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This is to certify that the

thesis entitled

A Case Study of Television Program-Type Diversity:
The Programming in Japan's Video Distribution Industry

I)ate

presented by

Goro Oba

has been accepted towards fulfillment
of the requirements for

M. A. degree in Te lecommunicat ion

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A CASE STUDY OF TELEVISION PROGRAM-TYPE DIVERSITY:
THE PROGRAMMING IN JAPAN ’8 VIDEO DISTRIBUTION INDUSTRY

By

Goro Oba

A THESIS
Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

MASTER OF ARTS

Department of Telecommunication

2003

ABSTRACT

A CASE STUDY OF TELEVISION PROGRAM-TYPE DIVERSITY:
THE PROGRAMMING IN JAPAN’S VIDEO DISTRIBUTION INDUSTRY

By

Goro Oba

This thesis studies the program-type diversity of Japan’s video distribution
industry in the multichannel era. Many US. media studies suggest that whereas
broadcast networks attempt to maximize audience with similar, mass appeal content
under limited channel capacity, more diverse presentations can be offered as the number
of channels increases with the advent of multichannel media. It is assumed that diverse
programming would increase the likelihood of maximizing the satisfaction of a wider
range of viewers. In Japan, however, multichannel media is not widely accepted, and
even subscribers to the media mainly watch the retransmission of broadcasting. The key
to understand these phenomena might lie in the programming of broadcasters. If Japan’s
over-the-air broadcast networks offer diverse types of programming to meet various
viewers’ preferences, cable television may not be perceived as adding significant
diversity. We discuss how much diverse programming is attained by Japan’s over-the-air
broadcasting and cablecasting with comparative research of those programming
schedules. It is discovered that while more program-type options per hour are available

on cablecasting, in the aggregate broadcasting provides diverse programming nearly

equivalent to cablecasting.

Copyright by Goro Oba
2003

iv

To my wife, Mitsuko Oba,
and my parenm, Yoshiki and Etsuko Oba

ACKNOWLEDGEMENTS

This thesis is the joint product of professors, friends, and family because of their
support and encouragement to complete this work. I owe a special debt of gratitude to
all of them.

My sincere appreciation goes to the Thesis Committee members. I wish to thank
Dr. Johannes Bauer, my academic advisor and the director of the Thesis Committee, for
his persistent, insightful feedback, which kept me rethinking and rewriting. I am also
grateful to Dr. Thomas Baldwin for comments and suggestions. His wealth of
knowledge regarding television study was invaluable at all phases of this project. I also
appreciate Dr. Barry Litman’s advice. The original idea for this thesis arose from his
outstanding research on television program-type diversity. I am proud of having worked
with those distinguished scholars.

A debt of gratitude is also owed to NTV, Nippon Television Network. My ten
years of experience in the network became the cornerstone for my academic career. I
appreciate invaluable data and comments shared by my former colleagues. In particular,
special thanks are owed to Eito Teshiba of the Department of International Strategy
Flaming. Sachiyo Morinaga, a doctoral student at Michigan State University, deserves
thanks for her suggestions. I also thank to Dawn Reed of the MSU Writing Center for
reviews of the manuscript.

Finally, my deepest thanks go to my wife, Mitsuko Oba, for her understanding
and devotion to my work. She accepted my dream with an open mind and
compassionate heart. This thesis could not have been completed if it had not been for

her continuing support and encouragement.

TABLE OF CONTENTS

LIST OF TABLES ..................................................................................................... viii
LIST OF FIGURES ..................................................................................................... xi
INTRODUCTION ........................................................................................................ l
Japan’s Broadcasting Industry ................................................................................... 2
History of Japanese and US. Cablecasting ................................................................ 5
American Attitude toward and Change in Television Viewing ................................. 10
Property of Multichannel Media—Program-type Diversity ..................................... 13
Japanese Attitude toward Multichannel Media and Program-type Diversity ............ 14
Causes Hampering the Subscription to Multichannel Media .................................... 22
The Focal Point. ...................................................................................................... 26
CHAPTER 1: Definition of Program-type Diversity ................................................... 28
CHAPTER 2: Literature Review ................................................................................. 32
CHAPTER 3: Factors Affecting Program-type Diversity ............................................ 38
Ownership .............................................................................................................. 38
Competition ............................................................................................................ 40
Policy and Technology ............................................................................................ 42
Syndication Market ................................................................................................. 44
CHAPTER 4: Research Questions and Methodology .................................................. 47
Research Method .................................................................................................... 48
Program-type Categories ......................................................................................... 48
Sample Networks .................................................................................................... 54
Coding .................................................................................................................... 55
Measurement and Assessment ................................................................................. 5 6
CHAPTER 5: Results and Analysis ............................................................................. 58
Intercoder Reliability .............................................................................................. 58
Horizontal Diversity ............................................................................................... 58

Vertical Diversity .................................................................................................... 68

Commercial Broadcast Networks ........................................................................ 68
Public Broadcast Network ................................................................................... 72
Independent Stations ........................................................................................... 74
Basic Cable Networks ......................................................................................... 76
Satellite Broadcasters .......................................................................................... 78
Premium Networks ............................................................................................. 79
Overall Diversity .................................................................................................... 80
CHAPTER 6: Conclusion and Discussion ................................................................... 9O
BIBLIOGRAPHY ...................................................................................................... 96

vii

LIST OF TABLES

Table 1 ................................................................................................ 3
Profile of Japan’s Over-the-air Broadcast Networks

Table 2 ............................................................................................... 10
Television Viewing Shares by Services in US. Cable and Non-cable Homes

Table 3 .............................................................................................. 16
Television Viewing per Day by Individuals with Cable

Table 4 .............................................................................................. 16
Length of Cable Subscription and Changes in Television Viewing

Table 5 .............................................................................................. 21
New Video Distribution Systems in Japan

Table 6 .............................................................................................. 49
Program-type Categories by Litman et al.

Table 7 .............................................................................................. 50
Program-type Categories by Youn

Table 8 .............................................................................................. 50
Program-type Categories by Kamijyo

Table 9 .............................................................................................. 51
Program-type Categories by Video Research

Table 10 ............................................................................................. 51
Program-type Categories
Table 11 ............................................................................................. 54

Over-the-air Broadcast Networks

viii

Table 12 ............................................................................................. 55
Networks/Broadcasters Included in Sample Cablecasting

Table 13 ............................................................................................. 60
Programming on Aug. 7

Table 14 ............................................................................................. 61
Programming on Aug. 13

Table 15 ............................................................................................. 62
Programming on Aug. 16

Table 16 ............................................................................................. 63
Programming on Aug. 22

Table 17 ............................................................................................. 64
Programming on Aug. 26

Table 18 ............................................................................................. 65

Horizontal Diversity

Table 19 ............................................................................................. 69
Programming Breakdowns (Hours)
Table 20 ............................................................................................. 70

Programming Breakdowns (Percentage)

Table 21 ............................................................................................. 71
Vertical Diversity
Table 22 ............................................................................................. 81

Programming Breakdowns by Groups of Networks/Broadcasters (Hours)

Table 23 ............................................................................................. 82
Programming Breakdowns by Groups of Networks/Broadcasters (Percentage)

Table 24 ............................................................................................. 86
Overall Diversity

Table 25 ............................................................................................. 88
Programming Mode] on Japan’s Broadcasting and Cablecasting

LIST OF FIGURES
Figure l .............................................................................................. 11
US. Network Prime-time Audience Share and Cable Penetration

Figure 2 .............................................................................................. 15
Japanese Non-cable Subscribers Attitude toward Cable Viewing

Figure 3 ............................................................................................. 37
Number of Channels and Program Types

INTRODUCTION

It has been long since the concept of “multichannel” came to the forefront.
Resulting from new video distribution services with large channel capacity, the number
of channels available to viewers has proliferated from single to hundreds. For viewers,
nonetheless, whether or not their favorite programming is offered on a large number of
channels might be more significant than how many channels are available. If almost all
channels provided quite similar content, most viewers would not reap the benefits of the
proliferation of channels since favorite content possibly differs among viewers. Thus, in
order to maximize the utility of a wider range of viewers, various types of programming
should be offered. In other words, the efficiency of multichannel media might be
evaluated by the degree to which the media can meet various viewers’ needs by
providing diverse programming. In this thesis, we attempt to clarify the significance of
program-type diversity in video distribution systems, discussing how much diverse
programming is attained by Japan’s over-the-air broadcasting and cablecasting with
comparative research of those programming schedules.

In this introductory chapter, we begin with an analysis of the structure and
development of Japan’s video distribution industry, followed by the observation of
viewers’ attitude toward broadcasting and cablecasting. Chapter 1 defines the idea of
program-type diversity. In Chapter 2, we review research literature in order to
understand the theoretical points associated with program-type diversity. Knowledge
obtained through literature review is developed further in Chapter 3, which explores
some possible factors influencing program-type diversity. Chapter 4 addresses research

questions and methodology, followed by Chapter 5, in which results of research are

fully analyzed and discussed. Finally, the key arguments of this thesis, concluding

comments, and future research are provided in Chapter 6.

Japan’s Broadcasting Industry

Watching television is quite popular conduct in Japan and probably as integrated
into daily life as in the United States of America. However, the general attitude of
Japanese toward television viewing differs significantly from the US, in which a large
number of individuals not only have a range of choice among a number of channels but
also enjoy accessing various channels through cable or satellite television. In contrast,
nearly half of Japanese choose to have only conventional over-the-air broadcasting.
Take cable television for example. As of 2002, 69.2 percent of US. television
households but only 26.8 percent of Japan’s television households subscribed to cable
television (Ministry of Public Management, Home Affairs, Posts and
Telecommunications, 2002; National Cable and Telecommunications Association, 2003).
Citing this low penetration, some scholars and media analysts assert that cable
television is not well developed in Japan (Tokinoya, I996; Cooper—Chen, 1997; Nishi,
1997; Hasegawa, 1998; Nakako, 2002). Indeed, it seems that Japan does not have a
vastly successful cable television industry, as the total revenue of the industry is
approximately 10 percent of that of the commercial broadcast industry, and most of the
new entrants to the cable industry have huge cumulative losses (Mori, 2000).l

We will look at the industry structure of Japan’s conventional broadcasting,

 

' The total revenue of commercial over-the-air broadcasters and cablecasters in 2001 was 2.58 trillion
yen, 21.5 billion dollars, and 272 billion yen, 2.3 billion dollars, respectively. All figures are converted at
120 yen to US. one dollar, according to an average exchange rate for the past few years. Note that the
figure for commercial over-the-air broadcasters includes that for radio stations (Ministry of Public
Management, Home Affairs, Posts and Telecommunications, 2002).

which has overwhelming power in the video distribution industry (see Table 1). Japan’s
broadcasting system resembles neither that of the US, where commercial broadcasting
has dominated, nor those of many Asian and European countries, where broadcasting
has been mainly operated by the government. Indeed, two broadcast systems,
commercial and public, have functioned and prospered in Japan. Tokinoya (1996) notes
that today’s development in Japanese broadcasting has resulted from well-balanced
competition between commercial broadcasters and a public broadcaster. There are 127

commercial over-the—air television broadcasters in Japan.

Table 1: Profile of Japan's Over-the-air Broadcast Networks

 

Nippon Television Network (NTV)

(1) August 1953 (2) 1966 (3) 3t] (4) 328,013 million yen

(5) Yomiuri Shimbun Newspaper, Tsuneo Watanabe, Yorniuri Television Broadcasting
Tokyo Broadcasting systems (TBS)

(1) April 1955 (2) 1959 (3) 23 (4) 260.676 million yen

(5) Japan Trustee Services Bank, Mitsubishi Trust & BankingLSumitomo Mitsui Banlo'ng
Fltfl Television (C3)

(1) March 1959 (2) 1966 (3) 28 (4) 412.237mi11ionyen

(5) Nippon Broadcasting System. Toho. Nippon Cultural Broadcasting
TV Asahi / Asahi National Broadcasting {AND}

(1) February 1959 (2) 1970 (3) 26 (4) 205,597 million yen

(5) Asahi Shimbun Newspaper, Toei. Shogagan Magazine Publishers
Television Tokyo (21)

(1) April 1964 (2) 1982 (3) 6 (4) 98,170 million yen

(5) Nihon Keizai Shimbun Newspaper, Nippon Steel. Nippon Life Insurance
Nikon Hoso Kyokai (NHK)

(1) February 1953 (3) 54 (4) 652.561rnillionyen

 

 

 

 

 

 

 

 

 

 

 

(1) Data ofKay StafionStartad', Q Year ofNatwork Formed;
Cl) Nimbus ofAfiliatadStationa; (4) Operatinngnue mam. (5) Top Shareholders
Sources: NTV, 1133. ex. AND, rx. mot. mm Corporata Bank
The main commercial broadcasters are five key stations, Nippon Television

Network (NTV), Tokyo Broadcasting System (TBS), Fuji Television (CX), Asahi

National Broadcasting (ANB), and Television Tokyo (TX). While commercial stations

are technically prohibited from forming networks by the Broadcast Law, cooperative
arrangements between key stations in Tokyo and local affiliates have formed networks
in all but name (Cooper-Chen, 1997). The key stations do in fact provide the local
affiliated stations with more than 80 percent of their programming. In addition to
network affiliates, there exist 13 independent stations. Nihon Hoso Kyokai (NHK or
Japan Broadcast Corporation), the public broadcaster, has a general channel and an
educational channel. NHK finances its operations from the monthly receiving fee that is
collected from television set owners, as it does not accept any advertising or financial
assistance from the government. As of 2003, the receiving fee is 1,395 yen, around
$11.63, per month.

NHK went on the air on February 1, 1953, followed by NTV in August of the
same year. In 1957 when the first allocation plan of television signals was implemented,
more than 30 local television stations were licensed. The 19603 became the television
era in Japan (Tadokoro, 1978, p.65). In 1967, channels in the UHF spectrum were
opened for television transmission, resulting in many regional and local UHF stations
commencing operations. Four commercial networks offering general programming had
already been launched by 1970. Total revenue in the broadcasting industry had
increased approximately tenfold for the past 30 years from around 220 billion yen in
1969 to around 2.2 trillion yen in 1999, larger than the growth in Japan’s gross national
product, 7.5 times, for the 30 years (Mizuho Corporate Bank, 2002). By Article 2-2 of
the Broadcast Law, broadcasters are obliged to make their broadcasting receivable
throughout the broadcast area concerned (Ministry of Posts and Telecommunications,
2001 ).

According to the national channel allocation plan, approximately 90 percent of

households can receive more than four terrestrial commercial broadcasting channels in
addition to two NHK channels (NHK 2001a; Ministry of Public Management, Home
Affairs, Posts and Telecommunications, 2002). In reality, nonetheless, many households
receive terrestrial services via cable on the grounds that they live in the mountains or

remote areas where over-the-air signals are not received clearly.

History of Japanese and U.S. Cablecasting

As a retransmission medium and an originator of television programing, cable
television should be in fierce competition with broadcast television (Baldwin et al.,
1996). We will now discuss the transition of Japanese cable television chiefly from the
relevant policies. Communications policymakers are in position to afl‘ect the structure
and functioning of an industry (Napoli, 2001). Certainly, the cable television industry is
no exception.

In 1955, two years later than the launch of the first broadcasting service,
community antenna television (CATV), a prototype of cable television, was designed
for remote areas, where the reception of over-the-air broadcasting was poor, to receive
the retransmission of programs provided by broadcasters. In the late 1960s, cable
television drew unprecedented attention as a new medium because of the possibility of
the coaxial cable, yielding a significantly greater carrying capacity. This led to the rush
of applications for starting cable services in various parts of the country. It is likened to
the “first cable television boom” (Ishimaru, 1994). The boom, however, vanished
quickly. The Cable Television Law established in 1972 by the Ministry of Posts and
Telecommunications (MPT), a supervisory authority at the time, contained strong

regulation. The tone of the MPT of the day was the following: “While cable television,

with the broad data-carrying capacity, has a possibility of serving as
telecommunications circuits, this sort of utilization is a future problem and, therefore,
not admited for the present” (Ishimaru, 1994). Accordingly, the use of cable television
was substantially limited only to the retransmission of over-the-air broadcasting. In
other words, cable television was regarded as no more than ancillary to terrestrial
broadcasting, and the unique characteristics were downplayed.

But then, by the Broadcast Law, broadcasters were obliged to endeavor to make
their broadcasting receivable throughout the broadcast area concerned, as noted earlier.
Consequently, even the demand for retransmission of over-the—air broadcasting, the only
raison d’etre of cable television in those days, was supposed to disappear. Okamura
(1993) notes that the possibility and, subsequently, the development of cable television
were remarkably hindered by a sufficient degree of protectionism of the MPT,
attempting to give favorite treatment to existing broadcasters. According to Witter (1996,
A1), “The nation’s fledgling cable industry has never recovered from onerous limits
once imposed by the MPT at the behest of Japan’s five big nationwide broadcast
networ .”

Besides, government restrictions limited companies to owning and operating
only one cable system serving a restricted local area in order to revitalize the local
economy (Kahaner, 1996). Thus, only local companies were allowed to invest in the
cable business. Restrictions were also placed on foreign ownership.2 As a result, cable
systems in Japan were fragmented into many small, single-system operations. (Sky

PerfecTV, 2001; Nakako, 2002). Japan’s cablecasters still had tough times in the 19805.

