World Media 2006: Japan

While its stuttering recovery has been overshadowed by China's rapid growth, Japan is still the world's second-largest economy and home to the most advanced media-market technologies.

It's sometimes easy to forget that Japan is the world's second-largest economy - these days, media coverage of the Asia-Pacific region tends to focus almost exclusively on China's enormous growth potential. In contrast, the Japanese economy has seemingly been in the doldrums since the Asian financial crisis of 1997.

There were more signs of optimism in 2004 - and the advertising sector, in particular, enjoyed serious growth rates for the first time in almost a decade - but in 2005, high taxation designed to help reduce the country's frightening budget deficit has threatened to dampen spirits once more.

And even though agencies have been seeing better times recently, spend levels are still not back to the levels they hit in 2000. Some of the gloss even seems to have come off Japan's hi-tech image. True, Japan's manufacturing technologies are still the world's most advanced but, these days, there's a feeling that if you want to see future media technologies in action you'd be better advised to visit LG's headquarters in Seoul than Sony's in Tokyo.

In truth, though, Japan is still by far the most advanced country (certainly among the major economies) when it comes to putting new technologies into media-market realities - and the central theme continues to be the rapid advance of mobile.

This was the agenda underlying the two biggest media stories last year: on the one hand, merger discussions between the internet retail giant Rakuten and the national commercial television network TBS; and on the other, an audacious bid by Livedoor, an internet service provider, to take over the radio network owner Nippon Broadcasting System, despite the opposition of its fellow NBS shareholder Fuji Television.

In both cases, the rationale was all about the acquisition of prime content for distribution via the web, and the underlying assumption is that Japanese consumers will spend a rapidly increasing amount of their time watching TV (or next-generation TV) on mobile devices.

In Rakuten's case, the whole model of commercial television is up for grabs, with instant purchase an option on every ad.

Hostile takeovers remain deeply unpopular in Japanese business circles, however - and the country still doesn't seem ready to adopt a more open, Western-style business culture.

ADVERTISING EXPENDITURE USdollars million at current prices. All years based on US$1= Yen 108.2. *Estimated Total TV News- Maga- Radio Outdoor Online papers zines 1994 35,840 15,191 10,362 3,210 1,875 5,201 0 1995 37,660 16,224 10,775 3,460 1,924 5,277 0 1996 40,352 17,711 11,442 3,765 2,016 5,403 15 1997 41,805 18,559 11,679 4,062 2,077 5,372 55 1998 40,162 18,028 10,895 3,936 1,990 5,208 105 1999 39,367 17,674 10,662 3,866 1,888 5,054 223 2000 42,386 19,219 11,530 4,038 1,914 5,139 545 2001 41,679 19,115 11,117 3,864 1,847 5,058 679 2002 38,845 17,886 9,896 3,744 1,698 4,839 781 2003 38,813 18,005 9,705 3,730 1,670 4,609 1,093 2004 40,323 18,889 9,760 3,669 1,659 4,669 1,677 2005 40,928 18,943 9,517 3,657 1,641 4,687 2,485 2006* 41,750 19,295 9,434 3,667 1,630 4,696 3,027 2007* 44,173 20,521 9,750 3,861 1,679 4,780 3,583 2008* 45,536 21,251 9,812 3,938 1,672 4,751 4,111 FACTFILE Highest circulating titles - Newspaper: Yomiuri Shimbun (daily, 10,021,000 copies) - Business magazine: Nikkei Business (weekly, 331,000 copies) - Consumer magazine: Kyou no Ryouri (monthly food magazine, 1,100,000 copies) Top TV shows - Most watched TV programme (2004): Kouhaku Utagassen - a music magazine show - Best new TV format: Get 100 - an "addictive" number quiz Major measurement tools - Circulation: Japan Audit Bureau of Circulations (ABC) - Readership: NHK Broadcasting Culture Research Institute - TV viewing: Video Research Main media owners - Newspapers: Asahi Shimbun - Magazines: Benesse Corporation - Television: NHK (public), NTV, Fuji, TBS

THE LOWDOWN

Media topic du jour: With Dentsu and Hakuhodu taking on accounts at negligible commission rates, smaller agencies are being squeezed out of the market.

Reigning media guru and why: Takafumi Horie, the chief executive of the internet service provider Livedoor. Horie recently hit a difficult spell, with financial scandals at his company, but he always has engagingly controversial views on the way that media markets should evolve.

Media mogul to be seen dining with: Sir Howard Stringer, the chief executive of Sony - the first Westerner (and Welshman, come to that) to take charge of a Japanese multinational.

Car to drive: Nissan Cube.

Phone to carry: Sanyo W41SA image-recognition clamshell phone.

Whatever you do, don't say: Does this contain whalemeat?