The True Meaning Behind the "Declaration to Quit Mass Media"? The Current State of Regional Media. Special Discussion: "2024 Japan's Advertising Expenditures"

2024 Japan Advertising Expenditure Special Discussion. This year, we spotlight regional newspapers and local TV stations.

Amid sluggish growth in newspaper and TV advertising spending, how will regional media find new avenues for growth?

Our guest this time is Tsuyoshi Oishi, Chairman of Shizuoka Shimbun and Director of Shizuoka Broadcasting System. What was the true intent behind his 2021 declaration that "Shizuoka Shimbun SBS will cease being a mass media company"? Toshiyuki Kitahara of Dentsu Inc. Media Innovation Lab spoke with him.

<Table of Contents>
▼Increasing Content Volume Without Reducing Staff

▼The Top Priority Now: Improving Journalist "Quality"

▼As a TV Station, Focusing on Short Video Production

▼The True Meaning Behind the "Quitting Mass Media" Declaration?

▼The Digital-First Ace Up Our Sleeve? Introducing an Integrated Editorial System for Newspapers
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"2024 Japan Advertising Expenditures" Analysis──Third Consecutive Year of Record Highs. Mass Media Advertising Spending Sees First Growth in Three Years

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Increasing Content Volume Without Reducing Staff Numbers

Kitahara: Japan's total advertising expenditure has hit a record high for three consecutive years. The driving force is internet advertising expenditure, which grew 109.6% year-on-year and is approaching half of total advertising expenditure.

Meanwhile, advertising spending across the four major media outlets reached 100.9% year-on-year. The year-on-year figures for each medium were: newspapers at 97.3%, magazines at 101.4%, radio at 102.0%, and television media (combining terrestrial and satellite) at 101.5%. How do you interpret these results, Mr. Oishi?

Oishi: It feels like we're seeing a clear trend for the future. While television has shown some recovery, newspapers have now declined for three consecutive years. Insert advertisements, linked to newspapers, have also fallen (94.8% compared to the previous year). While internet advertising is expected to continue growing, print media will likely face increasingly challenging times.

Kitahara: In this era of digital dominance, what are the core management priorities for the Shizuoka Shimbun and Shizuoka Broadcasting System (SBS) group?

Oishi: As we always say internally, our role is to "deliver information" to enrich the lives of Shizuoka residents. Broadcast, print, and online are merely means to that end—tools, if you will. The essence remains "delivering information," so we believe we just need to master the tools suited to each era.

Kitahara: How do you perceive the difference between national newspapers and the Shizuoka Shimbun?

Oishi: Regional newspapers are locally rooted media characterized by their close proximity to residents. For example, we've had cases where parents whose children were featured in the Shizuoka Shimbun called the newspaper asking, "We'd like that photo," and we provided it. Including Shizuoka Broadcasting, our commitment to being closely connected to the lives of local residents will remain unwavering.

Kitahara: In recent years, mass media outlets like newspapers and TV stations face challenging business conditions. Some companies are streamlining staff and pursuing productivity gains through DX. What are your thoughts on this?

Oishi: I believe that no matter the circumstances, we should not reduce the number of reporters. Earlier, I mentioned tools. With the emergence of new media from the web and elsewhere, our advantage in terms of tools is diminishing. In this environment, the strength and weapon of traditional media is our reporting power. That is, the power of our reporters.

Beyond print and broadcast, the expansion of our information delivery channels—the internet, apps—has allowed us to reach a wider audience. Consequently, the breadth of information demanded has become incredibly vast. To meet the diverse needs of the general public, we must continuously produce compelling content. Therefore, we cannot reduce the number of content creators—the reporters.

Kitahara: So, "increasing content volume without reducing reporters" becomes a major theme. What is essential for regional media moving forward?

Oishi: There are several things, but one is operational rationalization. Even if we can't reduce reporters, we're facing declining advertising revenue and shrinking subscriber numbers. So we're advancing initiatives like DX (digital transformation) for back-office operations and consolidating administrative departments within the group. Another is thoroughly adopting a "digital-first" approach. This means moving beyond the traditional model where print and broadcast were primary, with online being a secondary outlet. Instead, we must conduct reporting and create content with digital distribution in mind from the very start.

The most critical challenge now is improving the "quality" of our reporters.

Kitahara: Digital-first is indeed a crucial theme today. Consumers primarily access information via smartphones. Regarding the Shizuoka Shimbun SBS Group's digital-first initiatives, I'd like to start by hearing about the newspaper.

Oishi: For newspapers, we publish the print Shizuoka Shimbun and the digital edition "Shizuoka Shimbun DIGITAL."

Kitahara: Regarding the future of print newspapers, for example, Mitsubishi Heavy Industries announced in 2024 that it would cease manufacturing rotary presses. Looking globally, publications like The New York Times now generate more revenue from their digital editions, and print is in decline worldwide. At the current pace, the limits of publishing newspapers in print may be reached before long. What is your long-term outlook on this point?

