Figure Breakdown of corporate research spending by industry (FY 2015) ICT equipment and appliance manufacturing

Transcription

1 Chapter 6 Basic Data on the ICT Field Section 1 ICT Industry Trends 1. Economic size of the ICT industry (1) Market size (domestic production) The industry s average annual growth rate from 2 to 215 was.6 percent. ICT industry market accounted for about 9.9 percent of all industries, making it the largest industry The ICT industry s market size in 215 was 95.7 trillion yen (based on nominal domestic production), accounting for 9.9 percent of all industries and making it the largest industry in the country (Figure ). Looking at the industry s performance over time finds that its production value cooled off for several years after 2 in response to the collapse of the IT bubble. The industry entered positive growth territory again starting in 25, but its production value plummeted between 28 and 29 due to the global financial crisis. ICT s production value continued to slide even after 21 until signs of recovery finally started to appear in the years after 212 (Figure ). Looking at the transitions in market size (based on real domestic production ) of the main industries in constant 211 values reveals that the ICT industry fell down by the global financial crisis to 91.3 trillion yen in 212 but trended gradual upward after 213 (Figure ). The ICT industry s market size (based on real domestic production) in 215 was 95.7 trillion yen. (2) Gross domestic product (GDP) The real GDP of the ICT industry in 215 accounted for 9.3 percent of all industries The nominal GDP of the ICT industry rose in 215 by 4.9 percent year-on-year to 44.2 trillion yen. Conversely, the real GDP of the ICT industry in constant 211 values increased 1.8 percent year-on-year in 215 to 44.4 trillion yen. (Figure ). Looking at the size of nominal GDP of the main industries finds that the ICT industry s nominal GDP accounts for 8.9 percent of the combined nominal GDPs of all industries and is the third largest after the commerce and real estate industries. The growth rate of the ICT industry in terms of nominal GDP rebounded to plus 4.9 percent over 214 and 215. Examining the real GDPs of the main industries finds that the ICT industry s real GDP accounts for 9.3 percent of all industries, making it the third largest industries following commerce and real estate industries (Figure ). Figure Market sizes of major industries (based on nominal domestic production) (breakdown) (215) (trillion yen) ICT industry % Other industries % Nominal market size of all industries trillion yen Commerce % Real estate % Medical, health care and welfare % Personal services % Transportation equipment % Construction % Business services % (Source) Study on Economic Analysis of ICT, MIC (217) 56 14_CW6_AX468D6.indd /11/28 11:17:24

2 Nominal domestic production in billions of yen 12, 116,627 11, 1, 9, 8, 7, 6, 5, 4, 3, 2, 1, 95, year Real domestic production (in billions of yen, 211 values) 12, 11, 1, 86,974 9, 8, 7, 6, 5, 4, 3, 2, 1, Figure T rends in market sizes of major industries (based on nominal domestic production and real domestic production) 95, year Commerce Real estate Medical, health care and welfare Construction Commerce Real estate Medical, health care and welfare Construction Business services Transportation equipment personal services ICT industry Business services Transportation equipment personal services ICT industry (Source) Study on Economic Analysis of ICT, MIC (217) Figure Transitions in the nominal GDP and real GDP of major industries Nominal GDP in billions of yen 8, in billions of yen 211 values 8, 7, 6, 7, 6, 53,36 5, 44,221 5, 4, 4, 3, 3, 2, 2, 1, 1, Real GDP year 44,432 3, year Commerce Real estate Medical, health care and welfare Construction Commerce Real estate Medical, health care and welfare Construction Business services Transportation equipment personal services ICT industry Business services Transportation equipment personal services ICT industry (Source) Study on Economic Analysis of ICT, MIC (217) Figure Nominal GDP and real GDP of major industries Nominal GDP (trillion yen) Other industries % ICT industry % Nominal GDP of all industries trillion yen (trillion yen) Commerce % Business services % ICT industry % Other industries % Real estate % Medical, health care and welfare % Personal services % Transportation equipment % Real GDP Construction % Personal services % Transportation equipment % Real GDP of all Industries trillion yen (211value Business services % Construction % Commerce % Real estate % Medical, health care and welfare % (Source) Study on Economic Analysis of ICT, MIC (217) (3) Employment ICT industry employment totaled 4.1 million in 215 accounting for 6. percent of total employment in all industries The ICT industry employed 4.1 million people in 215 (up.8 percent from the previous year), accounting for 6. percent of total employment in all industries. Employment declined by 6.1 percent from 214 in the Broadcasting sector, by 3.5 percent in the video, audio and text information production sector, and by 1.4 percent in the communications sector. But employment in the research sector and the ICT-related services sector increased, by 3.3 percent and 2.6 percent respectively (Figure ) _CW6_AX468D6.indd /11/28 11:17:26

