Policies on Contents Need to be Established -- A New Strategy for the "Digital Era"

Ichiya NAKAMURA (Executive Director, Stanford Japan Center-Research)

High expectations and signs of stagnation

Japanese pop culture is winning attention all over the world. Spirited Away, an animated film by Hayao Miyazaki, won the Oscar for Best Animated Feature Film this year [2003]. Artist Takashi Murakami created huge colorful monuments in New York and caught the eyes of New Yorkers. Hollywood is now busy rolling out films full of Anime idiosyncrasy.

Since the 1990s, Japanese Animation, or Anime, as well as video games have captured the enthusiasm of children all over the world. Japanese pop musicians have been favored among the teenagers of Asia. Not only the younger generation, but also critics and academia have been attracted to the entertainment and mass culture of Japan for the last couple of years.

The traditional image of Japan in the past would have been reflected in the words harakiri and kamikaze: those of a fighting nation. After WWII, the buzzwords became Toyota, Honda, Sony, and so on: fighting corporations globally. And today, they are Pokemon, Dragon Ball Z, Sailormoon, and Super Mario Brothers. The icons of Japan are now comics, animation, and video games, all of them artifacts of Japanese pop culture.

This trend, together with the progress of the digital world, has elevated the hopes of the business world. Broadband Internet access is available in Japan at the lowest prices in the world, connecting 13 million people. Internet access via mobile phones has become a commodity, and in December 2003 terrestrial digital broadcasting was launched. Now that the infrastructure is amply in place, the focus is shifting to the importance of the contents channeled through it.

The private sector has begun taking action, such as Nippon Keidanren's recently compiled report on the promotion of the entertainment industry. And in July 2003, the government organized a taskforce on digital contents at the Intellectual Property Strategy Headquarters. In an effort to become a nation founded on resources of knowledge, Japan has placed the contents business as a strategic sector and is now contemplating measures in which this particular area can become more competitive in the global market.

Despite all the excitement, however, the contents industry is on a sluggish path. According to statistics by the Intellectual Property Strategy Headquarters, the proportions of this business sector contributing to GDP are 2% in Japan, 5% in the USA, and 3% for the world. It is a very small industry sector to begin with. Furthermore, conventional entertainment businesses such as publishing and music have been shrinking in recent years. Total market value was 11.7 trillion yen in 1997, which has dropped to 11 trillion yen in 2001 and is not expected to show expansion exceeding the rate of GDP growth in the near future.

On the other hand, the Japanese government has predicted that the growth rate of the contents industry globally will be 6.5% for 2006, exceeding GDP growth. Apparently the government assumes that the market exists overseas. But the percentage of sales in overseas markets based on total sales is only 3% compared to 17% for the USA, and the trade balance for the contents industry is in the red. Indeed, Japan's contents business is not as competitive as it seems. Even in areas such as animation and video games, where Japan has been considered to be in the lead, other countries such as Korea are closing in. The situation is rather grave.

Meanwhile, non-entertainment sectors such as e-commerce, remote medical care and education, and e-government systems seem to hold promises as new markets. These are the areas in which the activities are shifting from real world transactions to online contents, and growth can be expected. In fact, the market in 2002 has already grown to 1.6 trillion yen in the consumer market and 60 trillion in the enterprise market.

Increase of "amateur creators"

Visual and music entertainment by amateur artists is gaining momentum recently in Japan, as can be seen in such areas as growing indie music and proliferating coterie comic magazines. The increasing volume of personal communication is furthering the development of new contents areas. Individuals are publishing their work on websites, and the mobile phone is serving as a media for circulating personal self-expression, aided by various new functions such as shooting and sending digital photos and videos. Another example is the booming Internet BBS Ni-channeru (Channel 2), which has expanded to become a forum of contents by individuals maintaining anonymity.

With the promotion of digitalization and networking, people can easily enjoy contents from all over the world, thus promoting consumption. But the larger effect surfaces on the manufacturing side. Digitalization makes production and transmission of visual and musical works easier. It pulls down the barrier between professionals and amateurs, thus contributing to enriching the resources of creators. Anyone can now produce as well as enjoy digital contents.

With the transition from analog to digital technology, the world of media undergoes fundamental change. The range of what would be considered "contents" expands from entertainment to non-entertainment areas, and from the professionals-only arena to include amateurs also. The government is now expected to compile new policies fit for the new digital age.

However, there has never been anything that could be called a contents policy in Japan. There were a few short-term schemes initiated by individual ministries or agencies, but the government as a whole never had a large scale, comprehensive policy. The segments of business involved include film, music, publishing, broadcasting and communication, which necessitates involvement of multiple government agencies supposed to be in charge, such as copyright administration, art promotion, remote medical care, and e-governments. It also involves issues such as diplomacy, security, or maintenance of public order, each requiring cross-ministry efforts, but it still remains unclear as to who exactly is in charge.

The objective of the policy also needs to be multi-faceted such as to enhance economic growth or to ensure everyone can enjoy contents at a reasonable price safely, and to secure an environment in which anyone can "create". As these priorities change according to circumstances there may sometimes be conflict of interests, so the intention of the country must be formulated on a well-balanced basis.

From this perspective, the Ministry of Public Management's Digi-con project, in which I participated, compiled a report that provides a mid- to long-term viewpoint. In the report, we recommended that the government take measures to accommodate the digital era, diverting previous policies as necessary.

Need for further discussion

It is also important to form a consensus among the private sector. Nikkei Digital Core, a discussion forum hosted by Nihon Keizai Shimbun, has organized the Digital Content Policy Project to discuss this issue, where I have been asked to perform the task of coordinator. We are about to put together the following five key points for the promotion of digital contents, and we intend to put them forth to related industry sectors to promote further discussion on the issue:
1. Establishing the right to create – To recognize the fundamental human right to utilize, process, edit, create and send out information, so as to make full use of one's own ability as a creator.
2. Reorganization of the distribution structure – To reorganize the structure of this industry to put more resources in production rather than distribution, so that more talent can be accumulated.
3. Development of fields to accommodate contents – To promote creation of opportunities and channels in which young creators and new technologies can be tried out.
4. Reinforcement of contents education – To broaden efforts in places such as schools and museums to advance the creative and expressive talent of children.
5. Securement of the autonomy of the users – To make access costs reasonable and copyright procedures simple in order to improve the usability of contents.

The contents industry obviously concerns art and culture, education, and the wellbeing of society. Creativity and the ability of self-expression form the identity and brand value of a country. The contents industry could even become a soft power to enhance diplomatic leverage. Thus, contents policy is something that greatly influences the very form of a country.

It also requires various techniques of public administration, such as supporting the industries and introducing regulations. For example, the particular kind of pop culture that Japan currently is strong in was formulated in an environment that accepts a wide range of cultures, including violence and sexual morals, where the cultures of adults and children are not clearly categorized. It must also be noted that otaku, or enthusiast nerds, play a significant part in Japan's pop culture. Accordingly, the government is expected to acknowledge a certain level of value in the apparent jumble in areas of contents production.

The discussion concerning contents policies has just begun. Japan is traditionally known for its ability to catch up with its predecessors, but a new strategy may be called for in this digital age. We must not be preoccupied by the short-term issue of promoting industrial development, but must carry out nationwide discussion envisioning a hundred years of preservation and development of our culture.

(The original Japanese article appeared in the December 24, 2003 issue of Nihon Keizai Shimbun.)