Q. The Japanese have been slow to adopt the Internet, but some say they're on a cusp, and soon they'll embrace the Internet en masse as people in other tech-savvy nations have. You've been watching the Internet in Japan perhaps longer than anyone -- do you foresee a huge growth in the number of Japanese Netizens?

A. Japan has been "on the cusp" since 1995, and it's still "on the cusp." The Next Big Thing this year is broadband (last year the Next Big Thing was mobile, but that bubble popped). Incidentally, my "broadband" cable connection does about 25 kbps, or about one-fortieth what the provider claims.

I believe there are around 35 million people in Japan who use the Internet via personal computers and who actually know that they are using the Internet and can type URLs, and so forth. You'll hear numbers like 50 or 60 million bandied about, but these are nonsense, in my view, as they count network-enabled mobile telephone subscribers. So Internet adoption is at about 27 to 28 percent, in my view. I suppose that's low compared to Finland, but it's a lot of people (I talk about this at more length in my e-zine.)

 

"There is little tradition of rigorous investigative reporting in Japan. Most news stories consist of weakly diluted press releases from companies and government organizations."

The two biggest reasons for slow adoption are 1) high cost and 2) computer phobia/disinterest. People here are gadget-crazy, but primarily for user-friendly, consumer electronics products. The typical Western perspective is that Japan is a sort of techno-heaven, but in fact this country is quite backwards technologically. The Japanese government was very slow to deregulate the telecommunications market, keeping dial-up access costs very high (they still are, but because of telephone usage rates, not because of ISP costs).

In sociological terms, communications here are generally organization-to-organization rather than individual-to-individual. In the United States, a researcher at Cisco Systems wouldn't think twice about e-mailing a stranger at Hewlett-Packard or the University of Duisburg if he felt they had a common interest that transcended their respective organizations. But in Japan, people "belong" to their organizations more than they "belong" to themselves. In the United States, the individual is sovereign. In Japan, the organization is sovereign. The freewheeling exchange of ideas and sharing of information that we take for granted in the United States is simply unknown to most people here. Organizations are very secretive about information and guard it jealously. So the impact of e-mail, for example, hasn't been as great compared to the United States.

That said, it certainly has had some effect. For example, the Internet has been quite successful in exposing the traditional, lockstep new university graduate recruiting process as an antiquated ritual. With e-mail and the Web, kids can review open positions online, forward their resumes by e-mail, and even directly contact current employees. Some companies are encouraging this, and even authorizing current employees to chat online with prospective recruits. This is a remarkable development.

 

"I always wondered why Japanese newspapers were so incredibly boring. Essentially, it's because they agree to report the same thing from the same sources in the same way."

Q. What do you think is the biggest development on the horizon that will change how news and information is produced and consumed in Japan?

A. Maybe it's a lack of imagination on my part, but I simply do not see big changes ahead in how news and information is produced and consumed in Japan. A lot of change here is driven by outside pressure, but Japan is culturally very well-insulated from the rest of the world, thanks to the language barrier. In commerce, pressure from foreign countries, particularly the United States, can have significant market consequences. The telecommunications and finance sectors are good examples. But news and media are entirely dependent on language, and Japan's interactions with the world in this area are strictly one-way. For example, their overseas reporters enjoy the same unfettered access to news sources as any other journalists, regardless of nationality, but that is not reciprocated in Japan. In fact, true reciprocity is really not in the vocabulary here in Japan when it comes to dealing with anything non-Japanese.

Q. What do you think of journalism in Japan?

A. Journalism in Japan is fundamentally different compared to journalism in the United States. For example, there is little modern tradition of rigorous investigative reporting in Japan. Most news stories consist of weakly diluted press releases from companies and government organizations. The press club (kisha club) system, whereby reporters for the five national dailies literally may sit right next to each other at source-sponsored facilities, results in collusion and exclusion. An outstanding book that has informed my thinking on this issue is "Cartels of the Mind" by Ivan P. Hall. Here's a quote:

"The cozy, collusive ties between sources and club reporters discourage an aggressive, let alone adversarial, pursuit of the truth, turning the journalist all too often into a conduit for the source's spin on the news. The collaboration (and mutual monitoring) among the club members themselves contributes to that virtual identity of layout and that bland, non-controversial conformity of reportage and interpretation so often noted among Japan's competing news organizations."

The reporters themselves buy into this game. Here's what David Butts, the former Tokyo bureau chief of Bloomberg Business News, said about the issue:

"They're journalists organizing together to exclude other journalists … that's repugnant, disgusting. There's more danger inherent in trying to control or limit the press than there is in assuring that it's free … What we faced in Japan was suppression of the press, not by the government, but by other members of the press, which we thought was just egregious … ”

I always wondered why Japanese newspapers were so incredibly boring. Essentially, it's because they agree to report the same thing from the same sources in the same way.

 

"The typical Western perspective is that Japan is a sort of techno-heaven, but in fact this country is quite backwards technologically."

The weekly magazines are far more interesting and aggressive about speaking out.

Q. How do you think journalism in Japan can be improved?

A. The first step is unfettered access to press clubs by foreign reporters. But the system is so ingrained in Japanese society, and so intertwined with so many other things, that it can hardly be changed in and of itself. Massive structural reform and a real working through of economic problems, which will involve a lot of disruption, is what will get change moving. Give Japan another 20 to 30 years.

