NTV Affiliate Merger Brings Gains, but Subcontractor Layoffs Signal TV’s Decline

It was announced at the end of November that four key NTV affiliates — Sapporo TV (Hokkaido), Chukyo TV (Nagoya), Yomiuri TV (Osaka), and Fukuoka Broadcasting (Kyushu) — will undergo a management integration under a holding company in April next year.

The four companies will establish “Yomiuri Chukyo FS Holdings,” with each becoming a wholly-owned subsidiary under it. While this may not immediately resonate with viewers, it has sent shockwaves through the industry.

The background to this integration lies in the decline of television, particularly the financial struggles of local stations, which is something everyone understands. In fact, the integration of regional affiliates had been whispered about in private broadcasters for some time, but it faced significant hurdles to become a reality.

Maintaining revenue through real estate, hotel operations, and event hosting.

Because of that

” I can’t hide my surprise at NTV’s bold decision. But it’s something only NTV could have done.”

Says a former executive of a key station.

“With the spread of the internet, programs can now be viewed via streaming, and the shift away from TV is accelerating. It’s been said that television is over, and broadcasting revenue for TV stations has been decreasing year by year. Some stations are unable to generate profit purely from broadcasting, and are maintaining revenue through real estate, hotel operations, and event hosting.

Each key station has affiliate stations in each prefecture, but some local stations have a longer history than the key stations, or are not owned by the key stations. These stations are proud and would say, ‘How dare you talk about integration.’ The stations involved in this integration are probably thinking, ‘Why do we have to team up with such distant stations?’ because regional characteristics are completely ignored. But NTV holds stocks in each regional station and has its own presidents and executives at each station, so unlike others, its influence is strong. As for TV Asahi and TBS, the affiliate stations have more power, so it probably won’t be that easy.”

However, the benefits of integrating regional stations are said to be immeasurable.

Firstly, the sales work becomes easier, and cost-cutting can be pushed forward in various areas.

“With the growing influence of the internet and the decreasing benefits of airing commercials on TV, TV stations are spending a lot of effort finding sponsors. Particularly for local stations, it’s difficult to find large sponsors from local businesses. But with integration, the pitch of ‘we can air it across four stations, four prefectures, or nationwide’ becomes a huge selling point. By producing programs jointly, production costs can be shared, making it much easier from a cost perspective” (former key station executive).

NTV Holdings, which owns more than 20% of the integrated holding company’s shares,

“Amidst the domestic population decline and the diversification of media, the four companies will stabilize their management base under the holding company and fulfill their social responsibility by consistently providing quality information and rich entertainment to viewers and contributing to the local community in the future.”

It explains.

 

It seems like the management integration is full of good things, a perfect situation. However, when the companies create programs together, the number of staff needed per company decreases, and naturally, some staff will be laid off. While station employees don’t have to worry about this, production companies, which are subcontractors, are said to be extremely anxious.

Additionally, other affiliate stations that were excluded from the integration will have to search for ways to survive on their own.

 

Possibility of one station in each prefecture

“There is a possibility that only the core stations are involved this time, but we don’t know if more stations will join in the future. However, the stations that were left out face the same issues and are struggling to figure out what to do. One possibility is for the excluded stations to team up with others in their region. In Kyushu, for example, the prefectures other than Fukuoka—such as Kumamoto, Oita, Miyazaki, Nagasaki, and Kagoshima. In Tohoku, it could be Aomori, Yamagata, Fukushima, Iwate, and Akita” (former key station executive).

Even so, if the situation remains tough, another key station employee shares what might happen next:

“Stations in local areas may start to team up, regardless of their affiliation. If that happens, there would essentially be one television station per prefecture, which would simplify things. Under Tanaka Kakuei’s leadership, one station from each affiliation was established in each prefecture, but in reality, there’s no need for multiple stations in sparsely populated areas. Now, even in rural areas, key station programs can be viewed via cable television, and with fewer people watching TV, the situation is changing.”

So, what kind of benefits will this management integration bring to viewers?

“Perhaps the day will come when the four stations can cut costs through network streaming and offer programs at lower prices, or when they create something new with joint productions” (former key station executive).

The sound of television’s end is growing louder.