Japan has always been known internationally for doing things in its own way, at its own pace. But people unfamiliar with the country’s advertising industry might still be surprised to learn that the majority of TV stations still take delivery of ads manually—in ‘print’ format.
Japan holds the distinction of being the last major market to make the transition to digital ad delivery. The shift began almost a year ago and is now gathering pace, but it is still expected to take until the third quarter of 2020 before all 127 TV stations are in a position to accept content in digital format.
“If you look around the world, the larger economies switched 10 years ago,” says Simon Cox, CEO of Group IMD, which specialises in ad delivery and is helping the Japanese industry to modernise, along with companies such as Adstream.
Group IMD has managed the process in around 35 markets. To put things in perspective, India went digital in 2010. “Countries go at different times because it takes the action of an agent to get it going. What makes it challenging is that you’re replacing an old method that works, a simple standard that everyone knows.”
Cox says while a physical tape is easy to understand, putting the content online requires cooperation between different parties. “When you look at software, it’s a much more collaborative, participative process than a blind tape,” he points out. Once complete, the upgrade will see a single standard of files, with software written according to JAAA (Japan Advertising Agencies Association) specifications to authenticate and verify transactions.
It’s taken six years to get the various stakeholders to agree to the change, he says, saying that he initially hit a brick wall. In Japan, the pattern has been quite distinct from anywhere else.
“Broadcasters wouldn’t move without talking to the JBA (the Japan Commercial Broadcasters Association) and the JBA wouldn’t move without talking to the JAAA,” says Cox. “People like to do things very carefully, in a more coordinated way.”
Campaign asked the JAAA to confirm the number of broadcasters who have so far made the switch, as well as for observations as to challenges in making it happen and the biggest potential benefits. The organization declined to provide information or comment.
Cox says human nature is always the main limiting factor in the adoption of new technology. “The JBA [for example] doesn’t want people to say [the process] can happen much faster. They want things to be slow. People don’t like change—but you will find some who are interested.”
He says that a push from Dentsu and Hakuhodo helped the JAAA acknowledge the constraints of the manual system and conclude it would “be a handicap” if it failed to update. Effecting technical change comes with its own challenges, but there were economic factors at play too.
The main reason for resistance has been the cost involved in upgrading, especially for local TV stations, says Akira Kagami, Dentsu’s former creative head. At the same time, Cox says an incentive for broadcasters has been to stem the leakage of advertising investment from traditional to online TV, which offers advertisers a more straightforward, less costly process.
Kagami adds that production companies stand to lose a lot in terms of profits from printing. On the other hand, the prospective cost reductions and end to copyright disputes “got a big welcome from the client side”. Last year, Shiseido became the first advertiser to use the new delivery method.
Another source who did not wish to be named agrees that the printing process “is a big source of income” for production companies but added that it’s also “a useful buffer for bills”. The source explains that where printing fees have served as a catch-all for the numerous glitches and fixes in the production process, the new system means each of those will need to be accounted for. That means added bother in the form of having to negotiate with advertisers’ purchasing and accounting departments.
Cox sees transparency and speed as the biggest advantages of digital delivery. Under the manual system, prints are typically delivered three to four days before transmission. The new system theoretically means an ad can arrive minutes before going out, allowing considerable time for refinement and even last-minute changes if necessary. It means “linear TV broadcasting starts to behave a lot more like online—that’s one of the really important things about it,” he says.
Cox argues that the "economics of this are quite favourable" and lead to more efficiency for everyone. He says it’s not so much a question of cutting costs, but of reinvesting what would have been wasted on printing into higher value areas.
“For us, going tapeless is nothing but an advantage,” says Ryan McGuire, managing director of Cutters Studios Tokyo, which unlike some larger production companies does not make money from printing.
McGuire says he was surprised at Japan’s culture of tape delivery when he moved to the country from the US in 2010. He says the loss of a large number of tapes in the 2011 Tohoku earthquake was the tipping point that set the transition in motion. He thinks the change will be better for the environment, save money for clients, remove the need to buy expensive equipment (which is a burden for smaller production houses) and make things a lot more efficient. In an ideal world, he sees clients investing more of their advertising budget “into the actual work”. At the very least, he says having more time will help people be more creative.
“The tape workflow being taken out of the process is going to create yoyuu (space to think),” he says. “You can’t be creative when you’re racing against a moving target and deprived of sleep. You become creative when you’re comfortable.”
Peter Grasse, the founder of Mr Positive, an independent production company in Tokyo, says it’s “perversely beautiful” that Japan has held back the tides of technological innovation for so long. He suggests that as well as the financial considerations, it has something to do with respect for the craft of printing and a reluctance to cut jobs—but admits that it’s been an example of “protectionism to the point of being ridiculous”.
From a producer’s perspective, Grasse is not fully convinced that saving costs on printing (which he estimates are comparable to a day’s shooting) will result in higher production values and more money spent on the content itself, but as one might expect from someone who calls his company ‘Mr Positive’, he hopes for the best.
“If the budget for prints went into the screen, that would be an ideal outcome,” he says. “Will it happen? No. Yes… They will see value. Everyone inherently knows the value of money put on screen.
“If it increases the value of production, if we see the benefits of time and money with regard to what’s on screen, then it’s totally worthwhile. [In reality] it’ll give us more time. I don’t know if it’ll give us more money.”