AbemaTV × Dentsu Inc.: A Conversation Between Presidents. The New Form of Television Pioneered by the Internet

One year after Dentsu Inc. invested in AbemaTV, which continues to grow as a "free internet TV station," the event "Dentsu AbemaTV Day" was held on October 3rd at Dentsu Inc. Hall in Shiodome, Tokyo, aiming to further strengthen the collaboration between the two companies.

We present the talk session held during the event between AbemaTV President Shin Fujita and Dentsu Inc. President Toshihiro Yamamoto.

<Table of Contents>
▼What will pioneer the new era of television?
▼ Advertising thrives on passive viewing. That's where AbemaTV finds its competitive edge
▼What is Hybridization that Enhances "New Television"-like Value?
▼How Do CyberAgent and Dentsu Inc. View Each Other!?

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What will pioneer the new era of television?

―Please tell us about the background behind Dentsu Inc.'s investment in AbemaTV.

Yamamoto: "Where does the future of Japanese television lie?" has always been a key concern for me. The immense potential of Japanese television is truly remarkable, unparalleled anywhere in the world. However, to be honest, I also believe that continuing as we are is unsustainable. I have consistently felt that integration with the internet is essential to pioneer a new era for television. Therefore, regarding any initiative where television moves towards the internet, Dentsu Inc. wants to take on the challenge together. We're saying, "Let us in too!" Naturally, when AbemaTV launched its service in 2016, we wanted to be on the same side. I approached TV Asahi saying, "We want to do this together," but at that time, they said, "Mr. Fujita from CyberAgent is asking us to wait a bit" (laughs).

Then, two years later in 2018, I had the chance to have dinner with Mr. Fujita and hear directly what AbemaTV was aiming to do. At that moment, I was completely struck by his gut instinct and passion. It reaffirmed my strong desire to "be part of this frontline where the internet is helping TV forge a new future, facing the same direction together." So, I proposed, "Please let Dentsu Inc. join too." The very next day, Mr. Fujita called me. He told me they'd already finalized discussions with TV Asahi and presented very concrete terms. The very next day after I asked! I thought, "This is the place!"

Fujita: There was a reason I asked you to wait a bit initially. When we launched the service, there were many other ventures besides AbemaTV aiming to "create internet TV." I didn't want us to be just another one receiving investment. I wanted them to genuinely think, "We can't ignore this," before accepting. So, after consulting with TV Asahi, we decided, "First, let's push forward on our own until they can truly feel how serious we are."

The trigger for Dentsu Inc.'s investment later came when they joined the professional mahjong league I chair, the M League, last year. I was genuinely thrilled (laughs). Around that time, I happened to have dinner with President Yamamoto, so this time I immediately asked for their investment.

Advertising thrives on passive viewing. That's where AbemaTV's winning edge lies.

―Online video streaming services are rapidly increasing. Where do you see AbemaTV's competitive edge?

Fujita: There are two major points. Being "linear" and being "free" are significant strengths unique to AbemaTV.

There are several reasons for being linear, but the primary one is that we wanted to create 'passive viewing'. From my experience running an advertising agency, I felt that content users actively seek out online – that is, content they click on purposefully – doesn't pair well with advertising. Advertising truly comes into its own when it's part of passive viewing. Moreover, it doesn't function as advertising unless it reaches a large audience.

People have been saying "brand advertising is shifting to the internet" for a while, but in my experience, it hasn't shifted that much yet. There's simply nowhere to put it. Most media reaching large online audiences are CGM (user-generated content), meaning there are very few places where advertisers can effectively build brand equity or enhance favorability. Amidst this, I wanted to create a space with properly managed quality that people could trust.

Yamamoto: If I may interject. Everyone, when I heard this from Mr. Fujita over dinner, I was genuinely shocked. This is Shin Fujita of CyberAgent saying, "Advertising, especially brand advertising, still needs to be linear and passive viewing to be effective." Oh, sorry about that (laughs).

Fujita: No, no (laughs). Regarding the potential of Japanese TV that President Yamamoto mentioned earlier, I completely agree. However, most existing video streaming services are on-demand, and none have truly replaced TV. In other words, there's no place online for TV's main content – "news programs" and "sports broadcasts." The fundamental situation was that "what TV can deliver, the internet cannot."

Now, the idea that "if there's breaking news, open AbemaTV" has become somewhat ingrained among internet users. For sports too, more people are watching sumo wrestling and combat sports on AbemaTV. Another strength is its suitability for broadcasting very long-running content like shogi and mahjong. Plus, we're receiving tremendous expectations from minor sports like fencing and futsal, which are rarely seen on TV.

