Economic Contribution of the Japanese
Film and Television Industry
ReportOctober 2015
Mitsubishi Research Institute, Inc.

This report has been commissioned by The Motion Picture Association (MPA) in collaboration
with Japan and International Motion Picture Copyright Association, Inc. (JIMCA). JIMCA
represents the interests in Japan of major motion picture companies and the MPA.

Acknowledgements
This report required gathering data from number of sources, including publicly available data fromdomestic industrial organizations. We would like to thank the organizations below for their help in
our understanding of the data, as well as their cooperation with our interviews and discussions.
Japan Satellite Broadcasting Association (JSBA)

Foreign Film Importer - Distributors Association of Japan (FFIDAJ)

Motion Picture Producers Associations of Japan, Inc. (MPPAJ)Japan Video Software Association (JVA)Japan Cable and Telecommunication Association (JCTA)The Association of Japanese Animation (AJA)

Japan Association of Theatre Owners (JATO)

Compact Disc & Video Rental Commerce Trade Association of Japan (CDV-J)(Japanese alphabetical)

Contents
1. Executive Summary ................................................................................................................... 1
1.1 FRAMEWORK AND METHODOLOGY .................................................................................................... 1
1.2 RESULTS FOR ECONOMIC CONTRIBUTION AND MARKET OUTLOOK....................................................... 1

2. Framework and Methodology ................................................................................................... 3
2.1 OUTLINE OF THE STUDY ................................................................................................................... 3
2.1.1 Purpose of the study .............................................................................................................. 3
2.1.2 Study items ............................................................................................................................ 3
2.1.3 Study flow .............................................................................................................................. 4
2.2 FRAMEWORK AND METHODOLOGY .................................................................................................... 4
2.2.1 Measures of economic contribution ....................................................................................... 4
2.2.2 Methodology and assumptions .............................................................................................. 5
2.3 DEFINITION OF INDUSTRY ................................................................................................................. 7
2.3.1 Categorizing the subsector .................................................................................................... 7
2.3.2 Structure of the Japanese Film and Television Industry ........................................................ 9
2.3.3 Scope of industry and market ...............................................................................................11
2.4 APPROXIMATIONS AND LIMITATIONS ................................................................................................ 122.4.1 Time frame ........................................................................................................................... 122.4.2 Estimated versus actual figures ........................................................................................... 122.4.3 Unit for Evaluation ............................................................................................................... 13

3. Study results ............................................................................................................................. 14
3.1 FILM AND TELEVISION INDUSTRY (OVERALL) ................................................................................... 14
3.1.1 Economic Contribution ......................................................................................................... 14
3.1.2 Market outlook (2014- 2020)................................................................................................ 15
3.2 FILM PRODUCTION / DISTRIBUTION .................................................................................................. 18
3.2.1 Economic contribution ......................................................................................................... 18
3.2.2 Market trend ......................................................................................................................... 18
3.3 FILM EXHIBITION............................................................................................................................ 22
3.3.1 Economic contribution ......................................................................................................... 22
3.3.2 Market trend ......................................................................................................................... 22
3.4 TV PROGRAM PRODUCTION / DISTRIBUTION..................................................................................... 27
3.4.1 Economic contribution ......................................................................................................... 27
3.4.2 Market trend ......................................................................................................................... 27
3.5 TELEVISION BROADCASTING .......................................................................................................... 30
3.5.1 Economic contribution ......................................................................................................... 30
3.5.2 Market trend ......................................................................................................................... 30
3.6 HOME VIDEO.................................................................................................................................. 33
3.6.1 Economic contribution ......................................................................................................... 33

3.6.2 Market trend ......................................................................................................................... 33
3.7 ONLINE SERVICE ............................................................................................................................ 37
3.7.1 Economic contribution ......................................................................................................... 37
3.7.2 Market trend ......................................................................................................................... 37
3.8 ESTIMATION OF MARKET SIZE ATTRIBUTED TO FILMS ........................................................................ 40
3.9 REGIONAL ECONOMIC CONTRIBUTION ............................................................................................. 42
3.9.1 Contribution of local stakeholders in regional areas ............................................................ 42
3.9.2 Tourism impact ..................................................................................................................... 43

4. Appendix ................................................................................................................................... 45
4.1 METHODOLOGY AND SOURCES OF DATA ......................................................................................... 45
4.2 M AIN QUANTITATIVE DATA SOURCES ............................................................................................... 51
4.3 DETAILS FOR ESTIMATION OF MARKET SIZE ATTRIBUTED TO FILMS .................................................... 52
4.4 ECONOMIC CONTRIBUTION EXCLUDING OTHER AUDIO-VISUAL CONTENTS .......................................... 53
4.5 RESTRICTIONS............................................................................................................................... 54

1. Executive Summary
The goal of this project is to quantify the economic contribution of the film and television industry inJapan. This study is basically an update to the study conducted in 2012, providing additional
essence of recent industry trends as well as important aspects of government policy agendas suchas content industry development strategy and regional revitalization.
This project was conduct in collaboration with local industry organizations, in addition toquantitative analysis based on sources from governmental statistical agencies, industry bodies,and other parties, to provide robust results illustrating the industry structure.

1.1 Framework and methodology
In order to assess the economic contribution of the Japanese film and television industry, thisstudy estimates economic indicators such as gross output, value added, labor income, tax
revenue, and employment. These economic indicators were estimated through direct impact
which describes the economic activity within the defined industries, and indirect impact which
describes the economic activity in other industries triggered by the direct impact, as well as
induced impact which describes the further economic impact resulting from increase in income.
These are added to derive the total economic contribution for each indicator.

1.2 Results for economic contribution and market outlook
The economic contribution in 2014 brought about by the film and television industry in Japan are
as follows:

The total gross output in Japan arising as a result of the film and television industry isapproximately 5,301.5 billion Yen for the direct impact, and 11,352.5 billion Yen for the total
contribution including indirect/ induced impact.

The total value added to the Japanese economy in 2014 from film and television industry isapproximately 2,369.0 billion Yen for the direct impact, and 5,577.8 billion Yen for the total
contribution including indirect/induced impact.

The labor income in Japan generated as a result of film and television industry is 1,004.6 billion
Yen for the direct impact, and 2,571.5 billion Yen for the total contribution including indirect/
induced impact.

The tax revenue in Japan generated as a result of film and television industry is 418.1 billion Yen
for the direct impact, and 955.3 billion Yen for the total contribution including indirect/ induced
impact.



The total value added for the film and television industry accounts for 0.49% of GDP1 for the
direct impact, 1.15% for the total contribution.

1

Nominal GDP for 2014 : 487.5 trillion Yen (Announced by the Cabinet Office)1The total employment created in Japan as a result of film and television industry is estimated tobe 122,041 for the direct impact, and 381,368 for the total contribution including indirect/ induced
impact.

The market forecast (2014 to 2020) in Japan is as follows. This forecast covers the distribution(consumption) market, in particular, film exhibition, TV broadcasting, home video and online
service market.


In overall, the film and television broadcasting industry is forecast to grow at CAGR 1.0% to reach
4,566.2 billion Yen by 2020, compared to 4,390.1 billion Yen in 2014.



Japanese economy as a whole had a reduction impact during 2011 due to the Great East Japan
Earthquake Disaster in March 2011. However, the market is resuming its pace, mainly pulled by
the broadcasting market which accounts for over half of the industry revenue.

The key factors for growth in the Japanese film industry include further development indigitization, and new trends such as ODS (Other Digital Stuff/ Online Digital Source) for cinemas.
In terms of television broadcasting, utilizing new technologies such as 4K/8K broadcasting,hybrid TVs and multi-screen is expected to create new value in viewing. It is essential that thesefactors will create demand to widen consumer basis in the overall industry.



As regional vitalization is one of the important government agendas, business activities ofcontent related companies in regional areas, distribution of regional content, ripple effects intourism, and also overseas marketing of film and television program content by regional
stakeholders are important aspects in terms of contribution to regional economy.

22. Framework and Methodology
2.1 Outline of the study
2.1.1 Purpose of the study
The aim of this report is to analyze the contribution of the Japanese film and television industry to
the Japanese economy, quantitatively and qualitatively. In particular, this study measures the
direct and indirect economic impact derived from production, distribution and exhibition/
consumption of film and television content. In addition, this study includes industry outlook with
forecast over the next six years, considering the recent market trends in each subsector, which isdefined in this report.
Also, apart from these macro-economic approaches, this study covers case studies to give apractical image of the economic effects originating in films and television broadcasting.

2.1.2 Study items
This report covers the study items shown in Table 2-1.

Table 2-1 Description of the study items
Study items

Description

ArticleMarket trend analysis

The results include the past and recent market trend for each

3.1 –3.7

subsector within the industry, by explaining time series ofimportant statistics, and/or examples of major services.
Estimation of economic

The results describe the economic impact of film andcontribution

television industry as a whole as well as for each subsector forthe year 2014. This is the main purpose of the assignment.

Market outlook

The results explains the industry outlook and estimates formarket forecast for major subsectors taking into account themarket trend analysis.

Estimation of market

The study item intends to focus on the film content, andsize attributed to films

results include estimates of the market size (direct impact)

3.8

attributed to it.
Regional
contribution

economic

Qualitative perspectives and examples are provided toInternal and external trend and examples will be provided tosupport the quantitative macro analysis in above study items,
to illustrate practical cases of economic effects.

33.9

2.1.3 Study flow
This study was conducted based on the following steps:
1

Research planning

Existing study surveys, analysis framework and research items

2

Data collection

Market research, Economic indicators, interviews and discussions
with industrial organizations

3

Analysis

Estimation of economic contribution, market trend and forecast

Note that this report should be read in conjunction with the Restrictions stated in Appendix.
2.2 Framework and methodology
2.2.1 Measures of economic contribution
This study estimates the economic contribution of the film and television broadcasting industry infour indices. Table 2-2 describes each index in details.

Table 2-2 Economic index measured in this study
Index

Definition

Gross Output

Total amount of production concerning value of goods and services based onlabor and capital within the industry. This represents the total amount of revenueof all participants in the industry. Gross Output includes the intermediate inputs,
which is the value of all goods and services used as inputs to generate that
output.

Value Added

Value that was added by activities within the industry, which excludes the valueof intermediate input from the Gross Output. It consists of production surplus,
labor income and net indirect tax. Value Added is often described as the grossdomestic product (GDP) contribution of an industry. It is the most commonlyused measure of the value generated by an industry or by the economy as awhole, and can be used to compare with national GDP statistics.

