A Look At Japanese Media Market

Japan was always a mystery for me. Its culture and industry is so different from the American and European  markets that I am well versed in. That's why I spent some time talking with a friend who knows a thing or two about the Japaneese media market, Levi Shapiro. Levi worked in several Japaneese and media companies, so he knows the market pretty well.

Levi, what is your experience in the Japanese market?

I spent 6 years in Tokyo working in the Overseas Marketing Division of Toyota Motor Corporation. In addition, I have helped a variety of Western digital media and mobile companies with Japan market-entry. My consulting firm, TMT Partners, has an affiliate in Tokyo.

What makes the Japanese media so different from the US? and from Europe?

Japan is a highly concentrated market. For example, DoCoMo controls 50% of the mobile market, Dentsu handles more than one quarter of the $34 billion spent on advertising per year, and Yahoo Japan owns more than 60% of its sector. The limited fragmentation means that the best path to market is often collaboration with a local partners. For example, one of the reasons Yahoo Japan has such a dominant position in Japan (#1 portal, #1 in search and #1 in auctions) is their joint venture partnership with Softbank.

What are the main challenges that Japanese media companies are facing in the local and global market?

Innovation. Japan tends to be extremely responsive to the needs of their home market but has difficulty responding at "start-up speed" for trends that begin outside of Japan.

What are the opportunities for startups in that market?

It may surprise many Israelis to know that when I worked at Toyota, we were grateful for innovative ideas that could help the company do our business more efficiently. The challenge is learning how to reach Japanese customers and adjusting your work style to the Japanese business culture.
What are the two most important do's and don't's when doing business in Japan?

Do:

Invest time in building a network of relationships within a particular company- Japanese companies are highly hierarchical. At Toyota, we had lifetime employment. Typically, a Toyota staff would work in one division for 5 years and then be transferred to a completely unrelated department. It is important to meet as many people as possible as your counterpart in marketing may be transferred to some other division next month. Moreover, decisions tend to be bottom-up, with the most senior person simply approving the consensus decision of the team. It is essential to take the time to persuade all members of a work group, including the Junior staff, about the validity of your idea. That Junior staff may be your greatest advocate internally.

Don't:

Avoid confrontation. The most important business concept in Japan is "Wa", or  harmony. Japanese culture loathes direct confrontation. If you would like to share a candid opinion with your Japanese colleagues, do it in an informal environment away from the office. When I was at Toyota, we had business related social events about two nights per week. These were mandatory and often was the place where I learned how my colleagues REALLY felt about a particular project. No matter how busy your schedule is in Japan, it is a valuable use of time to take your Japanese colleagues to dinner.

Levi Shapiro, a fluent Japanese speaker,  is a wireless and digital media industry expert who has founded three digital media companies and sits on the board of four others. Through his consulting firm, TMT (Technology, Media & Telecom) Partners, Levi helps digital media and mobile start-ups with strategy, business development and market entry. He can be reached at Levi.Shapiro@gmail.com

Levi is hosting an event about doing business in Japan. More details here.