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NSK News Bulletin Online
November 2009
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* NSK Celebrates Newspaper Advertising Day
* NSK Holds 62nd National Convention in Shizuoka City
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*Topics
Newspaper Company Operating Profits Down 89% in Fiscal 2008
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Story of the Month>>>
Work Continues on Common Platforms for Digital Magazines, Newspapers
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NSK Celebrates Newspaper Advertising Day

NSK held a ceremony at a Tokyo hotel on Oct. 20 to mark its 52nd annual Newspaper Advertising Day. The event drew a crowd of 396 people from newspapers, advertisers and ad agency circles.

The ceremony in the Tokyo Prince Hotel at Tokyo°«s Shiba Park was held to announce and honor the winners of the 29th Newspaper Advertising Award and the fiscal 2009 Newspaper Advertising Creative Contest.

The Creative Contest focuses on up-and-coming art creators and designers, both professional and amateur, for original and innovative works that expand the horizons of newspaper advertising.

The prizewinners°« works are being featured in NSK member newspapers°« publication for as well as going on exhibit at the Japan Newspaper Museum (NEWSPARK) in Yokohama. The theme for this year°«s competition was °»Closer Link.°…

The Oct. 20 ceremony honored five prizewinners. Takayuki Soeta, an art director, served as the deputy chairman of the selection committee. He told the gathering that each of the prize-winning works deserved commendation for its original perspective and positive message. He added that he had high hopes for the development of young creators who could carry on the legacy of Jun Maki, a noted art creator who died in June of this year. Maki used to serve as the chairman of this year°«s selection committee.

Fujinari Tsutsumi, a creative director at Dentsu Inc.°«s Kansai branch, won the top prize. Tsutsumi said that he and two of his friends since school days had made it a rule to get together and enter the competition every year. °»I am very pleased to have our own °∆close link°« produce this result,°… he said.


Newspaper Advertising Creative Contest Top Prize Winner's Work

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NSK Holds 62nd National Convention in Shizuoka City

NSK convened its 62nd National Newspaper Convention at Shizuoka City Culture Hall in Shizuoka City on Oct. 15-16, drawing more than 500 executives and other officials of NSK member companies.

The opening session on the first day of the conference featured an address by NSK Chairman Hitoshi Uchiyama. After his speech, the participants adopted a general resolution to renew their pledge to: °»Earnestly address the task of maintaining the newspaper as the most reliable news medium by continuing to use it to bring together the words of truth.°…

The conference delegates also adopted a declaration on prompting proper newspaper sales activities by calling on all newspaper publishers and newspaper sales agents to join in promoting stronger sales activity nationwide.

Kazuo Ichiriki, the owner and chairman of the Kahoku Shimpo, a regional newspaper based in Sendai City, Miyagi Prefecture, was honored as the recipient of the Newspaper Culture Award in a presentation ceremony for the winners of this year°«s NSK Awards.

Kensuke Kosaka, an NSK vice chairman, said in an address at the opening session that: °»The summer general election gave the Democratic Party of Japan a landslide victory that has paved the way for a change in government. The public desire for reform is driving a major, historic change. It is now the ideal time for newspaper journalism to focus on delivering accurate information to the people and to serve as a vehicle for enlightening the public about the best options for the nation. Although we face a harsh business environment, I call on the participants at this conference to conduct a debate grounded in positive thinking.°…

Jun Matsui, president of the Shizuoka Shimbun, the regional newspaper based in the host city of Shizuoka, told the delegates that in order for newspapers to accomplish their mission, they must maintain management stability as a key priority. °»In this context, I expect this conference to provide direction as to the approaches that the newspaper, as an institution, should take in this new era, as well as concentrating on the creation of a new business model for the newspaper industry.

Akishige Tada, another NSK vice chairman, capped the meeting with an address in which he praised the participants for committing themselves to working together at a national conference on a matter as essential as prompting proper newspaper sales activities. In a vivid reflection of the state of the industry, the resolution that was passed on that subject was the first such motion adopted since the 47th NSK national convention, held in 1994, amid the collapse of Japan°«s so-called bubble economy.

At the afternoon session of the opening day, Yoshiharu Fukuhara, the president of the Characters Culture Promotion Organization, and honorary chairman of major cosmetics maker Shiseido Co., delivered a keynote lecture on the mission of the newspaper. His presentation was followed by panel discussion among newspaper executives.


