Terrie's Take: Japan Times Goes Paywall, Fukushima, Savings, Food Scandal, and J-Shipping, Featured

Terrie's Take - AkihabaraNews.com

Terrie’s Take is a selection of Japanese-centric news collected and collated at J@pan Inc by long-time resident and media business professional Terrie Lloyd. AkihabaraNews is pleased to present Terrie’s learned perspective; we all could use another take on the news - here’s Terrie’s:

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Terrie’s Take on November 11, 2013

Feature:

  • Japan Times Pay Wall

Briefs:

  • Spent fuel transfers to start at Fukushima
  • Families with no savings increases to 50-year high
  • Food scandal hits Japanese high-end establishments
  • China pollution hits Kyushu again
  • Yet other EC shipper from Japan

Japan Times Paywall
While researching for today's Take, we happened to visit the Japan Times website, a normally very good source of local in-depth news and opinion, especially news that is relevant to resident foreigners, such as proposed new legislation, crimes and punishment, and the background to political events. In this respect, the Japan Times is a valuable and badly needed community resource, and represents a viewpoint that is outside the official Japanese reporting world (i.e., the canned output you might read on Kyodo).

Unfortunately, this could be the last time in November that we view the Japan Times website, because we were greeted with a notice that the newspaper now has a pay wall. Nonetheless, thinking that maybe our once-a-week visit could be bought for an exchange of personal information, much like the NY Times (the Japan Times' partner nowadays), we checked out the terms and conditions. Sure enough, there is text of a "Free" option that allows up to 20 articles a month to be accessed in exchange for an email address. Only problem is, the option is poorly worded, and it took a while to realize that the Japan Times "Member" option is their code word for the free services as well.

Then, reading through the contract, because we are interested in such details, we found two rather unhappy requirements from the Japan Times. Firstly, members are not allowed to reproduce articles in any way at all -- unless you happen to be an expert in interpreting the Copyright Law of Japan. The contract even goes to the extent of stating in a subsequent clause that the Japan Times might have rights beyond the copyright law. Maybe it's not their intent, but the contract appears to even prevent people from a popular weekend activity -- extracting interesting parts of Japan Times articles and replaying them to friends abroad on Facebook. 

Overreaction by us?
Maybe, but here is the wording of the relevant section of the contract. Actually, come to think of it, even our reproducing this wording would be a breach...

Section.21 (Prohibition of reproduction, publication, etc.)
1. Members shall not reproduce, translate, adapt, broadcast, publish, distribute or lend, or the like (hereinafter collectively called "Reproduce") the content of the Site, or the screen displaying the content in whole or in part (hereinafter collectively called the "Site Content"), beyond the scope of private use or quotation permitted by the Copyright Act of Japan. Reproduction of the Site Content or a summary thereof without permission from the Company may be a violation of the Copyright Law of Japan.
2. In addition to copyright infringement, reproduction of any article title, summary or explanation of the contents of the Site, or words or phrases from advertisements on the Site may constitute a violation of the rights of the Company.
3. Members may browse or listen to the contents of the Site to the extent such activities constitute "reproduction for private use" permitted by the Copyright Law of Japan. However, only Members may browse or listen to such content regardless of whether the purpose is commercial or non-commercial.

As you can see, the last sentence of item #3 is quite aggressive and is particularly Facebook unfriendly.

Then, secondly, in another section, there is mention of damages for breach of contract. Is the Japan Times really going to sue its readers for sharing an article? This all seems pretty harsh for a newspaper that is supposed to represent the interests of the foreign community in Japan, and we'd call on the publisher of the Japan Times to loosen up a bit, or be prepared to lose a lot more readers. Yes, the paper is a great source of information, but it's not the only source, and while there are still many other publishers who don't charge, it makes sense to keep that "freemium" end of the funnel a friendly place if you want to convert the free members into paying ones later.

Which brings us to a major question: will the Japan Times' paywall strategy actually work?

There is a huge debate going on internationally about pay walls. We all know about the success of the Wall Street Journal and its ability to grow revenues on subscriptions after introducing a pay wall. Our theory is that if you're in the finance business and you are not reading a newspaper that has the power to move markets, then you're not going to be in business for long. In this respect, the Nikkei here in Japan has been successful with its pay wall as well -- even in English, which we regularly quote in our newsletter. They once indicated to us that they had more than 40,000 paying subscribers to their English service, which seems pretty healthy.

In March 2012 a more generalized publication, the NY Times, went to a pay wall, and it is doing exceedingly well, with around US$150m annually coming from digital subscribers. Further, the NYT said recently that its circulation revenue now exceeds ad revenue. The NYT experiment is being closely watched by others, and apparently as many as 450 of the USA's 1,380 daily newspapers are now either implementing pay walls or are in the process of doing so, including many smaller regional papers.

Like the Japan Times, which last year had an ABC-stated circulation of 27,225 copies, U.S. regional newspapers such as those in the Gannet group, have small localized readerships of between 10,000-50,000. Although there are no specific pay wall statistics available yet, early 2013 numbers appear to indicate that subscription income for these newspapers was up about 5% over last year, the first time in a long time that this has happened.

