NHK Takes 1st Step toward Management Reform

By Takuya Sasajima / Yomiuri Shimbun Staff Writer

15:27 JST, January 14, 2021

NHK has just taken the first step in drastic management reforms to determine its proper state as a public broadcaster.

NHK announced its management plan for fiscal 2021-23 on Wednesday, including its largest-ever reduction in receiving fees. The three-year plan also states that NHK will consider introducing a comprehensive receiving fee system, integrating satellite and terrestrial contracts. Its satellite contracts have long been criticized as too expensive for viewers.

The move is aimed at eliminating the sense of unfairness in “free rides,” as some households with only terrestrial contracts watch satellite broadcasts as well.

In tandem with the proposal to revamp its fee system, NHK also announced a policy to streamline its business due to a possible decline in income from receiving fees. The plan calls for a ¥55 billion reduction in expenditures over the next three years, bringing the total to ¥680 billion in fiscal 2023.

However, major challenges have yet to be addressed regarding reform from the standpoint of the people who pay receiving fees. NHK needs to think about why viewers think its receiving fees are too high.

Many viewers feel this way about the monthly fee of ¥2,170 for a satellite contract, which can be paid by bank transfer or credit card. With the rapid spread of premium video streaming services on the internet, NHK’s receiving fees are now being compared to those for the likes of Hulu and Netflix.

The NHK group as a whole is lagging behind in reforms, with 11 subsidiaries operating businesses that have little to do with broadcasting. Much of the profits from these businesses flows into NHK as dividends, bloating the business and putting pressure on the private sector.

Inefficient operating expenses and high labor costs are also a problem. Under the leadership of President Terunobu Maeda, a former banker who has been in his post for one year, management reform has accelerated rapidly, but reforms without any sacred cows are urgently needed.