■ The business environment of japan BS broadcasting <9414>
According to the "2023 Japan Advertising Expenditure" published by Dentsu Group <4324>, the total advertising expenditure in japan for 2023 is 7 trillion 316.7 billion yen, an increase of 3.0% year-on-year, surpassing pre-pandemic levels of 2019 and marking the highest since estimations began in 1947. In the first half of 2023 (January to June), recovery was noted due to an increase in real events following the transition of COVID-19 to Category 5, as well as the revitalization of domestic and international tourism and travel. In the second half of the year (July to December), despite the impact of the extreme heat from summer into autumn and issues in the Middle East, advertising demand increased, particularly in "transportation and leisure," "dining and various services," and "beverages and consumables," in line with the active social and economic activities carried over from the first half. The growth of the overall market has been contributed by the increase in internet advertising expenses due to the advancement of the information society and the increase in promotional media advertising expenses such as "events, exhibitions, and video" due to the active movement of people. The BS broadcasting to which the company belongs occupies over 70% of the satellite media-related (BS, CS, CATV) market, but advertising expenses related to satellite media were 125.2 billion yen (up from 125.1 billion yen the previous year), remaining virtually unchanged from the total advertising expenditure of 7 trillion 316.7 billion yen.
The BS broadcasting market was properly established with the start of BS digital broadcasting in December 2000 and has continued to grow steadily, except for the early stages from 2001 to 2003. The diversification of programming has led to an increase in programming across various genres, thus fueling growth through increased submissions from multiple companies. In 2020, due to the impact of the pandemic, the entire advertising market showed sluggishness, resulting in negative growth for the BS broadcasting market as well, but from 2021 onwards, the booming home shopping market continued strongly due to the increased demand for staying at home, in addition to the resumption of sports and other events that were canceled during the pandemic, leading to an increase in advertising revenue for BS broadcasting.
Currently, advertising expenditure on television media is on a declining trend, attributed to the rise of internet advertising. In 2019, the share of internet advertising exceeded that of television media. The growth of internet advertising has continued from 2020 to 2023, increasing by over 1 trillion yen in just three years to reach a market size of 3 trillion yen. As a result, the share in 2023 was 23.7% for television media (down 1.7 points year-on-year) and 45.5% for internet advertising (up 2.0 points year-on-year), widening the gap further. Regarding promotional media advertising for events and such, there was an increase in "events, exhibitions, and video" compared to 2022 due to the resumption of various events and traditional advertising promotional campaigns following the relaxation of movement restrictions, while "inserts", "DM", "POP", and "free publications" saw a decline. On the other hand, with the return of consumer mobility, "outdoor advertising" and "transportation advertising" outperformed 2022.
However, due to the progress of many households replacing old televisions with flat-screen televisions equipped with BS digital tuners, the percentage of households capable of viewing BS broadcasting reached 77.1% in the fiscal year 2019 (according to the "BS household diffusion rate survey" by Video Research), nearing 80%. It is believed that viewer awareness has changed during the COVID-19 pandemic, and concerns about accuracy regarding information on the internet remain, thus the inclination to gather information from television information programs, where accuracy of content is prioritized over speed, remains high. In this situation, it is believed that the company has a strong advantage in providing high-quality information, and the appeal of BS, which can broadcast nationwide compared to terrestrial waves with disparities in uptake by region, has been re-evaluated. Furthermore, it is considered that the expansion of distribution platforms increases revenue opportunities in the growing video advertising market.
(Writer: FISCO analyst Tomoichi Murase)