3 Figure Transitions in ICT industry employment thousands of jobs 5, 4,743 4,531 4,5 4,194 4,139 4,164 4,156 4,21 4,187 4,23 4,118 4, , 3,949 3,93 4,21 3,978 4, (year) 3,5 3, 2,5 2, 1,5 1, Communications Broadcasting Information services Internet-related services ICT-related manufacturing ICT-related construction Research ICT-related services Video, audio and text information production (Source) Study on Economic Analysis of ICT, MIC (217) 2. ICT industry contributions to the national economy (1) ICT industry s economic spillover effects The ICT industry contributes the largest class economic spillover effects of all industries in terms of added value and job inducements The ICT industry s real domestic production in 215 was 95.7 trillion yen. The industry s economic spillover effects,35 estimated to be 8.8 trillion yen in added value and million jobs. By comparison, in 2 the ICT industry s real domestic production value was 87 trillion yen, which contributed 73.8 trillion yen in added value and million jobs. Because technological innovation has a large impact on the ICT industry, the industry is believed to be a stronger driver of added value than employment (Figure ). Figure T ransitions in economic spillover effects (induced added value and jobs) from major industries production activities in trillions of yen Induced added value tens of thousands of jobs 1, , ,2 6 1, year Induced jobs 2 25 ICT industry Real estate Construction Transportation equipment year Commerce Medical, health care and welfare Business service Personal service 2 25 ICT industry Real estate Construction Transportation equipment 211 Commerce Medical, health care and welfare Business service Personal service (Source) Study on Economic Analysis of ICT, MIC (217)\ 3. Research and development in the ICT field (1) Research and development spending The ICT industry36 spent trillion yen on research in FY 215, accounting for 28.9 percent of all corporate research spending According to the 216 Research Investigation Report on Science and Technology, Japan s total scientific and technological research spending (i.e., research spending) in FY 215 stood at trillion yen (the combined research spending by enterprises, nonprofit organizations, public agencies, universities, etc.). Corporate research spending, which accounts for 35 There are two methods of calculating economic spillover effects: (1) calculating the economic spillover effects for all Japan s industries brought about by each industry sector s final demand, focusing on the goods and services that constitute the industry sector s final demand and (2) calculating the economic spillover effects for all Japan s industries brought about by each industry sector s production activities (total of final demand and intermediate demand), focusing on the industry sector itself. The latter method was used here. 36 ICT industry here refers to the ICT equipment and appliance manufacturing industry, the electrical equipment and appliance manufacturing industry, the electronic component, device, and circuitry manufacturing industry, and the information and communications industry (including the information services, communications, broadcasting, Internet-related services, and other ICT sectors) _CW6_AX468D6.indd /11/28 11:17:27

4 about 7 percent of all research spending, was trillion yen. Of this amount, trillion yen (28.9 percent) was spent on research by the ICT industry. The ICT equipment and appliance manufacturing segment was largest research spender in the ICT industry (Figure ). The ICT equipment and appliance manufacturing segment accounted for the largest share of the ICT industry s technology imports and exports (Figure ). (3) Number of researchers The ICT industry employed 169,717 researchers, or 34.9 percent of all corporate researchers in Japan There were 847,93 researchers in Japan on March 31, 216 (the total of all researchers at enterprises, nonprofit organizations, public agencies, universities, etc.). Enterprises employed 486,198 researchers, or about 6 percent of the total. The ICT industry employed 169,717 researchers, or 34.9 percent of all enterprise researchers in Japan. The ICT equipment and appliance manufacturing segment had the most researchers of any ICT industry sector (Figure ). (2) Technology trading The ICT industry posted a surplus in technology exports37 in FY 215 The value received from Japan s technology exports in FY 215 totaled trillion yen, to which the ICT industry contributed 57.8 billion yen, or 14.5 percent. On the other side of technology trades, the costs of technology imports was 62.6 billion yen, of which the ICT industry paid out billion yen, or 45.5 percent. Both Japan and the ICT industry posted export surpluses in technology trading. Figure Breakdown of corporate research spending by industry (FY 215) (corporate research spending trillion yen) (trillion yen) Total for other industries % ICT equipment and appliance manufacturing % Electrical equipment and appliance manufacturing % Electronic component, device, and circuitry manufacturing % Communications % Total for other manufacturing industries % Information services % Internet-related and other ICT services.34.% Broadcasting.8.% (Source) Prepared from the 216 Research Investigation Report on Science and Technology, MIC Figure Technology trading by industry (FY 215) Value of technology exports all industries trillion yen (billion yen) Total for other industries % Value of technology imports (all industries: 62.6 billion yen) (billion yen) ICT equipment and appliance manufacturing % Electrical equipment and appliance manufacturing % Electronic component, device, and circuitry manufacturing % Total for other manufacturing industries % Information and communications % Total for other industries % ICT equipment and appliance manufacturing % Total for other manufacturing industries % Information and communications % Electrical equipment and appliance manufacturing % Electronic component, device, and circuitry manufacturing % (Source) Prepared from the 216 Research Investigation Report on Science and Technology, MIC 37 The value of technology trade is the equivalent value received from the provision (export) of patents, knowledge, technical direction, and other forms of technology transfers to other countries or the equivalent value paid to receive (import) the same forms of technology transfers from other countries _CW6_AX468D6.indd /11/28 11:17:27

