Video streaming comes of age in Japan with 31% sector growth in 2014

DetailsRebecca Hawkes | 03 February 2015

Japan is beginning to embrace digital video, witnessing 31% growth in the sector last year to JPY81 billion (US$670 million) and marking its card against the country's robust packaged video market.

With 82 million smartphones at the end of 2014, equating to 65% penetration, Japan now has nine million registered subscribers to mobile video-on-demand (VOD) services a rise of eight million since 2011, according to Futuresource Consulting.

"Japan's home video market is the second largest on the planet, surpassed only by the USA," said Joanna Wright, senior market analyst, Futuresource Consulting.

"It has a strong packaged video sector that continues to provide the lion's share of revenues, but high broadband penetration, strong uptake of connected devices and a willingness to pay for premium entertainment are all finally coming together to galvanise interest in digital services."

Pay-TV accounted for 50% of the country's video spend in 2014, and is predicted to rise to 54% of overall video spend in 2018. This is low compared to the UK and USA, but must be considered within the context of a nation where free-to-air broadcasting accounted for 61% of households in 2014, and is still expected to serve 56% come 2018, say researchers.

Packaged video accounted for 48% of Japan's home video spend in 2014, with both rental and sell-through retaining their position, thanks to the growth of Blu-ray. Overall home video spend is set to remain relatively stable, to reach a total of JPY1.3 trillion by 2018, says Futuresource Consulting.