that need to be blanketed to give digital TV access to the US population, Japan is a relatively small country with a high population density. It is for this reason that on many mobile devices there is access to free, terrestrial TV broadcasts. Using a “1 seg” tuner, high quality digital audio and video can be accessed on a multitude of mobile devices. This takes away part of the appeal of “over-the-top” solutions which can also (in theory) be viewed on those same devices so long as they have a reliable, fast connection to the Internet.
Content providers are hesitant to put their stuff online.
A large portion of content created in Japan and exported overseas is animated. In a recent court ruling, the location shifting of Japanese content using a device such as the Slingbox was found to be illegal. This comes as a reaction to the large amount of animated content that makes its way to the US and abroad and is then illegally distributed via the Internet. Making this type of content available easily over the Internet on a variety of devices would increase the number of illegal fan subbed anime, and hurt legitimate export sales abroad. Or so the thinking of the industry goes.
Watching TV in Japan is even more of a passive and social experience than in the US.
For many families in Japan, there is one room in which meals are eaten, naps are taken, guests are hosted, TV is watched and most household activities are carried out. As a background to all this activity is the TV, which is almost always on, and serves as an incredibly passive form of entertainment. With an “over the top” system that requires constant input from the user to select what program to watch next, a key aspect of TV watching in Japan is lost. There are many instances where you don’t want your favorite show to be playing, but you want the TV to be on. Solutions that address this type of situation have limited implementation on many “over-the-top” devices. This will probably be the biggest hurtle to mass adoption of Internet based TV solutions in Japan.
As a relatively active consumer of Japanese media, I would absolutely love to begin to see subscription based or a la carte content on my TV delivered via the Internet. For now, there really aren’t any elegant solutions and it seems as though I’ll have to wait for quite some time. While there are ways for those living in Japan to obtain their favorite net delivered content domestically and from abroad, the solutions are often messy, unsatisfying and the best ones are usually illegal. This all begs the questions of why media companies both in Japan and abroad are so hesitant to make their content available to as many people as possible whenever possible. This is a topic for a different article however.
What are your experiences with net delivered content in Japan or abroad? Leave a comment and let us know!
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