The bloating of NHK's services will not be halted if the cap is scrapped. The role of the public broadcaster needs to be reaffirmed and efforts need to be made to manage the business in a moderate manner.
NHK has compiled a plan to abolish a rule capping the budget for internet operations, such as around-the-clock simultaneous streaming of TV programs online, at 2.5% of subscription fee revenue.
The total cost of its online services is expected to be 2.94% of fee revenue in fiscal 2021, and the same level has been forecast for fiscal 2022 and 2023. NHK will apply for approval from the Internal Affairs and Communications Ministry.
The public broadcaster in April launched the simultaneous online streaming service NHK Plus, through which programs broadcast on terrestrial TV can be viewed on smartphones and other devices.
NHK is dependent on the fees it receives from households with TVs and other such broadcast receiving devices. Under the Broadcasting Law, the online business is defined as a supplementary service.
NHK President Terunobu Maeda has stated that the convergence of broadcasting and telecommunications is progressing and that "it would be more in line with the reality of the situation if the [online service] became a part of the core business." A wholesale expansion of operations must not be allowed.
The 2.5% cap was decided between NHK and the ministry in 2015 in order to prevent the expansion of its online services.
In autumn last year, when NHK applied for approval for simultaneously online streaming, proposing a plan to set aside a budget for four services, including international broadcasting, the communications ministry asked for the plan to be revised.
In the end, approval was granted in January for the Tokyo Olympics-related budget to be set aside on the condition that overall expenses for online services would be kept within the 2.5% cap and efforts would be made to improve the efficiency of the online business.
It is hard to understand why less than a year later NHK is seeking a repeal of the rule. The broadcaster has said it will include language in its implementation standards stating it will "strive for controlled management" of its online services, but this is hardly a guarantee that it will deter the bloating of the business.
Internal Affairs and Communications Minister Ryota Takeda has pointed out that "the budget should be capped and truly restrained." The ministry must deal with the matter appropriately.
NHK, which enjoys a privileged position due to its stable fee revenue, must not put pressure on commercial broadcasters through unbridled expansion.
If it aims to strengthen its online services, the first step is to streamline other operations and cut costs.
In the draft of NHK's new management plan announced in August, the reform of subsidiaries such as event planning and product sales was not covered. Restructuring and streamlining must be carried out decisively.
Although NHK reduced its subscription fee by 2.5% this month, there have been vociferous calls for further reduction. NHK and its subsidiaries hold large amounts of internal reserves, and it is essential for the broadcaster to return these earnings to viewers.
-- The original Japanese article appeared in The Yomiuri Shimbun on Oct. 10, 2020.
Read more from The Japan News at https://japannews.yomiuri.co.jp/
