Competition among video-streaming services heating up in Japan

With competition heating up in the video-streaming market in Japan, efforts by service providers to shore up and reorganize such businesses have spread so as to secure more viewers.

Aided by demand among people spending more time at home amid the spread of the coronavirus, the video-streaming market in Japan has grown over the past few years, with competition intensifying in line with the participation of non-Japanese service providers such as Netflix and Amazon of the United States.

Some have criticized the market for excessive competition.

“Reform centered around improving our services is crucial in expanding our (market) shares further,” said an official at NTT Docomo, a major Japanese mobile phone carrier which also offers a video-streaming service.

One of the key attributes of video-streaming services is that people can enjoy movies and other content on their smartphones and other devices whenever they want.

Over 10 flat-rate paid subscription services for video steaming are currently available in Japan, including those operated by non-Japanese firms and companies partly owned by television broadcasters, with many producing their own original content.

U-Next, which boasts the largest market share among Japanese service providers, has absorbed the operator of the Paravi video-streaming platform, known for its Japanese TV drama series lineup, in hopes of improving its service and streamlining development costs.

Through the move, the combined sales from U-Next and Paravi services are expected to exceed ¥80 billion, with the total number of paid subscribers coming to over 3.7 million.

NTT Docomo announced that later this month it will replace its dTV video-streaming service with the new Lemino platform, which will feature double the amount of content. The new service will include a function that allows interaction between service users.

The company aims to boost the overall number of subscribers to the new service by introducing a plan that offers free access to some videos with advertisements.

According to Tokyo-based research company Gem Partners, the scale of the flat-rate streaming service market in Japan is estimated at around ¥450.8 billion in 2022, up 16.7% from the previous year.

Competition is fierce within the market, with the top market share rankings within the industry changing on a regular basis.

The service providers are also in a power struggle with short video app TikTok and other competitors.

“We are competing for service users’ viewing time against short video platforms,” an industry official said.

Meanwhile, some companies have pulled the plug on streaming services.

Z Holdings ended its Gyao! free video-streaming service at the end of March this year.

“The excessive competition within the market has led to a war of attrition (among service providers),” Ryunosuke Endo, head of the Japan Commercial Broadcasters Association, said.

This competition “will spark a further market shakeout,” he added. Japan Times