April 2023 | Japan Media Review

Public broadcaster’s funding model is unsustainable and short-changes viewers

Artwork by Julio Shiiki

On February 26, the Asahi Shimbun published an editorial marking the 70th anniversary of the first television broadcast in Japan as a means of discussing the legacy and fate of the country's public broadcaster, NHK. The newspaper pointed out that NHK has about 1 million programs in its vaults, and that such resources provide a precious window into history. Unfortunately, NHK has done little to make this resource available to the public, which essentially owns the archive since NHK receives all its revenue through mandatory subscription fees paid by everyone who owns a TV.

Only 11,000 programs are available for viewing at various locations throughout the country. About the same number is also available online through NHK On Demand, but users have to pay extra for the service. NHK has said it is trying to make as much of this material available as it can, but it requires time and money to secure rights from those who were involved in their production. Commercial TV stations should also be digitizing their archives, particularly regional outlets that covered news at the local level, but NHK has a greater obligation in this regard because of its status as a public corporation. These resources, says the Asahi, "were produced using subscription fees, so they are public assets, but they are just sitting on the shelf".

The editorial only touches on the fact that, for at least the past decade, NHK's biggest priority has been cutting costs, which is why its previous president, Terunobu Maeda, was selected from the world of finance: Maeda was once the chairman of the Mizuho Financial Group. More importantly, he was a member of Shiki no Kai, which was the business world's support group for the late former prime minister, Shinzo Abe, who, according to a long report that appeared in the Asahi last November, hand-picked Maeda to be NHK’s president.

Though NHK is ostensibly an independent body, its president must be approved by the government. In its article, the Asahi outlines how the choice of who becomes president is basically made by the cabinet. According to the Broadcast Law, the president is appointed by the NHK management committee, but the committee's 12 members themselves are appointed by the prime minister with the consent of both chambers of the Diet. Beyond that, the Asahi says that little is known about the actual process of choosing the president, but after talking to various people who have been on the management committee in the past, the newspaper says it is obvious that while various names are floated whenever a new president is selected, the past five were all “friends of Shinzo Abe,” who, along with Yoshihide Suga, Abe's chief cabinet secretary during his second term as prime minister, felt that the president should be a businessman the government could control. The committee only goes through the motions of looking at various candidates and in the end selects the one recommended by the cabinet. 

This process was apparent last fall when a citizens group petitioned NHK to appoint former education minister Kihei Maekawa to be the next president after Maeda's term was to end in January. The group said that, as the head of a corporation funded directly by the people, the president should answer to the citizenry, so the public should do the selecting. Needless to say, Maekawa was passed over for the government's choice, Nobuo Inaba, a former director of the Bank of Japan, making him the second president in a row from the world of finance. Maeda's assignment was budget reform, and the reason he wasn't kept on for a second term – a single term lasts three years – is that he didn't do a very good job. In fact, many employees of NHK told the Asahi that Maeda's reforms had effectively crippled the organization to the point where the quality of the programming had been compromised.

Maeda's problem was that he approached his task the way a banker would, through structural changes. He introduced a system wherein management level employees, regardless of job title, lose those titles after turning 50 as a means of encouraging earlier retirement. As a result the number of management level employees dropped by 30% during his tenure. In addition, the pay system for anyone who did remain switched to hourly wages. One employee told the Asahi that "veterans" not only became depressed, but younger workers feared for their futures, so many quit, hoping to get other jobs that guaranteed better security. In addition, anyone who aspired to an executive position within NHK would now have to take a test, which became the sole determinant for advancement. Past achievements meant nothing, so the possibility of younger employees managing older employees with more experience became likely. Conflicts ensued that affected the quality of the work. These reforms, one employee commented, reflected how a banker thinks … when an employee gets to be a certain age, they are simply discarded. 

In addition, Maeda dismatled divisions to eliminate the vertical hierarchy, replacing the overarching Broadcast Bureau in April 2022 with a Media Bureau that handled both news production and entertainment/drama production. Consequently, people with expertise in either field were made to work in areas in which they had no experience. The Sunday historical drama and the morning serial, both of which have traditionally attracted high ratings, were outsourced, again to reduce costs. 

The results were almost immediate: The cost of running NHK dropped, which was the main goal, and that allowed the government to cut the subscription fee by 10%, as Suga, when he was prime minister, had promised to do. However, viewership also dropped, though it's impossible to say if that had anything to do with these recent changes. Viewership had already been falling, and that had nothing to do with structure and everything to do with content. People who still watched NHK said they trusted NHK News, but ever since a previous president, Katsuto Momii, had remarked in 2014 that, due to its reliance on government approval, NHK "cannot say 'left' when the government says 'right'", many others have assumed its news content to be essentially government PR. Moreover, over the past several decades, NHK's entertainment content, in particular its variety and talk shows, became indistinguishable from similar fare on commercial TV, relying on the same celebrity on-air talent.

The online magazine Daily Shincho asked on March 7 the obvious question: Who is NHK supposed to be serving? When Inaba took over he announced that he would change some of Maeda's reforms, but he is still expected to keep costs down and, since he has no experience in broadcasting, it is not at all certain he will do a better job. In this regard, it should be stressed that not only did Maeda neglect NHK's stakeholders – its employees – he didn't even prioritize its shareholders: the viewers. It was the government he was serving.

Shincho cites a survey NHK conducted in 2019 that found about 46% of the population watched NHK's general channel for less than five minutes a week. That statistic shouldn't necessarily make a difference budget-wise, since, as already mentioned, subscription fees are mandatory for every household that has a TV, so the only real limitation in terms of revenue is the size of TV viewership, regardless of whether anyone watches NHK. But research has shown that young people hardly watch TV at all, and with the advent of the Covid pandemic, non-viewership of broadcast TV increased among the general population as many people switched to streaming services. Even people in their 60s, the cohort that tends to still watch NHK, discovered the internet. A government survey found that internet usage by people over 60 has doubled over the last five years.

These developments have prompted talk about the privatization of NHK, which would probably further diminish its reach and influence. The British Broadcasting Corporation, often touted as the model for NHK, is going through a similar identity crisis as the U.K., where some politicians are calling for an end to its current funding arrangements. Were the BBC to eliminate its license fee and go private, as some members of the ruling Conservative Party have suggested, it would have to compete with existing commercial broadcasters for a limited pool of advertising revenue. Either that, or it would have to become a subscription streaming service, which means it would have to compete with Netflix, Amazon Prime, and others. If that were to happen, BBC would have an advantage due to a strong international bran of which few other national and/or public broadcasters can boast, including NHK.

As Shincho points out in a different article, NHK's current subscription plan is unsustainable in the current global media environment. The corporation insists that its core viewership is strong enough, but that viewership has quickly become a minority, and if NHK wants to maintain itself as a public broadcaster that can demand universal fees it must answer to a majority of Japanese, in particular young people who have already given up on it. NHK has tried to mitigate the situation by extending the mandatory subscription fee to all devices “that can receive NHK” and not just televisions, since young people access content through their phones, PCs, tablets, and, increasingly, stand-alone monitors that don't receive broadcast signals. Content producers are looking more toward streaming than broadcasting, and since streaming is an inherently global platform style, those who wish to be competitive have to think of a global audience.

NHK's narrow focus on content made for domestic consumption is meant to satisfy subscribers. That’s an understandable position, but that demographic will continue to dwindle unless NHK truly becomes a public broadcaster whose primary mission is not maintaining a healthy bottom line but rather providing people with the news, information, and entertainment – not to mention services such as archival access – that they demand and deserve. NHK first has to figure out how to do that, but under the current management system it doesn't seem able to.