 

2 In Japan, there were no limitations on the number of imported programs unless the companies
delivering the imported programming were either entirely or primarily Japanese owned. (Kahaner, 1996;
Cooper-Chen, 1997; Oto, 2002).

The primary reasons were the lack of programing and program distribution systems, and,
therefore, enterpreneurs were afraid of not being able to get a return on huge initial
investment.

It was not until the late 1980s that “urban-type" cable television systems, which
have 10,000 or more drop line terminals, more than five channels for programming
other than retransmission, and two-way functions, finally started operations. The
launching of urban cable television systems, the new programming suppliers, and the
development of communication satellites all combined to herald the “second cable
television boom” (Okamura, 1993; Ishimaru, 1994). Immediately after the boom,
however, the asset-inflated bubble economy burst in Japan. As of 1993, Okamura (1993)
noted that the temporary frenzy had gone in an incredibly short time.

The 1993 deregulation policy allowed a single company to operate multiple
cable systems and more than one operator in each region (Kahaner, 1996; Hasegawa,
1998). In response to the emergence of multiple system operators (M805) and a
relaxation of the foreign ownership limit from the previous 20 percent to 33 percent,
many new networks are launched as program distributors for multichannel cable
television services.3 It is important to note that the MPT was trying to encourage U.S.
firms to take advantages of the deregulation in order to bring in U.S. cable management
know-how, capital, and programming (Kahaner, 1996). During 1995, four United
States-Japan joint venture groups announced their plans to enter Japan’s cable and
satellite markets (Friedland, 1994; Weinberg, 1995; as cited in Hasegawa, 1998, p. 290).

While the market share by the top three cable operators is 16 percent, Nakako (2002)

 

3 The strong ownership interests of MSOs in cable networks are one of the most prominent features of
cable industry structure (Parsons and Frieden, 1998). In Japan, cable networks are often called “CS
networks" since their programming is distributed via communications satellite to cable systems or

claims that further consolidation is necessary to finance and manage the cable industry,
together with the new programming.4 The rationale behind his assertion is that MSOs,
which control a number of systems and millions of subscribers, can easily achieve
economies of scale.

In sharp contrast to Japan’s cable television industry suffering from the low
penetration rate, its American counterpart has expanded astoundingly, described as “the
most successfiil media enterprise of the past two decades” (Dizard, 1997, p.120). Yet, as
well as in Japan, cable television had been strongly regulated in the U.S. by the mid
19703. Looking at CATV as ancillary to broadcasting, the Federal Communications
Commission (FCC) was initially opposed to cable origination (Baldwin and McVoy,
1988). Later, the FCC determined that cable television might pose a financial threat to
the development of a broadcasting system nationwide. As a consequence, the F CC ’s
intent on protecting broadcasting placed numerous restrictions on cable that prevented it
from penetrating larger cities and capped industry growth. The cablecasters in the U.S.
were severely discouraged from the commercial possibilities of pay cable, especially the
most attractive and profitable kinds of programming, such as movies, sports, and series,
by the 1970 rules. Furthermore, cable systems were required to carry signals from the
nearest network afliliate stations and prevented from importing a stronger station from
farther away by the 1972 rules (Parsons and Frieden, 1998).

Importantly, cable television had not developed well in both Japan and the U.S.

until the mid 19703. The gap between the penetration of cable television in Japan and

 

individual households with small dishes.

‘ In the U.S., MSOs have fostered concerns about the potential for anticompetitive practice in the
industry. For instance, there is worry that distributors have unhealthy control over the creation and
distribution of cable programming by virtue of their relationship (Parsons and Frieden, 1998). Yet, Japan's
cable industry might not be at the stage in which such harmful effects are argued.

that of the American counterpart began widening after the era. Indeed, in the U.S., the
FCC repealed the rules in July of 1980, sweeping away the remaining principal
components of the 1960-19703 rulemaking, on the ground that, in the commission’s
studies, cable television could not be shown to have a serious deleterious financial
impact on local broadcasting. The elimination of restrictions on pay cable and the
success of the national satellite distribution system spurred cable television, with the
stirrings of the cable software industry (Parsons and Frieden, 1998). Baldwin and
McVoy (1988, p.6) note, “Cable became a true multichannel medium with basic and
premium services from satellites making cable attractive to urban areas in addition to its
traditional markets.” Indeed, U.S. cable industries experienced huge growth from the
late 19703 through the early 19803: The 3,506 systems serving nearly 10 million
subscribers in 1975 leaped to 6,600 systems serving nearly 32 million subscribers just
ten years later (Television Digest, 2001).

The comparison of the U.S. policy for cable television and that of Japan makes it
clear that in the vicinity of the mid 19703, crucial perception gaps toward cable
television emarged between the two nations’ policy makers. Certainly, Japanese policy
makers, which continued to regard cablecasting as no more than ancillary to terrestrial
broadcasting, did not acknowledge the unique characteristics of cable television and
accordingly did not introduce laissez-faire philosophy into the cable market. From what
has been discussed above, it is quite probable that government policies determine a
paradigm for development in cable television. Yet, the question of why many Americans

have accepted cable television and Japanese have not remains unsettled.

American Attitude toward and Change in Television Viewing

Table 2 illustrates the comparison of television viewing by households with and
without cable in the U.S. In cable homes, cable sources account for 57.4 percent of all
television viewing, and the share of audience by commercial broadcast networks and
independent stations drops to 40.4 percent in cable homes from 93.3 percent in noncable

homes.

Table 2: Television Viewing Shares by Services in U.S. Cable and

 

 

Noncable Homes
4 Network mum/pm PBS Cable
Affiliates’ Independents Programming;
Noncable Households 64.9% 28.4% 6.7%
Cable Households 33.0% 7.4% 2.1% 57.4%

 

1: NBC, ABC, CBS. FOX 2: «supported. my cable. and other cable
Source: Cahletelevision Advertie'mgBureauaDm)

Assuming that additional program options do not necessarily translate into more
time spent viewing, the viewing shares for cable channels have steadily increased over
recent years at the expense of broadcast stations (Baldwin, McVoy, and Steinfield, 1996;
Webster and Phalen, 1997). That is, additional program options are more likely to
prompt a reconfiguration of how audiences allocate their time. Webster and Phalen
(1997, p. 109) point out, “across the entire audience, as more people subscribe to new
media systems, and as the systems to which people already subscribe expand their
services, fragmentation is likely to increase.”

Indeed, as cable penetration of American households increased from 21.9 % in
1980 to 69.2 % in 2001, the total prime time audience share by the big three broadcast

networks (NBC, CBS, and ABC) declined from 85 percent to 38 percent (see Figure 1).

10

In 2002, ad-support basic cable networks eventually grabbed the dominant audience
share over the seven broadcast networks (the big three networks above plus FOX, WB,
UPN, and PAX) for the first time, 48 percent of prime time share compared to 45
percent for the broadcast networks (Romano, 2002). The more choices available, the
less likely it is that viewers will be exposed to the same selection of content (Webster

and Phalen, 1997, p.105).

 

Figure 1: U.S. Network Prime-time Audience
Share and Cable Penetration

 

90
80

60
Share (%) :3
30
20
10
o a I r r a a

WTET§§$$§

- 50 .
Penetration

(Va)

 

 

 

 

 

IE1 Audience Share + Cable Penetrationl

 

Total arsdienee share bythe big three broadcaetnetworke (NREM CBS, andm
Surreal: National Cable arrd'l"

 

r

4 . "nine.“ m

 

 

 

Why have American viewers reduced the amount of time for watching
over-the-air broadcast networks and, instead, moved to cable networks? In general,
commercial mass media are interested in attracting as many viewers as possible.
Webster and Phalen (1997, p. 101) assume, “Given this overriding concern with
maximizing audiences, ...They (the media) resort to formulas and themes that can
easily be accepted by the broadest possible audience.” From a strategic viewpoint, it

made economic sense for each of the big three broadcast networks to aim for the mass

11

audience with similar tastes by creating the “lowest-common-denominator” programs
that would attract a one-third share of the majority (Baldwin and McVoy, 1988).5 The

rationale behind this is explained best by Owen, Beebe, and Manning (1974):

(This) duplication occurs because there is a tendency for a decentralized system
of broadcasting, with limited channel capacity, to produce rivalry for large blocks
of the audience with programs that are, if not identical, at least close substitutes.
There is a tendency, in our case, for the three networks to produce the same kind

of programming. (p.101)

Among three U.S. networks (NBC, CBS, and ABC), the general trend was toward more
and more homogenization of content, as the schedule of one network increasingly
resembled the schedules of the other networks, and the diversity of programming among
the networks declined over the 30 years period, with the exception of an increase in the
late 1970s due to the outbreak of rivalry (Dominick and Pearce, 1976; Litman, 1979;
Wakshlag and Adams, 1985). Because of a propensity for programming aimed toward
great middle ground of majority tastes, people who were not interested in the mass
appeal programming were under-served (Baldwin and McVoy, 1988; Litman, 1992).
Whereas the limited number of channels predetermined the strategy of audience
maximization in the case of the major broadcast networks, as discussed above, this is

not a necessary result if the number of channels is unconstrained (Owen and Wildman,

 

5 The “Common denominator" program means any program that will be watched by a number of
different viewers groups. In the viewer preferences, the common-denominator program is never assumed
to be the first choice of all viewer groups. In general, it will be a less-preferred choice. This use of the
common-denominator—program concept is consistent with the (plausible) assumption that viewers would
prefer to have programs somehow tailor made to their own tastes, but if this is impossible, will make do
with some other program. See Owen et al. (1974, p.54, footnote E).

12

1992; Waterman 1992). Although the availability of increased channel capacity does not
necessarily guarantee diverse programming, relatively heterogeneous content has begun
to appear in young, new media (Webster and Phalen, 1997). According to Noll, Peck,
and McGowan (1973, p.32), “The available evidence from both STV (pay television,
via broadcasting) and cable experience suggests the existence of a considerable
unfulfilled demand for television programming, both of the conventional type and a few
categories not well represented in the present program logs.” In this manner, cable
television with the unlimited channels responded to people who did not conform to the

interests of the mass audience in the U.S.

Property of Multichannel Media—Program—type Diversity

While cable television is clearly different in structure from over-the-air
broadcasting, its formation and philosophical raison d’etre are providing additional
choices beyond the broadcasting realm (Litman, 1992). Certainly, one of the positive
sides of cablecasting is the program diversity that it can attain with a number of
channels. According to Heeter and Greenberg (1988, p.35), “Because of the greater
variety and fixed structure of available content with cable, program choice should better
reflect viewers’ content preferences, particularly among those viewers who take
advantage of cable diversity and among those who have content preferences for which
specialized channel exists.”

Viewers have relatively consistent preferences for a program type (Webster and
Wakshlag, 1983). The existence of such preference patterns would underscore
policymakers’ desire for a diversity of program types, given that such diversity would

increase the likelihood of maximizing the satisfaction of a wider range of viewers

13

(Napoli, 2001). Multichannel media, with a greater variety of available content, is well
qualified to meet this desire. With respect to the correlation between audience
preferences and program-type diversity, Litman (1992, p.149) notes, “The more varied
or unconcentrated is the audience preference structure, the greater the opportunities for
receiving diverse programming, especially under a direct consumer payment or hybrid
system.” Accordingly, it is reasonable to assume that viewers’ preferences are more
likely to be met if they can access the media providing a variety of programming.
Napoli (2001, p.139) asserts, “Greater diversity of choices likely promotes greater
consumer satisfaction.”

From what has been discussed above, given various preferences among viewers,
it is presumed that the more program-type diversity is attained, the more viewers’
preferences are met, and hence the more viewers are satisfied. Presumably, one of key
factors for cable television to have penetrated into American homes rapidly is that the
cablecasting with diverse programming enthralled a number of audiences who were
weary of the duplication of content by broadcast networks and aspired to obtain
programs that more closely conform to their preferences. The promise of cable
television for viewers has been the ability to watch programs more specifically geared

to viewers’ preferences or interests.

Japanese Attitude toward Multichannel Media and Program-type Diversity

Figure 2 shows the attitude of Japanese non-cable subscribers toward cable
subscription. While respondents who are positive to cable viewing account for one third
of all, a quarter of them are negative to the viewing. A clear-cut trend toward cable

viewing among Japanese is not identified from Figure 2.

l4

 

Figu'e 2: Japanese Non-cable Subscribers Attitude
toward cable Viewing

urflerested
15.1%

 

 

 

Some: Bentham

 

We will then examine what Japanese actually watch under the environment
where additional channels are available with cable services. Table 3 and 4 show the
television viewing by individuals with a multichannel cable system that offers 6
over-the-air networks, 3 satellite broadcasters, and 22 cable networks. Respondents are
506 individuals of cable households chosen at random in a city of Japan.

We can see from Table 3 that Japan’s cable subscribers watch over-the-air
broadcast networks much more than non-over-the-air networks, such as cable networks.
Recall our earlier discussion of U.S. cable households allocating their viewing time to
cable networks more than to broadcast networks (see Table 2). Since the total viewing
time in Table 3, 3 hours 20 minutes, roughly conforms to the average time that Japanese
spend each day watching television, 3 hours 34 minutes (NHK, 2001b), it might be true
that audiences with the cable system reduce the viewing of over-the-air networks and,
instead, to watch cable networks. Yet, the proportion allocated for cable networks is

quite small. Presumably, cable networks have yet to pose a great threat to broadcast

networks in Japan.

Table 3: Television Viewing per Day by Individuals

 

 

with Cable (Averaged over A Week)
Over-the-air Networks Non~over~the~air Networks
2h39min 41min

 

Source: the Institute of National Association of C ornrnercial Broadcasters (2000)

Table 4 illustrates the correlation between the length of subscription to the cable
system and changes in television viewing over time, such as the number of programs
and program types that subscribers watch, or the agreeability to program-type
preferences. Subscription length greatly differs in respondents, ranging from a few
months to maximum seven years. There is no significant correlation at .01 level
between the length of subscription and substantial increases in variables above. Judging
from no positive and statistically significant correlation, Hamaoka (2000) assumes that
Japan’s cable subscribers do not necessarily feel the benefit associated with multicasting,
such as the increase in program-type diversity or the availability of programs
conforming to their specific preferences, even if they subscribe to cable television for

certain length of time.

Table 4: Length of Cable Subscription

 

 

and Changes in Television Viewing
Variable Correlation Conflict“: (r)
Increase in the number of proyarns .010
Increaseinproaramtypes .015
More agreeable to my taste .059
More variety available .038

 

-l S :5 1
Source: the Institute of National Association ofCommerciei Broadcasters (It!!!)

16

The critical question then is whether or not Japanese, many of whom chiefly
watch broadcast networks even under the multichannel circumstance, demand diversity
in television programming, which is supposed to increase in proportion to the number of
channels. Cooper-Chen (1997) concludes that “narrowcast” diversity given by the U.S.
choice in a number of cable channels and topics, from local access to country music to
the BET, is unknown to Japanese who prefer “broadcast” programs of general appeal.

Some scholars certainly attribute the reason why most Japanese do not
necessarily demand diverse presentations in television programming to the nature of
preferences and habits that Japanese have. According to Hashimoto (1999), Japanese
oflen tend to watch popular programs only in order to share common subjects with
friends or colleagues even if the programs are not truly attractive to them. To put it
another way, Japanese sometimes watch television for their social relationships, not to
be entertained or find information. In this case, only particular programs are likely to be
the subject of their viewing, and, consequently, other programs might be not necessary.
According to Sawa (1994, 18), “Most people tend to watch the same programs with
high viewing ratings. . .It’s a case of me-tooism.” This attitude is in contrast sharply with
that of Americans who want to be able to choose by themselves what they will watch
(Stronach, 1992).

Hashimoto (1999) also points out the authoritarianism peculiar to Japanese,
taking the form of channel loyalty when they watch television. The conceptualization of
channel loyalty is a tendency to prefer watching programs on one channel over
programs on another (Wakshlag, Agostino, Terry, Driscoll, and Ramsey, 1983). For
example, Japanese generally have strong sense of trust toward programs, especially the

news programs, offered by NHK (Okamura, 1993). Hashimoto (1999) assumes that

17

Japanese are likely to watch only the few networks supported with this authority, even
in the multichannel environment.

Webster and Phalen (1997, p. 103) note, “Perhaps the most significant is
programming that caters to ethnic and racial minorities.” The U.S. is a multiethnic
nation, where people who have various ethnic backgrounds live together. While
assimilated into American lifestyles, many immigrants maintain their own ethnic
identities and culture. Given that media content is more or less influenced by culture,
the U.S. media should ideally reflect a multicultural society. Nonetheless, the
over-the-air broadcasters did not necessarily maintain the diversity of programming in
reality, as noted earlier. Accordingly, it is reasonable to assume that there was demand
for multichannel media in the U.S. in order to make diverse presentations based on each
culture. The Black Entertainment Network (BET) and Hispanic channels, such as Gala
Vision or Univision, are good examples that illustrate networks embodying each culture.
By contrast, Japan is basically regarded as a racially homogeneous nation, although
there are some minority groups. However, the largest group, residents from Korea, is
approximately 640,000, no more than 0.5 percent of Japan’s entire population (Statistics
Bureau and Statistics Center, 2001b). Compared to Americans, therefore, Japanese
might have less motivation to have a number of channels to receive diverse cultural
messages.