Wages

A subcomponent of Value Added which is distributed to the employer, who(Labor Income)offered labor within the industry. It represents the value of output generated by
the entity’s direct labor inputs, as measured by the income to labor.

Tax revenue

Taxes (net of subsidies) paid by the industry.

Employment

Total of number of employees in each industry. In this study, in principle, Full
Time Equivalent (FTE) jobs are estimated, rather than total jobs which includes
part-time.

Export value

Export revenue or overseas sales of film and television content (package,
format, etc) and related products such as merchandizing.

Economic contribution estimated in this study represents the contribution of film and television4

industry to the domestic economy. In particular, it is the total of direct, indirect, and induced
impacts concerning economic index shown in Table 2-2. In this study, these are defined as follows:

Direct effectGross output, value-added, employment, and tax revenues that arise based on capital and labor
attributed to film and television industry. This represents the direct economic activities in theindustry, which includes, for example, production and distribution of film and television content aswell as film exhibition.
Indirect effectGross output, value-added, employment, and tax revenues that arise as a consequence ofchanges in the level and value for suppliers of goods and services to that industry. This represents
economic activities that are brought to other industries which provide goods and services to thefilm and television industry. For example, it includes revenue in industries which provide materials
to location for film production.
Induced effectGross output, value-added, employment, and tax revenues that arise as a consequence ofincrease in the level and value of expenditure on goods and services due to the increased labor
incomes, within the film and television industry and the industries that supply them.

The impact mentioned above are added together to present the total economic impact.

2.2.2 Methodology and assumptions
2.2.2.1 Estimation of direct impacts
We estimated the direct component of the film and television broadcasting industry’s economic
impact in terms of its contribution to the four indices (Table 2-2). The estimation flow is as follows:First, we estimated the total revenue for each subsector, which we defined it as Gross Output.
The figures our based on industrial statistics published from the government and industrialorganizations. Also, we gathered the data for Employment (number of employees : FTEs)
from these statistics, and conducted necessary estimation to meet the definition of eachsubsector.



We selected an industry sector that best describes each subsector, from the national
Input-Output transaction table. Input-Output transaction table is a format that describes thetransaction between goods and services of economic activities during the year. This study
used “Information and Communication Industry Input-Output transaction table” published by
the Bureau of Statistics of Ministry of Internal Affairs and Communications. It categorizes
industries that are relatively comparable to the industries defined in this study.



We then used the Input-Output transaction table to estimate the ratios of Value Added to
Gross Output, Gross Output to Employment, and Gross Output to Labor Income in the5selected industry sector, to derive the three indices from the Gross Output.


For Tax revenue, estimation has been conducted for indirect tax, individual tax, and corporate
tax. These components were estimated by multiplying effective tax rate to Value Added, Labor
Income, and Operating Surplus.

2.2.2.2 Estimation of indirect and induced impacts
The indirect and induce impacts were estimated by basically multiplying certain multipliers to thedirect impact. The multipliers were obtained from the “Inverse matrix table” contained in the
Input-Output transaction table mentioned in the previous section. Inverse matrix table is a table
which describes the value of economic activity required to meet the demand, when additional
demand in a certain industry is assumed. The sum of inverse matrix coefficient (“Multiplier”) is thetotal volume of effect in all the industries within the economy, when there is 1 unit demand in acertain industry sector. Therefore, the multiplier describes the “pump-priming effect” (scale ofimpact on own industry as well as on other industries) and is represented in figure of 1 or more.
For example, when a multiplier is “1.5”, “1” equals the value attributed to its own industry and “0.5”to the other industries.
The induced impacts were estimated by first obtaining the portion of the estimated labor income
from the direct and indirect impact, attributed to consumption. This value is attributed to eachindustry based on average propensity of consumption, which is the average percentage income
spent, and distribution ratio of private final consumption expenditure to every industry. Finally, themultiplier is multiplied to that expenditure and added up to derive the induced impact.
For the indirect and induced impact of Employment, this study focuses on employment based on
FTEs. However, the “Information and Communication Industry I-O table” mentioned above, does
not distinguish FTEs from the total number of employees. Therefore we combined the national
Input-Output table “2005 Input-Output table” compiled by Statistics Bureau of Japan, which
aggregates the FTEs for all industries. In particular, we derived the ratio for FTEs to total
employees for each industry from the 2005 I-O table, and multiplied the ratio to the employment
table contained in the “Information and Communication Industry I-O table”. Next, employment
coefficients (ratio of FTEs to gross output) for each industry are derived in order to estimate themultiplier for indirect and induced impact for employment, taking into account the increase in gross
output mentioned above. The multiplier is them multiplied to the direct impact (employment).
Details of the methodology are provided in the Appendix.

6

2.3 Definition of industry
2.3.1 Categorizing the subsector
In this study, we categorized individual subsectors within film and television broadcasting industry
by the following two aspects:
Types of output

Stages in the value chain

Breaking the industry down in these aspects helps understanding the value added in different
stages of the economic activity in the industry. This section explains the industry and subsectors
covered in this report in terms of the two aspects.

2.3.1.1 Types of output
Types of output refer to the output of content in products or services within the industry. In thisstudy, the following outputs are included:- Films (Japanese and foreign)- TV programs (domestic and foreign program distributed domestically, including commercials)- Other audiovisual content2
The categorization of the above is adopted from statistics published from government organization,
hence lowering the barriers in estimations. It currently represents the key output of the industry.
However, when economically evaluating the content industry, it is difficult to distinguish the value
added within the flow from production to final consumption. Moreover, taking into account the
recent trends in the market environment, its range of outputs is increasingly transformative. To
give examples relating to film and television broadcasting industry; convergence among different
types of content, merchandizing originated in film/ television programs, and increasing demand in
multi-screen (TV/ PC/ mobile) provision over broadcast and communication network. The
framework and industry categorization used in national statistics do not currently reflect thesetrends. Consequently, analysis of outputs based on traditional film screen and television screen
will not reflect the whole industry. This is why we have covered market trend analysis for eachsubsector to assess in a wider view, given that the estimates are bound by available statistics.

2.3.1.2 Stages of Value Chain (subsectors)
The value chain of the type of outputs, described in the previous section, which are produced andprovided to consumers, can be broken down into the following six subsectors:
2This report includes adult entertainment content
7- Production- Distribution- Film Exhibition- Television Broadcasting（Terrestrial /satellite / CATV）

Distribution(Consumption)- Home video (retail and rental)- Online service (Internet distribution to TV/PC/Mobile)

In this study, we analyze each subsector in terms of economic impact as well as market trend
analysis. The definition for each subsector is explained in Table 2-3.

Table 2-3 Definition of the each subsector
Subsector

Definitions

Production

Production subsector refers to producing the type of output defined in this report(film, television program, and other visual/ video content), which includes
development, photography and related technical process.

Distribution

Distribution subsector refers to distributing the produced or completed content. It
does not include retail distribution.

Film Exhibition

Exhibition subsector refers to displaying the distributed films to the public, throughlocation such as cinema and theatres. The revenue is generated from admission
fees paid by the audience. Revenue from merchandising in theaters is not included.

Television

Broadcasting subsector refers to distributing of content through broadcast television

Broadcasting

media. In this study, terrestrial, satellite, and CATV is covered as these are the main
television media in Japan. The revenue is generated from subscription fees andadvertisement. Internet Protocol TV (IPTV) is included here and its market trend is
explained within this subsector.

Home video

Home video subsector refers to selling or rental of content on physical format suchas DVDs/Blu-ray discs. In this report, the figures used to derive the economic
impact, are wholesale-based, which is the sale to retail shops or rental shops.

Online service

Online service subsector refers to distributing of content through internet media,
viewed on multiple platforms (e.g. PC, TV, and Mobile).

Out of those listed above, film exhibition, broadcasting, home video and online service are
generally referred to as “distribution” in a broad sense or “window”, which films or TV programs aredelivered to consumers. Film and television broadcasting industry is one of the most advanced
areas in the content industry in terms of multi-use / multi-window. Especially, film industry isremarkable in that trend. When a produced film is released, in general, revenue is generated fromadmission fees paid by the audience through exhibition in the cinemas and a portion of the8revenue is paid to film production / distribution companies. After a certain period, the same film isdelivered to consumers through multiple windows, such as pay-tv, home video (retail and rental)
and terrestrial television broadcasting. Hence, revenue is generated from retail sales oradvertisements. In addition, in recent years, internet media and devices such as mobile phones /tablets are penetrating at an enormous rate, leading to diversity of windows. Business model tend
to diversify also, as well as choice in pricing for consumers such as metered-rate (traditionally,
Pay-Per-View) or flat-rate. This implies that the means to deliver film and television content topotential viewers is widening.

2.3.2 Structure of the Japanese Film and Television Industry
2.3.2.1 Japanese Film Industry

Industry structure of Japanese film is shown in Figure 2-1 In the case of Japanese films,
production company, distribution company and exhibition company each play a large role.
Production company produces film, and distribution company reserves screens in theaters
and also rolls out sales promotion. Exhibition company basically operates and manage movie
theaters. The major domestic film companies, which is the four member companies of the
Motion Picture Producers Association of Japan, Inc. (Shochiku, Toho, Toei and Kadokawa),
integrates production, distribution as well as exhibition. As for the exhibition companies, otherplayers include independent companies as well as foreign-affiliated companies which mostly
manage the cinema complex. Also, many of the Japanese films are now produced by the“co-production committee”. The committee consists of film companies, publishing companies,
video retailing companies, advertising firms and broadcast operators. Co-production
committee scheme raises the recognition (of the film) relatively in a short term and contributes
to the increase in exhibition mobilization, since fund-raising, risk-avoidance and synergistic
effect can be expected.
In the case of foreign films, there are mainly two ways to distribution. One way is when major
foreign studios distribute through affiliated distribution agencies3 and the other is for the Japanesedistribution agencies to purchase a film through foreign market. The member companies alsopurchase and distribute foreign films. Film exhibition does not depend on the players categories(major domestic companies, independent, foreign-affiliated), and are released in various movie
theaters such as cinema complex.