Topics.......Topics.......Topics........

Newspaper Company Operating Profits Down 89% in Fiscal 2008

The annual NSK survey of newspaper company business performance has shown profits marking a third straight year-on-year decline.

The survey conducted by NSK°«s Accounting Committee, said operating profits were down a steep 89.0 percent from one year ago. The survey also revealed year-on-year declines of 79.3 percent for pretax profits and 90.7 percent for net profits.

Total industry revenue dropped 5.7 percent to \1,706,282 million, logging a fourth straight year-on-year decline. Operating expenditures fell 2.5 percent to \1,698,889 million.

The rate of decline in both revenue and operating expenditures increased from one year earlier. The rate of decline in revenue exceeded that in operating expenditures, thereby pushing up the margin of decline in operating profit to 89.0 percent year-on-year, as compared to the 29.6 percent year-on-year decrease reported in fiscal 2007.

Pretax profit, or the sum of non-operating profit-and-loss and operating profit, plummeted 79.3 percent, as compared to the 24.8 percent decrease in fiscal 2007, while net profit, which combines extraordinary income-and-loss and a corporate tax deduction, plunged 90.7 percent, as compared to the 33.2 percent drop in fiscal 2007.

Among the total revenue figures, advertising revenue declined 15.2 percent (as compared to the 6.0 percent decrease in fiscal 2007) to \471,750 million, while circulation income slipped 0.8 percent (as compared to the 0.5 percent drop in fiscal 2007) to \998,477 million. °»Other°… operating revenues decreased 4.7 percent (better than the 6.7 percent fall in fiscal 2007) to \236,100 million.

This year°«s annual survey results were based on an assessment of the closing accounts of a sample of 41 NSK member companies that publish daily newspapers.


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Story of the Month>>>

Work Continues on Common Platforms for Digital Magazines, Newspapers

New moves continue to emerge in the aim of standardizing the electronic delivery of digital content for newspapers, magazines, books and other print publications.

The debate continues within Japan over Google Inc.°«s controversial digital book project that aims to scan existing print copies of published books for distribution over the Internet. One of the results of that debate has been an effort to provide Internet access to digitalized contents of publications and reference materials held by the National Diet Library.

Toward that end, the publishing industry has been experimenting with a pilot project for distributing digital copies of magazine articles over a common platform. Two private companies in particular have launched services to establish a standard platform for newspaper publishers to distribute their electronic editions.

The new developments focus on creating a functional online infrastructure for digital distribution and on expanding the prospects for the commercialization of such new services.

The Japan Magazine Publishers Association will in January 2010 begin a pilot project for the distribution of digitalized magazine articles, supported by the Ministry of Internal Affairs and Communications. In August of this year, participants established the Consortium for the Promotion of Digitalization of Magazine Contents. In addition to 44 publishing houses, a total of 44 companies in telecommunications, advertising, printing and the electric appliance and other fields joined the consortium.

Tetsuya Okubo, a board-level manager for magazine channel and sales development at major publisher Shueisha Inc., was selected to head the consortium. Okubo said: °»Until now, publishers have been individually tackling the challenge of digital distribution of magazine contents. But the financial burden was too heavy and there was little prospect for profitability in that (non-standardized) approach.°…

The steep drop in advertising revenues following the Lehman Brothers fiasco has provided momentum for adopting an industry-wide solution instead of continuing the previous individual company approach, asserted Okubo.

Against that backdrop, the Japan Book Publishers Association applied the ministry to take part in an international development project under the umbrella of ICT (Information & Communication Technology) advanced undertakings. The ministry readily endorsed the association°«s proposal for a model project.

The book publishers association now aims to commercialize the digital distribution of magazine content by 2011, at the end of a two-year pilot experiment. In January, the association was committed to begin experimenting in digitally distributing articles from 30 to 40 magazines to personal computer users.

Okubo said that in order to get users to read as many articles as possible over the Internet, the unit fee per article should be held to a low level of perhaps less than \100. To cope with payment settlements dealing with such small sums, users are to be asked to purchase articles through the use of points.

The consortium is also setting up three study groups to continue feasibility studies into the creation of an integrated database for articles, the launch of a portal Web site, and into developing a payment settlements method that also focuses on a common way to carry advertisements.