5 Figure Corporate researchers by industry (as of March 31, 216) corporate researchers in all industries 486,198 Total for other industries 33,48 6.9% Electrical equipment and appliance manufacturing 38,767 8.% ICT equipment and appliance manufacturing Electronic 78,146 component, 16.1% device, and circuitry manufacturing 28, % Total for other manufacturing industries 283,1 58.2% Information services 18, % Communications 5, % Internet-related and other ICT services 247.1% Broadcasting 4.% (Source) Prepared from the 216 Research Investigation Report on Science and Technology, MIC 4. State of ICT enterprise operations The Basic Survey on the Information and Communications Industry is a general statistical survey (started in 21) that MIC and the Ministry of Economy, Trade and Industry jointly conduct under the Statistics Act (Law No. 53 of 27) to clarify the operations of enterprises belonging to the ICT industry a Large Category G in the Japan Standard Industry Classification and to obtain basic data for ICT industry policies. The following sections provide an overview of the 216 survey that pertains to ICT enterprises. (1) Summary of enterprises engaging in ICT business operations (activity-base results) a. General summary of the survey results 5,474 enterprises were engaged in ICT business operations with sales in excess of 48 trillion yen Sales attributed to ICT business operations in FY 215 totaled trillion yen (total sales by the enterprises were trillion yen). By sector, the telecommuni- cations sector accounted for 34.6 percent of all sales (down 1.9 percentage points from the previous year), the software sector 31.5 percent (down.5 points), and the information processing services sector 11.7 percent (up.5 points) (Figure ). The number of enterprises engaging in ICT business operations (irrespective of whether ICT business operations are the enterprise s mainstay operations) stood at 5,474. Operating profits were trillion yen, ordinary income was trillion yen, and the enterprises held 9,86 subsidiaries and associated companies. b. Breakdown of sales Enterprises capitalized at less than 1 million yen accounted for more than 5 percent of all enterprises in 8 of the 12 ICT industry sectors A breakdown of ICT industry enterprises by capital size discovers that enterprises capitalized at less than 1 million yen accounted for more than 5 percent of all enterprises in 8 of the 12 ICT industry sectors. Of par- Figure ICT industry sales Advertising agencies (148) 2,464.5% Cable broadcasting service providers (221) 5, % Audio program producers (12) 1,58.3% Film makers and distributors (431) 8, % Publication companies (349) 1,88 2.2% Service providers related to video, audio, or text information (156) 1,283.3% Miscellaneous communication service providers 8, % Newspaper companies (128) 14,534 3.% Private broadcasters(39) 23,18 4.8% Internet-related service providers(76) 3,42 6.3% Information processing service providers (1,72) 56, % Figures in parentheses are the number of companies Unit: 1s of millions of yen Telecommunication service operators (379) 166, % Sales in the ICT industry FY trillion yen Software service providers (2,88) 151, % (Note) Miscellaneous communication service providers refers to enterprises that selected other as the primary business in the breakdown of sales attributable to ICT business operations. (Source) 216 Basic Survey on the Information and Communications Industry, MIC / METI 6 14_CW6_AX468D6.indd 6 217/11/28 11:17:28

6 28.7 Telecommunication service operators (379) Private broadcasters (39) Cable broadcasting service providers 221) 13.1 Software service providers (288) Information processing service providers (172) Internet-related service providers (76) Audio program producers (12) Publication companies (349) Less than 5 million yen 5 million yen to less than 1 million yen 1 million yen to less than 3 million yen 5 million yen to less than 1 billion yen 1 billion yen to less than 5 billion yen 5 billion yen to less than 1 billion yen Newspaper companies (128) Film makers and distributors (431) Advertising agencies (148) Service providers related to video, audio, or text information (156) TV / radio program producers (included in other results) (364) Figure Breakdown of ICT industry enterprises by capital size All reponses (5474) (%) 3 million yen to less than 5 million yen 1 billion yen or more (Source) 216 Basic Survey on the Information and Communications Industry, MIC / METI ticular note is the video information production and distribution sector and the audio information production sector, where enterprises capitalized at less than 5 mil- lion yen accounted for more than 4 percent of all enterprises in the respective sectors (Figure ). 5. Telecommunication market trends (1) Market size Mobile communications accounted for more than 5 percent of sales in the telecommunications sector, while, by service category, the data transmission services share is the highest Sales in the telecommunications sector in FY 215 were trillion yen (an increase of 2.5 percent from the previous year) (Figure ). Fixed-line communications accounted for 29.5 percent of all sales in FY 215, and mobile communications for 54.5 percent (Figure ). Looking at sales by service category finds voice transmission services accounted for 29.2 percent and data transmission services for 54.8 percent (Figure ). The average revenue per user (ARPU) among the main mobile communication service providers was 4,43 yen for NTT Docomo, 6,34 yen for KDDI, and 4,5 yen for SoftBank (Figure ). 6. Broadcasting market trends (1) Size of the broadcasting market a. Broadcaster sales B roadcaster sales totaled trillion yen in FY 215 Japanese broadcasters are divided into 2 categories: Japan Broadcasting Corp., a public broadcaster known as NHK, which depends on reception fee revenues, and private broadcasters that depend on advertisements or paid programming. Apart from these categories, the Open University of Japan provides broadcasting services for educational purposes. The entire broadcasting sector s sales, including revenues from broadcasting and non-broadcasting operations, increased in FY 215 (by 1. percent from the previous year) to trillion yen. By category, Figure Transitions in telecommunications sector sales in 1s of millions of yen 16, 14, 132, , , , ,342 12, 1, 8, 6, 4, 2, 215 FY (Note) Comparisons must be made with caution, as sales represent the simple sum of figures from all responding carriers and the number of responding carriers differs from year to year. Prepared from 216 Basic Survey on the Information and Communications Industry, MIC / METI 61 14_CW6_AX468D6.indd /11/28 11:17:28