3

Warner Entertainment Japan, Sony Pictures Entertainment Japan, Walt Disney Japan,
Paramount Japan G.K., Twentieth Century Fox Film Corporation, and Universal Pictures(Toho-Towa is responsible for distribution). As for the other independent distributing agencies offoreign films, Toho-Towa, GAGA Corporation, Asmik Ace Entertainment Inc., and others can belisted.
9

Figure 2-1 Structure of domestic film industry(Source： Mitsubishi Research Institute, Inc. based on multiple sources)

2.3.2.2 Television Broadcasting Industry
Figure 2-2 shows the structure of the Japanese television broadcasting industry. In Japan,
television broadcasting is broadly divided into terrestrial broadcasting, satellite broadcasting and
CATV. In recent years, IPTV (Internet Protocol TV) and 1 SEG broadcasting provided for mobile
phones have penetrated to a certain level. The terrestrial broadcasting consists public broadcasterNHK and commercial broadcast operators. NHK collects subscription fee and commercial
broadcast operators’ business is basically based on advertising revenues. Commercial broadcast
operators conclude “Network Agreement” to build cooperative relationships such as programming,
news report, production and sales business among local stations. Currently, there are fivecommercial broadcast operators.
For satellite broadcasting, there are two categories; BS (Broadcast Satellite) broadcasting which
utilizes broadcast satellite, and CS (Communication Satellite) which utilizes communication
satellite. The former has been developed as semi-quasi-media and the latter has developed as
multi-channel specialized media. In 2002, CS broadcasting utilizing communication satellite, which
is at the same orbit as BS broadcasting (110°East), has started. However, due to a revision in theregulatory framework, BS broadcasting and CS broadcasting (110°East) are currently categorized
as are categorized as “Primary Broadcasting”, which is the same as terrestrial broadcasting, andare referred to as “Satellite Primary Broadcasting”. Other satellite broadcasts are categorized as“General broadcasting”, which is the same as CATV, and are referred to as “Satellite General
Broadcasting”. As for the CATV, there are two categories. One is which CATV provides
retransmission of terrestrial television broadcasting programs. The other is which CATV provides

10

pay multi-channel packages that bundle retransmission of terrestrial and BS broadcasting withspecialized channels. Moreover, some provide services with VOD services or internet connections
and telephone services.
As of March 2013, there were 475 terrestrial commercial broadcast operators, 72 satellite
commercial broadcasters, 539 CATV operators (operators that have wired electronic
communication facilities that provide their own broadcasting) and 3 of them are IPTV operators(broadcasting by IP multi-cast scheme).

Figure 2-2

Structure of Domestic Television Broadcasting Industry(Source： Mitsubishi Research Institute, Inc. based on multiple sources)

2.3.3 Scope of industry and market
Based on 2.3.1- 2.3.2 and the scope and categories of the available statistical data, we have set
the target scope of this study as shown in Figure 2-3. The economic contribution of each window
in distribution (consumption) includes all visual content other than film exhibitions, as sum ingeneral, and as for the films, revenues related to the film content are described in section 3.8.
For the market outlook, we have set distribution (consumption) market, as whole, for forecast.

11

Figure 2-3 Scope of the industry and market(Source： Mitsubishi Research Institute, Inc.)

2.4 Approximations and limitations
2.4.1 Time frame
The economic contributions stated in this study are basically based on the economic activity of theyear 2014. However, note that the size of economic activity of film and television broadcasting
industry relatively tends to change year by year, similar to other content industries such as music/
books, and that the cycle goes beyond one year and spans multiple years.
Forecast is based on past market trends and forecast of industrial organizations as well as
discussions. The duration of past market trends taking into account, is for past 5 years (2008 to
2013, or 2009 to 2014). Note that this 5 year duration includes the highest record for film revenue(2010), and also the economic impact due to Great East Japan Earthquake of March 2011.

2.4.2 Estimated versus actual figures
Numerical values were based on the latest data available (2013 or 2014), by using the actual
value of the corresponding year. The details are provided in the Appendix. Also, for somesubsectors, the available statistics do not fully specify the component parts of the subsector
defined in this report, therefore assumptions were made in order to estimate the most approximate
results. In particular, approximations from the similar or broader industry categorization have beenused. This is provided in the Appendix.
The figures for Employment, we used the actual value for the year 2014 or estimated taking into
account the ratio of the number of employees to the gross output in the industry that best
describes the subsector in focus. However, note that taking into account the labor-intensive
employment structure often seen in the film industry, there is a limit in estimating the snapshot of
the current employment status.

122.4.3 Unit for Evaluation
When considering the flow of added value along the value chain in the industry, there areimportant aspects such as to avoid double counting and to reflect the actual structure in eachsubsector. In particular, we need to define the unit of evaluation, whether it is based on production
or demand (consumption), or other aspects such as usage scenes.
For example, when evaluating based on production, in general, there is an advantage ofunderstanding the value added in the content (film or TV program) production stage. Therefore, it
can be said that it is a valid evaluation unit in understanding the cross-window or value added
within indirect economic effects to other industries, before the produced content is consumed.
However, compared to the general consumer goods where value added can be understood fromdifferences between production and retail sales, it is difficult to discriminate the value added, due
to its intangible nature and mixed distribution channels such as broadcasting or internet. On theother hand, when evaluating based on demand (consumption), the value added includes all thevalue added in the distribution process. However, it is likely to double count the value added andbe over-estimated, since it is difficult to distinguish between Business to Business and Business toConsumer relationship. Therefore there are limitations in understanding the value added flow fromcontent production to consumption, with a single evaluation unit. Moreover, there are limitations inavailable data across every subsectors defined in this report.

13

3. Study results
3.1 Film and Television Industry (Overall)In this section, we present the total estimated economic contribution for 2014 concerning all theindustries defined in this report, as well as six year industry outlook to 2020.

3.1.1 Economic Contribution
The economic contribution in 2014 brought about by the film and television broadcasting industry
in Japan are as follows.


The total gross output in Japan arising as a result of the film and television industry isapproximately 5,301.5 billion Yen for the direct impact, and 11,352.5 billion Yen for the total
contribution including indirect/ induced impact.

The total value added to the Japanese economy in 2014 from film and television industry isapproximately 2,369.0 billion Yen for the direct impact, and 5,577.8 billion Yen for the total
contribution including indirect/induced impact.

The labor income in Japan generated as a result of film and television industry is 1,004.6 billion
Yen for the direct impact, and 2,571.5 billion Yen for the total contribution including indirect/
induced impact.

The tax revenue in Japan generated as a result of film and television industry is 418.1 billion Yen
for the direct impact, and 955.3 billion Yen for the total contribution including indirect/ induced
impact.



The total value added for the film and television industry accounts for 0.49% of GDP4 for the
direct impact, 1.15% for the total contribution.



The total employment created in Japan as a result of film and television industry is estimated tobe 122,041 for the direct impact, and 381,368 for the total contribution including indirect/ induced
impact.

Table 3-1 shows the detailed estimated results for economic contribution and Table 3-2 shows thecomparison results with other industries.

4

Nominal GDP for 2014 : 487.5 trillion Yen (Announced by the Cabinet Office)14

Table 3-1 Estimated economic contribution (overall including other audio-visual contents)[Unit: billion Yen, person]

SectorGross output

Value added
Total

DirectTax revenue

DirectTotal

Film Production

113.5

229.8

51.4

115.8

25.4

56.6

7.5

Film Distribution

115.0

232.7

52.1

117.3

25.8

57.3

TV Production

390.1

789.5

176.8

398.0

87.4

TV Distribution

328.9

665.6

149.1

335.5

Film Exhibition

207.0

441.7

77.0

TV Broadcasting

3,746.7

8,183.1

Home video

274.8

Online service

125.5

Total

DirectLabor income
Total

DirectEmployment

Total

Direct

Total

18.4

8,852

21,661

7.6

18.7

1,360

3,326

194.4

25.9

63.3
14,27034,913

73.7

163.9

21.8

53.4

205.9

41.2

102.7

13.0

34.2

12,90425,686

1,679.4

3,993.3

656.8

1,791.2

313.5

699.5

78,552 279,083

556.2

124.5

280.4

61.5

136.9

18.2

44.6

2,005

4,906

253.9

58.7

131.6

32.8

68.5

10.6

23.2

4,098

11,7935,301.5 11,352.5

2,369.0

5,577.8

1,004.6

2,571.5

418.1

955.3 122,041 381,368(Source： Mitsubishi Research Institute, Inc.)

Table 3-2 GDP contribution of Film/ television industry
Film Industry and Television Industry

Value added
GDP Contribution

Direct contribution

Total contribution

2,369.0 billion Yen

5,577.8 billion Yen

0.49%

1.15%
(Source： Mitsubishi Research Institute, Inc.)

3.1.2 Market outlook (2014- 2020)
The market forecast (2014 to 2020) in Japan is as follows. This forecast covers the distribution(consumption) market, in particular, film exhibition, TV broadcasting, home video (retail, rental)
and online service market.


In overall, the film and television broadcasting industry is forecast to grow at CAGR 1.0% to reach
4,767.2 billion Yen by 2020, compared to 4,496.3 billion Yen in 2014.



Japanese economy as a whole had a reduction impact during 2011 due to the Great East Japan
Earthquake Disaster in March 2011. However, the market is resuming its pace, mainly pulled by
the broadcasting market which accounts for over half of the industry revenue.

The key factors for growth in the Japanese film industry include further development indigitization, and new trends such as ODS (Other Digital Stuff/ Online Digital Source) for cinemas.
In terms of television broadcasting, utilizing new technologies such as 4K/8K broadcasting,hybrid TVs and multi-screen is expected to create new value in viewing. It is essential that thesefactors will create demand to widen consumer basis in the overall industry.
15



As regional vitalization is one of the important government agendas, business activities ofcontent related companies in regional areas, distribution of regional content, ripple effects intourism, and also overseas marketing of film and television program content by regional
stakeholders are important aspects in terms of contribution to regional economy.

Figure 3-1 shows the market forecast for film industry and Television broadcasting industry.

Figure 3-1 Market forecast (2014-2020)(Source： Mitsubishi Research Institute, Inc.)

