Market View

Japan in 2012 - the Economy, Technology, and Media!

2011/12/22 Thursday
fromTTDirector ? Ron Huber
As another year draws to a close the Internet, printing presses and broadcasts around the world are rapidly filling up with predictions for 2012, some positive, some negative, and of course some that are complete nonsense. For my last column of the year and TrainTracks' last newsletter of the year I think we can end on a positive note with a few meandering thoughts - some serious, some not - about where things are now and where they might go.

Any discussion about the state of Japan right now still touches on the rebuilding efforts that have continued since the Tohoku Earthquake. It is fairly obvious already that many of the affected regions are going to be rebuilding or feeling the aftereffects in one way or another for many years to come, but if you have been following the TrainTracks newsletters and our columns then you probably know how remarkably Japan has already recovered. Much of this recovery can be attributed to the incredible support the whole world has shown us. In fact, everyone here at TrainTracks had a chance to experience some of that support firsthand through a number of unique and touching corporate social responsibility (“CSR”) projects that several of our clients created.

Economically things are looking surprisingly bright ? with the tremendous efforts of the people here Japan has already pulled itself together. Media advertising spending has already surpassed expectations for the year. Additionally, while the post-earthquake momentum will inevitably diminish with time, the continuing pro-Japanese sentiments and consumer support of Japanese products and travel have already resulted in an upward trend in GDP growth that no one would have expected just one year ago. In spite of the European debt crisis and a high yen, unemployment figures are moving in the right direction and the worldwide demand for eco-friendly vehicles has given Japan’s crucial automotive industry a boost.

The events of 2011 have also resulted in a renewed focus in Japan on some important technological trends. Disruptions to business operations and supply chains coupled with worker displacement following the Tohoku Earthquake was a boon to software and solutions providers for telecommuting, virtual collaboration, optimization and cloud computing. The threat of power shortages in the summer ? which were ultimately avoided thanks to the power saving efforts here ? resulted in a relaxation on the ultra-conservative dress codes and mandatory nine-to-five corporate face time (Super Cool Biz! ). While the country still has a long way to go to truly achieve the flexibility and efficiency that telecommuting and virtual offices make possible, it was still a good start with surprisingly upbeat summer news coverage.

Finally we have the media trends for 2012. I think it is fairly obvious that things are changing rapidly for the media both in- and outside of Japan. For me though there are three big picture items that are already hot topics, that will either start or continue to gain momentum and change the landscape here (and that are just plain interesting to me personally). Before you start guessing let me just say that it is not newspapers in Japan ?the last few years has seen the death of numerous high profile American newspapers but in Japan for at least the next twelve months do not expect much change. This is a topic fit for another column another time, but for now apart from a slow decline in circulation do not expect to see what happened in the US since 2008 repeat itself here ? at least not just yet. So what are my three media trends for 2012? Facebook, mobile games, and e-books!

Let us start with facebook ? facebook is going to conquer the social networking scene in Japan in 2012. Twitter and mixi can come up with all of the useless partnerships and ventures they like ? by the end of the year facebook will leave them in the dust. What this means for the landscape is that more and more Japanese companies are going to be looking for ways to monetize facebook ? so expect a boom in boutique firms offering facebook development services.

The next is the boom in mobile games, which anyone who followed the 2011 Tokyo Game Show (“TGS”) will be familiar with. When Gree took up nearly as much floor space at as Sony did this year the world took notice. What does this mean for the gaming media landscape ? more shovelware (crappy pirate- and ninja-themed mobile games, J-Pop game tie-ins) and a shrinking console game market ? I like console games and do not like shovelware so this makes me sad, on a purely personal level of course.

Finally there is the e-book market in Japan. While I actually do not think this is going to be in any way as big as the abovementioned two trends, it is going to be the beginning of a trend with the potential for far-reaching consequences. Assuming that the publishers here can finally get their acts together Kindle will be ready to take off and catch up with Sony’s PRS-650 reader (already available here), which will finally start the e-book revolution in Japan. Once this happens and the aging population warms to digital publishing ? which will take more than one year ? then I think you can expect a dramatic change in the media landscape, including the traditional Japanese newspaper industry.

So that is the end of my meanderings thoughts for this issue, and for 2011. I hope you have a wonderful New Year’s and are looking forward to 2012 as much as I am!