7 Figure Telecom carriers sales breakdown by fixed-line communications and mobile communications Other 16.% Fixed-line communications 29.5% Mobile communications 54.5% (Note) Calculating excluding sales breakdown "Unknown" Prepared from 216 Basic Survey on the Information and Communications Industry, MIC / METI Figure Telecom carriers sales breakdown by service category Others 16.% Voice transmission services 29.2% Data transmission services 54.8% (Note) Calculating excluding sales breakdown "Unknown" Prepared from 216 Basic Survey on the Information and Communications Industry, MIC / METI Figure Transitions in mobile ARPU in the past five years for 3 domestic mobile operators (yen per month) 7, 6,13 6, 5, , ,5 49 4, 3, 6,34 4, ,17 4,43 2,69 2,64 2,6 2,96 3,18 4, , , ,21 3,45 4,49 4,29 5,69 5,83 2,77 4,45 4,7 4,23 1,73 FY12 1,37 1,18 1,21 FY13 FY14 FY15 NTTdocomo 1,25 FY16 Voice ARPU 1,33 FY12 94 FY13 Data ARPU 4,5 55 2,93 2, 1, 54 1,52 1,52 FY12 FY13 4,15 3,95 FY15 FY16 78 FY14 FY15 KDDI au FY16 Voice ARPU + Data ARPU FY14 softbank Other ARPU (Notes) *E ach company s ARPU is calculated and released based on the respective company s criteria. The figures were not calculated using the same method. *Due to rounding, the total of individual ARPU figures may not equal the total ARPU figures. *NTT Docomo includes Smart ARPU, KDDI includes value added ARPU, and SoftBank includes service ARPU. * The ARPU figures for KDDI after FY 212 were taken from au Communications ARPU under the personal segment. Applied discount amounts were subtracted from the voice ARPU. *SoftBank ARPU figures included communication modules until FY 211. *SoftBank Mobile took over SoftBank BB, SoftBank Telecom, and Y!Mobile on April 1, 215 (name changed to SoftBank on July 1, 215). Prepared from financial statements from each company 62 14_CW6_AX468D6.indd /11/28 11:17:29

8 Figure Transitions in and breakdown of the broadcasting sector market size (total sales) 1s of millions of yen 45, 4, 38,356 41,178 39,698 4,152 4,422 39,689 38,254 39,89 39,115 38,915 39,37 38,759 39,152 35, 3, 25, 2, 15, 1, 5, Terrestrial-based broadcasters fiscal year Private Terrestrial-based broadcaster broadcasters Community broadcasters included in total above 4 Satellite-based broadcasters 1 Cable TV broadcasters 2 3 NHK total Satellite-based broadcasters FY NHK 3 Cable TV broadcasters ,229 26,153 26,138 26,91 25,847 24,493 22,574 22,655 22,52 22,87 23,216 23,375 23, ,995 3,158 3,414 3,525 3,737 3,95 3,887 4,185 4,49 4,51 4,491 3,661 3,89 3,33 3,533 3,85 4,5 4,746 4,667 5,134 5,437 5,177 4,931 5,3 4,975 5,3 6,83 6,855 6,749 6,756 6,848 6,624 6,659 6,812 6,946 6,64 6,57 6,748 6,879 38,356 39,698 4,152 4,422 41,178 39,689 38,254 39,89 39,115 38,915 39,37 38,759 39,152 ( 1) Figures for satellite-based broadcasters represent operating revenues from satellite-based broadcasting services. ( 2) C able TV broadcasters until FY 21 were business enterprises providing independent broadcasting services with facilities licensed under the former licensing scheme (under the former Act on Cable Television Broadcasting. Note that facilities registered under the former Act on Broadcast on Telecommunications Services included those that use the same broadcasting method as facilities licensed under the former licensing scheme). From FY 211 on, cable TV broadcasters were registered business enterprises with wired telecommunication facilities providing independent broadcasting services. (Both exclude business operators using IP multicasts.) ( 3) Figures for NHK represent ordinary operating income. ( 4) Community broadcasting operators that also provide cable TV broadcasting services are excluded. Prepared from MIC materials and the NHK financial statements for each fiscal year terrestrial-based private broadcasters sales were trillion yen (up.4 percent from the previous year), satellite-based private broadcasters sales were 38.9 billion yen (up 4. percent), cable TV broadcasters sales were 5.3 billion yen (up.6 percent), and NHK s ordinary operating income was billion yen (up 1.9 percent). In terms of market share, terrestrial-based private broadcasters accounted for 72.7 percent (down.3 percentage points from the previous year) of private broadcasters sales. (Figure ). 7. Content market trends (1) Size of Japan s content market The Japanese content market was valued at trillion yen, over 5 percent of which was attributable to video content, about 4 percent to text-based content, and less than 1 percent to audio-based content The Japanese content market was valued at trillion yen in 215. By content segment, video content accounted for over 54.3 percent of the market, textbased content, about 39.2 percent, and audio-based content, 6.5 percent.38(figure ). The overall size of the content market in 215 has remained essentially unchanged since 211. The size of each content segment as well stayed flat between and 212, after 213 the video content segment expanded while the text-based content segment contracted (Figure ). (2) Trends in the online content market The market for online content, which is downloaded or streamed via the Internet to computers or mobile phones, grew to trillion yen, accounting for 25.7 percent of the entire content market As part of the overall content market, the market for online content, which is downloaded or streamed via the Internet to computers or mobile phones, reached trillion yen. By content segment, the video content segment accounted for 55.7 percent of the online con- The market size was measured and analyzed by assessing the primary nature of the content works and recalculating the value at each distribution level, such as primary distribution or multiuse. The value of content was not calculated by media channel _CW6_AX468D6.indd /11/28 11:17:29