The basis of the forecast for each market is as follows.
 Film exhibition market: The market most recently marked the highest figure in its history,
reaching 220.7 billion Yen in 2010. We assumed that the market trend observed in the recent
years will continue for the next six years. In particular, adopting a trend forecast method for the
total revenue (domestic and foreign films) during 2008 and 2014, we forecast the market tomaintain 200 billion Yen as an average. Demand creation to widen consumer basis, throughdevelopment in digitization, and new trends such as ODS（Other Digital Stuff / Online Digital
Source, as well as international market development are essential for growth in this sector.
 Television broadcasting market: For terrestrial broadcasting markets, we adopted the mid-term
forecast results published by the Japan Commercial Broadcasters Association (JBA)5, which
5

MINPO KEIEI SHIKIHO (Commercial Broadcasters Management quarterly), December 2014.
16

covers advertisement forecast toward 2020 based on the Japanese economy outlook andrelationship among advertisement media. According to its results, during 2011 and 2014,
television advertisement market will grow 1.1% average per year, and growth will continue
beyond 2015. For satellite and CATV broadcasting, considering the strong growth in thenumber of viewers for multi-channel TVs, we forecast its growth toward 2020 at CAGR 1.2%
which is derived from the growth rate for terrestrial broadcasting. The television broadcasting
market is entering a new era, due to full digitization which was completed during 2012, andchannel re-farming have been put forward including high definition channels. In mid-term, newtechnology trends such as 4K/8K and hybrid TVs (e.g. Hybridcast) will promote market growthand new experience for audiences.
 Home video (retail, rental) market: We assumed that the market trend observed in the past 5
years will continue for the mid-term. In particular, adopting a trend forecast method for the total
revenue (sell and rental) during the past 5 years, we forecast the market to continue to reduce
at CAGR 3.3%. The market is seeing increase in demand for Blu-ray discs, especially forcertain genres (e.g. animation) which is already gaining concrete market share.
 Online service (TV/ PC/ Mobile) market: We forecast its growth toward 2020 at CAGR 3.7%
which is derived from the growth rate of internet advertisement, based on the JBA forecasts
mentioned above. This market is gaining momentum on the basis of consumer demand invisual content viewing over broadband internet, a highly penetrating infrastructure in Japan. In
particular, multi-channel broadcasting, subscription-based Video-On-Demand (VOD) market is
expected to continue to grow. To add, high-capacity/ high-speed mobile network and high-spec
devices has realized long-length streaming such as movie in full package, therefore it isanticipated that advanced multi-screen would bring new style of visual content viewing for the
consumers.

17

3.2 Film production / distribution

3.2.1 Economic contribution
The estimated result of the economic contribution of the film production/ distribution industry isoutlined in Table 3-3. The film production industry has brought the economic effect of 229.8billion
Yen for gross output, 115.8 billion Yen for value added, 18.4 billion Yen for tax revenue, and21,661 employees. Likewise, the film distribution industry has brought the economic contribution of
232.7 billion Yen for domestic production, 117.3 billion Yen for value added, 18.7 billion Yen for tax
revenue, and 3,326 employees.
Especially, since the production industry mobilizes a large scale of the staff ranging from projectplanning to location, film shooting, editing and so on, it can be said this is a labor-intensive industry
that creates much employment compared to the distribution industry.

Table 3-3 Economic contribution- Summary of results[Unit: billion Yen, person]

SectorGross output

Value added
DirectLabor income

Total

DirectTotal

Tax revenue

DirectTotal

DirectFilm production

113.5

229.8

51.4

115.8

25.4

56.6

7.5

Film distribution

115.0

232.7

52.1

117.3

25.8

57.3

Total

228.5

462.5

103.5

233.1

51.2

113.9

Employment

Total

Direct

Total

18.4

8,852

21,661

7.6

18.7

1,360

3,326

15.1

37.1

10,212

24,987(Source： Mitsubishi Research Institute, Inc.)

3.2.2 Market trend
3.2.2.1 Revenue
The revenue from film production and distribution industries is shown in Figure 3-2. This industry
tends to be influenced by a degree of prosperity of the produced works such as numerous
box-office hits and so on. However, in recent trends, the revenue in domestic production anddistribution industries tend to expand due to the popularity of the domestic films. As for therevenue, in addition to the revenue from the main production and distribution of films which
accounted for 46% in FY2013, revenue from various rights management, including TV
broadcasting rights, has increasingly accounted for the percentage. The revenue from productionindustry and that of the distribution industry cannot be separated in the current statistics. However,according to the statistics published by the Ministry of Economy, Trade and Industry in 2004, theannual revenue of the film production industry (including the rights revenue) was 122.9 billion Yen,
and 124.4 billion Yen for the film distribution industry, therefore approximately equal to one to one.

18

Figure 3-2 Revenue from film production and distribution industries6(Source: “Survey of Selected Service Industries”, Ministry of Economy Trade and Industry)

3.2.2.2 Number of distributed films
The number of Japanese and foreign films released in Japan is shown in Figure 3-3. Reversal
phenomenon in numbers of Japanese films and foreign films was seen twice, in 1987 and 2006.
The number of films have significantly increased after 2011 for both Japanese and foreign films,
surpassing 1000 films in 2013.
The background of these figures can be explained from several aspects. Firstly, digitization has
dramatically improved the efficiency of film production environment. Some of the impacts ofdigitization include the improvement of efficiency in filming and editing, as well as reduction of
production cost. This enables production under small number of staffs, and post production
companies specialized in computer editing has attracted attention. The shift toward digital cinema
and implementation of state-of-the-art equipment has all accelerated this trend.
Secondly, due to diffusion of cinema complex, the structure of film distribution has changed, where
film can potentially be released in theaters without via major distributors, which had led to increasein turnover of released films.
However, as number of films increases, some films are eventually screened, for example, only
once per day, which can be considered as a decrease in opportunity for audiences who wishes to
see that certain film. In terms of distribution, creating box office hits via traditional mass media
marketing and leveraging social awareness of films is considered less effective compared to pasttrend. Practically, the revenue per film has been decreasing. During the 2000s, revenue per
foreign films was higher than Japanese films, however it has reversed since 2011.

6

The index related to the film production and distribution business is extracted from the “Surveyof Selected Service Industries (Production and distribution of video content)”. Note that the survey
was not conducted for 2011 and 2012.
19

Figure 3-3 Number of distributed films and revenue per film (Japanese and foreign)(Source: Motion Picture Producers Association of Japan, Inc.)

3.2.2.3 Television’s role in the film industry
The film industry in Japan, especially for the Japanese films, leaped forward due to the extensive
promotion (i.e. advertisement in a spot time and in television programs) of films led and producedby the commercial TV broadcasters in the 2000's. As previously stated, co-production committee
scheme is the mainstream in Japan, and films produced mainly by the TV broadcasters are
increasing as they had become one of the key players in the committee.
Revenue from film business of major 5 Tokyo commercial TV broadcast operators7 as well as its
contribution to the overall revenue is shown in Figure 3-4. During the past 6 years, the total
revenue of film business has ranged from 200 to 300 million Yen, which accounts to 1.5% to 2.9%of overall revenue. Broadcasters have the advantage of having strong media influence, capitalstrength, and also extensive knowledge and promotion strength through production of TV
programs. Broadcasters have the ability to increase their non-broadcast revenue, by making thefilm version of popular TV drama or animation, DVD distribution, book publication, commoditizing
related products, events, internet content distribution, overseas marketing of programs formats,etc. To add, participation of regional broadcasters can induce positive effect in terms of regional
vitalization such as in regional cinemas.

7

Nippon Television, Tokyo Broadcasting System, Fuji Television, TV Asahi and TV Tokyo

20

Figure 3-4 Major five commercial broadcast operators' revenue from film business(Source: Financial results from commercial broadcast operators)

3.2.2.4 International market development
The total revenue of Japanese film export has recorded 13.8 billion Yen in 20138. In May 2015, in
China, animation film of popular Japanese animation series, “Doraemon : Stand by me” has hit
box office revenue of 424 million Yuan in just 10 days, exceeding the domestic revenue.
In terms of international market development, international co-production scheme is gaining
interests from various stakeholders, other than selling / licensing completed films through subtitle
editing and dubbing. International co-production is considered as a joint production of parties fromtwo or more countries, in which collaborating together combining production resources from bothsides while reflecting demand and preferences of both markets. In, particular, there are several
approaches, such as co-investment and co-producing employing producers / staffs / casts fromboth sides, or gathering producers / staffs / casts from different countries to develop a film createdin one of the countries. Although there are challenges in terms of developing scripts based oncommunication among members from different countries as well as sharing of responsibilities,
there are advantages in business relationships, personal exchanges, and domestic industry
promotion through knowledge sharing. In recent development, collaborations between staffs fromrural prefectures in Japan and ASEAN countries have attracted attention. These activities are inline with current Government initiatives such as “Cool Japan” and “Visit Japan” strategies topromote international market development and cultural collaboration, and also regional vitalization
where local production companies contribute to the local economy in regional districts.

8

Announced by Ministry of Internal Affairs and Communications
21

3.3 Film Exhibition
3.3.1 Economic contribution
The estimated result of the economic contribution of the film exhibition industry is shown in Table
3-4. The film exhibition industry has brought the economic contribution of 441.7 billion Yen forgross output, 205.9 billion Yen for value added, 34.2 billion Yen for tax revenue, and 25,686
employees.

Table 3-4 Economic contribution for Film Exhibition sector[Unit: billion Yen, person]

SectorGross output

Film Exhibition

Direct

Total

207.0

441.7

Value added
Direct77.0

Labor income

Total

Direct

205.9

41.2

Total

102.7

Tax revenue
Direct13.0

Employment

Total

34.2

DirectTotal

12,90425,686(Source： Mitsubishi Research Institute, Inc.)

3.3.2 Market trend
3.3.2.1 Revenue and Number of Attendance
Revenue from film exhibition, number of attendance, and average admission fees at the movie
theaters is shown in Figure 3-5. In 1950s, the number of Japanese film productions has exceeded
500 (see Figure 3-3). Production and distribution were active and the revenue from Japanese films
continued to increase. Movie attendance exceeded 1 billion annually from the late 1950s to thebeginning of 1960s. Later, as television rapidly became popular and widespread due to Tokyo
Olympics in 1964, inversely, film industry started to decline. 1 billion in attendance dropped toapproximately one quarter by 1970s.
In 1970s, with the background of this sluggishness, average attendance fee rose and the
expansion of the box-office revenue was seen. In 1970s, although the percentage of foreign film
revenue increased, from the late 70s to the mid-80s, with the entry of KADOKAWA films,
Japanese films, which were overpowered by the foreign films and television broadcasting, became
thriving and the revenue from exhibition increased rapidly. In 1980s, although it turned into
declining tendency again due to growth in rental market, the film exhibition market saw anincrease tendency with the development of cinema complex and the rapid increase in screen
numbers, after 1993. The number of attendance gradually recovered and film became once again
gained its position. In 2000s, due to the contribution TV broadcast operators, Japanese film
exhibition market maintained its condition and the revenue size of 200 billion Yen and 160 million
attendances. It should be especially stated that the revenue from the film exhibition in 2010
marked the highest record in the Japanese film exhibition history. Although decrease has been
seen in 2011 due to the Earthquake crisis, the market revenue is pitching up again. In this way, thefilm exhibition in Japan is comparatively stabilized now, in spite of a little up and down, and it has
22established its position at a certain level in consumer market.