Assuming that Japanese in general do not demand a variety of television
programming as discussed above, it is possible that most Japanese television programs
resemble each other. That is to say, even if a number of channels are available by cable
services, diverse programs might not be offered. In respect of the program-type

diversity in Japanese television, Straubhaar’s observation ( 1988, p.321) deserves our

18

careful attention. He points out, “With one noncommercial/educational and five
commercial/entertainment television networks in Japan, there is considerable diversity
in conventional broadcasting, and, therefore, cable may not also be perceived as adding
significant diversity in video distribution.” The remark was made in 1988 when a
prototype of multichannel cable systems was just launched in Japan. This observation,
nonetheless, might still hold true under more advanced multichannel services today.
Kahaner (1996) asserts that Japanese viewers are not encouraged to subscribe to cable
television because of the widespread perception that the existing over-the—air networks
already provide adequate programming on various topics. Indeed, by research on the
international comparison of diversity in television programming, Ishikawa, Leggatt,
Litman, Raboy, Rosemgren, and Kambara (1994) discover that the overall diversity of
Japanese broadcasting in prime time is higher than that of the other countries included
in the study, namely, the U.S., Britain, Canada, and Sweden.

Importantly, Japan’s broadcasters are required by Article 3-2 of the Broadcast
Law to maintain a harmonious balance among the broadcast program-types by
providing general cultural educational programs as well as news and entertainment
programs. In order to ensure such a balance, a notification of the scheduling of
television programming was issued by the MPT in 1961 and—it remains the basis of
present-day programming (Tokinoya, 1996). Both NHK and commercial broadcasters
are obliged to assign a minimum of 20 percent of their programming schedules to
cultural programs and no less than 10 percent to educational programs, although there
are no special stipulations regarding the minimum ratios for news and entertainment
programs. According to Tokinoya, (1996), each television station is required to submit a

report detailing the proportion of these program types in its schedule. This obligation

19

might play an important role in ensuring diverse programming.

Some authors assert that Japanese over-the-air broadcasters sufficiently meet the
audience needs, and the fullness of this programming prevents multichannel cable
television from prevailing (N ishi, 1997; Shimbo, 2000). Stewart (1995) points out that
the limited variety in cable programming is the main reason of Japanese public’s poor
response to cable television. If broadcast networks air a wide variety of programming,
additional channels by cable subscription might not lead to the increase in the number
of program types available. However, it is unclear whether or not Japan’s over-the-air
broadcasting, consisting of only six networks, can achieve such a considerable degree of
program-type diversity as to meet most viewers’ preferences.

The degree'to which Japanese are satisfied with program-type diversity of
over-the-air broadcasting might be reflected in their choice of satellite television. As a
new type of video distribution system, satellite broadcasting has been slightly more
accepted in Japan than multichannel cable television. As of 2002, the number of
subscribers to multichannel cable and satellite broadcasting were approximately 13
million and 14.8 million, respectively (Ministry of Public Management, Home Affairs,
Posts and Telecommunications, 2002). However, it should be noted that in Japan,
“satellite television“ refers to two different systems: broadcasting via broadcasting
satellite (BS) and broadcasting via communications satellite (CS). The only CS
broadcaster, Sky PerfecTV, is substantially equal to its American satellite counterparts,
such as DirecTV or EchoStar. This can be defined as multichannel satellite television.
On the other hand, analog BS broadcasting, launched in 1989 by the strong promotion

of NHK, currently has only three channels, and hence it is inadequate to regard it as

20

multichannel media (Nozaki, 1998).6 In Japan, nevertheless, BS broadcasting is much
more popular than CS broadcasting at the moment. A list of those new video distribution

systems is shown in Table 5.

Table 5: New Video Distribution Systems in Japan

 

# of Subscribers # of Channels Monthly Basic Fee

 

 

 

Multichannel Cable Television 13. 0 Million‘ <60 3,980 yen‘
Satellite Broadcasting (BS) NHK 11.4 Mrllion’ 2 2,340 yen

WOWOW 2.6 Million’ 1 3,380 yen
Multichannel Satellite Broadcasting (CS) 3.4 Million‘ <17? 3,980 yen
N HK(Receiving Fee) 1,395 yen

 

1: As ofMar. 2W2; 2: As ofOct. 21112.3; As ofDec. 21112.4: As oflan 2003
‘: Chuge furl-COM Broadband(eMSO)
Sources: WOWOW (2N3); SkyPerfecTV (21113);
Ministry of Public Mmaernent. lbme Afters. Posts aid Telecammunicetbne 0002)

It is quite probable that most people are facing the alternative of BS or CS
broadcasting when they think about subscribing to satellite television because most
cannot possibly afford to pay double subscription fees. It is noteworthy that, as the
number of subscribers indicates, most Japanese have preferred to watch special
programming by NHK on BS broadcasting rather than multiprogramming by CS
broadcasting. Whether or not this propensity will be kept after the digitization of BS
broadcasting deserves further observation.7 At this moment, however, it appears that
Japanese prefer adding a small number of channels offered by BS to conventional

broadcasting rather than a large number of channels offered by CS.

 

6 NHK has two channels, BS] for world news and sports and BS2 for entertainment and culture. Japan
Satellite Broadcasting, a commercial broadcaster, has one channel named WOWOW (885), a premium
channel for movies and sports events. Those channels are also available on multichannel cable systems.
While NHK BS channels are generally included in basic channels, WOWOW is offered as a premium
channel. Technically, however, NHK has one more satellite channel used for pilot broadcasting in
high-definition television format.

7 The digitization of BS broadcasting in the end of 2000 encouraged the new entry of commercial
over-the-air networks into the market. Yet, almost all broadcasters adopted one hi gh-defrnition television
(HDTV) channel, instead of three standard-definition television (SDTV) channels. As a result, the number
of channels presented by digital BS broadcasting merely increased up to 16.

21

One view might be, “Now that Japanese preferences are sufficiently met by
over-the-air broadcasting, they no longer need the proliferation of the large number of
channels.” If conventional over-the-air broadcasting attains a sufficient degree of
program diversity that meets Japanese viewers’ needs, they might not feel the necessity

to subscribe to multichannel video services.

Causes Hampering the Subscription to Multichannel Media

It is possible that program diversity is not the only factor for many viewers to
determine the subscription to cable television. It might be useful to considering some
other independent variables possibly affecting media choices.

It has been proposed that the resistance toward subscription fees, which people
potentially feel, has resulted in the low penetration rate of cable television in Japan
(Matsudaira, Nakamori, Sudo, and Hattori, 1992; Ishimaru, 1994; Nishi, 1997). Viewers
can watch commercial terrestrial broadcasting for free. It is, therefore, likely that
viewers who are accustomed to free television feel uncomfortable paying subscription
fees for television reception. Shimbo (2000) assumes that because each television
household in Japan is in principle obliged to pay the receiving fee to NHK, it is quite
possible that most people no longer want to pay additional cash for television
reception.8 Ishimaru (1994) tests this theory with data. According to him, while the
subtotal revenue for pay-television and public broadcasting accounts for 35 percent of
the total revenue in the U.S. broadcasting industry and 24 percent in Japan, the
proportion of the revenue for pay-television is very different between the U.S. and

Japan, with 32.4 percent and 1.8 percent, respectively. Accordingly, he points out, “The

 

8 The receiving fee is 1,395 yen, about $11.62, per month as of 2002.

22

expenditure, which is perhaps allocated for pay-television, might be spent for the
receiving fees for NHK in Japan’s reality.” It is reasonable that many households cannot
afford to pay an additional charge for television viewing and, as a result, shelve their
plans for cable subscription.

A number of studies of media consumption claim that expenditures for media
remain a constant proportion (Baldwin et al., 1996). That is, households generally spend
on the media usage at a constant rate regardless of their income. The monthly average
net income per household in 2000 was $3499.17 in the U.S. (U .8. Census Bureau,
2001a). Because the monthly average subscription fee for the basic service in the U.S.
was $30.08 in the year (U .8. Census Bureau, 2001b), American households allocated
0.86 percent of their income for basic cableviewing. On the other hand, given Japanese
cable households, they allocate 1.06 percent of their net income for both the receiving
fee paid for NHK and cable subscription.9 Although the share of expenditures for
media usage is larger in Japan, it is not clear if the difference between the share in
American homes and that in Japanese homes, 0.2 percentage points, is so significant as
to deter Japanese from subscribing. It is ofien pointed out that many Japanese still
perceive cable television service as expensive and unappealing (Kahaner, 1996; Nishi,
1997; Shimbo, 2000). As far as subscription fees are concerned, it might be possible that
many Japanese are not willing to subscribe to cable services because the services are not
appealing in comparison to the cost, not because of a mere budget constraint in a

household finance.

 

9 The monthly average net income per Japanese household in 2000 was 508,984 yen, $4241.53 (Statistics
Bureau and Statistics Center, 2001a). As data for the average monthly subscription fee in Japan are not
available, the fee for J-COM Broadband in 2001, 3,980 yen, $33.17, is employed here. Accordingly,
Japan’s cable households have to pay $44.79 for television viewing ($11.62 for NHK and $33.17 for
cable viewing). All figures are converted at 120 yen to one U.S. dollar.

23

Next to a budget constraint, a time constraint should be taken into account.
Television viewing entails the expenditure of time. Especially for individuals who
esteem value of time, the time allocated for television viewing, an opportunity cost, is
significant (Kurokawa, 2000). The time allocated for television viewing will not double
even if cable subscription increases the number of channel options twofold. According
to Nagaya (1998), there is no difference in viewing time for Japanese to watch
television between before and after cable subscription. It is assumed that viewers choose
television programming so as to maximize utility within a limited amount of time
(Yuguchi and Yamauchi, 2000). If Americans have already allocated about as many
hours as possible to television viewing, it is probable that audience attention to cable
television comes at the expense of broadcast television (Webster and Phalen, 1997). In
contrast, as we saw in Table 3, even cable subscribers mainly watch programming by
broadcast networks in Japan. For many Japanese viewers, watching over-the-air
programming in a time constraint might be maximizing utility of television viewing,
possibly because broadcasting is more appealing to them than cablecasting.

As discussed above, whether viewers spend budgets and time for broadcast or
cable television might be greatly influenced by the audience appeal of a program. In
general, viewers are attracted to television programs that are produced with larger
production budgets (Owen and Wildman, 1992). It is true that broadcast networks have
ample production costs. For instance, NTV, one of Japan’s broadcast networks, has
production budgets ranging from 30 million to 50 million yen, from about 250,000 to
417,000 dollars per program broadcast during prime time. In the case of dramas, the
budget further increases up to 60 million yen, around 500,000 dollars (NTV, 2002). On

the other hand, it is said that the production cost for a program on cable networks is an

24

average of approximately 500,000 yen, around 4,200 dollars (N ishioka, 2000).

The gap in production budgets is caused by the difference in market size. Recall
that while over-the-air broadcasting is received by almost all households in Japan, only
26.8 percent of them can access cablecasting. Even for top-ranked cable networks by
subscriber counts, the number of subscribers is around 5 million, approximately
one-tenth of the potential audience reach by broadcast networks. According to Owen

and Wildman (1992):

Programs with wide geographic distribution can generally be expected to attract
the largest shares of audience because substantial cost savings can be realized by
spreading the fixed costs of production over as large an audience as possible,
and there is an incentive to produce more expensive programs when it is

possible to reach a large audience (p.52).

The gap in production budgets is visible in the quality of programs. As Owen and
Wildman (1992) assume, a producer can enhance the expected appeal of a production
by spending more money on the creative inputs of production, such as popular actors or
actresses, better writers, or special effects experts, all of whom affect the appeal of the
final product

Indeed, circumstances similar to this happen to producers in Japan’s broadcast
networks. As a result, it seems quite probable that high quality of programs offered by
over-the-air networks, sustained with higher production budgets, urges mass audience to
continue watching only over-the-air broadcasting. On the other hand, cable networks are

forced to produce or acquire programming with smaller production budgets.

25

Low-budget programs usually are not appealing to people, and hence people might take
a negative attitude toward the subscription to the media. There seems to be a vicious

spiral of low penetration rates and low production budgets.

The Focal Point

We will now return to the discussion of program-type diversity. Given
broadcasters providing mass appeal programming with ample production budgets, they
simultaneously fail to offer programming for minority tastes (Owen et al., 1974). As
discussed earlier, this actually occurred in U.S. commercial broadcast networks that
preferred programs producing large audiences over those catering to minority-interest
tastes. If mass audiences are worth more per viewer than minority audiences in the
advertising market, then this will cause less diversity and more duplication of programs
(Owen et al., 1974; Owen and Wildman, 1992). Yet, the programming strategies of
commercial channels might change as the number of channels increase. Minority tastes
will be served if the number of channels is large enough to exhaust the profits in
duplication, making programs for minority-taste audiences as profitable as
majority-taste programs at the margin (Owen and Wildman, 1992).

According to the theory, there seems no incentive for Japan’s broadcast networks,
which hold a dominant share in the video distribution industry, to offer diverse
programming, instead of mass appeal programming. Certainly, it would be incompatible
with the assumption cited previously that there is a possibility of considerable program
diversity in Japan’s over-the-air broadcasting. In order to shed light on this issue, we
need to observe the program-type diversity by Japan’s broadcast networks.

On the cable networks’ side, they might be able to meet the needs of viewers,

26

who seek programs that more closely conform to their preferences, by offering narrowly
targeted programming, even with their production budgets much smaller than those of
broadcast networks. Yet, given broadcast networks attaining a considerable degree of
program-type diversity, the audiences left for cable networks to target might be very
limited. In this manner, the programming by broadcast networks has an effect on
programming by cable networks. If diverse programming is offered by broadcast
networks, cable networks presumably have only two options: to develop further niche
programming in order to attract audience groups whose needs have yet to be fulfilled by
broadcasting, or to duplicate broadcast programming with much smaller production
budgets. Now that several multichannel video services are now available in Japan, what

types of programming is offered by the media deserves our careful attention.

27

CHAPTER 1: Definition of Program-type Diversity

According to Levin (1971; as cited in Napoli, 2001, p.125), diversity has
became a fundamental principle underlying evaluations of the performance of mass
media systems and the objectives of communication policymaking, so much so that,
today, an important measure of the quality of any media system or market is the
diversity of offerings available to the audience. Diversity has been described as one of
the paramount goals of broadcast regulation in the U.S. (Owen, 1978, p.43). The impact

of the goal of diversity is expressed best by the following quotation:

Diversity has come to acquire the status of an end in itself. . .a broad principle to
which appeal can be made on behalf of both neglected minorities and of
consumer choice, or against monopoly and other restrictions. (McQuail, 1992,

p.142)

Both social concerns, such as increasing minority presentation, and economic concerns,
such as eliminating monopolies can motivate diversity policies (Napoli, 2001).
Commenting on the situation in the U.S., Napoli (2001) identifies three
components of diversity: source diversity, content diversity, and exposure diversity.
Source diversity is divided into two subcomponents: ownership diversity and workforce
diversity. The former denotes the diversity of ownership of media outlets or of
content/programming, and the latter denotes the diversity of the workforce within
individual media outlets. The Federal Communication Committee (2000) argues that

promoting workforce diversity promotes ownership diversity, which in turn promotes a

28

greater diversity of content.

Content diversity includes program-type diversity, demographic diversity, and
idea diversity. Program-type diversity, the main theme of this thesis, will be examined
later in this chapter. The issue of demographic diversity is related to whether minority
and other demographic groups are portrayed on television in reasonable proportion to
their prevalence in society. Idea diversity refers to the diversity of viewpoints and of
social, political, and cultural perspectives represented within the media. According to
DeJong and Bates (1991, p.160), “The essence of the concern over media diversity is
based on the Jeffersonian concept that truth will emerge from the interaction and clash
of diverse opinions and information in the marketplace of ideas.” Increasing the
diversity of ideas was the central motivation behind the imposition and enforcement of
the Fairness Doctrine, as broadcasters were forced to provide a reasonable opportunity
for the presentation of all positions on matters of public importance (Lentz, 1996).

Exposure diversity is the diversity of content as received. Analysis of exposure
diversity would seek to answer questions, such as how many different sources are
audiences exposed to in their media consumption, or whether they are consuming
diverse types and formats of programming. Yet, such questions regarding the diversity
of content “as received” have gotten much less attention from policymakers, policy
analysts, and academics than questions related to the diversity of content “as sent”
(McQuail, 1992, p. 158-159).