9 Figure Breakdown of Japan s content market (215) (billion yen) Original Internet other content % Movies % Books Videos % 3.5% Database information % Magazines % Text based content segment trillion yen 39.2% Terrestrial TV programs % Comics % total content market trillion yen Newspaper articles % Audio-based content segment.744 trillion yen 6.5% Original Internet audio-based content 7.9 Radio programs.1% % Video content segment trillion yen 54.3% Satellite and cable TV broadcast programs % Music % Game software % Original Internet videos % (Source) Survey on the Production and Distribution of Media Content, Institute for Information and Communications Policy, MIC Figure Transitions in Japan s content market size (by content segment) trillions of yen Video content segment Audio-based content segment 215 year Text-based content segment (Source) Survey on the Production and Distribution of Media Content, Institute for Information and Communications Policy, MIC Figure Breakdown of the online content market (215) (billion yen) Tex-based content segment 1.97 trillion yen 34.1% Newspaper articles % Books % Database information % Original Internet other content % Other Other text-based content Game software 5.2% % Video content segment trillion yen 55.7% Total digital content market trillion yen audio-based content Music % 9.7% Voice-based content segment.323 trillion yen Satellite and cable TV 1.2% broadcast programs % Original Internet videos % Videos % Terrestrial TV programs % Movies % (Source) Survey on the Production and Distribution of Media Content, Institute for Information and Communications Policy, MIC tent market, the text-based content segment, 34.1 percent, and the audio-based content segment, 1.2 percent. (Figure ). The online content market has been growing steadily since 211. The market by content segment shows that the video content segment which more than doubled from 211 to 215 in particular due to the hot game software portion increase, has been driving the online content s market expansion (Figure ). The 216 mobile content industry s market increased 14.5 percent from the previous year to trillion yen The Japanese mobile content industry s market,39which 64 14_CW6_AX468D6.indd /11/28 11:17:3

10 is made up of the mobile content market4 and the mobile commerce market, continued to expand in 216, reaching trillion yen (14.5 percent increase year-onyear), due to the growth and proliferation of smartphones and tablets. By individual segments, the mobile content market reached trillion yen (up 2. percent) and the mobile commerce market reached trillion yen (up 11.4 percent) (Figure ). ing broadcast content had been to sell the program broadcast rights. But today, methods have diversified, so that revenue streams other than program broadcast rights account for more than half of all revenue. Cartoons and animations account for over 7 percent of export value by program category, followed by dramatic programs and variety shows, and Asia accounts for more than 5 percent of exports, followed by North America and Europe Looking at the broadcast content export value by program category finds cartoons and animations account for 76.6 percent of total, variety shows, 1.8 percent, and dramatic programs, 1. percent, followed by documentaries and sports programs (Figure ). The largest export market for broadcast content was Asia, at 56.4 percent of the total, followed by North America at 27.6 percent, Europe at 12. percent, and South and Central America. Diverse export destinations for Japanese broadcast content are developing, particularly in Asia. (3) Trends in the broadcast content market Export value of Japanese broadcast content was billion yen in FY 215 The export value of Japanese broadcast content in FY 215 was billion yen. Note that from FY 21 onward, Internet distribution rights, video and DVD rights, format and restaging rights, merchandising rights, and similar rights, in addition to program broadcast rights, have been included in the export value of broadcast content (Figure ). The traditional method of export- Figure Transitions in the online content market size (by content segment) trillion yen Video content Audio-based content 215 year Text-based content (Source) Survey on the Production and Distribution of Media Content, Institute for Information and Communications Policy, MIC Figure Mobile content industry market size in 1s of million of yen 6, 5,619 5, 44,228 39,46 4, 11,61 24,48 23,57 2, 1, 31,862 3,142 3, 13,524 15,26 16,55 9,681 1,85 7,329 8,689 19,61 11,716 28,596 19,359 14,997 1,783 14,566 6,465 7,345 8,51 4,272 4,835 5,525 15,632 18, (year) Mobile content market Mobile commerce market (Source) Study Report on Technical Factors and Systems Pertaining to Open Platforms Promoting Mobile Content Business, MIC 39 The mobile content market refers to the market for digital content provided over the mobile Internet (including ringtones, music streaming, videos, games, and fortune-telling). The mobile commerce market refers to the sales of physical goods (mail-order sales, etc.), sales of services (ticket sales), and transaction fees (including stock brokerage commissions, auction fees, and other payments) conducted over the mobile Internet. 4 In 21, the scope of the mobile content market was expanded to encompass the open platform market (such as smartphones) _CW6_AX468D6.indd /11/28 11:17:3

