1, 06. 2006
Japan needs to produce a gigantic media company like Time Warner Inc.-this is the idea behind the government's broadcast-media reforms spearheaded by Internal Affairs and Communications Minister Heizo Takenaka.
With financial reforms complete, Takenaka is itching to make media next. He argues that a new industry would result from the fusion of broadcasting and telecommunications.
Japan needs to produce a gigantic media company like Time Warner Inc.-this is the idea behind the government's broadcast-media reforms spearheaded by Internal Affairs and Communications Minister Heizo Takenaka. With financial reforms complete, Takenaka is itching to make media next. He argues that a new industry would result from the fusion of broadcasting and telecommunications.
Since assuming his new post, the former finance minister has repeatedly spoken in favor of the fusion of the broadcasting and telecommunications industries, and of reform of broadcasting. He poses basic questions like why the Japanese people cannot watch TV programs over the Internet. He also asks why there is no media giant in Japan like Time Warner of the United States.
Yamanoi Norio
Takeovers by US or European Media Groups are Possible
Takenaka announced on Dec. 6 his plan for creation of a caucus of experts to discuss the fusion of the telecommunications and broadcasting industries, with recommendations for bold change in broadcasting policy to be worked out by June 2006. The panel is expected to come up with a blueprint for Takenaka's media reforms.
What exactly does Takenaka have in mind? 'Time Warner's sales amount to 4 trillion yen, rivaling the sales of all Japanese broadcasting firms together,' he reportedly said when he met with Toranosuke Katayama, Secretary General for the Liberal Democratic Party in the House of Councillors, an LDP heavyweight with experience of Takenaka's new portfolio. 'If the telecommunications and broadcasting sectors merge, both sides would benefit and a new industry would come into being.'
Another source, a university professor close to Takenaka, has this to say.
'Takenaka always says that if things go on like this, Japanese media companies will be swallowed by US and European rivals. To prevent this, he believes a world class media company like Time Warner must be founded. Takenaka has said that a merger of the telecommunications and broadcasting industries is in line with current trends, and that laws should be changed accordingly. He seems to have in mind amendment of the Broadcasting Law and even the telegraph business law.
Existing laws regulating broadcasting in Japan aim to prevent concentration of power in the mass media. They ensure that one entity cannot control a multiple media companies and foreign shareholdings are restricted. There is no doubt that such provisions protect the independence of broadcasting in Japan, but they also stifle the emergence of a big media organization. An easing of these regulations seems to be what Takenaka seeks.
In the United States, Time Warner merged with AOL Inc. in 2001. The new company is the world's largest media organization, with TV stations, cable TV, movie companies, magazines and publishers and other companies under its umbrella. It employs about 85,000 people. For the period between January and September 2005, it reported sales of 31,700 million dollars, an operating profit of 2,300 million dollars and a net profit of 1,500 million dollars.
Orix Boss is Takenaka Ally
Internal Affairs and Communications Minister Heizo Takenaka aims for media reforms, after financial restructurings are completed.
A Japanese equivalent of Time Warner would bring together, say, the likes of Fuji Television Network, Inc., movie company Shochiku Co., Ltd. publisher Kodansha Ltd. and internet services giant Softbank Corp. A single such company could enable a content industry like that centered on Hollywood to develop in Japan, which is one of Takenaka's aspirations. So can a Japanese Time Warner emerge?
As reform coordinator for the financial sector, Takenaka reorganized more than 10 major banks into three megabanks. His thinking is in line with that of Yoshihiko Miyauchi, CEO of leasing giant Orix Corp. and chairman of the government's council for the promotion of deregulation and privatization, which wants media reform too. Cooperation between the two is gaining momentum.
Takenaka plans to complete the groundwork for media reform while Prime Minister Junichiro Koizumi is still in office. Not only NHK (Japan Broadcasting Corporation) and private broadcasting companies but also Nippon Telegraph and Telephone Corporation (NTT) and other big names in broadcasting and telecommunications fear that Takenaka's reforms could erode their vested interests. A full scale tug-of-war between them is set to begin in 2006.