Figure 3-5 Revenue from the film exhibition and number of attendance(Source: Motion Picture Producers Association of Japan, Inc.)

3.3.2.2 Number of screens
The number of screens in the Japanese movie theaters is shown in Figure 3-6. The number ofmovie theaters once was 7,457 in 1960, continued to decrease due to the penetration of television.
The number of movie theaters in 1993 decreased to 1,734, around 20% compared to the peak.
However, after 1995, the increasing tendency was consistently seen for the number of movie
theaters.
This is supported by the development of the cinema complex that has two or more screens in one
facility9. Since one preferable film can be selected within the same cinema complex from manyothers, the choice widened for the audience, resulting in the increase in number of the attendance.
Moreover, it can be said that the cinema complex has boosted demand among residents in thesuburb area, because the location of the cinema complex is usually within a shopping mall in thearea. Cinema complexes attract various consumer segments to adjacent commercial facilities (e.g.
shopping centers) and public events, which lead to additional consumption of goods and services.
In 2010, 267 out of 527 movie theaters were complex facilities with shopping centers10. In addition,
9

Motion Picture Producers Association of Japan defines cinema complex as “Theaters that hold morethan 5 screens at one location, managed by the same organization under a uniform title (ex.
1,2,3…A,B,C..)”
10

Based on “Survey of Selected Service Industries (Cinemas)”, Ministry of Economy, Trade and23it can be assumed that the development of cinema complex brought change in film distribution
structure, as it lowered the barrier of film releasing without the support of the major distribution
companies. Therefore, the number of released films has increased, which had led to the increasein number of attendance. At present, more than 80%of the screens are occupied by the cinema
complex.
On the other hand, on the contrary of the increase in number of screens, the revenue from film
exhibition per screen has been declining since 2000, thus placing small-scale theaters to a severemarket condition. In 2011, the number of screens has decreased for the first time since 1993,
when the cinema complex was first opened in Japan, however it has seen an increase trend again
from 2013.

Figure 3-6 Number of screens(Source: Motion Picture Producers Association of Japan, Inc.)

3.3.2.3 Preference of movie fans
As mentioned above, the size of exhibition revenue and number of attendance has remained
steady after 2000. Therefore it can be said that the exhibition market is currently supported by a
portion of movie fans going to theaters one or few times annually. On the other hand, with theIndustry24diffusion of smartphones and tablets which provides easy access to video formats from various
media, the market is seeing the decline of, especially, young-aged group within the audience.
Moreover, nowadays big-screen TVs equipped with high quality features is becoming more andmore affordable for homes to watch various audio-visual contents. Past customs, for people taking
time to go to movie theaters, have changed, for example going to see a movie before or after
shopping or having dinner was a casual case for many young adults. Although it is not an
industry-specific issue, in the long term, aging of current movie fans would become a challenge forthe exhibition industry, for example, it would be a burden for senior-aged group to go out to see amovie in theaters.
Moreover, due to the impact of the internet, marketing approaches and promotion activities basedon traditional mass-media is considered as having lesser effect compared to the past, as to reachout to certain consumer segments and to forecast the impact on the audience.
With these backgrounds, nowadays publicity and promotion activities are more focused on theactual audiences that come to theaters. Also, campaign activities are seen using social media (e.g.
Twitter) for spread the comment and impressions of the actual audiences, to reach out toyoung-aged groups that is familiar with these new medias.

3.3.2.4 ODS / Public viewing
Theaters have progressively invested in digitizing its content delivery environment. This has
accelerated the provision of ODS (Other Digital Stuff / Online Digital Source), where these screenscan show public viewing of non-film contents, such as music live entertainment, sports andperformance arts. Going to the theaters to see the live performance, instead of the actual event
venue, is being recognized as one of means of enjoying live entertainment.
This trend is also expected to be one of means toward Tokyo Olympic Games in 2020. For
example, local theaters can, not just to screen live footage of the games, but also feature certain
athletes whose hometown is in or near that local area, so that the local supporters can participate
remotely. These activities will add value to the current business of exhibition and theaters in termsof growing indifference of viewership in theaters, and also contribute to local economy and society
in terms of local revitalization.
In relation to the trend above, Figure 3-7 describes the number of audiences and screensnormalized in terms of population, for each prefecture in Japan. In terms of number of audiences,
Tokyo has the highest figure, followed by Fukuoka, Kanagawa, Osaka, and Aichi prefectures
which have major cities in the country. The difference is three to four folds between the highest(Tokyo) and the lowest (Tottori). On the other hand, number of screens, also normalized in terms of
population, the trend is different where many regional prefectures, such as Ishikawa, Yamagata,
Fukui and Ehime prefecture has higher figure than Tokyo. Although this difference is due to factors
such as geographical concentration and/or population composition, it can be viewed that these
prefectures have the infrastructure of the potential environment to attract audiences, thereby
efforts and approaches can be taken to realize the potential.
25

Figure 3-7 Number of audiences and screens per population in each prefecture(Source: Motion Picture Producers Association of Japan, Inc., Ministry of Economy, Trade and Industry)26

3.4 TV program production / distribution
3.4.1 Economic contribution
The estimated result of the economic contribution of the TV program production/ distribution
industry is shown in Table 3-5.
The TV program production industry has brought the economic contribution of 789.5 billion Yen forgross output, 398.0 billion Yen for value added, and 63.3 billion Yen for tax revenue. Likewise, theTV program distribution industry has brought the economic contribution of 665.6 billion Yen forgross output, 335.5 billion Yen for value added, and 53.4 billion Yen for tax revenue. In total,
1,455.1 billion Yen for gross output, 733.5 billion Yen for value added, 116.7 billion Yen for tax
revenue, and 34,913 employees.

Table 3-5 Economic contribution for TV program production / distribution sector[Unit: billion Yen, person]

SectorGross output

Value added

Labor income
DirectTotal

Tax revenue
DirectEmployment

DirectTotal

Direct

Total

Total

TV Production

390.1

789.5

176.8

398.0

87.4

194.4

25.9

63.3

TV Distribution

328.9

665.6

149.1

335.5

73.7

163.9

21.8

53.4

Total

719.0

1,455.1

325.9

733.5

161.1

358.3

47.7

116.7

DirectTotal

14,27034,913

14,27034,913(Source： Mitsubishi Research Institute, Inc.)

3.4.2 Market trend
3.4.2.1 Revenue
Production and distribution of TV programs has the most highest share in terms of revenue within“Motion Picture and Video Production/ Distribution "(Industrial Classification) in Japan. Revenue
from the TV program production and distribution industry is shown in Figure 3-8. Similar to the film
production and distribution industry, the increasing tendency in revenue can be seen in thisindustry as well. As for the revenue breakdown, in addition to the revenue from the main businessof the production and distribution of TV programs, the revenue from the commissioned production
has increasingly accounted for the percentage in the breakdown.

27

Figure 3-8 Revenue from the TV program production and distribution industry11(Source: “Survey of Selected Service Industries”, Ministry of Economy Trade and Industry)

3.4.2.2 International market development
Similar trend to film production / distribution, international market development of TV broadcast
contents is another area of considerable attention.
Figure 3-9 indicates the international revenue of Japanese TV broadcast content. It shows theincrease trend, and 2013 saw the highest figure of 13.8 billion Yen. Figure 3-10 shows thebreakdown of the latest revenue results. It indicates that over half of revenue is attributed to items
other than broadcasting rights, which describes the variety of business models in international
marketing. In terms of genres, the highest was for animation(62.2%), followed by dramas(15.6%)
and variety(13.3%), therefore animation content can be considered as possessing strong
international competence.
Under the Japanese Government’s “Japan Revitalization Strategy”, promotion of “Cool Japan” astrategic initiative to promote Japan’s appeal, and to develop domestic industry and market
creation. One of the goals of the strategy is to increase of current international revenue of
broadcasting content by three-fold, by 2018. In reaction to this initiative, in September 2013,
Broadcasting Export Association of Japan (BEAJ) has been established consisting ofbroadcasters, advertisement companies, trading companies and other various organizations, topromote collaboration domestically and internationally. These activities would bring positive impact
in terms of revenue stream and domestic industry development.

11

The index related to TV program production and distribution is extracted from the "Motion
Picture and Video Production/ Distribution "section in Survey of Selected Service Industries(Ministry of Economy, Trade and Industry).
28

Figure 3-9 International revenue of Japanese TV broadcast content(Source: IICP)

Figure 3-10 Revenue breakdown of international revenue for 2013

(Source: IICP)

29

3.5 Television broadcasting
3.5.1 Economic contribution
The estimated result of the economic contribution of the television broadcasting industry is shownin Table 3-6. The television broadcasting industry has brought the economic contribution of
8,183.1 billion Yen for gross output, 3,993.3 billion Yen for value added, 699.5 billion Yen for tax
revenue, and 279,083 employees.

Table 3-6 Economic contribution for Television broadcasting sector[Unit: billion Yen, person]

SectorGross output

Value added

Labor income

DirectTotal

DirectTotal

DirectTotal

Public broadcasting

674.8

1341.6

380.6

743.5

169.5

352.4

Private broadcasting2208.35092.8837.42325.1

347.7

CATV broadcasting

497.5

960

297.3

541.9

Satellite broadcasting

366.1

788.7

164.1

Total

3746.78183.1

1679.4

Tax revenue
DirectEmployment

Total

Direct

Total

61.8

122.1

11,79446,0471070.8160

408.6

46,918 173,177

120.1

241.6

47.2

88.4

18,21539,400

382.8

19.5

126.4

44.5

80.4

1,625

20,4593,993.3

656.8

1791.2

313.5

699.5

78,552 279,083(Source： Mitsubishi Research Institute, Inc.)

3.5.2 Market trend
3.5.2.1 Revenue
Total revenue of the major broadcasting media is shown in Figure 3-11. The operating revenue ofthe terrestrial broadcasting has been sluggish in accordance with the declining tendency in theadvertising expenditure. However, it is forecasted that it will turn to increase trend after FY 201212.
On the other hand, revenue is steadily increasing for satellite broadcasting and CATV. One reason
for this is due to increase in households upgrading a TV set and tuners to receive terrestrial digital
broadcasting. As for BS broadcasting, number of subscribers continues to increase by providing
program menu to different market segment compared to free-to-air terrestrial broadcasting andthus contributing to the overall advertising market. As for CATV, the shift to HD (High Definition),
expansion of channel lineups, bundled service offers (with internet and/or telephone services),
resulted in increase in subscription leading to revenue growth. It is now common that CATV
broadcasters offer 30 to 50 channels for basic packages including various channels such as films,
sports, news, animations, documentaries, and additional option channels. As shown in Figure 3-11,
especially satellite broadcasting and CATV’s subscribers are steadily increasing. Due to thetransition to terrestrial digital broadcasting, the market has seen the penetration in BS/ CS 110°E
broadcast hybrid antennas and multi-band receivers, subscribers to CS 110°E are increasing as
12Based on the simulation result by the Japan Commercial Broadcasters Association (JBA) (theformer NAB).
30

well. Therefore it can be said that the replacement of receivers for terrestrial broadcasting has also
made the BS/ CS 110°E to penetrate widely.