11 Figure Export value of Japanese broadcast content in 1s of million of yen (FY) (Notes) *E xport value of broadcast content: total export value of program broadcast rights, Internet distribution rights, video and DVD rights, format and restaging rights, merchandising rights, and similar rights. * From FY 21 onward, the export value from other revenue streams has been included along with program broadcast rights in the export value of broadcast content. Figures prior to FY 21 are the export value for program broadcast rights only. Source: Survey on the State of Overseas Expansion of Broadcast Content (FY 213, 214, 215), Institute for Information and Communications Policy, MIC Figure Export value of Japanese broadcast content by program category Export value of broadcast content (by program category) Sports.9% Documentaries.8% Export value of program broadcast rights (by program category) Other.9% Dramatic programs 1.% Variety shows 1.8% Sports 2.5% Documentaries 2.5% Other.7% Dramatic programs 16.8% billion yen Cartoons and animations 76.6% *Aggregated excluding unknown 9.66 billion yen Variety shows 18.3% Cartoons and animations 59.2% *Aggregated excluding unknown (Source) Survey on the State of Overseas Expansion of Broadcast Content (FY 215), Institute for Information and Communications Policy, MIC Section 2 ICT Service Usage Trends 1. Internet usage trends (1) State of ICT device proliferation (2) State of Internet proliferation a. State of major ICT device proliferation (households) Ownership gap between smartphones and computers is closing to just 1.2 percentage points The household ICT device penetration rate of 216 was 94.7 percent for mobile terminals41 and 73. percent for computers. The penetration rate for smartphones, which are included in the mobile terminals category, has remained flat to 71.8 percent (down.2 percentage points from a year earlier), reducing the ownership gap with computers from 4.8 percentage points to just 1.2 percentage points, due to the decline of computer penetration rate (Figure ). a. State of Internet usage Both the number of Internet users and the Internet population penetration rate rose The number of Internet users42 of 216 was 1.84 million, an increase of 38, from 215. The Internet penetration rate as a percent of the general population was 83.5 percent (up.5 points) (Figure ). Those using computers to access the Internet accounted for 58.6 percent (up 1.8 points) of all Internet users, the largest portion, followed by 57.9 percent (up 3.6 points) for smartphones and 23.6 percent (up 5.3 points) for tablets (Figure ). 41 The figures for mobile terminals includes, mobile phones and PHS handsets, personal digital assistants, or PDAs, since the end of 29 to the end of 212 and smartphones since the end of _CW6_AX468D6.indd /11/28 11:17:3

12 Figure Transitions in household ownership rates for ICT devices Ownership rate year n=3,64 n=4,515 n=4,547 n=22,271 n=16,53 n=2,418 n=15,599 n=16,529 n=14,765 n=17,4 Fixed-line telephones FAX Mobile terminals Smartphones Computers Tablets Wearable devices Home game consoles with Internet connectivity Portable music players with Internet connectivity Other appliances (information appliances) with Internet connectivity Figure Transitions in the number of Internet users and the penetration rate among the general population tens of thousands 11, No. of Internet users 1, 9, 8, 7, 8, , Penetration rate among the general population 9, ,48 9,462 9,61 9, ,44 1,18 1,46 1, , 5 5, 4 4, 3 3, 2 2, 1 1, year b. Purposes of using the Internet Sending and receiving s was the most common purpose of using the Internet 42 Among all age groups, the most common purpose of using the Internet was sending and receiving s. Viewing the results by age group finds that larger num- (1) The survey covers an age range of 6 and up. (2) The estimated number of Internet users is based on the results to a question on whether the respondents, aged 6 or older, had used the Internet in the year covered by the survey. The number of Internet users was calculated by multiplying the estimated population aged 6 or older (estimated from Population Census and death table data) by the Internet usage rate obtained in the survey for people aged 6 or older. Internet access devices include computers, mobile phones / PHS handsets, smartphones, tablets, game consoles, and all other devices (irrespective of device ownership). The purposes of using the Internet cover all possible purposes including personal, work, and school. (3) The Communications Usage Trend Survey does not include the number of no answer responses in the calculations (except for Figure ) _CW6_AX468D6.indd /11/28 11:17:31

