Archive for July, 2011

After the death of analog, whither Tokyo Tower?

Wednesday, July 27th, 2011

As everybody by now knows, Sunday, July 24 marked the end of analog TV broadcasts in Japan. However, the capital’s new broadcast tower, Tokyo Sky Tree, won’t begin sending out digital signals until May 12 next year, which means the iconic Tokyo Tower still has a reason to exist until then. The big question is: Will it have a reason afterwards?

Hey, don't forget me!

According to Tokyo Shimbun, the operators of Tokyo Tower lobbied the key broadcast companies to retain some of their business after Tokyo Sky Tree itself becomes operational. However, all six TV networks have decided to move their broadcast functions to TST. In terms of broadcasting, Tokyo Tower will remain a backup facility in the very unlikely event that TST is down. This will be a big blow to Tokyo Tower. Its revenues in 2010 amounted to ¥5.48 billion — ¥2.9 billion for tourism and ¥2.58 for renting out broadcast functions to TV and FM radio stations.

With the broadcast functions gone, Tokyo Tower will have to rely almost completely on tourism for its income; that and cutting expenses. And even there, TST had the advantage of being newer and taller. It opens to the public on May 22, and Tobu, the main investor, projects a whopping 25 million visitors in the first year. Tokyo Tower’s peak tourist year was 1989, when 3.8 million people visited. Afterwards, attendance dropped to a bit over 2 million by the turn of the century, and then the management implemented an image makeover that included live performances and special events. Attendance creeped up to about 3 million by 2006.

That, in fact, seems to be the strategy. Rather than compete with TST for out-of-towners, Tokyo Tower will makes its appeal to Tokyoites, whom the management hopes will look at the iconic structure with both nostalgia and a sense of permanence. Construction of Tokyo Tower started in 1956 from discarded armaments used in the Korean War, and represents to many Japan’s emergence from its darkest period. Another advantage Tokyo Tower will have over the younger upstart is pricing. Total costs of the Tokyo Sky Tree is estimated at ¥65 billion, and the price of a ticket to the main observatory will be ¥3,000 for adults. Tokyo Tower only charges ¥600 just to get to the top, and ¥1,420 to go to both observatory stations. Will that make a difference? Apparently, the insurance company Daiichi Seimei thinks so. According to a study the company carried out, it projects only 3 million visitors a year will come to TST, the same as Tokyo Tower now.

Hidden pachinko industry workers make some noise

Monday, July 25th, 2011

Getting paid: A patron exchanges prizes for cash outside a pachinko parlor

Pachinko isn’t the huge money maker it used to be. At around the turn of the century, it was a ¥30 trillion a year business, putting it on the same revenue level as medical care, but according to the Nihon Yugi Kanren Jigyo Kyokai, the pachinko industry association, pachinko parlors now pull in about ¥10 trillion less, give or take a few trillion. Ten years ago there were about 17,000 parlors nationwide. Now there’s only about 12,500.

Unlike horses and certain other racing sports, pachinko is not approved by the government for gambling purposes, but the industry has traditionally gotten around this obstacle by offering prizes to winners. These prizes can then be exchanged for cash at secretive little booths (keihin kokan-jo) located outside the premises, since having the booths inside the parlors themselves would be against the law. The businesses that run the booths sells the prizes to a wholesaler who then redistributes them back to pachinko parlors.

Organized crime elements used to be centrally involved in this buy-back cycle, but in the early ’90s the police managed to lock them out of it and set up their own organizations to administer the business. It’s been reported in the past that a portion of the money these schemes make go to the National Police Agency for things like pension funds. A prepaid card system for pachinko parlors was introduced in the ’90s that made it easier for the police and tax authorities to monitor revenues.

Continue reading about keihin kokan-jo →

The imperfect science of delineating poverty

Wednesday, July 20th, 2011

If you live here, it's got to mean something

You’re as poor as you feel, but economists demand a criterion that’s more exact. One way is the “relative poverty” index, which the Organisation for Economic Cooperation and Development (OECD) uses. The poverty line is set at about one-half a country’s median individual income. If your income falls below that line, you are considered poor.

