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Part 1: Digital Strategy differentiate the Future, Japanese Publishers Facing the Transition Period

Apr 27, 2018.Ichiro KumegawaTokyo, JP
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The following is the closing account settlement of the Japanese best 3 magazine-based publisher and Kobunsha subsidiary of Kodansha (from Shinbunka ONLINE).

 

Kodansha declined in revenue and profits, Shueisha posted lower sales and profits, and Shogakukan got to post a deficit for the second consecutive year. Kobunsha has become the first account loss in seven quarters, and in a sense, a disastrous. It can be said that this represents a big trend of the current Japanese publishing industry. Regarding these 4 major companies, not only they have not been able to respond quickly to digitization, but they’ve also lost to Amazon's tremor. Is it to say that they still don’t have the in-house system that digitization could contribute? 

Regarding print publishing, delays in dealing with digitization have become the cause of such harsh settlement in accounts. Major publishers can not easily shift to digital because print media occupies a significant proportion of their business. However, as an example, we have seen deficits in Shogakukan and Kobunsha and the fact is that executives have already recognized that the paper magazine era is decentigrating, yet they can’t quit easily. In doing so, their transition to digital is at a sloth-like pace. Meanwhile, digital media’s emergence is winning more readers. Speeding up the digital game for the 4 major companies poses a challenge.

Meanwhile, CCC (TSUTAYA) is actively moving around M & A. Publishers acquired by CCC over the past few years are as follows.

NEKO PUBLISHING CO.,LTD. (2012)

Hankyu Communications Co.,Ltd. (PEN and Figaro, 2 magazines only) (2014)

BIJUTSU SHUPPAN-SHA CO.,LTD. (2015)

Tokuma Shoten (March 2017)

SHUFUNOTOMO Co., Ltd. (December 2017)

 

Muneaki Masuda, President of CCC, gives his reasons as to why the company has continued to acquire these publishers,

"Our bookstore seeks to provide customer satisfaction. In an era where almost everyone is connected on the Internet, it is critical to have products that are original. Bringing them into the group and working together seems better than providing information to external companies"(Nikkei December 15, 2017).

Most surprising among those M&A is the purchase of SHUFUNOTOMO. This was a historic prestigious publishing company founded in 1916, and even its sales were 8.6 billion YEN (End of March 2017). It’s clear that CCC is aiming to become a general publisher as oppose to being an ordinary bookstore or a rental DVD shop. Frankly, it’s a purchase that seems motivated to create a new type of publisher. We’ll see how it rolls for now.

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