So maybe they are really are making money out of pay walls after all? The common wisdom is that so long as they keep subscription prices low, to around Apple Store pricing, and that the information is local and is otherwise hard to find, then people will just find it easier to pay than go without. So maybe the Japan Times can achieve success with their pay wall too. Their pricing is not bad, at JPY900 for 80 stories a month and JPY3,000 stories for unlimited use of the site. We could imagine their signing up a couple of thousand people providing the editorial level remains high. The main problem (apart from the usage policy) is that there is the perception by foreign readers that the Japan Times is diluting their local coverage with the International New York Times tie-up, and calls into question whether paying a subscription for news that may not be relevant or which has alternative sources on Google and other websites is a good deal or not.

If we were the Japan Times, we would consider breaking out a subscription for Japan content only, and make the re-use policy a lot more flexible. As an example, when we spoke to the Nikkei some years ago about our commentary on their articles and their re-use policy, they agreed that we sent enough traffic to them via article links that our coverage was basically good marketing for them. Similarly, every time a foreign resident posts a Japan Times article on their blog or Facebook, they're providing the newspaper with free marketing, some of which will convert into more paying customers along the way.

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Spent fuel transfers to start at Fukushima
One of the most dangerous phases of the Fukushima nuclear power plant clean up is about to start, when TEPCO starts transferring 1,500 spent fuel rods from the No 4 reactor building to special transportation containers. There are significant risks involved with the operation, which will take at least until the end of 2014. The assemblies are extremely fragile and experts have warned that the slots they are engaged in probably have debris in them which will hinder their smooth removal. Breakage, water leakage, toppling or collapse of the spent fuel pool due to another earthquake, and a variety of other potential accidents could result in fresh radiation being released into the atmosphere. ***Ed: Oh, and before we forget, Reactor No. 4, is only the first challenge, TEPCO then has to figure out how to remove molten fuel from the other three reactors -- but then that work isn't scheduled until around 2019 (or, our guess, 2021, after the Olympics).**
(Source: TT commentary from theguardian.com, Nov 6, 2013)

Families with no savings increases to 50-year high
The number of households with no financial assets rose to a 50-year high this year, with 31% having no buffer at all, up from 26% from last year. The number was derived from a Bank of Japan survey of 8,000 households consisting of two or more people. Of those 5,600 households which did have assets, many had falling assets, and 40% seeing such a decrease said the main reason was falling regular income, which forced them to tap their savings. Wages in Japan fell for the 16th month in a row last month. ***Ed: Of course not everyone is seeing falling incomes, and those households which owned assets (particularly stocks) in fact on average saw their holdings increase from JPY15.39m last year to JPY16.45m this year. But we note that there is still only a small percentage of households, about 15%, that actually own stocks.**
(Source: TT commentary from bloomberg.com, Nov 8, 2013)

Food scandal hits Japanese high-end establishments
If you watch the news in Japanese, you'll have been entertained over the last couple of weeks by various high-end brand names being outed for switching expensive cuts of meat, fish, and other ingredients with much cheaper foreign versions. Hankyu hotel chain was the first to be caught out, when it came to light that they were selling Brazilian chicken as Japanese-grown. They were quickly followed by a variety of famous brands admitting similar consumer fraud. While there has been plenty of embarrassment to go around, there apparently will be no legal actions because in Japan is it not technically illegal to have a menu that describes a product different to the one you actually get served. ***Ed: However, given the fuss being made, we imagine there will be a lot of chefs taking extra care in the future to get their labelling right.**
(Source: TT commentary from theaustralian.com.au, Nov 9, 2013)

China pollution hits Kyushu again
While Kyushu's proximity to Korea and China ensures that the island stays popular with tourists from both countries, it is in the spring and fall that the closeness also becomes a liability, because that's when the pollution from China is blown across the Sea of Japan by the seasonal winds. Authorities in Kyushu are warning that PM2.5 particulate matter is at high levels (35ugm/cu. m. or more) and that residents with allergies needed to stay indoors or wear masks. Although the Japanese safety level for PM2.5 particulates is 35ugm over 24 hours, the central government doesn't start issuing warnings until the level hits double that. ***Ed: Of course whatever hits Kyushu is only a fraction of what people have to deal with in China itself. Beijing PM2.5 readings on Friday morning hit 179ugm/cu.m., while in Nanjing, they were 291ugm...!
(Source: TT commentary from japantimes.co.jp, Nov 8, 2013)

Yet other EC shipper from Japan
Those 1m+ Japanese living overseas must really hanker for food and apparel from home, because yet another major eCommerce player, Kakaku.com, has announced that it will start shipping goods to purchasers overseas. They will be competing with firms like Netprice, whose www.tenso.com site has been shipping to shoppers abroad for over 5 years and now has about 230,000 members. What's a bit different about Kakaku.com is that you can search for products through their single interface, and apparently this will be available shortly in English, Chinese, and Korean, as well as Japanese. ***Ed: These services will go a long way to helping Japanese companies unable to overcome the international language/shipping barrier to find new customers.**

(Source: TT commentary from e.nikkei.com, Nov 6, 2013)

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Images: Terrie’s Take; AkihabaraNews.com

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