The World: Japan's backroom baron steps into the spotlight

When Tsuneo Watanabe, the Cannes Media Person of the Year, finally gives an interview, people listen.

The shoguns who head Japan's privately owned media companies like to keep low profiles. None more so than Tsuneo Watanabe, the chairman and editor-in-chief of Yomiuri Shimbun Holdings, who has found himself thrust into the global spotlight as the Cannes Media Person of the Year.

Although a journalist at heart, Watanabe, 81, has avoided being interviewed during the half century it has taken to rise to the top of Yomiuri. Even when he was obliged to step down as the owner of the Yomiuri Giants baseball team, in 2004, to take responsibility for the unethical scouting of a young player, he refused interviews.

Then, last year, he initiated Yomiuri's exploration of responsibility for events leading up to World War II. The public questioning of Japan's relations with its Asian neighbours sent shockwaves round the world; it was an about-face for a conservative publication that had been moving rightward recently, and a vocal stand that put Watanabe on the global radar.

For the head of the Japanese newspaper, magazine, broadcast, film, sports, cultural and property development conglomerate, the Cannes Lion must have come as a surprise.

Even Terry Savage, the Cannes executive chairman, acknowledges the festival has traditionally looked West rather than East when making the award. However, he hails Watanabe's contribution to "building one of the great media organisations in the world" and describes him as "a leader who has not just embraced press, but also TV, radio and a range of other media and business initiatives".

But it's still true that Watanabe represents the conservative establishment rather than the new world. His path from a cub reporter at the Yomiuri Shimbun in 1950 to Japan's most influential media baron has been a journey along the inside track of power and government.

After graduating from the University of Tokyo, Watanabe joined the Yomiuri Shimbun in 1950 and soon made his mark as a political reporter. Political reporters in Japan succeed by forging close links with powerful politicians.

The Yomiuri Shimbun - the Yomiuri Group's flagship paper founded in 1874 - claims the world's highest circulation. Sales of its morning edition top ten million, with another four million sold by the evening edition.

The bold acquisitions that have created global media organisations in the West have never played a role in Japan. Compared with the US and Europe, where the media landscape has been transformed, Japan's media system has remained surprisingly stable for decades.

Transparency is not high on the Yomiuri Group's agenda. Noting that the Yomiuri Shimbun is a private company, executives decline to provide any financial, operating or corporate data that might reveal the group's overall business performance or ownership.

However, according to Dentsu, Japan's largest communications group, newspaper ad revenue dropped 20 per cent from 2000 to 2006, while TV ad revenues fell about 3 per cent. Over the same period, internet expenditure soared. With advertising a major source of revenue across the group's many activities, Yomiuri has felt the pinch.

"The Yomiuri Shimbun has faced some difficult times in trying to increase ad revenue, apparently due to the rise in internet advertising. Nevertheless, I remain convinced that the Yomiuri Shimbun group will remain profitable on the strength of our premier colour ads, a technology that cannot be matched by the internet," Watanabe says.

Even so, he believes the web will play a bigger role in Yomiuri's future and argues that despite the pressures, the business model and sophisticated distribution network that sustains Japan's newspaper industry are robust enough to meet the challenge.

"Furthermore, Japanese newspapers are based on a unique business model - each copy contains ad inserts tailored for community-specific circulation on a daily basis. These particular ads are superior to the internet ad market in terms of sales," Watanabe explains.

Japanese papers are privately owned, a feature Watanabe feels frees them from shareholder pressures. Even newspaper proprietors traditionally must defer to editors.

As for global ambitions, while Yomiuri already co-operates with The Washington Post, Chicago Tribune and others, international expansion doesn't appear to be on the agenda. Watanabe says: "We do not see any necessity to invest in, acquire or merge with foreign companies."

1952: Political writer, Yomiuri Shimbun
1968: Washington bureau chief
1977: Senior deputy managing director
1980: Managing director
1985: Editor-in-chief
1987: Vice-president, editor-in-chief
1991: President, editor-in-chief
2002: President, editor-in-chief, Yomiuri Shimbun Holdings
2004: Board chairman, editor-in-chief