Oishi: Decisions on how much of the Shizuoka Shimbun print edition to maintain will naturally be based on the circumstances of our readers in the prefecture. However, I believe the need for print newspapers will never completely disappear. While the scale is uncertain, I think it will continue indefinitely. That said, it will likely shift away from the current model of mass printing.

Kitahara: Earlier, you mentioned increasing content volume without reducing the number of reporters. What specific initiatives are you undertaking for the newspaper?

Oishi: Historically, newspapers had quite limited content output per reporter. This was because of the "relay system" where several reporters gathered information, which was then compiled and turned into articles by captains or desks.

However, regional papers like ours have limited resources, so greater efficiency is essential. We prioritize enhancing each reporter's individual capabilities so they can write as many articles as possible and publish them quickly. To achieve this, they need to handle volume and gain experience.

Kitahara: You mentioned that print newspapers won't disappear, but with issues like the discontinuation of rotary press production, I imagine there are situations where downsizing becomes unavoidable. What changes are occurring at this point?

Oishi: One pressing issue is the labor shortage. Shizuoka Prefecture is facing an aging population, and the number of people delivering newspapers in depopulated areas is decreasing. Moreover, many residents in these depopulated areas are not accustomed to digital media, so the demand for print remains high. Maintaining the physical "capacity to deliver" information under these circumstances is a major challenge.

Kitahara: Regarding delivery, I understand there are various approaches being tried, such as delivering to community centers where residents can pick them up.

Oishi: We want to deliver to each household whenever possible, but in some areas, we have no choice but to resort to methods like leaving papers at the door. We're experimenting with various approaches, and we want to continue exploring partnerships with our sales outlets. Regarding printing, I think there are various possibilities, such as reconsidering paper sizes.

As a TV station, we are also focusing our efforts on producing short videos.

Kitahara: Let's shift the conversation to television. Shizuoka Prefecture has four commercial broadcasters (Shizuoka Broadcasting System, Shizuoka Daiichi Television, Shizuoka Asahi Television, and TV Shizuoka). Nationally speaking, that's quite a large number, isn't it?

Oishi: Four stations is indeed on the high side. However, with services like TVer gaining traction, allowing viewers to watch key network programs anytime, anywhere, the presence of local stations is fading. Amid the possibility that Shizuoka Prefecture's commercial stations may eventually be consolidated, we must cultivate our unique strengths.

Kitahara: What unique strengths do local stations possess?

Oishi: Shizuoka Broadcasting System was the first station established in Shizuoka Prefecture and has long been cherished by the residents. We've received numerous awards for our documentary programs, which I believe is proof of our commitment to staying deeply rooted in the community and delivering high-quality reporting. We intend to continue valuing this community-focused approach; it's our strength.

Kitahara: Leveraging our reporting capabilities to create locally rooted content. That's the path for regional media to thrive, isn't it?

Oishi: Yes. Increasing the volume of content, as we've discussed several times today, is also about demonstrating the unique value regional media can offer compared to key stations or platforms like TVer. In that regard, we need to enhance our "in-house program production capabilities" – content not supplied by key stations.

Since Shizuoka Broadcasting discontinued its evening information program, our in-house production ratio has dropped significantly. To raise this, we need to create original programs. Additionally, regarding internet distribution, I believe it's also crucial to leverage the TV station's program production capabilities to create and distribute 2-3 minute short videos.

Kitahara: Regional stations generally have an in-house production ratio of around 10%, rarely exceeding 20%. You're saying we need to increase this ratio significantly.

Oishi: That's correct. I believe we should aim to raise our in-house production ratio to 30%, though this is quite challenging in reality. Sports content holds a major key. As you know, soccer is extremely popular in Shizuoka Prefecture. Our company has invested in Jubilo Iwata and Shimizu S-Pulse, and local sports content represents a strength that key stations cannot fully cover.

Kitahara: Regarding the challenge of increasing the in-house production ratio, the number of production companies is limited in regional areas. What are your thoughts on this point?

Oishi: Beyond production capabilities, "procurement capabilities" are also required, right? In other words, building connections beyond the key networks is a crucial point we must focus on going forward.

Furthermore, to increase our in-house production ratio, we must also change how we conduct reporting. For example, television often relies on a "crew" consisting of a reporter, cameraman, and director for coverage. This approach needs to be thoroughly revised. Going forward, we won't be able to increase content volume unless we implement methods where a single reporter shoots footage using a smartphone and also handles the reporting.

What is the true meaning behind the "Declaration to Quit Mass Media"?

Kitahara: The main revenue sources for media are advertising and subscriptions, right? For example, the Shizuoka Shimbun digital edition attracts paid members through options like "digital edition only" or "print + digital edition," while also selling online ad space. Focusing solely on digital, which will you prioritize going forward?

Oishi: Both are essential. We aim to grow both revenue streams. We'll increase paid digital subscribers while also developing advertising revenue. Going forward, whether it's advertising or article content, one-to-one marketing leveraging user data will become crucial.

