Online Media in Japan: Can the Huffington Approach Succeed?

My previous article looked at how election campaigns in Japan have entered the Internet age, and concluded by emphasizing the key role of online media in conveying the messages of politicians to voters. The Internet provides a constant stream of information, most of which is instantly buried and goes unnoticed. Voters have a hard time picking up relevant information, so the media needs to help with that process.

Voters need the online media—particularly the established outlets producing and editing their own content—to navigate the various political arguments and viewpoints so that they can make an informed decision at the ballot box.

Despite this need, businesses and organizations seeking to get a foothold in Japan’s online media sector—or develop and manage their operations—now face a difficult situation. Here I will take a closer look at the challenges they are dealing with.

Balancing Profitability and Quality

Two main issues confront Japanese firms seeking to establish a presence in the online media sector. First, they need to have the resources, including skilled personnel, to produce high-quality content. Finding such media personnel in Japan, however, is difficult, given the limited liquidity in the labor market due to the “one-job-for-life” tendency among employees at major media firms.

On top of this, online media companies have a hard time recruiting the best talent since traditional media outlets such as television and newspaper firms offer much higher salaries. The companies also lack the financial resources needed to station staff all over Japan, which is crucial to fostering the careers of younger employees.

The second issue concerns profitability. At present, most online media outlets make their articles available for browsing free of charge, earning revenue from advertisements placed alongside the content. Under this business model, the number of page views and the number of times readers click on advertisements become the key metrics. But there is a limit to how many page views any organization can generate, especially in fields such as politics or economics. Although this is a problem that confronts any media outlet that relies on advertisement revenue, and indeed the advertising industry as a whole, the fact remains that generating revenue while producing high-quality content is very difficult in the short term under this model.

Some major newspapers have been putting their online content behind pay walls recently, but this is only possible because they have existing print subscriptions and advertising income. It would be very difficult for the online media to do the same. The fact that the Japanese live-streaming service Niconico Nama Hōsō was able to successfully broadcast live debates between the leaders of Japan’s political parties in the run up to recent elections was only because of its solid revenue generated from viewers who pay mainly to access content related to entertainment and other areas.

One index that has recently gained traction is called Social Return on Investment, which seeks to measure the social value of activities not reflected in financial data. Some in the United States and Europe are also actively exploring how to manage operations based on contributions from users. In Japan, however, there are few examples of online media like ProPublica, which are contribution-based nonprofit organizations.

These two issues are essentially opposite sides of the same coin. That is to say, good content attracts customers and therefore profits, which are used in turn to hire talented staff to produce better content. Every company in the online media space is trying to work out how to get that sort of positive feedback loop started. Many online media outlets are abandoning the publication of straight news to focus instead on opinion pieces. The basic trend is toward producing content at the minimum cost. Aggregation sites, like our site Blogos, publish articles by individual bloggers. The writers are compensated based on the number of times an article is viewed, and they also benefit from the wide exposure of a major site.

The Huffington Post Arrives in Japan

Blogos and other Japanese online media recruit writers in various ways. The original appeal of Niconico Nama Hōsō, mentioned earlier, was that users could freely post videos. Recently the videos have been combined with text to produce a paid service called Blomaga that hosts online “e-mail magazines.” Japan’s most popular portal, Yahoo! Japan, contains a section where contracted individuals can freely post articles. Starting in the spring of 2013, however, fees were required to view some of this content in order to better compensate writers. At Blogos, we will be introducing a new system for rewarding writers, as part of our efforts to provide them with better support.

In the past few months, the Japanese version of the Huffington Post has entered the fray, going live on May 7, 2013. Editor-in-Chief Matsuura Shigeki hopes to create a new space for online discussion and says that the comments on each article will undergo strict filtering. A key issue will be how to raise the motivation of “contributors” in the broad sense, including those who are expressing their opinion in the comments section rather than writing articles. The Huffington Post seems to have enjoyed success where it has operated because even high-profile writers have agreed to contribute free of charge in order to benefit from publicity generated by the site.

However, criticism has been leveled at the website in the United States, where it started, because the trend in its content is toward fewer and fewer political and economic articles—concentrating on entertainment and gossip instead. It is true that advertising dynamics demand that the media touch on the juiciest stories, but this presents a dilemma for a site that has positioned itself as a forum for serious public debate. Shifting to a pay-to-view model would make it harder for viewers to gain access and drive down the page views, which in turn cuts into profits. This means that site operators need to carefully weigh the pros and cons before making a decision.

How to Support Writers

The content and funding problems described above are not so hard to solve when it comes to a site run by an individual. Some writers have used revenue from their e-mail magazines or other online publications to invest in staff and research. But many of these writers already have an established record in the world of print publication and a certain level of fame. There are very few cases in Japan of writers that have built their reputation and fame from writing on the Internet. At present, it is still easier for a writer to be “discovered” by working for a traditional publisher. I think that online media organizations need to make serious efforts to change this. There are likely to be many lessons that can be drawn from the traditional publishing model, where editors guide writers and the best work is rewarded with prestigious prizes.

The Huffington Post site in Japan seems to be aiming for higher quality journalism, with a focus on politics and economics, and its writers overlap with Blogos’ contributors and the individual writers section of Yahoo! Japan. The site also has the potential to open up a space for public debate in response to the articles posted, via the comments section, but it will need first to secure enough content contributors. It will be interesting to see how the Huffington Post promotes its writers. This issue of how to provide better support to writers is one that all online media outlets, including Blogos, will have to carefully consider in the future.

Since the eighteenth century, a concept has existed among Japanese tradesmen and merchants called sanpō yoshi, literally meaning the “three-way good.” According to this concept, a transaction must be beneficial to not only the buyer and the seller, but also society at large. There is already an awareness that the mainstream news media has an obligation to serve the public. But with online media, too, it is essential for site operators to focus not only on the “buyers” (readers) and the “sellers” (media), but also on the writers who are providing the content. If the operators do not arrive at a proper balance, they will find themselves on shaky ground in five or ten years’ time—and let me be clear that this observation equally applies to my own site.

My next article will look at how online media can produce outstanding content, particularly in relation to online political campaigns.

(Originally published in Japanese on July 3, 2013.)