Japan, known for its preference for physical media, has finally embraced the era of video streaming. According to a report by data analytics company AMPD, the premium video-on-demand (VOD) category in Japan witnessed significant growth, with subscriptions reaching 52.6 million in 2023, up from 50.6 million in 2022. This surge translated into $4.5 billion in subscription revenues, surpassing the previous year’s $4.1 billion.
Changing Tides in the Japanese Streaming Sector
Interestingly, despite the increase in subscriptions, the total number of minutes watched on premium streaming services decreased from 110 billion in 2022 to 102 billion in 2023. AMPD’s Japan Online Video Consumer Insights & Analytics report, which analyzed over 19,000 members’ digital activities in partnership with the Intage Group, shed light on this trend.
The Competitive VOD Landscape in Japan
The report highlighted Japan’s large and competitive VOD ecosystem. Among the various platforms, Tver, a local broadcaster-led advertising-based VOD (AVOD) platform, stood out with over 20.2 million monthly average users (MUAs), accounting for 38% of premium VOD viewership in 2023. In the subscription-based VOD (SVOD) category, Amazon’s Prime Video emerged as the leader with 19.7 million MAUs, followed by U-Next with 8.2 million and Netflix with 7.5 million.
Engagement and Revenue Leaders
When it came to user engagement, Tver and Netflix topped the charts, with an average of 8.8 and 7.3 hours per user respectively, each quarter. AMPD also noted that five major platforms – Amazon Prime Video, Netflix, U-Next, Disney+, and Hulu Japan – shaped Japan’s SVOD economy in 2023. Together, these platforms generated a cumulative subscription revenue of $3.3 billion, with a combined subscriber base of 38.0 million by the end of the year. In terms of monetization, Prime Video and Netflix led the way, accounting for 23% and 21% of total subscription revenue respectively. Notably, U-Next experienced the highest growth rate, capturing a 30% share of net new subscriber additions in the SVOD market.
Content Consumption and Preferences
The report also delved into content preferences in the Japanese streaming landscape. Prime Video emerged as the dominant player in SVOD-only viewership, capturing 24% of the market, ahead of Netflix with 21%, U-Next with 14%, and Abema TV with 13%. Disney+ and Hulu Japan lagged behind, garnering only 3% and 2% respectively. U-Next, with its acquisition of Paravi and an extensive anime, local TV, and sports offering, emerged as the leading local player in the SVOD space, benefiting from high average revenues per user (ARPUs).
The Role of Local and Anime Content
Japanese anime, live-action dramas, and variety shows played a significant role in driving viewership in the premium VOD category, accounting for 65% of the total. These genres also contributed to over 50% of customer acquisition in the SVOD category in 2023. Tver, U-Next, and Hulu Japan leveraged licensed local dramas to engage viewers, while Netflix and Prime Video saw success with their original dramas and variety shows. The report emphasized that anime remains a crucial aspect of SVOD viewership, with major SVOD services offering extensive libraries of non-exclusive and current anime content. Exclusive releases like “One Piece Film: Red” on Amazon Prime Video showcased the impact of exclusive anime on customer acquisition.
As Japan’s streaming subscriptions exceed the 52 million mark, the country’s VOD landscape continues to evolve, offering a diverse range of content to cater to the ever-growing demand for digital entertainment.