We will then examine how to define program-type diversity. Program type
denotes a category of programming usually based on similarities in program content

(Webster, Phalen, and Lichty, 2000). Webster and Phalen (1997) note:

29

To stipulate a viewer-defined typology forces us to consider exactly what
categories of content are systematically related to audience likes and dislikes. In
theory, such a typology must mean that people like one type of program will like

all other programs of that type. (p.32)

Increased program-type diversity implies a closer matching of video products with
consumer tastes, which usually improves consumer welfare (Wildman and Owen, 1985).
As greater diversity of choices likely promotes greater consumer satisfaction, for the
marketplace of ideas to be effectively realized, there must be a substantial diversity of
products available, which translates into a substantial diversity of program options,
(Napoli, 2001). At the same time, as Turner (2001) notes, the program type, “genre” in
his phrase, operates as an important means of communication information about the
television text to prospective audiences. For audiences, program types play a major role
in how television texts are classified, selected, and understood.

Research on program-type diversity in entertainment content has usually been
focused on the number of different program types or the degree of choice, available to
viewers within or across different program sources (Dominick and Pearce, 1976; Litman,
1992; Grant, 1994). Levin (1971) and Litman (1979) identify two types of program
diversity: “vertical” diversity and “horizontal” diversity. Vertical diversity is the degree
of program-type diversity offered by a single network/broadcaster or a group of them
(e. g. broadcast networks or cable networks) over its entire schedule, judging whether
the network/broadcaster or the group presents a balanced schedule of programs.

Increase in vertical diversity, however, does not fully translate into increased

viewer options available at any point in time (Litman, 1979). We will assume that a new

30

type of programming is provided by all broadcasters at the same time slot. Whereas
program-type diversity within a broadcaster, vertical diversity, certainly increases by
adding the new type of programming, viewers have no options but the new type of
programming at that point in time. In order to correct this problem, horizontal diversity
should also be gauged. Horizontal diversity is the number of types available across all
networks/broadcasters in the market at any given time (Litman, 1992; Grant, 1994). In
other words, the vertical aspect of diversity can facilitate judgments of either individual
or groups of networks/broadcasters while the horizontal dimension will facilitate
assessment of how the groups or all networks/broadcasters simultaneously perform.
Thus, the diversity index should reflect horizontal quality as well as vertical quality

since both conditions contribute positive utility to viewers (Litman, 1992). ‘0

 

1° Litman (1992) defines vertical diversity and horizontal diversity as depth and breadth. Presumably,
consumers are interested in the characteristics, namely physical properties contained in goods, such as
size, shape, odor, and so on, rather than the goods themselves and possess preferences for collections of
characteristics. Hence, depth and breath may be considered equivalently as characteristics or product
attributes rather than products themselves. For instance, for some viewers, additional breath might be
more important than additional depth. See Litman (1992, p. 136-137, 154 footnote 2).

31

CHAPTER 2: Literature Review

In spite of a number of television studies conducted in Japan, there have been
few studies that focus on program-type diversity with some exceptions (e. g., Ishikawa
and Muramatsu, 1992; Nishino, 1994). Presumably, this is because multichannel media
have not been well developed, and possibly because the concept of diversity has not
taken the center of attention among Japanese media policy makers and scholars.

In the U.S., to the contrary, academic research on the subject appears to be
conducted on an active basis. Most important studies on television program diversity
have been conducted from an economic viewpoint. In Litman’s phrase (1992), diversity,
which obeys the laws of supply and demand, is more like an economic product than a
policy or performance goal. This assertion is very persuasive when we consider the
notion that commercial television is in principle a business. Owen et a1. (1974, p.4)
assert, “Television stations are in the business of producing audiences. These audiences,
or means of access to them, are sold to advertisers.” As Owen et al. note, what is
important here is that advertisers are interested not merely in the size of an audience,
but in its characteristics, such as age, sex, income, and other compositions of the
audience. Given that viewers are not homogeneous, it is reasonable to offer difl‘erent
types of programs as programming strategies.

In a model of program supply, Steiner (1952) concludes that monopoly yields
greater program diversity, whereas competitors engage in program duplication, and
hence diversity is undermined since they simultaneously offer programs that have the
largest number of viewers. Noll, Peck, and McGowan (1973) discover that new station

entry does not automatically guarantee greater diversity because of the tendency of

32

commercial broadcasters to maximize audience size by duplicating popular types of
programs rather than experimenting with different program categories. These findings
raise questions about any assumption of a positive relationship between an increase in
the number of outlets and program diversity. It is possible that new outlets may choose
to distribute programs that duplicate already available program types. We can recognize
from these theories that duplication of programs could be an obstacle that hinders more
diverse programming.

Nonetheless, as Owen et al. demonstrate (1974), we should note that snict
assumptions are required in order to produce Steiner’s conclusion in respect to program
diversity. These assumptions are as followings: (1) viewer groups are highly unequal in
size; (2) viewers watch only their first choices; (3) channel capacity is limited; (4)
competitors duplicating a program share audience equally; (5) all viewers are of equal
value to broadcasters; and (6) program costs are ignored. Modifying these unlikely
assumptions more realistically, Owen et a1. discover several critical points that were
missing in Steiner’s model. If viewers watch their second or third choices, and viewer
groups are not highly skewed in size, then competition is likely to provide more first
choices. Furthermore, under unlimited channels, minority programs, if preferred by
viewers and if economically viable, appear in addition to the duplicated programs.

As Owen et al. (1974) and Owen and Wildman (1992) point out, if mass
audiences are worth more per viewer than are minority audiences in the advertising
market, then this will cause less diversity and more duplication of programs. It seems
reasonable, however, that as the number of channels increases, advertisers who seek out
minority groups will find television increasingly attractive as an advertising vehicle.

Owen and Wild man (1992, p.92) note two important points: additional channels are a

33

necessary condition for specialized programs to appear, and program patterns must still
reflect advertisers’ values of exposure to viewers in addition to viewers’ value of the
programs.

At the same time, Owen and Wildman (1992) predict that, assuming that
program quality is measured in terms of viewer appeal, there is a trade-off between
program diversity, which increases with the number of competitors, and program quality,
which decreases as production budgets decrease in a competitive market. That is, with
the increase of channels, revenue per channel is likely to decline, partly because
audience per channel declines and the size of program investments that can be
supported by any given channel must fall as well, and partly because viewers have
closer substitutes available. Accordingly, given that larger production budgets generally
result in programming that audience find more attractive, the variability of quality raises
the possibility that viewer welfare may decline as diversity increases.

Other scholars conducted longitudinal research, which measures television
program-type diversity trends, or comparative research of program-type diversity across
sources, including broadcasting networks, superstations, and basic and premium cable
networks. In order to assess the diversity, some use measures or indices of program
diversity based on industrial organization measures of market concentration (Litman,
1992).

C ontrary to Noll et al. ’s finding noted previously, Levin (1980) concludes from
his research of horizontal diversity that an increase in the number of stations serving a
community leads to greater horizontal program diversity, the number of program types
available across all stations at any given time, and thereby stimulates higher total

television viewership within the local market. In addition, Grant (1994) finds that as the

34

number of channels within each channel type (broadcast network, basic cable,
superstation, and pay cable) increase, the horizontal program diversity within that
channel type increases. As an example, he takes Fox Network that should be a catalyst
for increased diversity in program types offered by the other three broadcast networks.
On the contrary to the horizontal program diversity, however, he also discovers that the
average vertical diversity of all channels within a given channel type is negatively
related to the number of channels within that channel type.

Dominick and Pearce (1976) classify broadcasting networks’ prime time
entertainment programs that started during the fall season of each year from 1953 to
1974 into fourteen categories. With the diversity index, they find that fewer and fewer
choices were available to the audiences and the network attention was being focused on
fewer and fewer topics. For instance, in 1974, three categories (action/adventure,
movies, and general drama) accounted for 81 percent of prime time, sending the
diversity index to its lowest value ever. They also find out the strong correlation
between profits and homogeneity, suggesting that the more money industry made, the
more the prime time schedules on the networks began to resemble one another.

Measuring the vertical diversity offered by each of the three major broadcasting
networks during the late 1970s, Litman (1979) discovers that there was a greater degree
of balance and a gradual increase in the diversity. Triggered by the success of ABC’s
aggressive and innovative programming in the 1975-76 season, a period of rival
behavior suddenly emerged, in which the networks broke out of their pattern of
imitation and became more willing to take chances on new types of programming and to
counter-program against their rivals. Litman (1979, p.405) notes, “This should mean

that the overall quality of the network schedule is improved and more viewers should be

35

enticed into watching a more diverse menu of programs.”

The Wakshlag and Adams study (1985) confirms the overall decline in program
diversity offered by networks over the thirty year period, except for an increase in the
late 1970s discovered by Litman, as noted above. Wakshlag and Adams find that there
was a sharp and enduring decline in diversity associated with introduction of the Prime
Time Access Rule (PTAR), which was intended to increase diversity.

DeJong and Bates (1991) extend the research on broadcast diversity to the cable
television industry. What they discover is channel capacity nearly doubled from 1976 to
1986, and both absolute and relative diversity significantly increased as well. ”
However, the rate of increase of relative diversity did not keep up with the growth of the
number of channels, indicating the prevalence of some duplication in filling new
channels.

Ahn and Litman (1997) compare the consumer welfare of integrated multiple
system operators (MSOs) with that of nonintegrated MSOs in service price and program
diversity. In the research, they find out that nonintegrated MSOs provided less diversity,
compared to the integrated groups. Among the integrated MSOs, however, the more
integrated the system, the less the diversity. This is because the natural propensity or
economic imperative to favor their affiliates in carriage decisions leads to the reduction
of the absolute and average diversity.

So far, we have seen that diverse programming is premised on the proliferation
of channels and the demand for specialized programs from viewers and advertisers. At

the same time, it is probable that program-type diversity does not increase as much as

 

” Absolute diversity is the number of different cable channel types carried by a local system divided by
the total number of channel types for the industry as a whole. Relative diversity is the number of different
cable types divided by channel capacity on the system.

36

the increase of the number of channels, because the duplication of programming might
occur at a given fixed point. Figure 3 illustrates a possible relation between the number
of different program types and the number of channels. As Owen and Wildman (1992)
point out, adequate channel capacity is a necessary but not a sufficient condition for
programs for a minority-taste audience to be available under profit-maximizing
ownership and advertiser support. Besides, program diversity is also determined by
other factors, such as policies (e. g. the PTAR). Those factors will be examined further in

the next chapter.

 

Figure 3: Nutrber of Channels and Program Types

 

i

/ _

 

 

/
/
/

/

 

 

 

# of Program Types

 

 

 

 

#ofdnmds

 

OwnCcnstruct

 

 

37

CHAPTER 3: Factors Affecting Program-type Diversity

It is likely that the diversity of programming results from the confluence of
various factors. It is, therefore, necessary to consider the causal factors related to
program diversity, although systematic studies focusing on the causality have been far
too few in number. It will be helpful to distinguish supply and demand side factors as
Litman (1992, p.147), who conducted one of the few studies, claims, “Diversity obeys
the law of supply and demand.” Demand side factors, such as discretionary leisure time
and income, or individual preference patterns, greatly affect program-type diversity
available to the individual. Similarly, supply side factors, such as the level of
technological development, the degree of regulatory and political control, and intensity
of competition, possibly impact on the number of channels offered and the diversity
within and across such channels (Litman, 1994). Here we will focus our attention only
on the supply side factors since the demand side factors, such as viewers’ preferences,
budget and time constraints, or ethnicity and national character, have already been

discussed in relation to the penetration of multichannel media in Chapter 1.

Ownership

Suppose that all broadcasting media are exclusively owned and operated by a
single owner, the owner can be a gatekeeper who has discretion to manipulate content.
As a result, there is the possibility that the content available is biased and the diversity
of programs is low. This theory is the basic premise of the decentralization of media
ownership and the rationale of the ownership regulation (Sugaya, 2000). Recall the

assumption that increased source diversity containing ownership diversity will increase

38

content diversity.

Take a recent event for example. In spring of 2002, some Hispanic groups asked
the Federal Communication Committee (FCC) to deny the various transfer applications
regarding NBC’s acquisition of the Telemundo Communication’s television stations, a
Hispanic television network. The groups suggested that NBC had failed to demonstrate
how the Telemundo stations would continue to meet the needs of the Hispanic
community when NBC takes over operations of the stations (FCC, 2002).

It is quite likely that the FCC’s approval was influenced by the decision made by
the U.S. Court of Appeals in Washington in February 2002, in which the court ordered
the FCC to reconsider the 35 percent of television station ownership limitation (Labaton,
2002). The Telecommunication Act of 1996, amending the 1934 Act, eliminated the
limit on the number of commercial broadcasting stations that a single company was
allowed to own, and raised the national audience reach limitation from 25 percent of
homes to 35 percent (Telecommunication Act of 1996, sec. 202 (c)). While the FCC has
long insisted that the rule is needed to ensure the diversity of media voices for the
public, the court held that the FCC had failed to adequately justifyits retention of the 35
percent cap. It is said that the FCC will not scrap the cap entirely but will likely increase
it dramatically (Higgins and McClellan, 2002). In the U.S., whether or not achievement
of diversity in program content is compatible with the duopoly, which might result from
the deregulation of television ownership cap, is a topic of debate.

In Japan, based on the principle of the decentralization of media ownership
provided in the Broadcast Law, the investment by commercial over-the-air broadcast
networks in other networks or stations is limited by less than 20 percent for those in

different markets and 10 percent for those in the same markets. Besides, the investment

39

in BS (broadcasting satellites) and CS (communications satellites) broadcasters is
restricted to less than one third of the target firm’s capital (Ministry of Posts and
Telecommunications, 2001).I2 It is obvious that these rules intend to secure diverse
information sources and diverse content, as well as to prevent a company from
dominating in the market, and, as a result, to make the market competitive.

In reality, nonetheless, the way that broadcast licenses are awarded is

controversial in Japan. According to Weinberg (1991):

Japan’s system of bargain-oriented license allocation has been criticized for
centralizing media power, promoting blandness in broadcast content, and
encouraging an active political role in the licensing process. . .The Japanese
approach rejects the basic philosophy of diversity and is designed to keep
control of broadcast licenses within the circle of the socially and politically

influential. (p.729)

When there are a number of applicants for a single license, the MPT (the authority of
broadcast regulation) facilitates the creation of a joint venture representating all
influential applicants rather than engaging in a competitive selection process (Weinberg,

1991; as cited in Cooper-Chen, 1997, p. 180).

Competition
Whereas diversity and competition are related concepts, the diversity principle

encompasses the “characteristics” of the marketplace participants, and the competition

 

'2 All broadcast networks were obliged to set up subsidiaries when entering the digital BS broadcasting

4O

principle generally focuses only on the “number” of marketplace participants and their
market shares (Napoli, 2001). Nevertheless, competition is likely to result in program
diversity as Litman (1979) finds that competition is correlated with diversity of program
types. The more the number of competitors, the more differentiated programming
services are expected to become (Waterman, 1992).

When competition is limited and all major competitors are sharing equally in the
success of business, they have little motivation to try the untested (Walker and Ferguson,
1998, p.23). As we discussed earlier, this had been the case for the U.S. broadcast
industry by the late 19703 where three relatively competitors, CBS, NBC, and ABC,
used the same formulas and strategies. The rationale for this is explained best by Litman

(1979):

Full-fledged competition seldom takes place in oligopoly markets because every
attempted price cut, new advertising campaign, or new product innovation
invites a retaliatory response in kind from one’s competitors. . .Through mutual
agreement and cooperation on maintaining high prices, low input prices, or
limited advertising expenditure, the industry’s profits will be higher and each

firrn’s share of those profits will also be greater than if it acts independently.
(p.394)

Cable television grew in such oligopolistic video market, responding to people who had
an unfilled demand for conventional broadcast programming. Cablecasters did make the

U.S. video distribution industry more competitive, by increasing the number of

 

business.

41

marketplace participants and eroding the share of conventional broadcast networks.
In contrast, in Japan, six broadcast networks with general programming had
already been launched by the early 19805. In such a competitive broadcasting market
that is unlike any other in the world, each network has long adopted the strategy of
counterprogramming.l3 Given that Japan’s over-the-air broadcasters attain the
considerable degree of program-type diversity, this could be a result of fierce
competition among broadcasters. On the other hand, it is unclear if cablecasting
significantly contributes to further competition in Japan’s video distribution industry.
Hasegawa (1998) observes more competition in the multichannel television market,
caused by the deregulation of the cable and satellite television industries by the Ministry
of Posts and Telecommunications. It is true that the number of players in the market
increased by the proliferation of cable networks, but cablecasting has so far rarely

affected the audience share by broadcast networks.

Policy and Technology

How does policy making influence the development of technology, such as cable
television, and make more diverse programming available? As Owen et al. (1974) point
out, the key point is that diversity is functionally related to technological factors
affecting the number of channels.

Early in its history in the U.S., cable television captured the imagination of
communication policy makers who saw more promise for the medium than the products

of limited-channel commercial television. Cablecasting was expected to fulfill various

 

'3 Counterprogramming means scheduling programs to pull viewers away from the competitors by
offering something of completely different appeal than the other shows. This strategy relies on finding a
large, ignored group of viewers and scheduling a program for them (Eastman, 1993).