Kitahara: I see. Initiatives using ID-based marketing are being actively pursued by media like the Nikkei, and it seems regional media are following suit. How do you view the value of the IDs held by the Shizuoka Shimbun?

Oishi: I believe it holds tremendous potential. Shizuoka Prefecture has long been a hotbed for test marketing, and its value lies in being a cultural region that embodies both the so-called Kansai and Kanto mentalities.

Kitahara: Speaking of one-to-one marketing, in 2021, Shizuoka Shimbun and Shizuoka Broadcasting System declared they would "quit mass media." It was a highly impactful declaration that drew widespread attention. What was the intent behind this declaration?

Oishi: It means delivering information tailored to each individual reader, rather than broadcasting uniform information to the masses. For about 30 years, marketing methods have gradually shifted from mass to personal approaches, but we "mass media" were slow to adapt. I believe this is clearly reflected in the decline of advertising revenue. As we aim to deliver information that truly connects with each individual, the utilization of user IDs becomes a crucial point.

What's the trump card for digital first? Introducing an integrated editorial system for newspapers

Kitahara: As a symbol of digital first, the Shizuoka Shimbun SBS Group launched the integrated media app "@S+ (At-S Plus)" for Shizuoka Shimbun and Shizuoka Broadcasting System in April 2023. It's the app version of the digital edition portal site "@S (At-S)".

Oishi: This app isn't just a gateway to the digital editions of the newspaper and TV. It's a free app serving as a point of contact with residents, delivering a wealth of original content like local events, gourmet spots, trends, and lifestyle information. Users can read text versions of SBS TV and radio programs, access region-specific discount coupons, and find event information across the prefecture.

Furthermore, from this "@S+" app, users can access two separate ID-registration-based apps: "Shizuoka Shimbun DIGITAL" and "Shizusaka." First, "Shizuoka Shimbun DIGITAL" is for paid members only. It provides access to many articles published in the print newspaper, plus additional photos and articles not featured in the print edition. "Shizusaka" is a media outlet specializing in soccer information, also requiring ID registration.

The key challenge for @S+ operations is how to enhance free content while increasing subscribers for Shizuoka Shimbun DIGITAL. Currently, we have 200,000 members, and our goal is to reach 400,000 as soon as possible.

Kitahara: 200,000 members is impressive! So driving both advertising and subscriptions is the Shizuoka Shimbun SBS Group's digital-first strategy, right?

Oishi: Yes. And regarding digital first, the key is how we can enhance the immediacy of news delivered through "@S" and "@S+". Traditionally, newspaper reporters wrote their articles at their desks, revised them multiple times, finalized them at night, and then submitted them. But with digital first, we need to publish articles immediately after gathering the information.

Kitahara: To boost immediacy while flexibly distributing information across multiple media, you need a system that can handle that, right?

Oishi: We have now begun discussions with Stibo DX, a Danish company, to develop a Japanese version of their integrated editorial system for news media, "CUE."

Shizuoka Shimbun Partners with Stibo DX to Transform News Delivery Methods | Press Release from Shizuoka Shimbun Co., Ltd.
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"CUE" is essentially a CMS (Content Management System), but it offers the flexibility to publish content across multimedia platforms. It particularly excels in integrating print and broadcast media like newspapers and TV with digital channels. It enables centralized management of assets, facilitates collaborative editing, and handles publishing, distribution, and customer analytics—making it a highly attractive and user-friendly system.

Kitahara: "CUE" is used by over 800 organizations, including major media outlets like the U.S. "New York Times" and the UK's "Economist." If this is realized, it will truly enable digital-first directly from the reporter's desk.

Oishi: However, implementation presents many challenges, such as adapting it to accommodate Japanese newspapers' vertical writing. Furthermore, the entire workflow—including reporting and editing methods—must be redesigned around "CUE," requiring company-wide reform, including changing employee mindsets. Even so, we firmly believe it must be achieved.

Kitahara: That said, it's incredibly difficult for a single company to adopt a new overseas system alone. Collaborating with competitors to implement it together is another approach worth considering.

Oishi: That's true, but I think it's difficult for anyone to adopt it unless one company goes first and creates a "success story." Many Japanese companies are conservative, so I believe our company should be the "guinea pig," take the lead in implementation, establish a digital-first approach, and then have it spread to other newspapers.

Kitahara: Hearing you speak, I clearly understand your stance: preserving core values like reporters' investigative skills and locally rooted content creation while shifting from mass to 1-to-1, and then embracing digital-first. You place the utmost importance on your media's raison d'être – delivering information to every single resident of the prefecture.

Oishi: And of course, it must be a sustainable business. Today, the notion that "information on the internet is free" has become deeply ingrained. While a trend of paying for digital information is finally emerging through subscription apps and similar models, we are strongly focused on "delivering information and generating profit." To achieve this, we intend to drive both "advertising and subscriptions" as our dual engines.

Kitahara: I feel the Shizuoka Shimbun SBS Group's pioneering efforts will serve as a litmus test for the future of newspapers and television as media. Thank you very much for today.