The Ministry of Health Labor and Welfare recently released the relative poverty statistics for Japan as of last year, and found that 16 percent of Japan’s population falls below the poverty line, which is calculated as being about ¥1.12 million in annual income for one person. This is 0.3 percentage points higher than it was the last time the survey was taken, in 2007, and 4 percentage points higher than the figure found during the first survey in 1985. On the other hand, the average population portion living below the poverty line for all 30 countries in the OECD is 10.6 percent, which is 0.4 percentage points lower than three years ago. (The only other OECD country with a higher poverty rate than Japan’s is the U.S., at 17.1 percent.) For reference, the average household income in Japan is ¥5.49 million.

Continue reading about the "relative poverty" index →

Nadeshiko Japan obviously doesn’t do it for the money

Monday, July 18th, 2011

The victory of the Japanese women’s soccer team at the FIFA World Cup tournament in Germany smashed a lot of preconceptions, most of them having to do with Japan’s international sports profile. However, a more specific truism bit the dust Sunday afternoon in Frankfurt when Japan came out on top, and that’s the notion that the more money you spend on a sport, the better your chances. About 1.5 million girls and women play soccer in America in some sort of organized fashion. There’s a popular professional league. Women’s soccer is a huge business. In Japan, about 45,000 girls and women play soccer. The women’s semi-pro and pro leagues are barely solvent, and there are no organized teams in Japan for elementary school girls. In fact, one of the more interesting factoids to come out of the news about the victory is that many of the members of the Japan national team started playing soccer as children on boys teams.

As pointed out in an article in the tabloid Nikkan Gendai published before the championship victory, Nadeshiko Japan was winning in spite of their meager remuneration. Very few of the members have pro contracts. Two members, Aya Samejima and Karina Maruyama, earned the most at one time playing soccer, about ¥5 million a year each, but that’s because they originally played for the Tokyo Electric Power Co. team — in Fukushima, as a matter of fact — and were thus company employees. After the disaster of March 11, Tepco’s soccer team activities were suspended, but by that point Maruyama has already left. She went to the U.S. and played for while but ended up returning to play for JEF Chiba. Gendai says her salary there is “very small.” Samejima stayed with Tepco until March and then moved to the USA, where her salary was better, the equivalent of about ¥300,000 a month. Team captain Homare Sawa earned about ¥3.6 million a year playing for the Nihon TV team, which among women soccer players is considered “good.” NTV dissolved its team not long ago, and Sawa now “makes less” playing for a team in Kobe.

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Hummer don’t hurt them: Are Japanese consumers allergic to big cars?

Thursday, July 14th, 2011

Problem solved!

This fall, General Motors plans to start selling a “small car” called the Aveo in Japan. Though the company only expects to sell a few hundred, its purpose is to make the Aveo a “feeder model” that will prepare Japanese consumers for more upmarket models down the line. It will be interesting to see the reaction, since American car companies have never been very successful selling large numbers of cars in Japan.

Apparently, GM is thinking along the lines of fighting fire with fire. Small Japanese cars have sold like hotcakes in the U.S. ever since they were first imported there in the early 1970s, so it follows that Japanese prefer small cars, and GM will give them what they want. But the major appeal of import cars in Japan is based on image, so GM’s competition is not Toyota-Nissan-Honda, but rather Mercedes-Volkswagen-Audi.

A Japanese person who wants to buy a small car is not going to buy one from GM, because the average Japanese doesn’t equate GM with small cars. If GM actually wants to compete in a realistic way then they have to compete with something that’s quantifiable, like gas mileage, regardless of the size of the car.

Continue reading about GM in Japan →

Realists and idealists on the cost of adopting renewable energy

Monday, July 11th, 2011

Though the power companies and their allies in the business community still insist that nuclear is the more viable form of energy generation for Japan, everyone else is already thinking beyond nuclear, including the government.