42

promises that were not achieved in limited-channel commercial broadcasting, one of
which is to ensure diversity (Baldwin and McVoy, 1988; Sugaya, 1997). As discussed
earlier, the deregulation in the late 19705 and the success of the national satellite
distribution system spurred cable television to become a true maltichannel medium
(Baldwin and McVoy , 1988; Parsons and F rieden, 1998). Policy makers,
acknowledging the uniquness that cable television had, introduced laissez-faire
philosophy into the cable market. Based on this philosophy, many of the largest multiple
system operators (MSOs) joined to become even larger, and new media entrants injected
fresh capital into cable (Parsons and F rieden, 1998, p.59).

However, what kind of programming was desirable for the MSOs with a number
of channels? There'was a limit to the number of program networks that can succeed
with mass appeal programming made for the aggregated audiences. Broadcast networks
and most stations were programmed for mass market advertisers, for whom the large
audience were efficient. However, as the number of channels of programming increased,
the average size of the audience available for each channel became smaller and smaller,
eventually allowing a programmer to maximize audience size with narrow appeal
programming. In attempting to disaggregate the audience, the cable programming
sometimes called “narrowcasting” and the networks called “niche channels” were
created (Grant, 1994; Baldwin et al., 1996). ‘4 As Owen and Wildman (1992) note,

cable television with the unlimited channels enabled minority programs to appear. '5

 

" Eastman (1993) points out that niche service should be based on two intertwined elements: the content
and the target. For instance, CNN has a broad audience with narrow content; Nickelodeon targets a
narrow audience with a broad range of content; and MTV combines restrict content range and narrowly
defined audience. For convenience, I identify those networks as “narrowly targeted networks” in this
thesis.

'5 It should be noted that MSOs today have unhealthy control over the creation and distribution of cable
programming by virtue of the relationships, in which MSOs invested, often heavily, in neophyte
programming service. Vertical integration between M805 and cable networks generates unexpected result.

43

In contrast to U.S. cable television, its Japanese counterpart has not functioned
well as the media that provides sufficient program-type diversity (Stewart, 1995;
Yoshida, 2000).16 As we discussed earlier, cable television had long been regarded as
no more than ancillary to over-the air broadcasting, and the unique characteristics had
been omitted until recently. As a result of deregulation in 1993, however, cable
operators are no longer restricted to a single, local area and can acquire content from a
variety of pipelines (Sky PerfecTV, 2001). Hasegawa (1998) notes that Japan’s current
deregulatory climate and media market offer great opportunities for content providers
because of a growing need of entertainment programs from cable and satellite television

service providers.

Syndication Market

In the U.S. many of the cable networks or independent stations relied on the
syndication market for programming (Baldwin etal., 1996). Waterman and Grant
(1991) discover that aftermarket programming on cable television accounts for a major
portion of cable television menu and a still higher proportion of cable viewing. The
Financial Interest and Syndication (F in-Syn) Rules, initially adopted in 1970, aimed to
limit broadcast networks’ control over television programming and thereby encouraged
the development of a diversity of programs through diverse and antagonist sources of
program services (FCC, 1993). Although the rules were repealed in 1995, they certainly
revitalized the syndication market. Chan-Olmsted (1991 , p.9) defines the syndication

industry as “a primary alternative to broadcast network program distribution.”

 

According to Ahn and Litman (1997), “Absolute and average diversity decrease as the number of affiliate
networks increases.”
'6 As of 1997, Cooper-Chen asserted that narrowcasting did not exist in Japan and a few broadcast outlets

44

What is important is that most programs produced for broadcast television are
not owned by the networks that air them but by the production companies that created
them (Parsons and Frieden, 1998). Almost all of the popular entertainment programs
have two runs on broadcast television and then, having made a reputation on a broadcast
network, continue in circulation in additional exhibition on individual broadcast stations
and cable systems (Baldwin et al., 1996, p.95). In addition to off-network network
programming, syndication includes first-run syndicated materials. Eastman (1993)
classifies syndicated programs into the following eight types: situation comedy,
action-adventure, talk, magazine, reality, games, children’s, and weeklies. It is probable
that the established syndication market plays a role for cable networks to acquire
diverse types of programs from a number of producers. '7

While television programs are essentially the products physically reusable, the
environment for rerun on other networks or multiuse of programs has yet to be created
in Japan (Kudo, 1998; Nishioka, 2000). The absence of a mature aftermarket possibly
has an extreme effect on programming in multichannel media. Japan’s cable networks
are facing serious shortage of programs (Okamura, 1993; Shimbo, 2000). For cable
networks whose production costs are not ample compared to those of broadcasters,
whether they can secure programs might be a matter of life and death.‘8 In Japan
over-the-air broadcast networks produce over 90 percent of programming under their

own rights, and broadcast rights for programs usually attributes to the networks. Those

 

could serve large audiences.

'7 Waterman and Grant (1991, p. 183) note that cable’s afiermarket role is sharply dichotomized along the
lines of fictional versus nonfictional program formats. According to them, to an overwhelming extent,
aftermarket cable programming consists of fictional programs, such as dramatic and animated format
programs.

" The average production cost for cable programming, 500 thousand yen, is much less than that of a
broadcast programming, tens of million yen (Nishioka, 2000).

45

programs, especially entertainment programs, are all too often produced with the
cooperation of program production companies. Yet, there are few examples where
program production companies, which are positioned as subcontractors and have little
bargaining ability to networks, can absorb the production cost and sell finished
programs as packages to networks. In addition, the handling of rights necessary for
reruns, for instance neighboring rights or publicity rights, is tied up in red tape
(Sunagawa, 2000).'9 For these reasons, the frequency that network programming is
secondarily used is low in Japan. Nishioka (2000) asserts that in Japan programs are
basically produced on the premise that they are aired only once in their first runs, and,
indeed, while for movies, revenues by multiuse (e.g. via telecasting or video packages)
account for 77 percent of all, the ratio for television programs is just 4 percent
(Nishioka, 2000).

Unlike in the U.S., there had been few demands for syndication markets in Japan
until recently when outlets proliferated.20 With the rise of multichannel media, however,
the necessity of syndication markets is often discussed in Japan (Nishi, 1997; Nishioka,

2000).

 

'9 For a program to be rerun, the minimum requirements are the licenses from the owner of a copyright
(broadcast networks), scriptwriters, all performers appearing on the program, and record companies
associated with all music used in the program. Sunagawa (2000) assumes that cable networks with small
production budgets, about 500 thousand yen or 4 thousand dollars per program, cannot afford even to
handle those rights.

2° There are only 13 independent stations. Network-affiliate local stations can be provided programs by
networks as much as they want.

46

CHAPTER 4: Research Questions and Methodology

Based on what we have discussed so far, we propose three research questions
related to program-type diversity.
RQl: How many diflerent program-type Options are ofl'ered by Japan is broadcasting

and cablecasting for each one-hour period? '
With this question, we will examine horizontal diversity, that is, the number of different
program types available at a given hour across all broadcast networks and then all
networks/broadcasters included in a cable service. In addition, horizontal diversity in
other optional combinations of media, such as over-the-air broadcasting plus satellite
broadcasting, will be researched.
RQ2: What is the degree of diversity in programming by a network/broadcaster?
This research question is regarding vertical diversity. We will research program-type
diversity within an individual network/broadcaster. In other words, how much the
programming by an individual network/broadcaster concentrates into a particular type
will be examined.
RQ3: Which one, broadcasting or cablecasting, oflers more diverse programming?
As overall diversity, vertical diversity in broadcasting and cablecasting will be
examined in order to make sure which offers more diverse programming. We will
discuss the degree of diversity in aggregate programming by broadcasting and by
cablecasting. Besides, as well as research question 1, vertical diversity in other optional
combinations of media, such as over-the-air broadcasting plus satellite broadcasting,

will be examined.

47

Research Method

In order to ensure that each day of weekdays was represented and to examine a
typical programming schedule during weekdays, a five-day composite week for August
2002 was constructed. The study used a sample of one Monday, which was drawn at
random from the four Mondays in the month, one Tuesday, and so on, until all
weekdays had been included. For the sampling, a random number table containing from
1 to 31 was used. The number hit on the table was chosen as a date representative of
each weekday. When the number representing the same day of a week was hit again, for
example 19 after 26, both of which represented Monday, the second number was
ignored. In this manner, August 7 (Wed), 13 (Tue.), 16 (Fri.), 22 (Thu), and 26 (Mon.)
were selected. Note that Japan’s networks do not have special summer schedules, unlike
their American counterparts, and hence August is not a time for reruns or tryouts of new
series in Japan. On the days selected, coders observed the programming schedule of
Japan’s broadcasters and cablecasters. The time frame was five hours a day, from 6 pm.

to 11 pm.“

Program-type Categories

The problem that we had to consider next was categories chosen for program
placement. The outcome of program-type diversity measurements can be greatly
influenced by the choice of the number of categories and their appropriateness (Litman,

Hasegawa, Shrikhande, and Barbatsis, 1994). Nonetheless, researchers have seldom

 

2' This time frame follows Youn’s observation (1993). There is considerable validity in choosing the time
frame since it covers hours containing the largest number of audiences and hence the most critical daypart
for networks. It is assumed that diverse audiences watch television during the time frame. For reference,
prime time consists of the hours from 8 pm. to 11 pm. during Monday through Saturday, and 7 pm. to

11 pm. on Sunday. In Japan, the time frame from 7 pm. to 11 pm. is often called “golden time".

48

relied on the same typology of program categories. For instance, Wakshlag and Adams
(1985) assign programming into 37 program-type categories, much more than the 14 in
Dominick and Pearce ’s study (1976). In the extreme, it could be argued that every
program is unique in and of itself and hence should occupy its own program category
(Litman, 1992, p.128).

Indeed, Litman et a1. (1994) note that one of the most complex and disputatious
aspects of research measuring diversity is the decision concerning the number of
categories chosen. They identify fifteen categories (see Table 6). What is unique is that
narrative fictional stories are divided into three categories, depending on whether they
are created specifically for television or have origins in cinema or on the theatrical stage.
According to Litman et a1. (1994, p.136), “The form of the originating media plays a
critical and different role in the story telling process, thereby mandating separate
categories rather than a single narrative drama area.” In addition, what draws our
attention is that the relatively uncommon types, religion and minority, are categorized

independently. These categories reflect religious and ethnic diversity in the U.S. well.

Table 6: Program-type Categories by Litman et al.

'I'V Narrative Game
Cinema Narrative Sports
Theatrical Narrative ArtsfMusic
Documentary Children
News/Current Afi'airs Religion
Educauonflnstructional Minority
Hobby/Personal Interest Other
Variety/Show

Youn (1993) categorizes programs into twelve types as shown in Table 7. Youn
never refers to the definition of these categories. Thus, how some categories, such as

lowbrow amusement, contest, classic, and war/crime, are exactly defined is not clear.

49

Additionally, the categorization lacks some typical program types, movies and

children’s programs.

Table 7: Program-type Categories by Youn

Sports Talk! Soap
News Popular Music
Educ ationaVIriformahonal Classic
Lowbrow Amusement Contest
Dramatic Story WarICrime
Comedy Other

We then look at studies conducted in Japan. Kamijo (1998) lists thirteen genres
in his research of audience behavior (see Table 8). Wide shows, which are targeted at
housewives and thus broadcast the whole morning and afternoon, mainly deal in
show-business gossip and scandalous news. Interestingly, animations are separated from
children’s program although most of them are certainly targeted to children and
youngsters in Japan. The separation of animation from children’s programs is also found

in the next example of categorization.

Table 8: Program-type Categories by Kamijyo

News Animan'on
Drama Quiz Show
Variety Show Music
Hobby Sports
Culture Movie
Wide Show Other
Children

Video Research, a Japanese audience ratings organization, uses categories
shown in Table 9 (Kambara, 1992). What catches our eye here is the categorization for
three types of dramas. While Litman et al. (1994) classify narratives according to the

origins, Video Research categorizes dramas by the detailed genre. The difference

50

between commentary and sports event is not clear.

Table 9: Program-type Categories by Video Research

News Reports Children's Program
Commentary Ordinary Drama
Education and Culture Historical Costume Drama
Practical Use Thrillers and Action Drama
Music Comedy

Quiz and Game Theater Film

Entertainment Sports Event

Cartoon and Comic Other

Comparing four types of categorization in both Japan and the U.S., we notice
that they are much the same except for a few differences, which are probably based on
the national character or a component of a nation (e. g. religion or minority in the U.S.).
For example, eight out of fifteen categories identified by Litman et al. are precisely
congruent with those by Video Research. In addition, some categories, such as variety
and entertainment, or hobby/personal interest and practical use, may be synonymous.

Considering the four types of categorization above, we selected the program
types for our research. The fourteen program types are shown in Table 10. These
fourteen categories are mutually exclusive, and every program falls into one and only
one of the categories. They include the reality show category, which is a relatively new

but essential genre on modern day presentation of television, in addition to well-known

genres.
Table 10: Program-type Categories
News Reality Show
Sports Music
Drama Culture
Movie Hobby/Practical Use
Entertairimenthariety Education
Quiszame Children
Comedy Other

51

Clear definitions are required for all categories. The news category includes
daily newscast, news shows, news documentary, and discussion and interview programs
dealing with current affairs. The sports category contains sports events regardless of live
or taped broadcast, sports documentary, and interview programs featuring athletes. The
drama category involves all genres of drama originally produced for television, such as
ordinary drama, the mini-series, the police series, costume drama, and so on. Soap
operas are included in this category. Similarly, the movie category basically contains all
genres of movies that have origins in cinema. In addition, TV movies originally created
for television are included in this category because of their format, such as length.

The entertainment/variety category contains so-called variety shows. They are
usually taped in studios and are composed of conversation among the hosts and
entertainers or celebrities and light entertainment performances. The quiz/ game
category includes shows in which participants win or lose through quizzes or games.
Some programs categorized into the entertainment/variety category might contain a
game or quiz. The boundary line between them is whether or not the game or quiz
comprises the heart of the program. For instance, some Japanese variety shows might
contain quizzes or games as a part of the entire composition. These quizzes or games are
intended to warm up conversations after them. In these cases, the emphasis of programs
is obviously laid on the conversations, rather than quizzes or games themselves. The
comedy category includes stand-up comedy or situation comedy. The only object is to
get a laugh from the viewers. Specific difference between the entertainment/variety and
the comedy category is that there is usually no host in programs contained in the latter
category.

The reality show category involves programs filmed outside studios, and the

52

stories usually comprise of introduction, development, turn, and conclusion although
they are ostensibly nonfiction. A reality show is referred to as “document variety” in
Japan. The difference from authentic documentaries is that there exist characters
premised on filming and various directions in reality shows. The music category
includes live or taped music performances. Like the quiz or game in the quiz/game
category, the heart of programs classified in the music category is music itself. This
differentiates the music category from entertainment programs, which include music
performance as a part of the composition.

The culture category includes travel, history, nature, or art. Nonfiction
documentary films that deal with such topics are categorized into this area. The
hobby/practical use category contains a wide range of programs in such areas as health,
cooking, fashion, living information, or other personal instruction techniques.
Compared to the culture category whose emphasis is usually put on introducing an
unknown or inaccessible world, the hobby/practical use category deals with viewers’
near affairs. This category is collectively called an informative program in Japan. The
education category involves academic, formal instructional programs. The children
category includes programs specifically produced for and targeted at children. Movies
and dramas for children and cartoons are contained in this category. Finally, the other
category is the residual for programming that does not apply to any of the categories
above.

It might be found that the categorization excludes two common genres:
documentary and talk show. Because these programs have a wide application, it would
be a stretch to identify them as their own categories. Rather, it is valid to segment them

into the news, sports, culture, or hobby/practical use category according to their main

53

themes. For instance, a documentary program depicting a life of a movie star should be

classified into the movie category.

Sample Networks
Table 11 shows Japan’s over-the-air broadcast networks, consisting of five

commercial broadcasters and one public broadcaster with two channels.

Table l 1: Over-the-air Broadcast Networks

 

Commercial Broadcast Networks Public Broadcast Network

 

NTV N HK (General Channel)
TBS N HK (Educational Channel)
CX
AN 8
TX

 

The diversity of program types ofl‘ered by Japan’s over-the-air broadcasting was
compared with that offered by Japan’s cablecasting. The networks/broadcasters included
in cablecasting were listed in Table 12. They are all offered by Jupiter
Telecommunications (J-COM Broadband), Japan’s top MSO, at the service areas in
Tokyo.22 The sample of 27 cable networks exhaustively covered all cable networks
contained in the basic service as of August 1, 2002.23 Additionally, some premium
networks were added on the grounds that they are definite features in cablecasting
(Dizard, 1997). Consequently, the sample of Japan’s cablecasting covers 41

networks/broadcasters: 7 channels by 6 over-the-air broadcast networks, 2 independent

 

22 J-COM Broadband serves in 21 managed franchises, most of which are located around large cities,
such as Tokyo, Osaka, Sapporo, and Fukuoka. It was established in January 1995, as a joint company of
Sumitomo Corporation and Tele-Communications, Inc (TCl). The current principal shareholders are
Sumitomo, Liberty Media, and Microsoft. As of the end of December 2002, the number of households
subscribing to J-COM TV is 1,422,800 (Jupiter Telecommunications, 2003).

23 The sample, however, does not include Home Channel and Weather Channel because data on their
programming schedules were not available.

