NHK is no different. All told, NHK has probably never been in such difficulties at any other point in its history.
To begin with, it is useful to examine the recent scandal that so dented the reputation of NHK. In late 2004, NHK employed more than 10,000 people and had revenue from a viewing fee that came to almost $5 billion. But then all hell broke loose. Top executives were accused of embezzling funds, and the popular company chairman was forced to step down. NHK came under increased governmental and legal scrutiny, and competitors revved up their engines. This report neatly summarizes the situation:
In Japan, the NHK viewing fee (which is something that akin to BBC’s license fee) is mandatory under the country’s broadcasting law. Although there is no penalty for those who fail to pay, almost 80% of about 46 million Japanese TV households make monthly payments of about US$12. The 2004 scandal, however, triggered waves of consumer discontent, resulting in about 1,280,000 refusals to pay. This translates into a total revenue loss of some US$42 million or 7.4% of NHK’s gross revenue for the fiscal year 2005 which ended in March 2006. The percentage of fee-paying consumers dropped by almost 10%.1
That marked only the beginnings of NHK’s financial woes. Two twin problems were approaching on the horizon that will affect NHK’s bottom line for years to come: the financial crisis and recession of 2008-09 and the huge changes in the media world brought about by the Internet.
Like everyone else NHK is finding that serious journalism is in trouble. Laborious and expensive, news stories and investigative reports that reflect a passionate commitment to the public interest are being squeezed out of our media by new economic realities. Faced with decreasing advertising revenue, media companies have been consolidating rapidly in recent years, in part to take advantage of economies of scale. . .