Towering, infernal; or, How I learned to stop worrying and love the pylon

On March 11 when the earthquake/tsunami happened, it just so happened that the Diet was discussing a bill to promote renewable energy sources like wind and solar. It is the exact same bill that Prime Minister Naoto Kan insists on passing before he steps down, and was written by the Ministry of Economy, Trade and Industry, the government organ whose predecessor was mainly responsible for putting nuclear power at the center of Japan’s energy policy. It’s not as ironic as it sounds. METI has been charged by the international community with reducing Japan’s carbon output, and since renewables only account for one percent of the country’s energy production there’s room for improvement in that area. Besides, as bureaucratic maverick Shigeaki Koga wryly suggests in the Asahi Shimbun, for METI officials there are as many opportunities for career advancement in the renewable field as there are in the nuclear field.

The question now is, how much is the consumer going to have to pay for this shift to renewable energy? NHK ran a discussion of the matter on Saturday morning with two experts. Tetsuya Iida, a former nuclear power insider who now runs an energy research center, is, as the announcer labeled him, an “idealist”; while Yuzo Yamamoto, a professor at Kotoha University, is a “realist” on the matter.

According to the proposed bill, called the Renewable Energy Act, the government will endeavor to increase the share of wind and solar energy to 13 percent of all power generation in Japan in 10 years by setting the price that power companies will have to pay for that energy. Though a number of venture businesses have tried to make a go of renewables, their main problem is startup costs. “It’s unavoidable that you operate in the red at first,” said the president of one solar farm in Miyazaki Prefecture. Construction of windmills is very expensive and the cost has almost doubled over time owing mainly to the price of materials. Moreover, the power companies pay less for wind energy than they used to: ¥10 per kilowatt-hour, down from ¥12 per kw/hour in 2003.

An NHK reporter pointed out that METI had been subsidizing the construction of solar and wind farms, but that last year the subsidies were stopped after a round of the Administrative Reform Council, which was charged by the ruling Democratic Party of Japan to cut waste. The premise was that the Renewable Energy Act would eventually be passed and thus make the subsidies obsolete.

Continue reading about Japan adopting renewable energy →

Okozukai vs. hesokuri: An alternate view of home economics

Tuesday, July 5th, 2011

Imitation of wife: Some homemakers keep a lid on it

Late last month the media covered the results of an annual survey carried out by Shinsei Financial Co. that attempts to get a handle on the state of family finances. According to the one thousand respondents, the average amount of okozukai that wives give their salaryman husbands has declined for the fourth year in a row to ¥36,500 a month. It’s also the first time in seven years the monthly allowance dropped below ¥40,000. It’s now the lowest it’s been since 1982. For comparison’s sake, the highest amount recorded by the survey was ¥76,000 in 1990, just before the so-called bubble burst.

Okozukai is usually translated as “pocket money” or “allowance,” but the main point is that it is money “given” to someone by another person who, implicitly, controls it. In Japan, traditionally, the wife handles the finances even if the husband is the sole breadwinner. Consequently, it’s a fairly easy statistic to track and does a good job of illuminating the financial situation of the middle class. The husband spends his okozukai on himself, often on after-hours drinking with colleagues, and according to various analyses of the survey it seems that families are saving money by having the husbands spend less on lunch and said drinking. This trend explains the explosion of low-priced izakaya (drinking establishment) chains in recent years.

The survey also indicates that the custom of wife-controlled finances is changing in accordance with demographic shifts. Now, only about half of all Japanese household finances are controlled by the wife alone. In about 30 percent of the households, the finances are shared by a couple since both work full-time. This means that each spouse has his/her own bank account and, in most cases, they divide certain expenses between them, with one handling the house payments, the other the utilities, etc. And in the remaining 20 percent of homes the finances are controlled by the male householder, which tends to be the dominant situation in the West. However, there’s one important difference that the media never mentions with regard to household finances probably because it never occurs to Japanese reporters. In the West, regardless of who nominally controls the pocketbook, property is often held jointly by a married couple, meaning that bank accounts and property titles have two names. In Japan there is no such thing as a joint account.

Continue reading about household finances in Japan →

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