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▼ Why Netflix Is Targeting the Japanese TV Market
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With little room to grow in the West, the streaming giant is spending big on originals in one of the most coveted regions in Asia: "We’re looking for stories that haven’t been told."
When Netflix launched in Japan in late 2015, its first move to win local subscribers was as predictable as it would prove effective: acquire and finance as much beloved anime content as possible. Now, with the brand gaining traction in the country just as competition from other U.S.
streaming rivals arrives, Netflix is diversifying its Japanese content offerings by doubling down on live-action originals — but it’s doing so by working against local expectations rather than adhering to them.
Kaata Sakamoto, Netflix’s head of content for Japan, says nearly every show on his slate of more than 50 Japanese scripted originals is something unlikely to have been attempted by Japan’s increasingly conservative and cost-focused domestic TV industry.
“We’re looking for stories that haven’t been told — and visually, in terms of approach, things that have never been seen from here before,” says Sakamoto, who has been with the streamer since the establishment of its Tokyo office in 2016.
The company’s first scripted original hit from Japan, The Naked Director, which began airing its second season in late June, exemplifies the strategy. Set in the 1980s during Japan’s bubble economy era, the show is based on the true story of the rise and fall of pioneering Japanese porn director Toru Muranishi.
Its quirky tone and sexual explicitness would make it a no-go for local linear TV, as would its lavish period production values. (Netflix hasn’t released budget figures for the show, but Japanese business outlet Nikkei Asia estimates that Naked Director costs about 100 million yen — slightly less than $1 million — per episode when most local TV shows run in the tens of millions of yen per installment.)
Other recent, early successes include the feminist lesbian romantic thriller Ride or Die, starring Kiko Mizuhara, Japan’s most popular model-turned-actress, and Alice in Borderland, a Hunger Games-esque YA dystopian sci-fi series based on a popular manga — again, each involving themes or production prowess that are generally untouchable by risk-averse Japanese networks.
Unsurprisingly, Netflix’s large investments in Japanese originals come at a moment when Asia — and Japan in particular — are becoming increasingly important to the streamer’s growth prospects as new sign-ups in North America and Western Europe plateau.
In the second quarter of 2021, Netflix added just 1.5 million subscribers globally, with two-thirds of them coming from Asia.
riber gains by Disney+ and others in developing markets like India and Southeast Asia, Netflix’s share of total premium video subscribers in Asia-Pacific (not including China, where foreign video services are banned) is forecast to drop by half to 16 percent by the end of 2021 compared with the 32 percent share it had at the end of 2020, according to estimates from regional consultancy Media Partners Asia.
But since the bulk of Disney’s gains, so far, have come in those developing markets, where earnings per user are low, Netflix’s share of total subscription video revenue in Asia is projected to remain stable at 35 percent in 2021 versus 34 percent last year.
Japan, still the world’s third largest economy behind the U.S. and China, has crossed 5 million subscribers and is simultaneously expected to become Netflix’s largest revenue market in APAC this year — and that’s despite the fact that the service only commands a 10 percent share of total premium video minutes consumed in the country, leaving plenty of room for growth.
Reflecting such realities, Netflix in Japan continues to invest heavily in anime — still the most important content category for competing against local and regional rivals, such as Japanese streamer U-Next or South Korean upstart TVer — with more than 40 new original anime titles premiering on Netflix this year, double the number it released in 2020.
Netflix’s approach to Japanese scripted originals, by contrast, is less about keeping up than creating an appealing point of contrast.
“Japan is filled with unique, original stories,” says Sakamoto, but on a global basis, the country’s scripted TV sector, unlike South Korea’s powerhouse drama industry, has created little in recent years that’s traveled.
A general conservative streak among network decision-makers also has resulted in an industry-wide avoidance of the kind of edgy storytelling that might connect more with viewers, both internationally and within Japan.
Industry figures also point to a habitual reliance on quick and cheaply made adaptions of best-selling manga properties and an overall inward focus that is evident in the distinct low-budget aesthetic of most Japanese TV — a penchant for curiously harsh lighting and production values that feel out of touch with the global revolution in high-end series storytelling.
Japanese filmmaker Masaharu Take, whom Netflix hired as lead director of The Naked Director, says the local industry’s hidebound tendencies have left many Japanese creatives dispirited.
“Often when we come up with fresh, interesting ideas, [network executives] will say, ‘That’s very interesting, but let’s not do it this time because it’s too costly, and how can we know that it will sell?’ They only want to repeat what has worked in the past.”
Forthcoming Japanese originals from Netflix include The Journalist, a drama series based on Isoko Mochizuki, a dogged real-life female reporter who has challenged Japan’s political elites to investigate corruption, and Sanctuary, a series set in the seedy underbelly of Japan’s Sumo wrestling world.
The arrival of the other major multinational streamers in Japan is expected to further shake up the local landscape. Disney+, which debuted in Japan last year, declined to comment for this story, but it is known to be building a robust Japan live-action originals team and slate.
Meanwhile, HBO Max, though still awaiting a launch date in Japan, has partnered with premium Tokyo-based cable channel Wowow on Michael Mann’s big-budget yakuza drama Tokyo Vice, which shot in Tokyo throughout the past year.
