Innovation Nippon 2015 Research Report
The Economic Impact of Information Sharing on the Internet
In this report, we investigate the positive economic impact of information sharing on theInternet in the following four aspects. 1. What services are there to support online information
sharing? 2. How many people use these services? 3. How large is the direct economic impact?
4. What social values do these services create?
First, we analyzed existing services supporting online information sharing and classified
these into eight types: "online review sites," "electronic bulletin boards," "blogs," "Q&A sites,""SNS and communication sites," "video sharing sites," "opinion sharing sites," and "content
curation sites." Second, on the basis of an analysis of the questionnaire and the economic
impact, we identified the number of users and associated economic effects. It should be notedthat "users" are the number of users in their 20s~60s.
The number of users and the economic impact of the information sharing
ServiceMarket

CommuniEconomic

Users

Characteristics

TypeSizecation Fee

ImpactOnline

35.6

108.8

144.4

24.68 million

A large number of female

review sites

billionbillion

billion(31%)

users.

yen

yen

yen

Electronic

14.7

159.3

174.0

17.60 million

A large number of malebulletinbillionbillionbillion(22%)

users in their 30s.

boards

yen

yen

yen

Blogs

23.9

229.4

253.3

22.61 million

There is no difference inbillion

billionbillion(28%)

the number of users by

yen

yen

yen

19.2

78.3

97.5

20.94 million

A large number ofbillion

billionbillion(26%)

middle-aged users.

yen

yen

yen

SNS and87.2

279.9

367.1

22.58 million

A large number of users

communicati

billionbillionbillion(28%)

in their 20s; 59% ofon sites

yen

yen

yen

Q&A sites

gender.

women in their 20s use
these.

Video

88.6

538.1

626.7

30.58 million

The highest number ofsharing sites

billionbillionbillion(38%)

users. Over 50% of theyen

yen

yen

men and women in their
20s use these.
1Opinion

5.1

39.0

44.1

9.25 million

A large number of users

sharing sites

billionbillionbillion(11%)

in their 50s and 60s.

yen

yen

yen

19.9

38.1

58.0

8.43 million

Very few users in theirbillionbillion(10%)

50s and 60s.

yenyenyen

294.1

1,470.9

1,765.0

Contentcuration sites billion
Total47.47

There are over 10Ibillion

billionbillionmillionmillion users in theiryenyenyen(59%)

20s.
There are over 5 million
users in their 60s.

We divided the economic impact into the market size and communication fee, which istypically the amount a user pays to the ISPs and other telecommunications providers. It was
found that the overall economic effect was 1,765 billion yen. This value represents about 90%
of TV advertising revenue, and 214% of Internet advertising revenue. In short, the information
sharing on the Internet has already had a significant economic effect.
The market size and communication fee are quite different. One may infer from this thateither the communication fee is too expensive or the revenues of the information sharing sites
are too small. First, the creation of innovative online services could be hindered if Internetusage cost is high for end users. One may further connect this with recent policy discussions
about mobile device fees. However, the information presented in the mobile phone fee IIinternational comparative study in 2014 suggests that the fee in Japan is not particularly high.
Second, the online sites may have some problems. Earning 294.1 billion yen from serving 50
million users is too small. At least two explanations seem possible: 1) the service providers inJapan may not have established good business models, or 2) advertisers in Japan do not use
Internet advertising and end users are not willing to pay for these online services. These arequestions for future studies.
There are some other limitations to the current study. The figure 1,765 billion yen is thedirect economic impact of information sharing on the Internet. However, there are othereconomic benefits outside of this direct economic impact, most notably stimulation ofconsumption and elimination of asymmetry of information. Furthermore, reviews of
e-commerce sites, sharing services, and distribution services are not included in our current
study. They, too, have online information sharing functions, and the economic benefitsI
IIThe number of users who use at least one of these services.
The comparison is based on cost of packets, excluding the rate for telephone calls.
2generated there are presumably sizeable.
Among them, there are two types of effects on consumers. First, online information
services eliminate asymmetry of information because consumers can use third person opinions
as a reference when they make purchasing decisions. Thereby, they can avoid purchasing poor
quality products and choose better goods within the same budget. Second, consumers canacquire new information easily because many information-sharing services have sort functions
by review evaluation points. Consumers can acquire the new information that suits theirinterests using these sorting features.
In addition, there are two types of effects on producers. First, small and medium
enterprises have a greater chance of gaining consumer attention. Attracting consumer attention
was next to impossible for such enterprises up until these information-sharing services
appeared. Second, producers can acquire knowledge about consumer needs at low cost,enabling them to improve services and develop products more easily.
The following table summarizes the economic benefits beyond the direct economic
impact.
The economic benefits beyond the direct economic impact
Subject

EffectConsumer a) Eliminating asymmetryOutlinea) Consumers can acquire information not transmittedof informationby producers.

b) Access to newb) Consumers can acquire new information that suits

information

them using sorting functions for the information otherconsumers transmit.

Producerc) Easily attract customersc) Small and medium enterprises can improve
consumerawareness,previously

impossible

toengender until information sharing services appeared.
d) Optimum improvementd) Producers can learn about consumer needs at lowof, or new development

cost, enabling them to improve services and developof, services and products

products easily.

Furthermore, the scope of this effect can be explained as follows.

3

Scope of influence
Scope of Influence

Scale of Economy

Online transaction

12.8 trillion yen

Offline transaction

27.4 trillion yen

Total

40.2 trillion yen
It was discovered that the economic benefits beyond the direct economic impact ofinformation sharing on the Internet has had a strong effect on society. However, this effect has
not been reflected in the GDP. Therefore, it is necessary to consider this impact when thegovernment makes Internet policy decisions affecting online information sharing. Furthermore,creation of an index of these other economic benefits is an imperative.

4

Innovation Nippon 2015 Research Report
The Economic Impact of Information Sharing on the Internet
Published January 2016.
The Center for Global Communications (GLOCOM), International University of Japan
Address: Harks Roppongi Bldg. 2nd floor, 6-15-21 Roppongi, Minato-ku, Tokyo 106-0032
Tel: 03-5411-6677
Please contact Shinichi YAMAGUCHI (syamaguchi@glocom.ac.jp) for inquiries on thisresearch.

Innovation Nippon is a project that has co-founded by GLOCOM, International
University of Japan and Google Japan. The project has been conducting studies
and producing policy proposals related to Information & Communications
Technologies (ICT) usage to accelerate innovations in Japan. The project's updates
and archive can be found on its website: http://innovation-nippon.jp.