Figure 3-11 Revenue from terrestrial broadcasting, satellite broadcasting, and CATV

(Source: "Revenue and expenditure of general broadcasters and cable TV broadcasters",
Ministry of Internal Affairs and Communications)3.5.2.2 Promotion of 4K / 8K broadcast
In Japan, all the prefectures have completed transition to the terrestrial digital broadcasting. In
March 2015, Digital-Analog conversion service provided by CATV platform has concluded due tofull transition. Satellite broadcasting has been allocated with new channels transition from theconventional standard definition (SD) broadcasting to high definition (HD) broadcasting is inprogress. Multi-channel broadcasting through high definition (and 3D broadcasting) are being
provided over BS broadcasting and CS (Long. 110°E) .
In terms of further development, implementation of 4K / 8K in broadcasting is currently of thehottest topic among stakeholders in Japan. The roadmap initiated by the government, will promote
trial broadcasting for CS and BS by 2016, followed by actual transmission of 8K super hi-vision by
2018. In addition, in the development toward 2020, the year of Tokyo Olympic Games, thegovernment goal is to promote 4K / 8K based broadcasting, and diffusion of 4K / 8K TV sets.

31

Table 3-7 Roadmap for 4K / 8K service
Year

Goal

2015



Launch of 4K service over CS broadcasting (March)

Launch of 4K service over CATV and IPTV

Launch of 4K trial service (maximum 3 Ch.) and 8K trial service (1 Ch.)

Launch of 8K service over CATV and IPTV

Launch of 4K and 8K service over BS broadcasting (launch as early as possible)

2016

2018

(Source: Ministry of Internal Affairs and Communications)3.5.2.3 Convergence of broadcast and communication
Transition to full digitization, penetration of broadband internet access and terminals (smartphones,
tablets, digital TVs, etc.), and development of internet technology such as HTML 5, is expected tobring new era in converge of broadcasting and communication. In Japan, Hybridcast, a technology
standard to implement hybrid TV services developed by NHK, has been attracting attention andtrials have been conducted to enhance current broadcast platform by utilizing internet access andsecond screen terminals (smartphones, tablets). It provides high-quality visuals and intensive
information on TV screens, as well as interactive functions over social and personal services, andcollaboration with multi-screens. Future challenges rely on penetration of Hybridcast compatibleTVs, increase in internet access for TVs, production of Hybridcast compatible broadcast contents,
however the new platform will provide new interface for broadcasting and possibility for new
business models.

32

3.6 Home video
3.6.1 Economic contribution
The estimated result of the economic contribution of the home video industry is shown in Table 3-8
home video industry has brought the economic contribution of 556.2 billion Yen for gross output,
280.4 billion Yen for value added, 490.6 billion Yen for tax revenue, and 10,027 employees. Notethat due to limitation in available data, the figures are wholesale (shipment) based where it covers
the distribution between video distributor and retail and rental shops. For instance, number of
employees that work at retail and rental shops is excluded.

Table 3-8 Economic contribution of Home Video sector[Unit: billion Yen, person]

SectorHome Video

Gross output

Value added

DirectTotal

Direct

Total

274.8

556.2

124.5

280.4

Labor income
Direct61.5* Other audio-visual contents is included

Total

136.9

Tax revenue
Direct

Total

18.2

44.6

Employment
Direct

Total

2,005

4,906

(Source： Mitsubishi Research Institute, Inc.)

3.6.2 Market trend
3.6.2.1 Revenue (wholesale-based)
Revenue from home video sales is shown in Figure 3-12 Revenue from sell market (shipment tovideo retail stores) expanded steadily after 2000 as DVD penetration accelerated. However, itturned into a decrease in 2005, and the market has seen downtrend trend since.
The revenue from rental market (shipment to video rental stores) has constantly maintained themarket size, and a stable market has been formed. However, a little later than the sell market, itbegan to turn into a declining tendency around 2008, although the declining tendency is not as
seen in the sell market due to inventory management of rental video stores.

33

Figure 3-12

Revenue from home video sales (wholesale to retail and rental shops)(Source: Japan Video Software Association)

3.6.2.2 Revenue (retail-based)
Revenue from home video sales from final consumer market (retail-based) is shown in Figure 3-13
The ratio has been generally maintained between sell (retail) and rental market, however thedecreasing tendency is seen as a whole. The rental market has seen declining tendency recently,
due to decrease in demand for foreign films and foreign TV dramas (see 3.6.2.3 ). In 2014, sellmarket was 228.7 billion Yen and rental market was 210.3 billion Yen amounting up to 439.0 billion
Yen.

34

Figure 3-13 Revenue from home video market (final consumption)(Source: Consumer survey conducted by Japan Video Software Association)

3.6.2.3 Revenue by media and genre
Revenue for each home video media is shown in Figure 3-14. DVD has substituted former major
media rapidly after 2000, however its revenue has been in decreasing tendency since 2005, after
the substitution reached the completion stage. However, BDs, which shipment started around2008, has expanded its share steadily. Its result in 2014, accounted for about 40% of the total
home video revenue, a rise compared to 23% in 2011. The shift to BDs depends on genres, inwhich animation videos have robust demand for high definition media. With this background, it isexpected that BD will contribute to minimize the declining tendency in sales.

Figure 3-14 Revenue by home video media(Source: Japan Video Software Association)

35

Revenue share by genres is shown in Figure 3-15 and Figure 3-16, for sell and rental, respectively.
For sell market, foreign film / TV drama has been declining since 2004, currently the market is
supported by domestic animation and music video products, which fans have a high willingness topay for packaged products. These fans have potential demand for high quality products, therefore
increase in sales for Blu-ray disc products has been seen particularly in this market.
For rental market, foreign film / TV drama is still the base of the market mostly provided underrevenue-share scheme, however the market is seen decline trend in the long term.

Figure 3-15 Revenue share by genres (Sell)(Source: Japan Video Software Association)

Figure 3-16 Revenue share by genres (Rental)(Source: Japan Video Software Association)

36

3.7 Online service
3.7.1 Economic contribution
The estimated result of the economic contribution of the film/ video distribution through online
service (internet) is shown in Table 3-9. Online service industry contributes 253.9 billion Yen forgross output, 131.6 billion Yen for value added, 23.2 billion Yen for tax revenue, and 11,793
employees.

Table 3-9 Economic contribution- Summary of results[Unit: billion Yen, person]

SectorGross output

Online service

Direct

Total

125.5

253.9

Value added
Direct58.7

Labor income

Total

Direct

131.6

32.8

Total

68.5

Tax revenue
Direct

10.6

Total

23.2

Employment
Direct

Total

4,098

11,793(Source： Mitsubishi Research Institute, Inc.)

3.7.2 Market trend
3.7.2.1 Revenue
The online service market described in this section is mainly the VOD (Video On Demand) market.
VOD market in Japan is typically provided over the internet, including managed services through
CATV or IPTV, and so called OTT (over the top) services which viewers can access to audio-visualcontents as long as they have internet connection. Also, in terms of business models, various
services is currently provided based on free-access service (typically, advertisement model), andpremium service (charged model).
The revenue for online service for film / video contents market is growing remarkably reaching
125.5 billion Yen in 2014 and it is expected to pass 200 billion Yen by 202013. The percentage of
VOD service usage was 16.7% (7.8% for active users) out of 20 – 69 age group14. Also, themarket is seeing gradual shift to VOD service over mobile, where currently 36.3% of VOD users
mostly use either smartphone or tablet to access VOD content.

13

Forecast provided by Digital Content Association of Japan
Research conducted by Japan Satellite Broadcasting Association (JSBA) in September 2014
over web-survey (20,000 sample)
1437

Figure 3-17 Market revenue trend for VOD services(Source： Digital Content Association of Japan)

Figure 3-18 Mostly used devices to access VOD content(Source： Japan Satellite Broadcasting Association)

3.7.2.2 Rise of SVOD services
VOD (Subscription Video on Demand) services have been in the market for a few years, withvarious providers such as major broadcasters and mobile operators entering the market. However,in the early phase of VOD market, there were major challenges in internet distribution of video
contents, such as TV programs, due to lack of framework for rights management and business.
Also healthy distribution market for home videos (especially rental) has also been seen as a hurdle
for VOD market.
Overcoming these challenges, currently most major broadcasters have launched their own VOD
platform providing catch-up services of their TV programs. Recently the market has recently seen
38

high growth in mobile VOD services. NTT Docomo, the largest mobile operator, has gained 4.4
million subscribers by January 2015 for its mobile VOD “d Video”, compared to 0.7 million in March
2010. The background of success in mobile VODs have been supported by, high demand in
mobile content consumption, high penetration of broadband mobile internet access, reasonablepricing at 500 Yen per month, as well as exclusive content for mobile VOD platforms.
The market has continuously attracted attention, for example, in which Hulu’s Japan business(launched in September 2011) was acquired by one of private broadcasters, Nippon Television
Network Corporation in February 2014. Another global SVOD platform service, Netflix is alsoplanning its launch during 2015, which will bring impact into to both audio visual production anddistribution market. According to analysis conducted by JSBA, although currently VOD services
and traditional multi-channel services (CATV/satellite broadcasting discussed in section 3.5 ) aremutually substitute rather than alternative, the relationship will shift to latter in the long term.

393.8 Estimation of market size attributed to films
In this section, taking account the analysis in the previous sections, we estimated the market value
focusing on films, for each distribution window. The results are derived from studies conducted by
Institute for Information and Communications Policy (IICP).
In general, film is first distributed through exhibition, which we define in this section, as primary
distribution market. It is then distributed through home video (retail, rental), pay TV, terrestrial
broadcasting, TV/ PC online and mobile, which we defined as secondary distribution market.
Figure 3-19 shows the market revenue attributed to films, and the share for each distribution
window. The figures are estimated by multiplying certain ratio to overall revenue (The details arenoted in the appendix). Note that the home video market (sell, rental) accounts for the retail market
revenue, which covers the final consumption. The total revenue accounts for 682 billion Yen for2014. Primary distribution market, or film exhibition, consists of approximately 30.4%, andsecondary distribution market accounts for 69.6%. This indicates that the overall market attributed
to films is more than three times as large as the film exhibition market. Within the latter market,
home video (rental) market has the most shares at 27.2%, which is larger than the size of the
primary distribution market15.

