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NHK has finally revealed details about a reduction to the receiving fee paid by television owners, but the reforms by the public broadcaster are not enough. Efforts to slim down the bloated organization should not be eased.
NHK has announced a ¥125 cut to the monthly fee for its terrestrial service and a ¥220 cut to the monthly fee for its satellite service — which includes the fee for the terrestrial service — from October 2023.
The broadcaster included the fee reduction in its revised business plan for fiscal 2021-23. The about 10% fee reduction is the largest ever cut by NHK. The monthly fee will be ¥1,100 for NHK’s terrestrial service and ¥1,950 for its satellite service when paid by bank transfer or credit card.
NHK is a special public corporation that has no need to make profits. Nevertheless, its carried-over surplus funds — or retained earnings, in the case of private companies — have continued to swell in recent years. The public broadcaster must maximize the return for viewers.
NHK’s surplus funds soared to ¥223.1 billion at the end of fiscal 2021 from ¥116.1 billion three years earlier.
The significant increase in surplus funds is because expenditures decreased amid the novel coronavirus pandemic due to such factors as the cancellation of events and the scaling down of program productions, but annual income from the receiving fee was unaffected, enabling NHK to receive stable revenue of ¥700 billion a year, according to the broadcaster.
NHK had initially intended to reduce only the price of its satellite fee by 10% and to make a nominal reduction to the terrestrial fee, which accounts for half of all of its service contracts.
However, the plan was considered to be unsatisfactory by the government and the ruling Liberal Democratic Party, which are trying to devise measures to combat rising prices. Following strong calls from the government and the ruling party, NHK decided to also lower the terrestrial fee by 10%, earmarking ¥150 billion to cover the cut, instead of the initially planned ¥70 billion.
It is unfortunate that NHK did not take the initiative to proactively reduce all fees by 10%. Given the surplus funds, there must be room for the broadcaster to make further cuts.
The government has called for NHK to implement a trio of reforms: streamline management, review its fees and improve its governance. NHK President Terunobu Maeda described the fee reductions as a “wrap-up of the reforms.”
However, NHK has many subsidiaries that compete with private companies in such areas as event planning and online product sales. So far, no specific measures have been provided regarding the restructuring of such subsidiaries. The broadcaster has also been seeking to expand its online services. Issues remain, such as how to prevent bloat.
NHK should focus on its primary business of providing high-quality programming. In recent years, it has been broadcasting more and more entertainment programs similar to those of commercial broadcasters. Discussions must also be deepened on the course of action the public broadcaster should take.
