TBI Tech & Analysis: How Japan’s streaming landscape is embracing consolidation

Japan’s streaming landscape is evolving rapidly and the merger between U-Next and Paravi looks set to create a new giant in the industry, writes Omdia analysts Sharon Kong & Rob Moyser.

Online video subscription revenue in Japan is expected to hit north of $4bn by 2027, with global streamers vying with domestic operators for their share of that pot.

And in a bid to compete with Disney+, Netflix and Amazon Prime Video, two domestic operators have merged operations.

U-Next and Premium Platform Japan, which operates Paravi, agreed to merge earlier this year in a move that has created the largest Japanese video streaming service provider in the country with sales of more than ¥80bn ($650m) and more than 3.7 million paid subscribers.

U-Next has also revealed that it plans to transfer Paravi’s service to its platform by July this year and has signed a comprehensive strategic business alliance with TV Tokyo (a major shareholder of Premium Platform Japan), which will include cooperation in the supply of content, marketing and creative development.

The impacts are myriad. Following the integration with Paravi, U-Next subscribers will have access to content from TBS Television, TV Tokyo, and WOWOW, as well as an archive of Japan’s domestic dramas, variety shows, anime, sports, business shows, and movies.

Paravi subscribers, meanwhile, will be able to view selected genres of U-Next’s content.

The merger of Japan’s leading domestic streaming services is aimed at enabling the combined entity to remain competitive with global streaming services such as Amazon Prime Video, Netflix, and Disney+.

As of Q2 2022, Prime Video had 8.38 million subscribers, Netflix clocked in with 6.24 million subscribers and 2.88 million were subscribed to Disney+.

Total online video subscriptions in Japan reached nearly 37 million during the same period, according to Omdia data, with subscription numbers expected to hit the 40 million mark sometime in 2024.

Omdia has also forecast that Japan’s online video subscription revenue will increase from $3.25bn in 2022 to $4.1bn in 2027, reflecting stable annual growth in new subscriber additions.

The excerpt above comes from Omdia’s TV & Video Industry Developments Impact Brief ‒ March 2023, available here (subscription req’d). Omdia, like TBI, is part of Informa.

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