54

stations, 27 basic cable networks, 2 satellite broadcasters, and 3 premium networks.

Table 12: Networks/Broadcasters Included in Sample Cablecasting

 

Commercial Broadcat Networks Basic Cable Networks Satellite Broadcasters
NTV Super Channel ' NHK BSl
TBS FOX NHK BSZ
CX AXN
AN B Channel NECO Premium Networks
TX J tdaigeld (l-Iistortal Costunn Drum) Ch. WOWOW‘
Nihon Eiga (lap-nee Mav‘n) Channel Star Channel
Public Broadcast Network CSN Movie Eisei Gelojyo (Satellite nearer)
NHK General Space Shower
NHK Educational Viewsic
MTV
Independent Stations Sky A
T'VK Gaora
NIX J Sky Sports 1
J Sky Sports 2
J Sky Sports 3
Golf Network
LaLa TV
Discovery
Animal Planet
History Channel
Igosyog' (Japanese Class) Channel
CNN International
Nikkei C NBC
Family Geldiyo (Family Thu-r)
Kids Station
Catoon Network
Animax

 

 

 

 

 

‘: This catsgorizationforWOWOWrsqu’resfintheruplanationlna sense ofbeing detaibutedviaebroedeasting satellite,
WOWOW should be clessifisdinto satellite broadcasters. However, while I‘ll-{Ks satellite services are generally inchrdedin
abasie cablepack. WOWOWismsspeetedlyoflesedasaprerniunchanneLSineethisthesisintendsecorapemivesmdy of
thsprograraningbybroedeastingendceblscasu'n‘itis appropriatetofollowthenosmofceble paekegahere.

Coding

In the research, two coders conducted the categorization of all programs into
each program type. Ideally, coders should watch all subject programs and categorize
them into one of the program types. Nevertheless, Japanese programs are obviously not

available in the U.S. where the coding was conducted. Coders, therefore, physically had

55

no choice but to refer to secondary sources, such as web sites or television magazines,
to gather data about Japanese programming schedules and the details of programs. In a
case that two coders categorized a program differently, full consensus was reached

through the discussion between them, and a code was entered.

Measurement and Assessment

For the calculation of horizontal diversity, the number of different program-type
Options offered by broadcastinycablecasting for each one-hour period was counted. The
number of options available would vary from one where all networks/broadcasters offer
same type of programming to fourteen where each type of programming is offered by at
least a network/broadcaster. For the average number, the sum of program-type options
on each hour was divided by 25 (five hours per day multiplied by five days).

In order to measure vertical diversity for an individual network/broadcaster and
overall diversity for groups (e. g. over-the-air broadcast networks), the
Herfindahl-Hirschman Index (HHI) was employed. HHI can be expressed in the
following mathematical formula: Hi=£p|’. This measure involves summing the squares
of each program type’s share of the total hours of available programs. The higher the
HHI, the greater the concentration of programming into a few program types and hence
the lower the amount of the diversity (Litman, 1979, p.403). Thus, the Hill declines
with increases in the number of program types and equality among the program types. If
14 program types based on the categorization in our research are offered at the same
amount, the index is 0.07. To the contrary, if a network/broadcaster provides only one
type of programming, the index is 1.00.

Some might wonder why the HHI was not employed to measure horizontal

56

diversity in this research. This is because counting the number of different
program-types at any given point in time, relative to measuring the equality/inequality
of programming, more clearly illustrates the range of options available to viewers. On
the other hand, counting the number of different program-types within an individual
network/broadcaster might be inadequate as a diversity measurement. The programming
of a broadcaster that allocates 90 hours to a program type and 10 hours to 9 other
program types is not as diverse as the programming of another broadcaster that allocates
100 hours to 10 program types equally. Thus, we employed the HHI to measure vertical

diversity.

57

CHAPTER 5: Results and Analysis

Intercoder Reliability

Table 13, 14, 15, 16, and 17 show programming during the evening schedule
from 6 pm. to 11 pm. Intercoder reliability for coding was 83.2 percent (1042 out of
1252 programs). Disagreements were often found between the culture and the
hobby/practical use category. This seems to stem largely from the fact that it was often
hard to distinguish if a program contained in either of those categories was only for
appreciation or for practical usage. For instance, a program dealing with epicurean food
of the world might be categorized as the former and that introducing recipe in local
restaurants as the latter. Yet, it depends on viewers whether to watch the content for
appreciation or for cooking or eating. The boundary line between those categories was
sometimes very obscure.

Additionally, hybrid of genres was observed in some programs. Entertainment
programs especially tend to incorporate other elements, such as a quiz, music, or videos
edited as a reality show. As an extreme case, a program identifies itself as a news variety
show. This is the program in which some comedians and entertainers make jocular
remarks about news events, mainly bizarre ones. In these cases, coders decided the
category the program was placed in, considering which elements formed the core in the
program. That is, this process was based on fairly subjective judgments and

occasionally led to dissention.

Horizontal Diversity

First, we will discuss research question 1: how many different program-type

58

options are available on broadcasting and cablecasting for each one-hour period. As
shown in the column under “Commercial Over-the-air Networks” of Table 18, five
commercial over-the-air broadcast networks provide 3.68 types of programming on
average. There is not too much duplication of programming among the networks
because of the counterprogramming strategy employed by them. Out of 25 hours for the
observation, five different types of programming are provided in 6 hours and four types
in 11 hours. That is, viewers are offered more than four different types of programming
by five commercial broadcast networks at 68 percent of the sample time slots.

The programming schedule at 7 pm. on August 7 might be a good example to
illustrate the counterprogramming (see the top five rows under “7:00-8:00” of Table 13).
A variety show, a sports program, a culture program, a reality show, and a children’s
program are offered by five different commercial broadcast networks. On the other hand,
a few number of program-type options are available at 6 pm. This is because four out of
five commercial broadcasters allocate this time slot for news. During 9 pm. and 10 pm.
on August 7, three commercial broadcast networks offer dramas (see Table 13). It is,
however, important to consider that each drama certainly targets narrowly segmented
viewers, such as youth, housewives, and elderly. This is a good example to show how
the decision concerning the programming category influences the outcome of
program-type diversity measurements. In this research we lumped all dramas together
regardless of the detail of content or targeted audiences. If we had more segmented
categories, such as a historical drama category and a soap opera category, in addition to
an ordinary drama category, three different types of programming would have been
offered by the three broadcast networks. On the other hand, it is likely that the

audiences for variety shows are not so narrowly segmented by content as those for

59

Table 13: Programming on Aug7 (Wed)

6:00-7:00 7:00-8:00 8:00-9:00 900-1000 1000-11 00

3
3
5
l

Chaml

AXN
Chanml NECO
Ch
Ch

Slower

MTV

A

Gun
.1 l
J 2
J 3
Golf Network

Labs TV

Ch.
Ch.
CNN Intl
thhi CNBC

Kids Station
Cartoon Net.
am

NHK BSl

NHK 352

WOWOW
Star Chantal
Eisei 7

 

1: News, 2: Sports, 3: Drama. 4: Maine, 5: EntertainmenWariety 6: QuidGame, 7: Comedy.
8: Reality Show, 9: Music, 10: Culture. 11: HobbylPractical Use, 12: Education 13: Children.
14: Other

60

Table 14: Programming on Augl3 (Tue)

8 00-900 9:00-10:00 1000-1100

6:00-7:00 7:00-8:00

l

l
l
l

13

Ch
Ch
CNNIntI.
NikhsiCNBC

Kids Statbn
Cartoon Net.
Animas
NHK BSl

NHKBS2
2

4
3 l4 l3

1: News, 2: Sports, 3: Drama, 4: Movie. 5: Entertainment/Variety, 6: QuidGame, 7: Comedy,
8: Reality Show, 9: Music. 10: Culture. 11: HobbylPractical Use. 12: Education 13:Chi1dren.

14: Other

 

61

Table 15: Programming on Aug.l6 (Fri)

6:00-7:00 7:00-8:00 8:00-9:00 900-1000 10 00-1100
5 8

Shower
Viws‘s:

MTV
A
Gore

1 l
J 2
J 3
Golf Network

 

l4
1: News, 2: Sports, 3: Drama. 4: Movie, 5: FntertainmenWariety, 6: QuidGame, 7: Comedy,

8: Reality Show, 9: Music, 10: Culture, 11: HobbyIPractical Use. 12: Education. 13: Children,
14: Other

62

Table 16: Programming on Aug 22 ('Ihur.)

9:00-1000 1000-1100

6700-700 7:00-8:00 8:00-9:00

5
3
3

1

Ch
Ch.
CNN Int].
Nikkei CNBC

Kit Stat'nn
CartoonNet.
Anita:
NHK BSI

NHK BS?
WOWOW
StarChannl 4
Eiei l3
1: News, 2: Sports, 3: Drama. 4: Movie, 5: EntertaimnenWanety, 6: QuidGame, 7: Comedy,
8: Reality Show, 9: Music, 10: Culture, 11: Hobbnyractical Use. 12: Education. 13: Chilm

14: Other

1
l3
9

 

63

Table 17: Programming on Aug 26 (Mon)

6:00-7:00 7:00-8100 8:00-9:00 9:00-10:00 10:00-11:00
l 13 5 ll 3

l
1
l

AXN

Ch
Ch.

Show

MTV

A

Gore
J 1
J 2
J 3
Golf Network

 

1: News, 2: Sports, 3: Drama. 4: Movie, 5: Entertainment/Variety, 6: Quiz/Game. 7: Comedy,
8: Reality Show, 9: Music, 10: Culture, 11: Hobby/Practical Use, 12: Education, 13: Children.
14: Odier

64

Table 18: Horizontal Diversity

 

 

 

 

 

 

 

 

 

Commercial 07')! All OTA OTAmd Non 0734 All Total W70
Morksfi) Networksfl) Wind?)— Networksflt) Totolfll) Prm‘umfld)
A A+B A+B+E C+D+E+F A+B+C+D+E+F A+B+C+D+E
Aug 7
6pm-7prn 2 2 3 9 9 8
7pm-8prn 5 7 7 9 ll 11
8pm-9pm 5 7 8 8 10 10
9pm-10pm 2 4 8 8 9 9
10pm-l lprn 3 4 6 10 11 11
Aug 13
6pm-7pm 2 3 3 9 9 8
7pm-8prn 4 6 6 9 l 1 ll
8pm-9pm 5 7 8 8 ll 11
9pm-10pm 4 5 7 8 10 10
lOprn-l 1pm 4 5 7 9 9 9
Aug 16
6pm-7prn 2 2 4 9 9 9
7pm-8pm 5 8 8 ll 12 12
8pm-9prn 4 6 7 9 1 l 10
9pm-10pm 3 4 5 9 9
lOpm-lljm 5 5 5 9 10 10
Aug, 22
6pm-7prn 2 2 3 9 9 9
7pm-8pm 5 7 8 9 l 1 ll
8pm-9pm 4 6 7 8 9 9
9pm-10pm 4 6 7 8 9 9
10pm-11pm 4 4 5 10 11 11
Aug. 26
6pm-7pm 2 2 3 8 8
79111-89111 4 6 7 10 1 l 1 1
8pm-9prn 4 7 8 9 10 10
9pm-10psn 4 5 8 9 9 9
10pm-1 1pm 4 4 5 8 9 9
Mean 3.68 4.96‘ 6.12 8.84 9. 88' 9.76
SD 1.11 1.81 1.81 0.80 1.05 1.13

 

': Significant atpsnl forpeirdt-teatrnean comparison

Notethetligiees indicatethemaabesof prepare-type options for each one hompenod.

Aramxaacxarrarx

Milli-IKOensraLNl-Ixfiducefioml

Cat-11mm

Da‘l). SuperChennel. FOX AXN. ChennalNHDJidu‘gefiChennel. NihonEigaChennsLCSN Movie. SpeceShowes.
Viewsic, MTV, SkyA.Oeors. J ShySposts 1,13hy8posts2. J SkySports 3, OolfNetworir. Lie", Discovery,
Animal Planet, HistoryChennel. lgosyop'ChameL CNN Intent-rim Nikkei CNN. FsailyOekijyo.
KideStetion CartoonNetwost. am

Ea). NHK.1,NHKBS2

17(3). WOWOW.StarChennel.EiseiOehijyo

65

dramas. Accordingly, the hours, on which entertainment shows are provided
simultaneously by more than two commercial broadcasters, are only 2 out of 25 hours
for the sample time slots, much less than 8 hours that dramas are offered simultaneously
by more than two broadcasters.

Two public broadcast channels of NHK increase the number of program-type
options offered by over-the-air broadcast networks from 3.68 to 4.96. We can see from
Table 18 that viewers are provided more than four types of programming in 20 hours by
over-the-air broadcasting. This makes up 80 percent of the sample time slots, 12 percent
higher than the case not containing the two public channels. Note that in Japan, viewers
are basically offered an average of five types of programming at each hour from 6 pm.
to 11 pm. in weekdays even if they do not subscribe to other video distribution services.

The center of the issue is how the number of program-type options varies by
subscribing to a cable service. The column under “All Total” of Table 18 illustrates the
number of different program types available on cablecasting. It is clear that cablecasting
including 41 channels doubles the program-type options to 9.88 from 4.96 on
broadcasting alone. We can say with fair certainty that cablecasting increases
program-type options. At the same time, nevertheless, we notice that the number of
program-type options does not increase as much as the increase of the number of
channels. While broadcasting with seven channels provides about five types of
programming on average, cablecasting with 41 channels offers about 10 types.
Presumably, this is mainly due to the duplication of programming by cable networks
specializing similar content. For instance, 34 sample cable networks contain 6 networks
specializing in sports programming. Given that they basically provide only sports

programming, cable viewers are usually offered at least six kinds of sports content by

66

them. In the same way, movies, dramas, culture programming, and children’s
programming are basically provided by several cable networks at one time (see Table
13-17).

Yet, on an individual basis, viewers might Obtain positive utility from choices
among perfect substitute programs within their favorite categories (Litman, 1992). For
instance, sports fans could be more satisfied to constantly access several sports
programs in order to make their own viewing selection rather than having only one
Option. That is, somewhat inconsistent with policy makers who evaluate the total
number of diverse program types available to all viewers, individual viewers might put
greater importance on more Options within their preferences.

Despite the'certain increase of program-type options brought by cablecasting,
many Japanese cable subscribers do not necessarily regard cable television as
contributions to more program types or vehicles to access programming more agreeable
to their tastes, as we saw at the outset of this thesis. A key to solve this discrepancy
might lie in the concept of “channel repertoire.” Channel repertoire is the set of
channels watched regularly by an individual or household (Heeter and Greenberg, 1988).
What is important is that the repertoire is as limited as most cable subscribers watch
only a small set of channels even under multichannel environments, but broadcast
networks are common across channel repertoires (Heeter and Greenberg, 1988;
Furguson and Perse, 1993). Given Japanese cable viewers whose repertoire includes
only broadcast networks, they might not be aware of the increase of program types
offered by other networks.

Finally, how different combinations of video services vary the number of

program-type options should be considered. For instance, it is very common among

67

Japanese to add NHK’s two satellite broadcast channels to over-the-air broadcasting. As
shown in the column under “Over-the-air and Satellite” of Table 18, two satellite
channels certainly increase program types available to viewers. Given viewers
subscribing to the satellite services, they have larger number of program-type Options,
an average of 6.1 types per hour, than do non-subscribers. On the other hand, whether or
not to subscribe to premium channels does not greatly influence the number of different
program types available to viewers (Compare the column under “All Total” of Table 18

to that under “Total without Premium”).

Vertical Diversity

We will now shift the emphasis away from horizontal diversity to vertical
diversity in order to examine an answer to research question 2: “What is the degree of
diversity in programming by a network/broadcaster?” Programming breakdowns by

hours and by percentage are shown in Table 19 and 20.

Commercial Broadcast Netwarks

Each commercial over-the-air broadcast network offers well-balanced general
programming, as their schedules are programmed with a broad variety of program types.
On average, eight to ten types of programming are provided by each of the networks. It
is noteworthy that networks not only offer programming geared to the general mass
audience, such as variety shows, but are also engaged in forms of narrowcasting that
appeals to a specific demographic group, such as reality shows for young viewers or
programming concerning hobby/practical use for housewives or old viewers.

