Contents and Culture Industries
Ryoichi Imai1

Issues• Contents industries today.
• A case study – symphonic orchestras.

2http://www.meti.go.jp/committee/materials2/downloadfiles/g100405a04j.pdf

3Culture as Industry• GDP share of the culture industry (excluding food andtourism) is around 7% (45 trillion yen).
– Tourism 16.7
– Transportation vehicle 16.6
– Electronics 14.9

• Employment share of the culture industry (excludingfood and tourism) is around 5% (2.15 million).
– Tourism 4.00
– Transportation vehicle 1.10
– Electronics 1.60

• http://www.nikkei.com/article/DGXNASFS0902F_Z00C
14A6EE8000/
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Gaps between Self Image and International Evaluation• Japanese people believe that our products areof high quality, while foreigners do not thinkso much.
• Japanese people think that Japanese products
are not so unique or original, while Asian
consumers value them as unique and original.
• The government suggests that Japan should
exploit more value‐added from the “cool”
image of Japanese products.
6http://www.meti.go.jp/policy/mono_info_service/contents/downloadfiles/1401_shokanjikou.pdf

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Contents Industry• What are the contents industries?
– Motion pictures– Music– Games– Books and printed products• Japan’s contents industry is ranked at thesecond largest of the world.
• It stagnates in the last decade, reflecting
population aging.
8Hollywood motion pictures adaptedfrom the Japanese originals

9TV programs• Japan’s TV programs
are deadlycompeting against
Korean’s in theglobal market.
• The market share ofthe Korean TV
programs is larger
than the Japanese
one in the world.
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11Animation and Games• The sales of Japan’s animated motion pictures
recorded its historical high in 2005, reflecting
the international success of the anime of
Hayao Miyazaki.
• The game industry acquire sales by 70% in theglobal market.

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A Case Study of Japan’s high culture
Symphonic Orchestras• Services, including culture, are superior goods inthe sense that the larger the economy is, thelarger GDP share is created by service sectors.
• Even though the government support has been
declining, Japan’s symphonic orchestras has
increased their industry.
• In 2009, Hashimoto Tohru, the controversial
Osaka prefectural governor, suddenly cut thefinancial support for orchestras located in Osaka
prefecture.
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US‐Japan Comparison• There are 65 orchestras, of which the annual
budget is larger than 5 million $ in the US.
• There are 25 professional symphonicorchestras in Japan.
– Among them 5 orchestras earns annual revenues
less than 500 thousand yen, comparable to the US
counter parts.

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Osaka• The annual revenues acquired by orchestras in Osaka
are much less than orchestras in Tokyo, and even lessthan Sapporo and Kyushu.
• Orchestra players can earn income by teaching
students of university orchestras.
• In urban area like Tokyo and Osaka, there are many
university orchestras.
• Then orchestra players in Osaka can compensate
them for their low income by teaching.
• Thus there are too many orchestras in Osaka.
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Tokyo• There are three major professional orchestras inTokyo:– NHK Symphony is employed by NHK broadcastingcompany.
– Tokyo Metropolitan Symphony is the official orchestraof the Tokyo Prefecture.
– Yomiuri‐Nippon Symphony is sponsored by Japan’slargest newspaper publisher.

• No Tokyo orchestras receive subsidies from thelocal governments, except for New Japan
Philharmonic.
16Other• Orchestras in other major cities are significantly
sponsored by the local governments.
– Sapporo, Kyushu, Hiroshima,,,– Kyoto City Symphony is owned by Kyoto city.

• In Tokyo, professional orchestras earn sufficient
income from concerts, and the local governments
do not provide financial supports.
• Orchestras in local areas crucially depend on thefinancial supports from the local governments.
17Orchestras are getting bigger under negative
GDP growth!
• Classical music is a superior good – its
consumption grows more than proportionallyas the economy grows.
• 2004: annual revenue 24 billion yen, Japan’s
GDP 503 trillion yen.
• 2013: annual revenue 26 billion yen, Japan’s
GDP 480 trillion yen.
• The GDP share of orchestral music isincreasing even under negative GDP growth!
18Mechanism behind• People believe that technological progress makesthat industry bigger.
• However, it is not true!
• Technological progress enables the industry to
make the product at lower costs.
• Consumers do not increase its consumption somuch, even if the price is reduced bytechnological progress.
• Consumers can save their expenses for thatproduct and spend more in goods and services,where there is no technological progress.
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Stagnant Sectors Grow!
• A famous economist, William Baumol, pointed
out this mechanism in 1960s.
• The relative price of the good where
technological progress occurs decreases.
• Demand as well as supply shifts frominnovative industries to stagnant ones.
• The string quartets of Mozart earn more than
100 times of what they did 220 years ago.
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