Japan dishes sats
Digital channels may change TV's picture
With high budgets for developing channels and limited viewership, the launch of the digital satcasting service is a gamble, but it does promise to increase the amount of programming, expand e-commerce and give a shot in the arm to the domestic electronics industry.
The Ministry of Posts and Telecommunications thinks the satellite channels will be big, and it has pitched a target of 10 million subscribers among Japan's 45 million households after the first 1,000 days of operations.
Baby steps
When service started Friday, about 200,000 people had purchased set-top boxes or digital TVs to get the new channels. About 1 million households can receive, or will soon be able to, the channels on cable TV, according to industry estimates.
The channels will rely on advertising revenue mainly for their income but revs from spot ads will be minimal because a top-rated show will probably attract viewers in the tens of thousands.
They will also offer interactive services, better sound and picture quality and a format within which people may engage in e-commerce.
Getting hooked up is a bit pricey. The pricetag for an antenna and set-top box is about $500 to $1,100, and digital TVs run well over $1,000.
Even under the most optimistic of scenarios, most of the networks believe that the channels will be in the red for at least three years.
But that did not stop them from packing their first-day lineups with specials and plugging their offerings on terrestrial siblings.
Executives at the satellite channels said that it should also take them a few years to devise a reasonable business plan. They will need to find a way to complement the offerings on their big brother terrestrial affiliates by featuring attractive data transmission services, integrating e-commerce services into their broadcasts and, most importantly, developing high-definition programming that will attract viewers.
"Market research indicates that our viewing audience will be approximately 5 million households, including current viewers of our cable television service, and that our viewer base is expected to reach 30 million by 2007," said Soya Hikita, president of network TBS' BS-i.
Hankering for hardware
For Japanese electronics companies, a booming satellite business means big yen. They want to see consumers take to the satellite channels, buying digital TVs, set-top boxes and antennas.
"Japanese companies are rushing splashy new products to the market hoping to ride the digital TV bandwagon. But while their product pipeline is bulging with goodies, it is far from certain whether they can turn digital technology into blockbuster profits," the financial daily Nihon Keizai Shimbun said in an editorial. "Japanese consumers remain uncertain about digital broadcasting. Unless electronics makers and broadcasters offer products and services that convince them of the huge benefits of the new technology, the promise of the digital revolution is likely to dry up and blow away."
