Japan News Portal Circles the Newspaper Wagons
Important Details: Come March 2008, there will be a new mega news site unveiled in Japan. So far unnamed, the site will provide easy access to the stories of three top news brands, Yomiuri, Asahi, and Nikkei. Yomiuri and Asahi are both general interest national dailies, commanding circulation of more than 25 million (morning and evening) between them, while Nikkei is Japan’s Wall Street Journal or Financial Times, with close to 5 million in daily circulation.
The new portal will link to each company’s own websites. The idea: readers like to see more in one place before making their news choices. “Several hundred million yen” ($2-4 million) is a sum of the companies’ investment in the site, which will be free to the public and supported by advertising. The partnership is the first operational one between and among the three competitors, which are also pushing forward with joint distribution efficiencies.
They come up at a time when the Japanese news industry is facing many of the same challenges as North American and European publishers. While Japanese papers pull a majority of their revenue from circulation — not advertising — the web challenges are similar. Newspaper readers are aging, while younger people turn more to the web, and to news aggregators including Yahoo. Yahoo, backed by Softbank with its 40%-plus ownership stake, set up a shop early in Japan and is the search leader. According to a recent Comscore report, Yahoo! has the largest search share at 47.4 percent, but Google is gaining on it, now with a share of 35 percent. Google’s search volume has increased 53.3 percent in the last 12 months while Yahoo!’s number of searches is down 12.4 percent.
In addition, Yahoo! Japan is now making a significant move into video, a key proposition for a nation with above-average broadband penetration. In Japan, concerns about foreign inroads into new communications platforms has led to national government funding efforts to improve search and other technologies to compete with foreign companies.
Implications: News of the Japan news portal brings reminders of attempts in the U.S. to set up a similar portal a decade ago, through New Century Network. That attempt foundered, and the search portals grew mightily to eclipse news companies in market size and internet ad share. Outsell believes the Japan news portal bears watching, but also believes that it may be too little too late. Search/aggregation is the preferred form of entry for most internet readers, and with news video coming on strong, search aggregators (who are embracing video faster than print-based news companies) add to their advantage. The Japanese dailies seem to have rounded their wagons around a wider circle — the content of three papers rather than one — but the corralling Yahoo! and Google are doing is far wider, around hundreds of sources — and readers see the difference.