At the same time, broadcast networks attempt channel differentiation by

68

Table 19: Programming Breakdowns (Hours)

Mo UV Co R Cu HIP Ed Ch 0
NTV 4h 2h 61: Ht 111 Ill
TBS 4h 41: 1h 1!:
CX 21: 2h 1!! 1h
21:
111

Big

C:
er

ANB 3h lit 21:
TX lh30m 11: 4!!
NHK mm 4105!!! 45m
NHK 3h15m 45m 11130111
TVK 51115:: 6mm 31:45m llflSm Jhflm
MX 6h 6h 31! 311
Channel
FOX
AXN
Channel NECO
' C11
Nihon Ch
CSN Movie
Shower
Viewsic
MTV
A

bib:
war

J l
.l 2
J 3
Golf Network
LaLa TV

Animal Planet
Ch
Ch
CNN Ind
Nikkei CNBC 251:

Kids Station

Cartoon Net.
Animal:

NHK 851 min

NHK 352 21:30:: I): won

WOWOW
Star Chamel 25h
Eisei .. 153 lb lh

25h
25h
25h
25h
25h
25h
25h
25h
25h
25h
25h
25h
25h
15h
25h
25h
25h
25h
25h
25h
25h
25h
25h
25h
25h
25h
25h
25h
25h
25h
25h
25h
25h
25h
25h
25h

 

N: News. 5: Spam. D: Dram. Mo: Movie. UV: EntertainmenWanety. QIG: Wm Co: Comedy.
R'RealityShow.Mtx ummcmwp: Hobby/Prunchngtt Education.Cerhildren.O:Othu

69

Table 20: Programming Breakdowns (Percentage)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

N S D Mo FJV Q/G Co R Mu Cu HIP Ed Ch 0
NTV 210 160 16.0 8.0 240 4.0 4.0 40 40 100 0
TBS 200 160 28.0 160 40 80 4.0 40 11130
CX 200 8.0 24.0 200 8.0 8.0 40 40 40 IEDD
ANB 43.0 8.0 160 40 12.0 4.0 40 8,0 40 100 0
TX 4.0 8.0 16.0 4.0 8.0 6.0 4.0 4.0 16.0 30.0 1010
NHK (General 63.6 3.0 9.0 16.4 3.0 5.0 lEIJD
NHK (£00.) 130 3.0 6.0 60 44.3 19.7 8.0 100 0
TVK 21.0 27.0 4.0 15 0 4.3 146 14.0 100 0
MX 240 24.0 8.0 10.0 12.0 12.0 6.0 40 1113.0
Super Channel 960 40 100 0
FOX 68.0 80 4.0 20.0 100 0
AXN 60.0 43.0 100 0
Channel NECO 16.0 70.0 120 2.0 100 0
Jidaigelo Ch. 100.0 100.0
Nihon Etga Ch 11110 100 0
CSN Math: 120 880 100 0
Space Shower 11110 100 0
Viewsic 100.0 100 0
MTV 20 2 0 92.0 4.0 111) 0
Sky A two 1111.0
Gaora 880 40 80 1mm
J Sky Sports 1 100.0 100 0
J Sky Sports 2 101.0 m 0
J Sky Sports 3 um: um)
Golf Network imo two
[.313 TV 3.0 260 7.0 10.0 6.0 80 36.0 4.0 1WD
Discovery 4.0 961) 100 0
Animal Planet 2.0 960 2.0 11110
History Ch 20 960 20 mo
m Ch imo two
CNN Intl 780 11.0 20 1mm
Nikkei CNBC m0 m0
Family Gekfiyo 601) 400 100 0
Kids Station 1WD 1030
Cartoon Net lCDO 1m0
Animax 1m 0 100.0
NHK 851 130 660 18.7 23 1ND
NHK 352 100 20 200 50 110 40 320 10.0 100.0
WOWOW 4.7 $80 60 31.3 1010
Star Channel 11110 11110
Eisei Gekijyo 1.0 90.0 4.0 40 to 100.0

 

N: News. 5: Sports. D: Drum. Mo: Mame. EN: EntertainmenWariety. QIG: QuidGune. Co: Comedy.
11' Reality Show, Mix Music, Cu' Culture. HIP: HobbyIPractical Use. Ed' Educator; Ch Children. 0: Other

70

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8.. .055
8.. ..oz 833
8.. Snow .3.
8... 036 been.
8.. omzo .88...
8... an. 220
8.. 6 32:8.
8... 8 he”...
a... .8"... .884
2.: b.9635
8... E. 33
8.. 83.02 8.8
8.. 8 33am on a
8.. ~ seam ea 8
8.. 3386.3 2... N:
8... 826 a. 8 VS...
8.. < a... 38% 3.8583
8... PE
8.. 3:85 B... 38808. umz
8.. 032.... Sam 3... 1080 0.5.
.2 8.8.6 new 2.... "so: 28 «322.88: 0.3.:
8.. .0826 am 8.. .6 8m 8......
$8 30303 8.. .6 38.3: 2 8 x...
382.2 eased 8 8 082 .0836 8 8 mz<
8... 28¢ 2 8 No
.3 8m 8...... .2 No“. 8... mm...
.3. .8. 2:2 8... .388 08m c. 8 PE
“0380895 2528 382.2 380 0:8 382.2 .883. 38.5.8

 

88.25 .8.E> ”8 0.8.8

71

allocating more time to a particular program-type, for instances NTV to variety shows
(24 percent), TBS to dramas (28 percent), CX to dramas (24 percent), ANB to news (40
percent), and TX to children’s programs (30 percent). In particular, TX, the perennial
last place in audience ratings race, clearly has a different programming strategy from the
other over-the-air commercial broadcast networks. It is the only commercial over-the-air
broadcaster that does not offer news at 6 pm, but, instead, presents animation films for
kids on the hour. Children’s programming is the highest category for the network at 30
percent, followed by movies and hobby/practical use programs, both of which account
for 16 percent of the programming (see Table 20). Taking into consideration that neither
the children, the movie nor the hobby/practical use category is ranked in the top three
highest programming of the other over-the-air broadcasters, we can realize the unique
programming by TX.

Interestingly, all the broadcast networks provide neither cultural programming
nor educational programming as much as stipulated by the Ministry of Posts and
Telecommunications. According to the stipulation, broadcast networks are required to
allocate a minimum of 20 percent for cultural programming and no less than 10 percent
for educational programming. It is possible that those types of programming, which
have less mass appeal compared to dramas or variety shows, would be offered at

different time frames in a day where the number of audiences is much fewer.

Public Broadcast Network
The ldnd of programming offered by NHK, the only public broadcast network in
Japan, with its two channels deserves careful attention. According to NHK’s former

President Kawaguchi, (Nishino, 1994, p.119), “Even if a certain program could attract

72

no more than 200,000 people, NHK should broadcast the program... The important role
of a public broadcaster is to secure diversity in broadcast programming.” In the analysis
of the interrelationship of the programming strategies between public and private

broadcasters, Noam (1987; as cited in Owen and Wildman, 1992, p. 141) proposes some

predictions:

(1) The program biases of commercial broadcasters create political demands for
publicly sponsored programming targeted to minority audiences not served by
commercial broadcasters.

(2) Private broadcasters may respond to public broadcaster programming

targeted to minority audiences by becoming even more majoritarian.

Taken in the light of his predictions, it is reasonable to suppose that NHK with the two
channels offers completely independent programming, not influenced by the interests of
the mass audience.

As shown in Table 20, this assumption holds true. For the general channel, 63.6
percent of their programming is devoted to daily newscasts or news shows dealing with
current affairs. Whether or not news programs are the presentation for minority is open
to discussion, but what needs to be emphasized here is that NHK with the general
channel almost constantly offers news during the evening although commercial
broadcasters seldom provide news with the exception of a time slot between 6 pm. and
7 pm. (see Table 13—17). Despite the name, NHK educational channel, programming
classified into the educational category is not at all offered by the channel. It seems that

their programming focus has shifted from educational programming-oriented to

73

practical use programming-oriented, as 44.3 percent of the programming is allocated to
hobby/practical use programs. In contrast, as shown in Table 19 and 20, NHK does not
broadcast variety shows, reality shows, and only broadcasts a few dramas, all of which
are popular among commercial broadcasters. These results lead us to the conclusion that
NHK has a distinctive programming strategy apparently different from that of
commercial broadcasters. We may say that NHK with the two channels plays a role as
an alternative to commercial broadcasters.

Nishino (1994) claims that NHK offers more diverse programming than do
commercial broadcasters. Yet, the programming of two NHK channels compared to that
of commercial broadcast networks is more concentrated to particular program types,
namely news for the general channel and hobby/practical use programs for the
educational channel. As illustrated in Table 21, the Herfindahl-Hirschman Index (HHI)
for commercial broadcast networks are, as a whole, lower than that for a public
broadcast network. In particular, the index for the NHK general channel is relatively

high, mainly because about 64 percent of their programming is allocated to news

programs.

Independent Stations

Independent stations are not affiliated with any of commercial broadcast
networks. Unlike U.S. superstations, such as WTBS or WGN, Japan’s independent
stations are not distributed to a national audience base; they are received directly with
UHF antennas or retransmitted within their local areas by local cable operators. They
offer general programming and, indeed, their programming covers diverse genres. The

HHI for TVK, 0.18, and MX, 0.17, is nearly as low as that for each commercial

74

broadcast network (see Table 21). Those indices clarify that the independent stations
offer a variety of programming as well as broadcast networks do.

Nonetheless, some decisive differences are observed between the programming
of them and that of broadcast networks, which offer general programming as well. For
instance, their programming heavily relies on sports programs. As illustrated in Table 20,
TVK and MX offer sports programming at 27 percent and 24 percent, respectively.
Those broadcast sports events are generally dichotomized: local games of popular sports,
such as baseball games of the Yokohama Baystars or soccer games of the FC Tokyo
(TVK and MX are Yokohama- and Tokyo-based UHF stations), or relatively minor
sports events, such as boat races or handball. It is likely that those games are rarely
provided by national broadcast networks. Besides, some other common characteristics
are observed between the two stations. Both of them offer news programming at more
than 20 percent, but neither of them airs variety shows, quizzes, nor reality shows,
which are common on commercial broadcasting. In addition, they collectively devote
only 3 hours to dramas, all of which are imports (see Table 19).

Two things, which have a great impact on the programming by independent
stations, are inferred from this result. First, compared to commercial broadcast networks,
they have to produce or acquire programs with extremely smaller costs because of
limited audience reach.24 Subsequently, programs requiring relatively large production
budgets, such as dramas or variety shows, are unlikely to be produced by those stations
alone. At the same time, as far as domestic programs are concerned, the lack of

syndicated programs whether off-network or first-run, as discussed earlier, makes it

 

2‘ The number of potential audience for broadcast networks are approximately 47 million across the
country, 13 times and 8 times larger than that TVK and MX, 3.4 million and 5.6 million, respectively.
These figures are numbers of households in Japan, Kanagawa Prefecture, and the Metropolis Tokyo as of

75

difficult for them to purchase such types of programs. To put it briefly, independent
stations cannot sufficiently acquire domestic variety shows or dramas, let alone produce

those programs by themselves.

Basic Cable Networks

When we discuss the programming of Japan’s cable networks, it is necessary to
keep in mind that there are few cable networks that offer general programming with a
broad format, such as the USA Network or TNT in the U.S. In other words, most cable
networks have specialized formats, emphasizing one subject matter.

As Table 19 and 20 clearly show, many cable networks devote almost all of their
programming to one specific category, such as Super Channel to the drama category,
Nihon Eiga Channel to the movie category, Space Shower to the music category, Sky A
to the sports category, Discovery to the culture category, Nikkei CNBC to the news
category, Cartoon Network to the children category, and the like. Accordingly, the HHI
for each cable network is extremely high as shown in Table 21. We can see from their
indices, 1.00, that many networks offer only a type of programming. Based on their
observations, Litman et al. (1994) note that in the U.S. even narrowly targeted networks
often consciously provide nonconforming programs to relieve the boredom and tedium
from always having the same type of programming. This might not be applied to most
of Japan’s cable networks.

Nevertheless, the analysis of the program-type diversity attained by an
individual basic cable network might be ineffective as far as each basic cable network is

in principle bundled into a group called the basic tier. Rather, the program-type diversity

 

2002.

76

of the tier should be evaluated aggregately.

LaLa TV, the network for women, has relatively diverse programming in
comparison to other cable networks. Indeed, different from other cable networks
providing one or two types of programming, LaLa TV offers eight types (see Table 19
and 20). At the same time, by analyzing the programming of the network in detail, we
notice that many of them are imported programs. Whereas the network devotes 36
percent of their programming to the hobby/practical use category, most programs
classified into the category are imports, such as those featuring Martha Stewart. All
dramas that account for 26 percent of the programming, too, are from foreign markets.
In addition, the network devotes 10 percent of the programming to an imported situation
comedy, “Full House.” From what has been discussed above, it is presumed that LaLa
TV depends on foreign markets to achieve relatively diverse programming. Discovery
Channel, Animal Planet, and History Channel provide a number of cultural programs,
which are rarely offered by other cable networks, and most of the programs are imports.

As a whole, cable networks rely on foreign materials much heavier than do
broadcast networks. One conceivable reason is that cable networks frequently offering
imported programming are owned by foreign media and hence positioned as a part of
vertical integration that their parent media develop on a world scale. For instance, while
FOX offers only imports, many of them are programs whose copyrights are attributed to
its affiliated program suppliers, Twentieth Century FOX or FOX Broadcasting. Another
reason might be the unavailability of afiennarket programming in Japan, as discussed
earlier. In the acquisition of television programs, the unavailability of domestic
programs would likely boost the demand for foreign programs on the grounds that

imports could be substitutes for domestics to fill schedules. Japan’s off-network

77

programs are simply classified into the following two types: outdated dramas that were
produced and owned by major film companies, or animation series. In terms of
aftermarket programming, it appears that imported programs consisting of wider genres
play a more important role in attaining program-type diversity than do domestic

off-network programs.

Satellite Broadcasters

NHK offers programming services, BS1 and BS2, via broadcasting satellites,
and, as of 2002, 11.4 million of the nearly 50 million television households in Japan
officially subscribed to the two channels. Besides those stand-alone subscribers, cable
subscribers can access the channels, which are in principle included in a basic cable
package.

According to NHK (2002), BS1 features news and sports programs, while BS2
is dedicated to top entertainment, the arts, and culture in general. This differentiation in
programming largely corresponds to the results shown in Table 19 and 20. B81 has
approximately two-thirds of their programming devoted to sports programs, followed by
culture programs with 18.7 percent and news with 13 percent. On the other hand, the
major categories on BS2 are children programs (32 percent), movies (26 percent), and
culture programs (11 percent). It is possible that they devote more time to sports and
children programs during summer than they do in other seasons.

Interestingly, we might be able to interpret these channels as a complementary
for NHK’s broadcast services (see Table 20). For instance, although NHK with the
general channel offers news at a very frequent rate, that type of programming is not so

high on both BS1 and BS2. Hobby/practical use programming, which is common on the

78

educational channel of NHK, is rarely offered by BS channels. On the other hand, BS
channels often offer sports, movies, and children programs, all of which seldom appear
on NHK’s broadcast channels. In regard to this point, Nishino (1994) notes that NHK
alone gives the audience a wider range of choice by avoiding providing similar types of
programs or those sharing targeted audiences at the same time slots.

At the same time, taken as a whole, programming on BS1 and BS2 inherits
something peculiar to NHK. They do not offer any programs perceived in a broad sense
as lowbrow entertainment, such as frivolous variety shows or grotesque reality shows.
The HHI for BS1, 0.49, is nearly equivalent to that for NHK general channel, and quite
higher than that for BS2 or commercial broadcast networks (see Table 21). This is
because their programming concentrates on sports programming at 66 percent. We can
safely say that BS2, providing eight different types of programming, achieves
considerable diverse programming as the index for the channel, 0.21, is slightly lower

than that for ANB, a commercial broadcast network.

Premium Networks

Pretty much by definition, the sample three premium pay networks devote most
of their programming to the movie category, “their historical raison d’etre” in Litman et.
al.’s phrase (1994), as shown in Table 19 and 20. Accordingly the HHI for each
premium network is high (see Table 21). While WOWOW, with 58 percent of its air
time devoted to the category, has other types of programming split among children (31.3
percent), music (6 percent), and sports programs (4.7 percent), the remaining two
networks, Star Channel and Eisei Gekijyo (Satellite Theater), heavily focus on movies

in 90 to 100 percent range.

79

Interestingly, however, movies presented by those networks are extremely
different: all movies offered by the former are imported ones, mainly from the U.S., but
those by the latter are domestic movies: In this research, all movies are classified as the
movie category altogether, regardless of countries of the origin. Nevertheless, given that
viewers preferring Japanese movies are inherently not overlapped with those preferring
American movies, it is likely that both networks are targeting apparently differentiated

viewers.

Overall Diversity

We can see from Table 23 that the programming breakdown by all
networks/broadcasters considerably differs from that by only over-the-air broadcast
networks.

Among over-the—air broadcasters, the most highly presented program type
during 6 pm. and 11 pm. is news (25.2 percent), followed by dramas (13.6 percent),
hobby/practical use programs (11.9 percent), entertainment shows (9.7 percent), and
children’s programs (8.2 percent), as shown in the row next to “over-the-air networks”
of Table 23. Top three and top five categories account for 50.7 percent and 68.6 percent
of their programming, respectively.

The whole amount of news programming offered by NHK alone accounts for
approximately 43 percent of all news provided by all over-the-air broadcasters (19 hours
10 minutes out of 44 hours 10 minutes). In addition, news is also the highest program
type by over-the-air broadcast networks, accounting for just 20 percent All commercial
broadcasters but TX have a one-hour news program at 6 pm. (see Table 13-17). Dramas

are rarely offered by NHK (1.5 percent) but common among

80

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82

commercial broadcast networks, ranked the second highest category (18.4 percent). The
hobby/practical use programming is the only category provided by all over-the-air
broadcasters whether commercial or public. The entertainment and variety show
category is the third highest program type among commercial broadcast networks at
13.6 percent but not offered by NHK’s two channels. Children’s programming is offered
by both commercial and public broadcast networks at roughly equal ratios, 7.6 and 9.8
percent, respectively. As a whole, all program-types but the comedy category and the
education category are available on broadcasting.