“I do hope that our work on The Naked Director has opened the door for [other directors in Japan],” says Take. “And I’m now excited to see what’s happening in Japanese film and TV in five years’ time.”
When Netflix launched in Japan in late 2015, its first move to win local subscribers was as predictable as it would prove effective: acquire and finance as much beloved anime content as possible. Now, with the brand gaining traction in the country just as competition from other U.S.
streaming rivals arrives, Netflix is diversifying its Japanese content offerings by doubling down on live-action originals — but it’s doing so by working against local expectations rather than adhering to them.
Kaata Sakamoto, Netflix’s head of content for Japan, says nearly every show on his slate of more than 50 Japanese scripted originals is something unlikely to have been attempted by Japan’s increasingly conservative and cost-focused domestic TV industry.
“We’re looking for stories that haven’t been told — and visually, in terms of approach, things that have never been seen from here before,” says Sakamoto, who has been with the streamer since the establishment of its Tokyo office in 2016.
The company’s first scripted original hit from Japan, The Naked Director, which began airing its second season in late June, exemplifies the strategy. Set in the 1980s during Japan’s bubble economy era, the show is based on the true story of the rise and fall of pioneering Japanese porn director Toru Muranishi.
Its quirky tone and sexual explicitness would make it a no-go for local linear TV, as would its lavish period production values. (Netflix hasn’t released budget figures for the show, but Japanese business outlet Nikkei Asia estimates that Naked Director costs about 100 million yen — slightly less than $1 million — per episode when most local TV shows run in the tens of millions of yen per installment.)
Other recent, early successes include the feminist lesbian romantic thriller Ride or Die, starring Kiko Mizuhara, Japan’s most popular model-turned-actress, and Alice in Borderland, a Hunger Games-esque YA dystopian sci-fi series based on a popular manga — again, each involving themes or production prowess that are generally untouchable by risk-averse Japanese networks.
Unsurprisingly, Netflix’s large investments in Japanese originals come at a moment when Asia — and Japan in particular — are becoming increasingly important to the streamer’s growth prospects as new sign-ups in North America and Western Europe plateau.
In the second quarter of 2021, Netflix added just 1.5 million subscribers globally, with two-thirds of them coming from Asia.
riber gains by Disney+ and others in developing markets like India and Southeast Asia, Netflix’s share of total premium video subscribers in Asia-Pacific (not including China, where foreign video services are banned) is forecast to drop by half to 16 percent by the end of 2021 compared with the 32 percent share it had at the end of 2020, according to estimates from regional consultancy Media Partners Asia.
But since the bulk of Disney’s gains, so far, have come in those developing markets, where earnings per user are low, Netflix’s share of total subscription video revenue in Asia is projected to remain stable at 35 percent in 2021 versus 34 percent last year.
Japan, still the world’s third largest economy behind the U.S. and China, has crossed 5 million subscribers and is simultaneously expected to become Netflix’s largest revenue market in APAC this year — and that’s despite the fact that the service only commands a 10 percent share of total premium video minutes consumed in the country, leaving plenty of room for growth.
Reflecting such realities, Netflix in Japan continues to invest heavily in anime — still the most important content category for competing against local and regional rivals, such as Japanese streamer U-Next or South Korean upstart TVer — with more than 40 new original anime titles premiering on Netflix this year, double the number it released in 2020.
Netflix’s approach to Japanese scripted originals, by contrast, is less about keeping up than creating an appealing point of contrast.
“Japan is filled with unique, original stories,” says Sakamoto, but on a global basis, the country’s scripted TV sector, unlike South Korea’s powerhouse drama industry, has created little in recent years that’s traveled.
A general conservative streak among network decision-makers also has resulted in an industry-wide avoidance of the kind of edgy storytelling that might connect more with viewers, both internationally and within Japan.
Industry figures also point to a habitual reliance on quick and cheaply made adaptions of best-selling manga properties and an overall inward focus that is evident in the distinct low-budget aesthetic of most Japanese TV — a penchant for curiously harsh lighting and production values that feel out of touch with the global revolution in high-end series storytelling.
Japanese filmmaker Masaharu Take, whom Netflix hired as lead director of The Naked Director, says the local industry’s hidebound tendencies have left many Japanese creatives dispirited.
“Often when we come up with fresh, interesting ideas, [network executives] will say, ‘That’s very interesting, but let’s not do it this time because it’s too costly, and how can we know that it will sell?’ They only want to repeat what has worked in the past.”
Forthcoming Japanese originals from Netflix include The Journalist, a drama series based on Isoko Mochizuki, a dogged real-life female reporter who has challenged Japan’s political elites to investigate corruption, and Sanctuary, a series set in the seedy underbelly of Japan’s Sumo wrestling world.
The arrival of the other major multinational streamers in Japan is expected to further shake up the local landscape. Disney+, which debuted in Japan last year, declined to comment for this story, but it is known to be building a robust Japan live-action originals team and slate.
Meanwhile, HBO Max, though still awaiting a launch date in Japan, has partnered with premium Tokyo-based cable channel Wowow on Michael Mann’s big-budget yakuza drama Tokyo Vice, which shot in Tokyo throughout the past year.
“I do hope that our work on The Naked Director has opened the door for [other directors in Japan],” says Take. “And I’m now excited to see what’s happening in Japanese film and TV in five years’ time.”
- August 13, 2021
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