13 Figure Internet usage by device Computers Smartphones Tablets Mobile phones and PHS handsets (excluding smartphones) Home game consoles with Internet connectivity Televisions with Internet connectivity 1 8 Internet usage rate (all devices) some 6% feel insecure (Figure ). Among households with concerns about using the Internet, 87.8 percent cited personal information and internet access histories will be disclosed or exposed externally without permission as a concern. This was followed, in order, by computer virus infections (67.4 percent) and False billing and other types of Internet fraud (51.6 percent) (Figure ). Among enterprises, 48.8 percent, the highest response rate, mentioned concern about virus infections as a problem when using the Internet, internal LANs, or other networks, indicating heightened security concerns among enterprises (Figure ) (n=33,525) 216 (n=4,297 b. Information security measures Almost 7 percent of households and almost all of enterprises have implemented some form of information security measures Looking at the state of information security measures taken by households that use the Internet finds that 67.7 percent of households have taken some form of information security measures. The leading security measures were install or update security software (47.7 percent) and sign up for or renew a security service (24.6 percent) (Figure ). Looking at the state of information security measures implemented by enterprises that use ICT networks finds that 98.4 percent of enterprises have implemented some form of information security measures, almost all the enterprises. The leading security measure was install anti-virus programs on computers and other devices (operating systems, software, etc.), which is done by 88.2 percent of enterprises. This was followed, in order, (Note) Figures indicate the percentage of people who accessed the Internet using the corresponding device during the past one year. ber of users in all age groups use the Internet for sending and receiving s, the number of users varies by age groups for using social media, and using video posting / sharing sites (Figure ). (3) Challenges for safe, secure Internet usage a. Matters of concern with Internet usage and problems with ICT networks Individuals are concerned about personal information, and enterprises are concerned about personnel shortage The percentage of individuals who feel insecure with the Internet which includes respondents of both insecure and somewhat feel insecure reached 61.6%, Figure Applications / purposes of using the Internet by age group (n=2,45) 4 49 (n=5,549) (n=3,57) 5 59 (n=5,44) 3 39 (n=4,724) 6 and older (n=7,768) other Using e-government and e-local government services Internet auctions financial transactions Purchasing or trading digital content Purchasing or trading goods and services (excluding digital content purchases and financial transactions Purchasing or trading goods and services (total) Using e-learning Using dictionaries and encyclopedias Using news sites Using weather forecasts (free of charge) Map or transportation information services (free of charge) Participating in quiz / prize competitions or questionnaires Using online games Using on-demand streaming services for radio, TV programs, movies, etc. Using video posting / sharing sites Using free voice call apps or voice chat sites Using social media Browsing, posting, creating and updating websites and blogs Sending and receiving s _CW6_AX468D6.indd /11/28 11:17:31

14 Figure M atters of concern with Internet usage of individuals do not feel insecure 17.1 somewhat do not feel insecure Personal information or internet usage history external disclosure or exposure without permission False billing and other types of Internet fraud 51.6 Unsolicited security measures 46.4 Trustworthiness of electronic payments somewhat feel insecure Browsing illegal and harmful information Conflict with communication partners % Internet addiction 216 (n=4,213) Others Computer virus infections feel insecure Figure P ercentage to feel insecurity with Internet usage at individuals (multiple answers permitted) n=2,578) Figure Problems with Internet and intranet LAN usage at enterprises (multiple answers permitted) Concern about virus infections Operational and management personnel shortages Operational and management cost increases Difficult to develop security measures 36.8 Low security awareness among employees Difficult to recover from failures, outages, etc Difficult to quantify benefits Difficult to obtain benefits High communication charges 8.9 Low communication speeds Concern about protection of copyrights and intellectual property Others Concern about trustworthiness of electronic payments Concern about trustworthiness of authentication technology No particular problems (n=1,85) 216 (n=1,963) Figure Implementation of information security measures at households (multiple answers permitted) Taken measures Have not taken measures Don't know whether measures have been taken Install or update security software Sign up for or renew a security service Do not connect to untrusted Internet connections Set passwords on devices Set administrator and check (n=1,945) 216 (n=1,892) 69 14_CW6_AX468D6.indd /11/28 11:17:32

15 (4) Cloud service usage trends of enterprises by install anti-virus programs on servers (66.8 percent) and control access with IDs and passwords (55.3 percent) (Figure ). a. State of cloud service usage The percentage of enterprises using cloud services rose from 215 Of enterprise respondents to the survey, 46.9 percent said they had used cloud services either partially or extensively, up 2.3 percentage points from 44.6 percent at 215 (Figure ). c. Personal information protection measures Nearly 9 percent of all enterprises have implemented personal information protection measures The percentage of enterprises that have implemented some form of personal information protection measures was 86. percent. The most cited protection measure, given by 49.5 percent of enterprises, was enhance internal training followed, in order, by appoint a personal information protection and management officer (47.8 percent) (Figure ). b. Breakdown of cloud service usage The most frequently used cloud service is The most frequently used cloud service is , cited by 51.7 percent of respondents, followed, in order, by 5.7 percent for file storage and data sharing and 46.7 percent for server usage (Figure ). Figure Implementation of information security measures at enterprises (multiple answers permitted) Implemented measures Have not implemented measures Install anti-virus programs on computers and other devices (operating systems, software, etc.) Install anti-virus programs on servers Control access with IDs and passwords Train employees Set up and deploy firewalls Apply operating system security patches Establish security policies Retain access logs Construct virus walls for external connections Use proxies (proxy servers) Encrypt data and networks Audit security measures Authenticate users with authentication technology Monitor access lines Set up and deploy intrusion detection systems (IDS) or intrusion protection systems (IPS) Establish anti-virus response manuals Outsource security management Set up and deploy Web application firewalls Other measures 215 (n=1,834) (n=2,14) Figure Implementation of personal information protection measures at enterprises (multiple answers permitted) Appoint a personal information protection and management officer Establish a privacy policy Reduce amount of required personal information Rebuild systems and structures Obtain Privacy Mark certification Other measures Enhance internal training Strengthen requirements when selecting suppliers (require Privacy Mark certification, etc.) Implemented some measures Have not implemented any measures (n=1, (n=1, _CW6_AX468D6.indd 7 217/11/28 11:17:32