Yamamoto: After three years of running AbemaTV, CyberAgent's President Fujita started saying things like this. It's because we're compiling and operating so many channels ourselves every day. In other words, he's become incredibly knowledgeable about "television-like things." Hearing him talk like that, I couldn't just leave him alone—I absolutely had to be there with him (laughs). The feeling of "I won't let him go alone!" was really strong.

Fujita: Thank you (laughs). Next, the strength of being "free." Many other video streaming services use a paid subscription model, which makes them less suited for "showing content to many people simultaneously." In contrast, AbemaTV is linear and free, making it exceptionally strong at handling large numbers of simultaneous viewers.

Take anime content, for example. Since our launch, we've been offering the world's fastest free streaming of anime first episodes, and we've now surpassed 200 titles. Traditionally, Tokyo local stations had the most "first-episode broadcast days," but in the January 2019 season, AbemaTV had the most. I feel this reflects growing expectations for AbemaTV as a "free platform accessible nationwide to more people," replacing traditional TV.

This "linear" nature and being "free" are characteristics of television as a traditional advertising medium, but they are also unique features of AbemaTV.

What does hybridization mean for enhancing the value of this "new television"?

―I believe AbemaTV is in the process of evolving. What direction are you aiming for?

Fujita: Currently, we're putting significant effort into "hybridizing linear and on-demand services." The reason is simple: as someone who uses AbemaTV myself, the more familiar you become with it, the more you inevitably start wanting to use it in on-demand ways—like watching via timeshift or catch-up playback.

To match this, we're also making significant changes to the UI. AbemaTV's traditional UI involved swiping sideways to change channels while watching a program, but that often left users with idle hands during viewing. So, we're changing it to a UI where you can discover "what to watch next," similar to YouTube.

This leads us to consider either making on-demand viewing a paid service or introducing some form of advertising for free on-demand content. However, this highlights a challenge we also see with terrestrial TV: users often skip ads during on-demand or time-shifted viewing. This eliminates revenue opportunities, so we want to work with Dentsu Inc. to develop new, appropriate advertising products that address this issue.

Looking at the history of the internet, the services that grew large—whether Google, Facebook, or YouTube—initially didn't think about monetization at all. They focused on gathering as many people as possible, and then one day, they created an advertising product that could scale decisively. For Google, it was adding listing ads to search results; for Facebook, it was combining in-feed ads with retargeting; for YouTube, it was TrueView. So, for AbemaTV too, we first want to gather many users and then develop highly effective, scalable advertising solutions.

To achieve this, we first need to establish a "viewing habit" among users as a media platform. We recognize this requires considerable time, so we're committed to a long-term approach.

Yamamoto: Thank you. We're also looking forward to collaborating on developing new advertising products. Regarding TV × Internet, what are your thoughts on simultaneous terrestrial and online broadcasts?

Fujita: I feel there's some misdirection in the reporting, but the real value isn't actually in the "simultaneous streaming" part itself. It's only by achieving simultaneous streaming, enabling catch-up playback, and making all programs available for timeshift viewing that we create a new experience that further enhances the value of television. We must "reinvent" television as something more convenient for users— . That's the hybrid model we're pursuing.

How do CyberAgent and Dentsu Inc. view each other!?

―As presidents, how do you each view the other's company?

Yamamoto: Since we have "President Fujita of AbemaTV" here today, let's start with AbemaTV. As I mentioned earlier, Dentsu Inc. also wants to pioneer new possibilities for television together, believing this benefits everyone.

On the other hand, the youth, innovation, and audacity of "CyberAgent President Fujita" as a competing advertising agency is a threat to Dentsu Inc. However, having such a presence makes us realize that even if our methods differ, we must constantly strive to be more innovative, new, and youthful than them every day. It's a tremendous stimulus. Though there's a bit of sour grapes in that too (laughs).

Regarding the new stage of "TV × Internet," I hope we can collaborate on AbemaTV, a promising new media platform. Once that stage is established, I look forward to competing head-to-head with CyberAgent as an advertising agency.

Fujita: For me, Dentsu Inc. is one of the few companies I genuinely aspire to emulate. They achieve remarkable unity while allowing employees to work freely. Building such a company while attracting top talent is something I truly want to learn from.

Back in the days of Ameba Blog, I became deeply involved in media business. At that time, someone from Dentsu Inc. invited me to dinner and asked, "Can't you do advertising agency work, like Dentsu Inc.?" I declined, saying, "It's difficult because of corporate culture." To which they replied, "Alright, then that's the end of that. Let's just drink tonight!" (laughs). That directness, without beating around the bush, is truly one of Dentsu Inc.'s strengths. It's also a company I personally admire.

As an advertising company, CyberAgent might be a competitor, but I hope we can deepen our collaboration with Dentsu Inc. going forward and unlock the potential of "Japanese television" through AbemaTV.

Yamamoto: Thank you very much for today!