Japan's Wowow Defies Streamers With 13th Year of Subscriber Growth

WOWOW
Wowow executive managing director Hajime Hashimoto

The premium content satellite network has increased original content and built fan bases through long-term commitments to airing sports and other events.

As talk about cord-cutting and the streaming wars moves around the world, cable and satellite TV providers, and in some cases premium TV networks, in mature markets continue to suffer. Japan's Wowow, the nation's largest satellite network offering premium content a la HBO, Showtime and Starz, has defied that trend though, logging its 13th consecutive year of subscriber growth.

Wowow's senior managing director Hajime Hashimoto and the head of its L.A. office Kayo Washio said the company has kept growing even as streamers have gained ground in Japan.

Japan's TV landscape was a "safe and stable marketplace," consisting of public broadcaster NHK, the commercial networks and Wowow, all engaged in "one-way transmission of content" until the disruption of the streamers, notes Hashimoto in a conversation with The Hollywood Reporter.

To its credit, Wowow was ahead of the curve in its strategy shift, announcing plans to transform itself into an "all-around entertainment media" company back in 2014. This followed its expansion from one channel to three in 2011 as digitalization was taking place, when it also opened its L.A. office. It now consists of Prime, a general entertainment channel; Live, featuring mostly sports and music; and the self-explanatory Cinema.

"Entertainment and engagement" are two keys when it comes to content, according to Hashimoto, who has been with the firm since its beginnings in 1990. While this could easily sound like standard corporate platitudes, it seems clear that Hashimoto takes the notion seriously.

"Someone might call the customer center and we find out they enjoyed watching Bohemian Rhapsody; that might mean they like Queen or rock, but we don't want it to end there. We try to talk to customers for longer, find out more and analyze the data more deeply than just giving simple recommendations," says Hashimoto.

He sees Wowow positioned "in between regular television and the streamers" with its full online simulcasts launched in December, on-demand services and availability on mobile devices through the Paravi platform from February.

As well as increasing its original content over the years, including international co-productions, Wowow has steadily built followings for sports and other content through long-term commitment, such as broadcasting the Oscars since 2000.

Tennis is a prime example of this. Wowow has been airing major tournaments since the network launched, through years when few Japanese players were competing at the top level. When Kei Nishikori became the first Japanese male player to be ranked in the top five in 2015, interest in the sport flourished in his home country.

That was topped in September last year when half-Japanese, half-American Naomi Osaka beat Serena Williams to win the U.S. Open, becoming the first Japanese Grand Slam champion and delivering a major boost to Wowow. The Naomi boom saw Wowow open its 24-hour customer center lines during the tournament and add 58,000 subscribers that month, compared to 8,000 in August.

The following month, UFC returned to Wowow after a few years of hiatus for the MMA super-fight between Conor McGregor and Khabib Nurmagomedov. Wowow is also a long-term broadcaster of Spain's La Liga soccer league, though it no longer has exclusive rights since the entry of streamer DAZN, sometimes dubbed the Netflix of sports.

The increased competition and emphasis on content saw Wowow's spending on programming rise 9 percent to $270 million (¥29.2 billion) last year, hitting its profit even though revenue rose. It still finished the fiscal year ended in March with a record of more than 2.9 million subscribers, even as the streaming sector heated up and against a background of a slowly shrinking national population.

A standard monthly subscription costs $22.90 (¥2,484).

Another winning strategy for the network has been increasing its efforts to sign contracts with hotels, which were up 6 percent to 64,000 last year.

"With hotels, more than just increasing subscriptions to them, it's a chance for people staying at them to watch the channels and see what we have to offer. They may see a tennis game from a tournament during their stay and want to continue following it when they get home," Hashimoto says.

U.S. dramas have been a major draw on Wowow since it aired the original Twin Peaks, a huge hit in its launch year of 1991. It also aired the reboot in 2017. These days, shows like Criminal Minds, CSI, Grey's Anatomy and The Good Doctor are popular, according to Washio.

Wowow has output deals with all the major Hollywood studios and while contracts are signed through their Tokyo offices, Washio says the personal relationships she has built up since being based in L.A. since 2011 are also crucial.

"Through working on documentaries with Robert Redford and Martin Scorsese, at least they now know the name of Wowow, which makes it much easier to work with them in the future," she says.