16 215 n=1, n=2, Figure State of cloud service usage 1 % Use company wide Use at some sales locations and divisions Do not use presently and have no plans to use in the future Do not use presently, but plan to use in the future Do not have a firm understanding of cloud services Figure Breakdown of cloud service usage % File storage and data sharing Server usage Internal information sharing / portals Schedule sharing Data backups Payrolls, financial accounting, HR Marketing assistance e-learning Production, distribution, and retail-outlet management Sharing information with trading partners System development and Website construction Purchasing Order-taking and sales Project control Billing and payment systems Authentication systems Research and development Other uses (n= (n=96 Figure Reasons for introducing cloud services No need for in-house assets or maintenance arrangements Services can be accessed anywhere Stable operation and higher availability Cheap initial costs Greater security against information theft, breaches, etc Cheaper than existing systems High service reliability Able to adjust system capacity quickly Greater system scalability Use equivalent services on all devices Proposals from system vendors Fast deployment speeds Can terminate services at any time Simple license management Enhanced service lineup Other reasons 215 (n=829) (n=958) 71 14_CW6_AX468D6.indd /11/28 11:17:33

17 ducing cloud services, chosen by 4.9 percent of respondents, followed, in order, by services can be accessed anywhere (36.5 percent) and stable operation and higher availability (29.6 percent). Respondents mainly cited functional and cost reasons for introducing cloud services (Figure ). c. Reasons for introducing cloud services No need for in-house assets or maintenance arrangements was the most frequently cited reason for introducing cloud services, chosen by about 4 percent No need for in-house assets or maintenance arrangements was the most frequently cited reason for intro- 2. State of telecommunication service provision and usage (1) State of provision (up 2.3 percent from the previous year). Subscriptions to mobile ultra-high-speed broadband services broke down into million for 3.9G and 4G (LTE) services (up 17. percent) and million for BWA services (up 36.3 percent) (Figure ). a. Overview (i) Subscriptions to telecommunication services Subscriptions to fixed-line communications are trending downward while subscriptions to mobile communications and ABJ-IP phone services have increased steadily Subscriptions to fixed-line communication services (including NTT East and West subscriber telephone services (including ISDN), non-ntt telephone services,43 and cable TV-based telephone services but excluding ABJ-IP phone services) have been declining, while those to mobile communication services (mobile phone and PHS handset services) and ABJ-IP phone services have been growing steadily. Subscriptions to 5-IP phone services have been flat in recent years. There were about 7.2 times more mobile communication subscriptions than fixed-line communication subscriptions (Figure ). b. Mobile communications Subscriptions to mobile communication services have risen each year; subscriptions to MVNO services counted as mobile communication subscriptions also surged Subscriptions to mobile communication services45 (mobile phones, PHS handsets, and BWA) at the end of FY 216 totaled million (an increase of 3.6 percent from the previous year). The net growth was 5.84 million subscriptions, which continues the upward trend (Figure ). The carrier (Group) shares by mobile communication subscription numbers were 44.6 percent for NTT Docomo (up 1 percentage points from the previous year), 29.4 percent for the KDDI Group (up.5 percentage points), and 26. percent for the SoftBank Group (down 1.5 percentage points) (Figure ). Subscriptions to MVNO services46 counted as subscriptions to mobile communication services (mobile (ii) State of broadband usage Subscriptions to mobile ultra-high-speed broadband services have leaped dramatically year by year The number of subscriptions to fixed-line broadband services44 at the end of FY 216 stood at million Figure Transitions in subscriptions to telecommunication services tens of thousands subscriptions 18, 16, 14, 12, 1, 1,17 1,734 11,25 11,63 12,329 13,276 14,113 14,789 15,514 16,46 16,69 8, 6, 4, 2, 5,515 1, ,123 4,732 4,334 3,957 3,595 1,453 1,79 2, , Fixed-line communications 21 Mobile communications 3,274 3,4 2,846 3,75 3,241 2,47 2,65 2,773 2,58 2, ABJ-IP phone services FY 5-IP phone services (Notes) *Subscriptions to mobile communication services cover mobile phone and PHS services. * Figures for mobile communication services from FY 213 forward are the figures after adjusting for internal group transactions. After adjusting for internal group transactions refers the adjustments made to count 1 mobile phone device as 1 contract and not 2 contracts so as not to diverge from the actual state of affairs, when an MNO receives mobile phone or BWA services as an MVNO from another MNO in the same group and provides these services together with its own services to 1 mobile phone device. Prepared from Announcement of Quarterly Data on Telecommunication Service Contracts and Market Shares (4Q of FY 216 (March 31, 217)), MIC 43 Non-NTT services are subscriber phone services provided by telecom carriers other than NTT East and West and cover direct subscriber telephone and ISDN services and new-type non-ntt telephone and ISDN services. 44 Figures for subscriptions to fixed-line broadband services cover FTTH, DSL, cable TV, and FWA services. 45 Figures after adjusting for internal group transactions. 46 Figures after subtracting subscriptions to MVNOs that are MNOs _CW6_AX468D6.indd /11/28 11:17:33