Figure 3-19 Market revenue and share attributed to films (2014)(Source: IICP report, Mitsubishi Research Institute estimates)

15

Note that the home video market stated in this section is retail based (see 3.6.2.2 )40

Figure 3-20 shows the change in market revenue after 2000. We can see that the primary
distribution market (film exhibition) has maintained its size of approximately 200 billion Yen.
Secondary distribution market has been declining since 2003, however its size have accounted for
68% to 76% in the total revenue during the past decade. The increase after 2000 was mainly due
to home video market resulting from DVDs gained momentum.
Considering the growth in subscription TV services (satellite and cable TVs) as well as TV/ PC
online and mobile video services, there are aspects that could bring an opportunity for film
attributed market to expand. For example, development in technological as well as regulatory
basis in broadcasting and internet/broadband industry, and also the provision of media devices
with high capacity /quality such as Blu-ray discs, suggests the importance of the secondary
distribution market.

Figure 3-20 Market revenue attributed to films (2000-2014)(Source: IICP report, Mitsubishi Research Institute estimates)41

3.9 Regional economic contribution
Content industry plays its role in various means in terms of regional economic contribution. As
local / regional revitalization is one of the main pillars of recent government agendas, this section
focuses on economic contribution of film and television industry in terms of regional economic
activity from both supply (industry) and demand (consumer) side.

3.9.1 Contribution of local stakeholders in regional areas
Digitization has dramatically changed the value chain of production and distribution, where small –medium sized enterprises can build their business outside of central cities and areas such as
Tokyo. For example, production houses with digital editing specialties can communicate anddeliver their works from any regional areas in the country to even oversea partners.
For example, in animation sector, although historically most companies are based in central
Tokyo16, recent trend is seen where companies locate their business based in regional prefectures
outside of central Tokyo, promoting and collaborating with local partners, including the local
government. These companies play an important role in contributing to the local economy, such as
employment, and anticipated social effects. Table 3-10 shows examples of these animationcompanies.

Table 3-10 Examples of animation companies setting their business outside of central Tokyo
Company

Description
Gainax, the anime studio behind such projects as Wings of Honneamise, Neon
Genesis Evangelion and Gurren Lagann, opened its animation studio for the purposeof global strategy, and also an anime museum, in rural Miharu, Fukushima Prefecture,

Gainaxin January 2015.
Gainax president Yoshinori Asao, originally from Fukushima, decided to open
themuseum to help the prefecture in its recovering efforts from 2011’s earthquake.
It is built in a former junior high school, which closed due to a lack of students.
Graphinica, the anime studio famous for its CG/VFX specialties and also forGraphinica

successfully digitizing its animation works, has opened its remote studio in
Sapporo,Hokkaido Prefecture.
Ufotable opened its animation studio in Tokushima Prefecture in 2009, also focusing

Ufotableon collaboration with the local government such as capacity building events forencouraging young students to learn digital content creation.

16

According to Association of Japanese Animation, out of 419 animation companies 365 werebased in Tokyo as of 2011.
42

Also, regional promotion utilizing locally-produced content, based on collaboration among local
governments, broadcasters, content creation companies, and sponsors, is another form ofregional revitalization, locally-produced content is favored by many local audiences. Moreover,recent trend is seen where these activities are driven to build relationships with overseas partners
and to promote these content to overseas market, such as ASEAN and other Asian countries.
Various international co-production schemes are taken for stakeholders to fulfill their demand.
Local film-commission activities are also focusing on attracting foreign production companies andbroadcasters.

3.9.2 Tourism impact
Content industry has various “ripple effects” to other industrial sectors which are not, in general,
directly associated with the original industry. Tourism impact is one of the typical ripple effects offilm and television programming. This includes, in particular, tourist’s consumption intransportation, lodging, meals, souvenir purchases and rise in popularity of film and television
program locations induced by the location tourism. Also, in Japan, content induced tourism foranimated content is nowadays referred to as “pilgrimage to scared places” a term used to mean
visiting the location of scenes in animation, considering these places as equivalent to holy places
for fans. As such tourism impact is expected, many local governments, local commercial
associations and local sponsors perform aggressive invitation activities of filming location as wellas promotion activities for the purpose local economy revitalization ; none the less the scale of theeffect varies according to the scale of the films producing, film director and the cast. Table 3-11
shows examples of ripple effects related to tourism impact.

43

Table 3-11
Category

Examples of Ripple Effects (Tourism impact) to the Local Area

Title [year]

Nobouno Shiro(“The floating
castle”)[2012]

Economic effects

3.791b Yen

Description of the effect
1.09b Yen (consumption of audience
including box office within Saitama
prefecture)
Direct effect(within Saitama Prefecture)*box-office revenue:

Film

2.84b Yen

Bizan
[2007]

2.39b Yen*box-office revenue:
1.21b Yen

Indirect effect0.843b Yen

Induced effect

0.438b Yen

Direct effect

1.80b Yen (consumption of tourists)

Indirect effect0.509b Yen

Induced effect0.07b Yen
2.096b Yen (consumption of tourists)* 688 thousand tourists visited after

Direct effectAma-Chan[2013]

Television
Drama/
seriesYae-no-Sakura[2011]

1.42b Yen (consumption of tourists)*500 thousand tourists visited after
release to Ikuta-City where the it wasfilmed (Its average annual number oftourist is 1.1 million)

3.284b Yen

on-air (doubling annual records)(within Iwate Prefecture)

11.3b Yen
(within Fukushima Prefecture)

Indirect effect0.707b Yen

Induced effect

0.482b Yen

Direct effect

7.0b Yen (consumption of tourists)

Indirect effect

2.9b Yen

Induced effect

1.3b Yen
34.2b Yen (consumption of tourists)

Direct effect
Ryoma-Den[2010]

53.5b Yen
(within Kochi Prefecture)* 920 thousand tourist visited to local
events (compared to 260 thousandof past records of related events)

Indirectandinduced effect19.3b Yen

(Source) Bugin Economic Research Institute, Shikoku Bureau of Economy Trade and Industry,
Iwate Economic Research Institute, Bank of Japan Fukushima Branch, Bank of Japan Kochi Branch

Table 3-12

Examples of “pilgrimage to scared places” of animated contents

Title[Year]
Hanasaku Iroha [2011]
K-On! [2009]
True Tears [2008]
Lucky Star (Raki☆Suta) [2007]

Location
Yuwaku Spa of Ishikawa Prefecture
Toyosato-Town of Shiga Prefecture
Toyama Prefecture
Washinomiya Town (currently Kuki-City) and Satte City of
Saitama Prefecture44

4. Appendix
4.1 Methodology and Sources of data
The estimation for economic contribution (gross output, value added, labor income, tax revenue,
and employment for each sector) was based on different data sources and assumptions, mostly
underlying on the basis of comparable industry within the national statistics. Here we describe thedata sources and methodology in details.

Film production / distribution
Item
DirectDetails
gross output

Based on the “2013 Survey of Selected Service Industries(Production and distribution of video content)” published by the

ImpactMinistry of Economy Trade and Industry. The actual value that
includes both production and distribution for 2013 are used, however
the figures are not separated between the two, since 2005 statistics.
Therefore, the ratio of production revenue to distribution revenue frompast statistics (2004), were applied to the total (production +distribution) revenue. Based on interviews, the ratio structure has notchanged significantly, therefore the ratio still applies.
value added /Based on the ratio of Value Added/ Labor Income to Gross Output forlabor income

the “Motion Picture and Video Production/ Distribution” in the “2012
Information and Communication Industry Input-Output transaction
table” published by the Bureau of Statistics of Ministry of Internal
Affairs and Communications.

tax revenue

Estimation has been conducted for indirect tax, individual tax, andcorporate tax. These components were estimated by multiplying
effective tax rate, in particular, effective indirect tax rate, effective
direct individual tax rate and effective direct corporate tax rate, toValue Added, Labor Income, and Operating Surplus, respectively. Tax
rates were derived from 2013 statistics from Ministry of Finance andMinistry of Internal Affairs and Communications.

employment

Based on the “Survey of Selected Service Industries (Production anddistribution of video content) “. FTEs were estimated by applying theratio of FTEs to total number of employees (both provided in thestatistics), to the total number of employees attributed to film
production / distribution activity.

Indirect/Inducedgross output

Indirect impact is estimated by applying multipliers for “Motion Picture
and Video Production/ Distribution” contained in the I-O table to the45Impact

Gross Output (direct impact) after considering self-sufficiency ratio.
Induced impact is estimated by applying average percentage income
consumed (0.745) and composition ratio of private final consumption
expenditure to every industry (derived from the I-O table), to the direct/ indirect labor income.
value added /Based on multiplying the ratios of Value Added/ Labor Income to thelabor income /Gross Output.

tax revenue

Based on multiplying effective tax rate, in particular, effective indirecttax rate, effective direct individual tax rate and effective direct
corporate tax rate, to Value Added, Labor Income, and Operating
Surplus for indirect and induced impact, respectively.

employment

Indirect / induced employment are derived from employment
coefficient and indirect / induced gross output, then multiplied the its
impact ratio to direct impact for employment.

Television production / distribution
Item
DirectDetails
gross output

ImpactBased on both “The 2014 Survey of Information and Communication
Industry (Television program production)” published by the Ministry ofInternal Affairs and Communications and “Survey of Selected Service
Industries (Production and distribution of video content)”. The latterincludes both the production and distribution of television programs,
therefore revenues from the former statistics were subtracted. The
actual value for 2013 is used.

value added /Based on the ratios of Value Added/ Labor Income to Gross Output

labor income

for the “Motion Picture and Video Production/ Distribution” in the I-O
table.

tax revenue

The methodology is the same as in the previous table.

employment

Based on FTEs for TV production in the “The 2014 Survey ofInformation and Communication Industry (Television program
production)”. As for FTEs in TV distribution, there are no specificstatistics, therefore the ratio of Film production FTEs to Film
distribution FTEs was multiplied to TV production FTEs, assumingthat both ratio are relative.

Indirectgross output

Indirect impact is estimated by applying multipliers for “Motion Picture/Induced

and Video Production/ Distribution” contained in the I-O table. Rest of

Impactthe methodology is the same as in the previous table.