Q. Do you see journalism in Japan changing as the Internet allows alternate sources of news to publish?

A. No, since the same media conglomerates that publish newspapers and operate television stations in Japan are also the sources of almost all online news. The few independent sources, such as Impress, limit their online offerings to specific sectors, primarily technology and the Internet. In fact, Japanese friends who monitor Japanese-language online news far more closely than I do tell me that the online offerings are actually starting to lag the offline offerings. That doesn't surprise me, as I doubt any of the major publishers have been able to successfully monetize their online offers to any substantial degree.

Q. What do you think are the most important new sources of information that are now available on the Web or via wireless in Japan?

A. Wireless is not a significant channel for news other than headlines and short summaries from the major players. There are, of course, thousands of special interest e-mail newsletters devoted to cooking, fortune telling, pets, love and romance, and so forth. Wireless is primarily an entertainment medium; in the United States, offerings comparable to those popular in Japan would probably be ignored by anyone over the age of 18.

Japan's wireless sector offerings are, in my view, as trivial in terms of content as they are remarkable in terms of business. I opine about this issue many times in the Japan Internet Report.

3G wireless is a failure so far. In my view, the future of new media does not lie in showing cat videos to your friends.

Q. Are there some unique driving forces that are shaping media in Japan today, and how are any of them different from elsewhere in the world?

A. Industry insiders tell me that Dentsu, the advertising conglomerate, gets away with things here that would be at best unethical and at worst illegal almost everywhere else in the world. For example, they can and do buy up huge blocks of newspaper advertising space and television ad time, then resell it to their customers. Moreover, they often do not itemize their media invoices to clients, simply because they monopolize the market sufficiently to get away with non-transparent billing.

Q. What social, cultural and economic factors are having the most impact in restraining evolution to new media in Japan? Conversely, what factors will promote the evolution in the years ahead?

A. The alternative press situation in Japan is really rather pitiful. Newspapers generally print the same thing. There are almost no free, alternative lifestyle, music, or political magazines of the type that are so common in the United States. The nation has only a handful of national commercial television networks and radio stations. When I'm in a car in the United States I must run through a dozen stations in one flip through the FM band; in Japan, I might get three.

This remarkable lack of choice is very important to understanding why Japanese consumers are not turning to alternative media sources for news and commentary. With so few options for news, and those options "pushed" so effectively, most consumers have simply not learned the skill of proactively seeking out and procuring the information they require. When faced with the "pull" medium that is the Internet, many are simply at a loss. They lack a tradition of proactive, aggressive information-seeking.

The logistics of space within Japanese homes is another factor. In the United States, many people enjoy a reasonable amount of private space in which they can sit back and read news on a monitor at leisure. A lot of people in Japan simply don't have that luxury. This anecdote is a few years old, but I recall a survey here that found that something like 40 percent of all Japanese consumer respondents had their computers in the kitchen. That may or may not have actually been the case, but the point is that in Japan, computers often sit in common spaces and are in common use by multiple family members.

Q. Can you point to evidence that things are beginning to change, that the Japanese are beginning to access online media in lieu of print media in growing numbers? How soon will a positive shift to new media become apparent?

A. I wish I could. Certainly Internet usage is increasing. Rich Chen of Google told me recently that in terms of inquiries, Japan is their third largest user market after the United States and Germany. No doubt the number of consumers reading news online is increasing as well. But I honestly don't see a sea change in terms of a basic shift away from traditional media toward new media.

Q. Do you think that the big newspaper companies (e.g. Yomiuri, Asahi, Nikkei) will lead the evolution to new media, or will it be led by smaller, more entrepreneurial media companies?

A. For the reasons presented above, it will definitely be the big media conglomerates you mentioned that will be responsible for the way media evolve in Japan. Whether there is a true evolution toward "new media" remains to be seen.

Q. Are there some interesting business models for the new media that will be effective in Japan, i.e. enabling new media companies to attract subscribers and advertisers at profitable rates?

A. The Internet-enabled mobile telephone is of course the most interesting and successful example of a new and different revenue model: Specifically, the telecommunications carrier gets to charge both content providers and subscribers for services! What could be better? I'm out of the Internet industry myself now, but insiders tell me that the new fee-for-content ADSL services are struggling badly. They attract a lot of temporary subscribers during their free trial phases, then lose almost all of them immediately. This doesn't surprise me in the least. Nothing loses money more quickly than providing "content" online. In my view, the only companies that can actually make this pay are highly regarded media groups who already make a good living by providing such content offline. That means companies such as the Wall Street Journal, which is regarded by many readers as indispensable. There are probably fewer than a dozen companies in the world today whose news offerings are perceived by buyers as having no substitute. Outside of this group I don't see how any online media business can survive.

Tim Clark, author of the Japan Internet Report, played with Bill Gates on the same Little League football team, but so far has managed to avoid working for Microsoft.  He is currently
writing a book about entrepreneurship while serving as Senior Fellow at Tokyo-based venture incubator SunBridge and editor of the monthly Japan Entrepreneur Report. The questions in this Q&A were posed by JMR Editor Michelle Nicolosi and contributing writer David James.

Over the next year we'll be publishing select Q&A responses at Japan Media Review. If you'd like us to publish your thoughts, please respond to our Q&A.