Playing catch-up on IPTV

10 Apr 2006

Japan is a country where the urban landscape changes at unbelievable speed, but business in the over-regulated and over-protected staid world of broadcasting shows little evidence of recent change beyond digitalization.

Despite the fact that the country leads the world in FTTH, true convergence of telecoms and broadcasting is still stymied by regulatory issues. Several companies have the capability to offer IPTV, but true IPTV does not yet exist in Japan. Some16 firms, including KDDI and a Softbank subsidiary, are registered as IP multi-casters, but only four are actually doing anything to date.

According to MIC sources, the service most resembling IPTV that Japan has is the GyaO service introduced last year by leading cable music provider Usen Corp, which is also a major FTTH player.

'The media companies, which have a very lucrative business with their regular TV business, were (and are) in no hurry to promote IPTV, where advertisement revenue is, I imagine, a fraction of what is generated in the broadcasting industry,' says George Hoffman, research manager of communications at IDC Japan. 'NTT and other communications companies are hoping to break into the broadcasting market via IP, but without content which is created by the media companies, how do they make money‾'

Dr Heizo Takenaka, minister of Ministry of Internal Affairs and Communications (MIC) since late 2005, has been openly pushing for IPTV and is planning not only to drive through regulatory changes necessary to merge the two worlds of broadcasting and telecoms under his jurisdiction but also to create some world-class Japanese new media enterprises. Fresh from his success in merging many of the country's biggest banks, the former professor is now seeking to repeat the formula in telecoms and broadcasting.

Forcing change

Last December Takenaka set up a task force with instructions to report this June on how to get rid of the outmoded practices and regulatory barriers, which he said at the time were preventing the country from capitalizing on the potential offered by the latest technologies. He has said that such changes could lead to Japan's media and telecoms business quintupling in revenue.

One of the key issues is broadcast retransmission rights that broadcasting companies supported by copyright owners are fiercely guarding.

Even before Takenaka's taskforce reports, TV broadcasters have been finding themselves under pressure as they and the MIC face the reality that terrestrial digital broadcasting will not be able to offer nationwide coverage when analog transmission is terminated in 2011.

The broadcasters have been pressing for financial assistance to build the expensive transmission towers needed to expand digital coverage. But Takenaka and the MIC want to use IP and satellite transmission to cover those areas that the terrestrial broadcasts won't be able to reach, which could be 5% of the country. While it seems unlikely that IP transmission could fully cover those less populated areas, it has become the leading issue in the debate.

In fact, already the MIC is working together with communications satellite operator JSAT and TV stations in Hokkaido, one of the areas that won't be fully covered. JSAT and SkyPerfect TV are even promoting an 'HDTV via satellite' experiment using H.264 transmission.

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