| It is no news to anyone here that TV has been the | | | | in the budget for the TV drama series that the |
| major source of advertising agency revenue | | | | company produces, and the outlook for improvement |
| throughout the last half century or so. Japan is no | | | | is not good. All but one of the five major networks |
| exception. So, as someone who runs a business in | | | | reported year-on-year declines in first quarter income. |
| the fringes of Japan's advertising industry, I couldn't | | | | At TV Tokyo, whose budget last year was in the |
| help the sinking feeling I got when I read in | | | | black to the tune of ¥880 million, the same period |
| yesterday's Asahi Shimbun a news report titled | | | | this year left it ¥370 million in the red. Overall, the |
| "Private Broadcasters Struggling with TV Commercial | | | | price for TV spots has been falling, resulting in a 10% |
| Recession." | | | | reduction in TV commercial income. High hopes for |
| Subheads summarized the grim tale: "Production | | | | the the Beijing Olympics, fuelled by the only one-hour |
| Budgets Squeezed," "Rebroadcasts Increasing," | | | | time difference between Beijing and Tokyo, were |
| "Burden Shifted to Production Companies." The | | | | dashed when total revenue reached only ¥11.2 |
| following is my summary of a story deemed | | | | billion, just fractionally more than the ¥10.9 billion |
| important enough to get nearly a quarter page in | | | | generated by the Athens Olympics four years |
| Japan's second largest national newspaper. | | | | before. |
| TV commercial revenue is falling and having a | | | | The networks have responded by cutting their own |
| negative impact on network bottom lines. To offset | | | | executives pay; but that alone is no longer enough. |
| declining revenue, the networks are squeezing | | | | Now a single cameraman shoots on location, without |
| program production budgets. The results are visible in | | | | the audio and lighting crew that used to accompany |
| programming schedule changes to begin this October. | | | | him. Fuji TV, the biggest of the private networks, |
| Pressure is increasing on production companies that | | | | reduced its first-quarter production budget to ¥23.6 |
| see network orders scaled back. The voices that talk | | | | billion, down 6% from the same period previous year. |
| about structural change in the industry as audiences | | | | If these cuts were just a response to a normal |
| abandon TV are growing stronger. | | | | business-cycle downturn, they wouldn't be so |
| At production company offices in a mixed | | | | frightening. What worries industry leaders most is the |
| residential-office complex in Tokyo, young members | | | | increasingly visible abandonment of TV by audiences |
| of the staff are still busy editing the rushes for the | | | | that now spend growing amounts of time in front of |
| next program segment. But the president is fretting | | | | computers instead of in front of the tube. Prime time |
| in his office. The network has cut his budget by | | | | remains sacrosanct, but re-runs are becoming |
| more than 10% since April. "It's a life and death | | | | increasingly common during daytime hours. One |
| struggle out there. We have to use every trick in our | | | | wonders what this means to household products and |
| book to prevent deterioration in program quality," he | | | | financial services advertisers who have traditionally |
| says. | | | | targeted housewives during daytime hours. |
| At another company the president reports a 3% cut | | | | |