46

value added /The methodology is the same as in the previous table.

labor income /tax revenue /employment

Film Exhibition
Item
DirectDetails
gross output

ImpactBased on the exhibition revenue statistics published by the Motion
Picture Producers Association of Japan, Inc. The actual value for2014 is used.

value added /Based on the ratios of Value Added/ Labor Income to Gross Output inlabor income

the “Movie theaters/ Performing theaters/ Event halls” in the I-O table.

tax revenue

The methodology is the same as in the previous table.

employment

Based on FTEs for Cinemas, provided in the “The 2013 Survey of
Selected Service Industries (Cinemas)” published by the Ministry of
Economy Trade and Industry.

Indirectgross output

Indirect impact is estimated by applying multipliers for “Movie/Inducedtheaters/ Performing theaters/ Event halls” contained in the I-O table.

ImpactRest of the methodology is as the same in the previous table.
value added /The methodology is the same as in the previous table.

labor income /tax revenue /employment

Television Broadcasting
Item
DirectDetails
gross output

ImpactBased on the revenue statistics of each broadcasting platform(Public, free-to-air, CATV, satellite) from revenue statistics for NHK,and “Income statistics of commercial broadcasters for FY2014”
published by the Ministry of Internal Affairs and Communications. The
actual figure for 2014 is used.

value added /Based on the ratios of Value Added/ Labor Income to Gross Output inlabor income

the “Public Broadcasting”, “Commercial Television Broadcasting”,“Commercial Satellite Broadcasting”, “Cable Television Broadcasting”
contained in the I-O table.

tax revenue

The methodology is the same as in the previous table.

employment

Based on the employment statistics for television broadcasting fromthe “The 2014 Survey on Information and Communication Industry”.
47

Indirect

gross output

Indirect impact is estimated by applying multipliers for each industry/Inducedselected as above, contained in the I-O table. Rest of the

Impactmethodology is the same as in the previous table.
value added /The methodology is the same as in the previous table.

labor income /tax revenue /employment

Home Video
Item
DirectDetails
gross output

Based on the revenue statistics published by the Japan Video

ImpactSoftware Association. Note that the figures represent revenue onwholesale basis (sales to retail and rental stores), and is notconverted to retail basis due to limited information. The actual figurefor 2014 is used.
value

added

/

Based on the ratios of Value Added/ Labor Income to Gross Output
in the “Motion Picture and Video Production/ Distribution” containedlabor incomein the I-O table.
tax revenue

The methodology is the same as in the previous table.

employment

Based on the “The 2004 Survey of Selected Service Industries(Production and distribution of video content) “. Ratio for
employment to revenue (video sales), from past statistics (2004)
were applied to the Gross Output, as current statistics does notdistinguish the figures.

Indirect

Indirect impact is estimated by applying multipliers for “Motion

gross output/Induced

Picture and Video Production/ Distribution”” contained in the I-O

Impacttable. Rest of the methodology is the same as in the previous table.
value

added

/

The methodology is the same as in the previous table.

labor income /tax revenue /employment

Online Service
Item
DirectImpactDetails
gross output

Based on the revenue statistics published by the Digital Contents
Association of Japan (DCAJ). This includes revenue for internet
video streaming (ex. VODs) to platforms such as TV/ PC/ Mobile.
The actual figure for 2014 is used.
48

valueadded/

Based on the ratios of Value Added/ Labor Income to Gross Output
in the “Internet based services” contained in the I-O table. Note thatlabor income

the statistics attributed to this category covers IPTV services.
tax revenue

The methodology is the same as in the previous table.

employment

Based on the number of employees provided in the “Survey on
Information and Communication Industry (Internet based services)”.
FTEs were estimated by applying the ratio of total FTEs to the total
revenue, to the Gross Output.

Indirect

Indirect impact is estimated by applying multipliers for “Internet

gross output/Inducedbased services”” contained in the I-O table. Rest of the

Impactmethodology is the same as in the previous tables.
tax revenue
value

added

/

The methodology is the same as in the previous table.

labor income /employment

The ratio and multipliers derived is provided in the tables below. Figures used, attributed to thesame sector in the I-O table, are provided in the same table.

Film production / distribution, Television production / distribution, Home video
Ratio or multiplier
Direct impact

Indirect impact

Induced impact

Value

Ratio of value added to gross output

0.45

Ratio of labor income to gross output

0.22

Multiplier for gross output

1.78

Multiplier for value added

1.94

Multiplier for gross output

1.25

Multiplier for value added

1.32

Film Exhibition
Ratio or multiplier
Direct impact

Indirect impact

Induced impact

Value

Ratio of value added to gross output

0.37

Ratio of labor income to gross output

0.20

Multiplier for gross output

1.89

Multiplier for value added

2.29

Multiplier for gross output

1.24

Multiplier for value added

1.37

49

Television Broadcasting
Ratio or multiplier
Direct impact

Indirect impact

Induced impact

Value

Ratio of value added to gross output

0.45

Ratio of labor income to gross output

0.18

Multiplier for gross output

1.94

Multiplier for value added

2.07

Multiplier for gross output

1.24

Multiplier for value added

1.30

OnlineRatio or multiplier
Direct impact

Indirect impact

Induced impact

Value

Ratio of value added to gross output

0.47

Ratio of labor income to gross output

0.26

Multiplier for gross output

1.75

Multiplier for value added

1.91

Multiplier for gross output

1.27

Multiplier for value added

1.34

The parameters for estimating tax revenue are as below.
Parameters

Value

Year

Source(b Yen, %)Indirect Tax revenue

25,266 2013 Ministry of FinanceNominal GDP

483,075 2013 Cabinet Office (SNA statistics)

Effective indirect tax rate

5.2% 2013 Ratio of above two parameters

Individual direct tax revenue

35,427 2013 Ministry of Internal Affairs and Communications

Compensation of Employees

248,168 2013 Statistics officeEffective direct individual tax rate

14.3% 2013 Ratio of above two parameters

Corporate direct tax revenue

25,897 2013 Ministry of Internal Affairs and Communications

Operating Surplus / Mixed Income

95,934 2013 Statistics officeEffective direct corporate tax rate

27.0% 2013 Ratio of above two parameters504.2 Main quantitative data sources

Income statistics of commercial broadcasters for FY2014, published by the Ministry of Internal
Affairs and Communications, September 2015.

The 2013 Survey of Selected Service Industries (The survey includes separate statistics for“Production and distribution of video content” and “Cinemas”), published by the Ministry of
Economy Trade and Industry, October 2014.



The 2014 Survey of Information and Communication Industry (Television program production)”published by the Ministry of Internal Affairs and Communications, March 2015.

The 2012 Information and Communication Industry Input-Output transaction table, publishedby the Bureau of Statistics of Ministry of Internal Affairs and Communications, March 2014.



Revenue statistics, published by the Motion Picture Producers Association of Japan, Inc.,
updated annually.



Revenue statistics, published by the Japan Video Software Association, updated every half
year.



Digital Content White Paper, published by the Digital Content Association of Japan,
September 2014

The 2014 VOD Market report, published by the Digital Content Association of Japan, April
2015

National account, published by Ministry of Finance, Ministry of Internal Affairs andCommunications ,Statistics office51

4.3 Details for estimation of market size attributed to films

MarketFramework

Methodology

SourceRevenue from exhibition of

Film

Movie Almanac

Distribution

films produced for theatricalrevenue

MarketreleasePrimary

Film Exhibition

Secondary

Terrestrial

Operators’

Distribution

Broadcast(subscription,

Marketrevenueadvertising)from broadcasting films

exhibition

Broadcast operators’ Commercial
revenue * percentage

Broadcastingof film broadcasted

Almanac,
NHK Radio &television

year

book
Satellite

Operators’

revenue

Broadcast,broadcasting films

from

CATV

Home Video

Revenue from film video

Satellite

broadcast

NHK Radio &operator and CATVs’ television
revenue * percentage

book,of film broadcasting

MIC materials

Wholesale Revenue *JVA materials(retail margin ratio)+
total

rent

wholesale

video

*

marketshare of film videos *average rental price
Online(PC Internet, Mobile) Online

User

Video (film) revenue

expenditure * number

average

IICP surveyof internet users /mobile internet users*MIC : Ministry of Internal affairs and Communications*JVA : Japan Video software Association(Source: “Report on production and distribution of media soft ”, IICP)

52

year

4.4 Economic contribution excluding other audio-visual contents

Table below shows the economic contribution of the film and TV industry excluding otheraudio-visual contents, which in this report is defined as adult-entertainment. The figures aretaken into account in the home video sector.

Table 4-1 Estimated economic contribution (overall, excluding other audio-visual contents)[Unit: billion Yen, person]

SectorGross output

Value added
Total

DirectTotal

Film Production

113.5

229.8

51.4

115.8

25.4

56.6

7.5

Film Distribution

115.0

232.7

52.1

117.3

25.8

57.3

TV Production

390.1

789.5

176.8

398.0

87.4

TV Distribution

328.9

665.6

149.1

335.5

Film Exhibition

207.0

441.7

77.0

205.9

8,183.1 1,679.4 3,993.3

Total

Tax revenue

DirectTV Broadcasting 3,746.7

DirectLabor income

Direct

Total

Employment
Direct

Total

18.4

8,852

21,661

7.6

18.7

1,360

3,326

194.4

25.9

63.3

73.7

163.9

21.8

53.4

14,27034,913

41.2

102.7

13.0

34.2

12,90425,686656.8 1,791.2

313.5

699.5

78,552 279,083

Home video

229.9

465.2

104.2

234.5

51.5

114.6

15.3

37.3

1,975

4,833

Online service

161.4

326.6

75.4

169.2

42.2

88.1

13.6

29.8

4,098

11,793

5,292.5 11,334.2 2,365.4 5,569.5 1,004.0 2,568.8

418.2

954.6 122,011 381,295

Total

53

4.5 Restrictions
This report has been commissioned by the Motion Picture Associations which has been preparedsolely for the purposes herein. Mitsubishi Research Institute, Inc. accepts no liability of any kind to
any third party and disclaims all responsibility for the consequences of any third party acting or
refraining to act in reliance on the information provided in this report.
All the data collected for the preparation of this report is publicly available; hence we have notconducted an audit in respect to various government departments or other organizations that haveprovided the information necessary to undertake this assignment. The statements and opinions
written in this report are given in good faith, based on information available at the date of thisreport, and on the basis that all information relied upon is true and accurate in all material respects,
and not misleading by reason of omission or otherwise. The views expressed in this report
represent our independent consideration and assessment.
We reserve the right, but are under no obligation, to revise or amend our report if any additional
information which exists at the date of our report, but was not drawn to our attention during its
preparation, subsequently comes to light.

54