Over the Top Video (OTT-V) is generally described as subscription video-on-demand services on the Web, of which easiness of introduction even across countries has grown global multi-channel platforms in short period often from outside of existing broadcasting industry such as Netflix and Amazon. It is significant to analyze how each country’s existing broadcasting industry react to the emergence of OTT-V, which might quickly transform supposedly domestic and stable existing broadcasting market and business.
The Japanese broadcasters have not seemed to react quickly. After seeing the success of the British Broadcasting Corporation (BBC) in 2007, the JapanBroadcasting Corporation, a public broadcaster known as NHK in Japan launched an OTT-V service in Japan in 2008. However, there were no significant projects by private broadcasters until the “TVer” project, initiated by five key terrestrial broadcasters in 2015, when Netflix entered the Japanese market. TVer was established to improve usability and combat illegal viewing, not to aggressively seek profits. However, signaling a change, “AbemaTV” began as a joint effort between an aggressive IT venture and amajor terrestrial broadcaster. Since 2016, it has provided a new OTT-V service based on the existing ad-supported terrestrial TV business model.
This study analyzes the players in the Japanese broadcasting market including terrestrial, cable, satellite,and related ones and their relationships to determine why they have been “slow” in developing OTT-V services with a comparison to the US. This analysis is conducted through “comparative institutional analysis” (CIA), focusing on the “institutional arrangements” in the broadcasting industry.
It is interesting to compare the Japanese and the US markets because the Japanese broadcasting system was set up under the influence of General Head Quarters of Allied Force after the World War II, which produced some similarity to the US system, which means that the initial conditions of development of broadcasting system were similar.
CIA developed under the new institutional economics (NIE) to analyze why various markets have different institutional arrangements,even for the same economic matters. Institutions are described as the “equilibrium[s] of the game,” evolving endogenously through the interactions of economic agents in game domains based on evolutionary game theory (Aoki, 2001). While multiple equilibriums are possible in games, equilibrium occurs with path dependence, which means that different “institutional arrangements” develop in different economic-societal environments. Recognizing institutions as equilibriums also explain aspects of the mechanisms of institutional change such as a tendency to resist change. Furthermore, CIA includes the concept of “institutional complementarity,” in which institutions interlink in various ways and form overall institutional arrangements. Interlinked institutions require “co-evolution” to change, which makes them durable. Therefore, this study will be able to give insights over the Japanese broadcast market’s capacity for change by determining what “institutions” and “institutional arrangements” have been formed in the expanding broadcast domain by game players -broadcasters.
This study will show institutions in the domains of the program production and distribution, and point out intricated and strong mutually dependent institutions in the Japanese broadcasting industry, which explains its stability.