NHK uses carrot and stick approach to get your money

September 27th, 2012 by Philip Brasor & Masako Tsubuku

Demand what you deserve: NHK’s On Demand home page

The good news first. Starting Oct. 1, NHK will be charging slightly less for subscriptions. If your account is only for regular terrestrial broadcasts (NHK-G and NHK-E), the price drops from ¥1,345 a month to ¥1,225, and if your account also includes satellite (NHK BS1 and NHK BS Premium) it goes from ¥2,290 a month to ¥2,170. The bad news, at least for corporate or institutional subscribers, is that the public broadcaster is cracking down on what it believes are scofflaws, particularly multiple-set users who don’t pay for every single TV they have.

On Sept. 10, the Tokyo District Court started hearing a case involving a lawsuit that NHK brought against the hotel chain Toyoko Inn. NHK is demanding the company pay ¥550 million for the period of January to July of this year. The money represents subscription fees for TVs in 236 hotels comprising some 34,000 rooms, which NHK claims Toyoko Inn has not paid in full. Toyoko’s defense is that it has for years had a contract with NHK to pay an annual subscription fee of ¥230 million, representing one-fourth of all the TVs in its possession.

The hotel chain says that it is unfair for NHK to demand fees for all the TV sets since rooms are not always occupied and even when they are guests don’t necessarily watch TV. Toyoko Inn’s lawyers told the Asahi Shimbun that NHK just “suddenly” demanded full subscription fees for all the rooms. He added that if NHK acknowledged the reality of the occupancy rate then the company would negotiate a new blanket subscription fee in good faith.

Asahi goes on to say that NHK is also suing two other hotel chains it doesn’t name for an additional ¥187 million. In the past, the broadcaster has brought other suits against institutional users, but it was for small amounts, never more than ¥2 million, and the cases were usually settled before they went to court.

NHK’s abrupt appetite for litigation is in line with a newly aggressive stance regarding fee collection. Since the advent of all-digital broadcasts and more sophisticated TV sets, it has become easier for NHK to monitor which households are watching its programs, and thus has streamlined its fee-collection activities, in particular with regard to people who watch BS channels.

In 2011, NHK reported revenues of ¥672.5 billion, or ¥4.5 billion more than 2010. The increase was credited to more subscribers paying for satellite service they hadn’t paid for in the past. However, NHK says that there is still plenty of untapped riches out there, and conducted a survey earlier this year to find out how many people aren’t paying their fair share so as to “maximize the transparency of the contract process.”

Nationwide, 72.5 percent of all people who should be paying — meaning people with TV sets — pay their fees in full. The prefecture with the highest percentage of paid subscribers is Akita at 94.6 percent; the lowest Okinawa at 42 percent. (The reason NHK gives for the high percentage of deadbeats in Okinawa is that the islands only reverted to Japanese rule in 1972 and so “still aren’t accustomed to the subscription service yet.”) It should be noted that NHK spent ¥170 million on the survey.

The survey also suggests a possibly effective though seemingly unexplored defense strategy for Toyoko Inn, which is that it’s likely its guests already subscribe to NHK at home. The public broadcaster insists on charging for each TV set rather than for each potential viewer, which means viewers in the end pay multiply to NHK for the privilege of watching programs in hotels or hospitals or any place that will likely incorporate subscription fees into their own charges. It matters nothing to NHK if a TV set is never tuned to their programs or even turned on at all. As long as it exists, it is subject to a fee. The people’s edification or entertainment is, in effect, beside the point.

Take, for instance, its video-on-demand policy. The majority of NHK programming is created and produced by NHK, and the rest licensed. All of it, however, is paid for by subscriptions. NHK is defined as a “publicly owned corporation,” which means all that content essentially belongs to the subscribers. So why does NHK charge for most of its VOD programs? According to NHK’s home page, the broadcaster has to charge a nominal fee (¥105 or ¥210, though a small number of shows are free) by law, since “broadcast lines and telecommunications lines are different” and have different usage fees.

NHK On Demand has a “completely separate financial system” than the one set up for NHK broadcasting because “using public funds for VOD” would violate the spirit of fair competition, presumably with regard to commercial broadcasters. Whether or not you buy this explanation, the fact is that VOD offers a loophole for the viewer who thinks it is unfair for NHK to be given the right to charge mandatory fees for programming that is determined unilaterally by the provider.

As mentioned above, it costs up to ¥210 to watch one program on demand on your computer or Internet-connected TV. That fee allows you to watch the show as many times as you want within a 10-day period. However, NHK also offers monthly VOD plans. There’s the minogashi bangumi (missed programs) pack for ¥945 a month that allows you to watch repeats of about 600 programs that were originally broadcast during the previous month; and there’s the tokusen (special) pack, which also grants access to some 4,000 programs in the NHK archives for an additional ¥945 a month.

Both plans include BS programming. The loophole here is that when you register for either plan, you don’t have to indicate you’re a subscriber. That means you can conceivably watch all the NHK you need, albeit later than originally broadcast, with the ¥945 minogashi plan and save ¥400 a month on a regular subscription and a whopping ¥1,220 a month on a BS subscription. Caveats: no bilingual, no overseas service and closed captions are limited. Also, you can’t record the programs. Still, the advantages are obvious. Even if you don’t use the monthly plans and only download individual programs it will probably add up to less than a subcription. Who watches 10 NHK shows a month, much less 600?

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