Japan’s Platform Conundrum

For a country that always conjures images of an advanced, futuristic society, it’s surprising to outsiders just exactly how Japan has found itself to be on the outside looking in when it comes to moving forward with the rest of the world in terms of the adoption of new social and content distribution platforms.

Oftentimes this is explained as if it’s some kind of cryptic cultural code – “Japanese prefer to do it in a such and such a way.” For the most part it’s my contention that this is misleading at best – the most perfect example being the overwhelming momentum of smartphone adoption in the country. When the iPhone was released many years ago, prognosticators predicted that the phone simply could not compete with the advanced Japanese feature phone. Ultimately, consumers proved this wrong and have been gobbling up Internet content, applications, and the handsets ever since.

The real secret behind the reason why the Japanese have appeared to have been slow to move to new platforms is purely structural – whereas Japanese consumers are relatively savvy and willing to try/adopt new technologies, the businesses that control the distribution of content are markedly less willing to adapt to the changing reality. This creates a distinct lack of choice, and keeps a critical mass of users from flocking to and making new technology platforms viable.

How this is played out varies across industries; as a marketer understanding the context of how this traditional approach has impacted emerging technologies is important to gaining a clear picture of how the market works.


There is a bit of a running gag that in Japan the e-publishing consortium, founded by the major Japanese publishers, was formed in Japan as a means of stalling the adoption of mainstream e-reading technologies. While the industry is not completely ignoring the potential of mobile technologies – best sellers such as Diamond, Inc’s “MoshiDora” series is one of the most downloaded standalone applications of last year – it’s now painfully obvious that Japanese publishers just aren’t that interested in fast tracking and making content available in a standardized format. IBunko, a Japanese book reading application, illustrates this content problem nicely – while over 8,000 books from the Aozora catalog are available for iBunko, most of these are classic texts that are available primarily as they are older than 70 years old. With no “new” offerings available, people are effectively only given the option of purchasing the content in book format, or in the case of some bestsellers, downloadable as an application for their smart device, which the industry promptly claims to be the preferred format.

TV and Video Content

TV companies are still stubborn when it comes to the Internet – they don’t integrate offline narratives into their shows, and for the most part don’t make their content available online. Technologies that they invent and promote are purely a response to keep the current model intact – one-seg is mobile streaming technology that allowed for users to “take their televisions” with them, but offered no real solutions for on-demand or downloadable content.

It is important to understand that TV is still the big media business in Japan – there are a handful of terrestrial stations that command millions of dollars worth of ad space. The industry has been very keen to protect this revenue stream, and the big part of that is keeping what happens on TV exclusive – almost to the detriment of even experimenting with other forms of distribution.

A lot has been made recently about moves from Hulu and the iTunes Movie store – these platforms have become more popular in the country recently but a quick look at the content featured on them backs up the contention that mainstream, terrestrial content is not yet ready to make the move onto these platforms. Apple’s content is strictly movie releases. Hulu is a little more interesting to follow in this market right now – it has hooked up with all major game/device platforms to deliver its service and cut its price by 33 percent to make it more appealing. It also recently made a deal with HBO that created more buzz in the U.S. than in the Japanese market. The real problem would be to mistake Hulu’s offer as mainstream. The Western dramas, and movies model along with older Japanese TV shows is precisely the same model followed by cable and satellite TV in Japan – which means it’s still appealing to niche interests. Until we see popular terrestrial shows being made available on the Hulu platform shortly after their viewing, we can’t really use the service as a bellwether of a change in how Japanese consume media.

Will It Change?

Change in Japan comes hard and takes time, not because consumers are fickle and unwilling to change, but precisely because there is not much structural incentive for change to happen in the first place. Even if companies recognize the need, they are typically not geared to make quick changes about how they do business, and the first course of action is to protect the business model as it is at all costs. This is why you see pixelated images of famous stars on websites, strict new download laws, and products and services like Sony’s new music service, which will lock out iPhones and other non-Sony/PC products.

We’re not likely to see change from within Japan, but dominant players from outside of Japan without a vested interest in current business models (i.e., Amazon and the Kindle), or new companies hoping to change the way things are done within Japan (i.e., Rakuten) are probably a better place to look to expose real and true consumer demand changes in media consumption in Japan.

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