Okubo said he expected major challenges in the treatment of copyrights and in standardizing a format for digital content. °»In particular, the treatment of copyrights is our biggest impediment,°… he said. He noted that more than 100 writers, photographers and illustrators are commonly involved as copyright holders in the publication of a single magazine. It therefore takes an enormous amount of labor to obtain permissions from each copyright holder to digitalize content for distribution over the Internet. One study will address the advisability of setting up an institution specifically charged with the management of copyrights.

As for adopting a common format for digital content, Okubo was relatively optimistic °»The number of printing companies is limited, and it ought to be comparatively easier to agree on a format for digital contents,°… he said, adding that the consortium will call on the printing companies to cooperate in the project.

While sales of print magazines remain weak, the consortium°«s project would provide a new opportunity for readers to stay in contact with magazines. Moreover, the planned distribution of magazine articles over the Internet will generate new competition among magazines, leading to higher quality among magazines in general, Okubo predicted.

He also said the project participants will seek not to interfere with existing distribution channels for print magazines. For instance, the system will seek to involve existing distributors, bookstores and convenience stores in the collection of fees from users of digital content, he said.

In the newspaper industry, efforts are centering on providing an industry-wide platform to distribute electronic editions of newspapers.

In August of this year, the software developer WAYZ JAPAN, Inc., based in Tokyo°«s Shinjuku Ward, launched a Web site called °»Shinbun Online .com°… that serves up digital editions of seven community papers and two trade journals.

The seven participating community papers are the Iwaki Minpo, the Kiryu Times, the Minamishinshu Shimbun, the Shimin Times, the Yukan Mie, the Minamikishu Shimbun, and the Shimane Nichi-Nichi Shimbun.

Newspaper Navi, Inc., a new company established by Yasuhiro Yamaguchi, a former official of the Sankei Shimbun, in October opened an experimental Web site featuring two trade journals.

In both cases, registered members of each site can browse the digital editions of their choice. The digital editions carry all the images contained in the print editions. As the content providers, the newspaper publishers can set subscription fees for their digital editions and can designate which areas of the digital editions will be available over the Internet. For instance, they can exclude from the online service all the areas where their print editions are being distributed.

Yamaguchi of Newspaper Navi said that newspaper companies can use his platform without taking any risks, or they can try it out just as an experiment. Naoyuki Kikuchi of WAYZ JAPAN°«s hyper-media business division shared Yamaguchi°«s view. He said that by using the firm°«s platform, newspaper companies could start an online business without having to earmark any initial expenditures or maintenance fees.

Asked about the prevailing skepticism about the diffusion of electronic newspapers and online editions, Yamaguchi said: °»The question is not the marketability of electronic newspapers, but the availability of new services by which to market them.°… Specifically, Yamaguchi pointed to the need to diversify the payment settlement methods for the convenience of subscribers to electronic newspapers. °»In addition, the merits of electronic newspapers should be fully utilized to offer new added value to newspapers,°… he said. To this end, his Newspaper Navi site enables users to search texts, and to copy and paste from page images for local data storage, as well as being able to put a memo marker on their content display screens.

Kikuchi of WAYZ JAPAN said that for the diffusion of newspaper online editions, it is vital to enable subscribers to read digital contents on mobile phones or game machines in view of the continuing change in user lifestyles.

He said that digital distribution must not be limited merely to images of newspaper pages but should instead allow users to read digital content on multiple terminals. On the other hand, he admitted that online distribution of page images would also be effective in inducing users to pay for digital content despite the prevailing public view that news content on the Internet should all be available for free.

One key outstanding challenge is finding a way to stop the diffusion of electronic newspapers from undermining the existing market for print editions.

On this point, Yamaguchi noted that regular subscribers to print editions are primarily in their 50s, while the primary targets for online editions are in their 30s or younger and have a better command of personal computers. Yamaguchi said he expected this distinction to keep online editions from seriously harming the business model for print editions.

°»While preserving the market for print editions, the newspaper industry must explore new markets by promoting the digitalization of its content. This will give us an opportunity to grab back future readers who have so far shied away from print newspapers,°… Yamaguchi stressed.

Nihon Shinbun Kyokai
The Japan Newspaper Publishers & Editors Association
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