On the other hand, if all networks and broadcasters are included, that is, in the
case of cablecasting, the highest presentation is the sports category at 19.2 percent,
which accounts for about 8 percent of the programming by broadcast networks (see the
row next to “All Total” of Table 23). Sports programs are followed by movies (15.2
percent) and dramas (13.2 percent). Those three categories account for 47.6 percent of
the programming offered by all networks, 3.1 percent lower than 50.7 percent occupied
by the top three categories in over-the-air broadcasting networks. Then, children
programs with 12.9 percent and news with 10.5 percent are the fourth and fifth highest
categories.

Summed up together, top five categories account for 71 percent of the
programming by all networks/broadcasters, slightly higher than 68.6 percent accounted
for by the top five categories in broadcast networks. Consequently, judging from how
much their programming is concentrated on the top five categories, both broadcasting
and cablecasting indicate an almost equal concentration ratio. At the same time,
however, it should be noted that the top five categories in cablecasting range from 19.2

percent to 10.5 percent whereas those in broadcasting range more broadly from 25.2

83

percent to 8.2 percent.

‘ It is likely that overall diversity in cablecasting is greatly influenced by the
programming of basic cable networks since they hold a majority in all
networks/broadcasters offered by cablecasting. As a whole, the aggregate programming
by cable networks is well-balanced. The highest category by basic cable networks is
sports programming at 22.6 percent (see the row next to “Basic Cable Networks” in
Table 23). Certainly, the percentage is correlated to the number of sports-oriented
networks. Among 27 cable networks, six are specializing in sports programming. The
sports category is followed by the drama category with 16.2 percent and the children
category with 14 percent. This is because relatively many networks exhaustively devote
their programming to dramas and children’s programming.

We will now look at the vertical diversity available in the mixture of the
programing of over-the-air broadcasting and that of satellite broadcast channels, the
most popular combination pattern of video services in Japan. Some important changes
are marked between the breakdown of programming by only over-the-air broadcasters
and by adding two satellite broadcast services (Compare the row next to “Over-the-air”
in Table 23 to that next to “Over-the-air plus Satellite”). Because of satellite
broadcasting’s concentration on sports programs, culture programs, and movies,
fractions for those program types increase from 7.9, 4.3, and 4.9 percent to 13.7, 6.2,
and 7.1 percent, respectively.

As a group, the three premium networks place strong emphasis on movies
accounting for 82.7 percent of all their programming. Yet, the movie category is not
highly represented on other network groups. As shown in Table 23, 13 percent on

satellite broadcasters is ranked second only to 82.7 percent on premium networks and

84

only 4.3 percent is filled with movies in the programming of over-the-air networks. In
this sense, we can safely say that premium networks have caved out a niche for
themselves. The bottom two rows in Table 23 indicate how premium networks influence
the entire program-type diversity, by comparing the programming of all networks with
the programming not containing premium networks. By adding those premium
networks, ratios occupied by any categories other than the movie category relatively
decreases, as seen in the news category from 11.3 percent to 10.5 percent, the sports
category from 20.6 percent to 19.2 percent, the drama category from 14.2 percent to
13.2 percent, and so on. Therefore, it seems reasonable to assume that Japan’s premium
networks certainly respond to the expectations of movie bugs, by increasing the relative
amount of movies.

We will now take a look at the Herfindahl-Hirschman Index in order to analyze
overall diversity (see Table 24). Note again that low values of the index denote less
concentration of program types and hence greater program-type diversity. Examining
intra-network/broadcaster concentration levels, we notice that the index for commercial
broadcast networks is the lowest at 0.124. Whereas each commercial broadcaster’s
index ranges from 0.16 to 0.22, the indices for NHK, the public broadcaster, mark 0.44
for the general channel and 0.27 for the educational channel because of their
concentration on particular categories, the news and the hobby/practical use category in
this case. Accordingly, the index for all over-the-air broadcast networks slightly
increases to 0.129 by adding the public broadcaster. Yet, we can safely say that Japanese
broadcast networks offer moderately diverse programming. We can recognize this from
the fact that the aggregate index for a group of seven channels for over-the-air broadcast

networks, 0.129, is lower than that for a group of 34 non-over-the-air

85

networks/broadcasters, O. l 3 8.

Table 24: Overall Diversity

 

 

 

 

 

 

 

 

 

 

A. Commercral Broadcast Networks 0.124
B. Public Broadcast Network 0.233
Over-the-ar’r Broadcast Networks (.4 +8) 0. 129
C. Independent Stations 0.162
D. Basic Cable Networks 0.142
E. Satellite Broadcasters U 198
Owr-the-az‘r + Satellite (.4 +B+E) 0. 1 18

F. Premium Networks 0.699
Non Owr-the-atr Networks J C+D+E+F7 0. 138
All Total (A+B+C+D+E+F) 0.125

Total 870 Premium Networks 0. 125

 

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It is significant here to note that the results obtained correspond to the fact found
by Litman et a1. (1994): the indices for the individual networks are higher than the index
for a group of networks. Even if each network has a relatively narrow range of program
offerings, overall diversity is attained collectively as a group of networks through a
process of counterprogramming and product differentiation. This tendency is more
clearly shown in the programming of basic cable networks. Their individual indices
range from 0.22 to 1.00, most of which indicate high concentration on particular
program types. Yet, calculated collectively, the aggregate index for all basic cable
networks is 0.142.

The overall index across all networks/broadcasters, 0.125, is slightly lower than

86

that for over-the-air broadcasting networks, 0.129. It is found from the results that the
programming provided by a cablecaster is more diverse than that offered by only
over-the-air broadcasters. This is an answer to research question 3: “Which one,
broadcasting or cablecasting, offers more diverse programming?” Yet, the difference of
both indices remains as a matter to be discussed further. If we consider the difference,
0.04, to be extremely small, it is no exaggeration to say that Japan’s six over—the-air
broadcast networks with seven channels offer almost as diverse programming as the 41
networks/broadcasters packed into cablecasting. From this viewpoint, we can say that
there is still much validity in Straubhaar’s assumption (1988, p.321), “With six
broadcasting networks in Japan, there is considerable diversity in conventional
broadcasting, and, therefore, cable may not also be perceived as adding significant
diversity in video distribution.”

The basic strategy for Japan’s broadcast networks on their programming is
counterprogramming. That is, when broadcast network A airs program-type 1, network
B and C air program-type 2 and 3. After program-type l, broadcast network A airs
program-type 2, and, then, network B and C air program-type 3 and 1. According to the
strategy, considerable program-type diversity is achieved among the broadcast networks.
Table 25 illustrates a simplified programming model by Japan’s broadcasters and
cablecasters. We can see from the model that although more program-type options per
hour are available on cablecasting (broadcast networks plus cable networks),
broadcasting aggregately provides programming as diverse as does cablecasting during

the schedule.

87

Table 25: Programming Model on Japan's Broadcasting and Cablecasting

 

 

 

 

 

 

6:00-7:00 700-8200 8:00-9:00 9:00-10:00 1000-11 00
Broadcast Network A 1 2 7 S 3
Broadcast Network B l 3 8 6 4
Broadcast Network C 1 4 2 7 S
Broadcast Network D 1 5 3 8 6
Broadcast Network E 2 6 4 2 7

 

 

 

 

 

 

 

Cable Network A
Cable Network B
Cable Network C
Cable Network D
Cable Network B
Cable Network 1"
Cable Network G
Cable Network I-I
Cable N etworkl
Cable Network J

 

 

 

 

 

 

 

 

 

 

 

 

WQO‘M‘UUNN—

 

Figuree indicate program type 13.

Additionally, some other important discoveries should be noted. As noted earlier
in this thesis, it is very common among Japanese to add the two satellite broadcasting
channels to over-the-air broadcasting. Because this combination pattern of video
distribution services penetrated among Japanese, it is appropriate to gauge how diverse
programming the combination provides. The index for the combination is 0.118, lower
than the index for all networks/broadcasters included, 0.125. That is to say, by only
adding two satellite broadcasting channels, viewers can be provided program types as
diverse as that ofl‘ered by cablecasting. It is likely that this is accurately reflected in the
popularity of satellite broadcasting. It was noted previously that those satellite channels,
whose programming is highly focused on sports programs, children programs, and
movies, play a complementary role for NHK over-the-air broadcasting, which rarely

provides those types of programming. To be precise, however, the satellite channels

88

supplement not only the programming of NHK but also that of commercial over-the-air
broadcasting networks as well, especially with their high concentration on culture
programs that are seldom offered by commercial broadcasters.

Finally, comparing the index across all networks to that not including premium
networks, we notice both indices are equivalent (see the bottom two rows in Table 24).
Whether or not to subscribe to premium networks does not affect program-type diversity,

which is available as a whole.

89

CHAPTER 6: Conclusion and Discussion

This thesis has analyzed program-type diversity in Japan’s video distribution
industry. The program-type diversity has been discussed from two main perspectives:
horizontal diversity and vertical diversity.

In terms of horizontal diversity, the number of different program-type options at
a given hour, viewers subscribing to cable services have more options than do
non-subscribers. It is quite natural to lead to this outcome since the presentation on
cable television involves the retransmission of over-the-air broadcasting. In regard to
this point, however, we need to pay our attention to the fact that in Japan the number of
program-type options does not increase as much as the increase of the number of
channels by cablecasting. Whereas broadcasting with seven channels provides five
types of programming on average, cablecasting with 41 channels offers ten types.

Vertical diversity, the degree of program-type diversity offered by a single
network/broadcaster over its entire schedule, clearly reflects its programming strategy.
While the programming schedules of broadcast networks, independent stations, and
satellite broadcasters consist of various program types and hence are well balanced,
many cable networks are narrowly targeted and devote almost all of their programming
to a specific category. Accordingly, the Herfindahl-Hirschman Index (HHI) for each
cable network is high, indicating that less diverse programming is offered by an
individual cable network compared to an individual broadcast network or independent
station. At the same time, however, the programming of cable networks certainly meets
the needs of audiences who desire to watch their favorite types of content anytime and

as long as they want. Only cable networks can provide this advantage. In order to take

90

into account a characteristic feature of cable networks whose programming is offered as
a bundle, it seems to be more appropriate to examine overall diversity, program-type
diversity attained collectively by a group of cable networks, rather than vertical
diversity by an individual cable network.

By comparing the overall diversity of broadcasting with that of cablecasting
over their entire schedules, we notice that Japan’s six over-the-air broadcast networks
with seven channels offer almost as diverse programming as the 41
networks/broadcasters included into cablecasting. Accordingly, we can conclude that
Japanese over-the-air broadcasting offers moderate program-type diversity nearly
equivalent to cablecasting. Given that diverse programming would increase the
likelihood of maxirnizing the satisfaction of a wider range of viewers, broadcast
networks whose presentations are nearly as diverse as cablecasting can possibly fulfill
the utility of audiences as much as cablecasting.

The point, which needs to be discussed, is the duplication of programming by
cable networks. Assuming that five different types of programming are available on
seven broadcast channels at a given hour, cable networks are expected to provide
programming other than the five types and broaden the number of program choices.
This is because there might be viewers whose content preferences are not fulfilled with
the five broadcast programs. To the contrary, if a cable network offers programming
quite similar to that by a broadcast network, the cable network, duplicating broadcast
programming with much smaller budgets, hinders the diversification of programming.
Given that cable television’s formation and philosophical raison d’etre are to provide
additional choices beyond the broadcasting realm as claimed by Litman (1992), what is

required for cable networks is to provide programs differentiated from those by

91

broadcast networks.

Whether or not the differentiation by cable networks becomes successful,
however, might be greatly determined by the programming of broadcast networks. On
time frames when broadcast networks simultaneously air six or seven different types of
programming, as observed in our research, other program types left for cable networks
to provide are limited. In addition, it is more important that the other program types
should be fully demanded by viewers and commercially feasible. This is possibly a
main reason why networks specializing in a particular religion or race are not available
on Japan’s cablecasting although those channels, if any, play an important role in
diversification of programming. Many Japanese have no religious faith, and Japan is
basically regarded as a racially homogeneous nation. Judging from considerable overlap
of program types between broadcast and cable networks, it seems that Japan’s cable
networks generally offer programming that has frequently appeared on broadcasting,
rather than unique programming unavailable on broadcasting.

As our research shows, a group of broadcast networks in the aggregate provide
more diverse programming in both the number of program types and the balance of
those program types than a group of cable networks. Broadcast networks not only offer
programming geared to the general mass audience, such as variety shows, on some time
slots, but are also engaged in forms of narrowcasting that appeals to a specific
demographic group, such as reality shows or programming concerning hobby/practical
use, on other time slots. Although most cable networks specialize in a specific program
type, there is concentration into some program types, namely sports programming,
dramas, children’s programming, and if premium networks are considered, movies,

indicating a possibility of the duplication of programming among cable networks.

92

Presumably, this contributes to lower program-type diversity among them compared to
broadcast networks. As well as the differentiation from broadcast networks on
presentations as discussed earlier, further differentiation among cable networks is also
required to secure more diverse programming.

At the same, however, we need to take into account that the utility of individual
viewers, not that of total viewers, might be increased by the number of different options
available within their favorite program types rather than by the total number of different
program-type options. In this sense, the duplication of programming might not be a
necessary evil. It is important to note that well-balanced, diverse programming would
increase the likelihood of maximizing the utility of a wide range of viewers as a whole
but does not necessarily lead to the utility of some individual viewers who demand the
availability of more of their favorite types.

In addition, the compatibility of high quality programming and diverse
programming needs to be considered. As discussed earlier, according to Owen and
Wildman (1992), there is a trade-off between program diversity and program quality.
Given that larger production budgets generally result in programming in which
audiences find more attractive, the variability of quality raises the possibility that viewer
welfare may decline as diversity increases. This assumption, however, would be
effective under the competitive condition where the revenue of conventional
broadcasters is substantially eroded by new networks offering differentiated content.

Importantly, the size of audience greatly influences production budgets and
hence the quality of programming. As Waterman (1988, p. 142) notes, “the larger (in size
and economic resources) the potential audience base which a producer can reach, the

greater the amount of economic resources the producer can profitably invest in a

93

program designed for that audience.” Achieving economies of scale, broadcast networks
produce relatively higher budget programs, leading to greater quality. In contrast, due to
smaller market size, cable networks rarely offer relatively high quality programming. In
terms of the contribution to program diversity, however, broadcast programming is often
criticized as majority-taste programs, with which networks attempt to attract a large
audience. On the other hand, cable programming, which aims for narrowly targeted
audiences, promotes diverse programming. In this situation, it is likely that viewers
have to choose between less preferred, higher quality programming or the most
preferred, lower quality programming. Yet, which option can be more helpful to ensure
viewer welfare in reality is not clear. We might encounter difficulties when attempting
to explain audience appeal based only on program-type preferences.

We have analyzed program-type diversity in detail in this thesis. Nevertheless,
the question of how the diversity influences the penetration of multichannel media
remains unsettled. There is no conclusive proof that due to moderate program-type
diversity by Japan’s broadcasting, nearly equivalent to cablecasting, many Japanese do
not feel the necessity to subscribe to multichannel media. If multichannel media
guarantee the increase of the number of options in favorite program types and hence
promote utility, as discussed above, many consumers might have clear incentives to
subscribe to the media. The correlation between program-type diversity and the
penetration of multichannel media is still open to discussion.

A further direction of this study could be to examine how the diversity at the
present will vary as multichannel media become more penetrated into Japanese homes.
It is possible that further audience fragmentation will occur and trigger more unique

cable programming, differentiated from broadcast programming, to be provided. At the

94

same time, whether Japan’s broadcast networks will eventually adopt to devote more of
their programming schedules to mass appeal programming or continue to maintain
considerable program-type diversity remains as a matter to be observed from now on.

Besides, it would be interesting to conduct cross-national research, comparing
the program-type diversity, for example, on Japanese television to its American
counterpart. As discussed earlier, in the U.S. there was a clear distinction between the
programming of broadcast networks and that of cable networks: the former offered a
few types of mass-oriented programs and the latter provided more narrowly targeted
programming for viewers who were not satisfied with broadcasting. If this still holds
true, it is inferred that Japan’s broadcasting might possibly provide more diverse
programming than U.S. broadcasting. According to Walker and Ferguson (1998),
nevertheless, FOX’s success and the proliferation of new broadcast networks targeting
specific demographic groups possibly triggered the diversification of programming
among U.S. broadcast networks. The authenticity of the assumption would be clarified
by the research on current program-type diversity in U.S. broadcasting. In terms of
cablecasting, however, it is possible that Americans compared to Japanese have a wider
range of program types. What types of programming are missing on Japan’s

cablecasting and the primary reasons deserve our careful attention.

95

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Cliffs, NJ: Prentice-Hall, Inc.

Baldwin, T. F., McVoy, D. S., and Steinfield, C. (1996). Convergence: Integrating
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