Why I bought a publishing company
The announcement yesterday that we have acquired a publishing company received a lot of attention, and I would like to explain the rationale behind it.
People have been unable to go out or travel during this COVID-19 pandemic, and they have been forced to stay at home for long periods of time. These circumstances have led to an increase in home-based consumption (when people stay at home). From the perspective of a business, this social demand definitely exists.
A year ago, we launched an online distribution platform (Speedy Live) for the music of NON and the productions of Eri Watanabe, which was followed by the distribution of e-books (Speedy Books) in 33 countries around the world. Both these businesses were founded on the “digital to digital” concept, but I believe that in the context of this year, there is tremendous potential in radio media content and the growth of the publishing business.
Although the protracted “home-based consumption” had initially led to high ratings even for repeat broadcasts on terrestrial TV channels, the lack of new programs eventually pushed the audience to Netflix. However, I believe that Netflix’s retargeting-based user interface (UI) has signaled the beginning of its end. No matter how many new programs there are, people will quickly get tired of them.
Home-based consumption ＝ Passive media for passing time
Desire for a new way of life in the post-COVID period by exploring active media
This shift is happening in the minds of many people.
I don’t want to spend the rest of my life watching animated films recommended by Netflix! I want to do something more creative and spontaneous! I think that’s what many people are thinking during the COVID-19 pandemic.
Nevertheless, the publishing business in Japan is a sunset industry. The sales of physical books have declined from 1,073 billion yen in 1997 to 672.3 billion yen in 2019, a drop of 400.7 billion yen, or nearly 40%, in 22 years. If we exclude the 166.5 billion yen generated from the sales of physical comic books, the market for physical books is only 505.8 billion yen. A 500 billion yen market is around the same size as flea markets such as Mercari, which is really tiny!
Moreover, the digitization of books in Japan has been unusually slow compared to other countries.
Because of this, I thought that the acquisition of a long-established publishing company would help us gain recognition from authors and the industry, even if this is just a transitional stage historically. Doing this would also allow us to publish the intellectual property of excellent creative artists (authors) who have long been the pride of Japan.
When I attempted to convince major publishers in 2004 to convert physical comic books into e-books that can be read on mobile phones, no one supported my idea. Yet, electronic comic books have now surpassed their physical counterparts. E-books have also surpassed physical books around the world, and Japan is now lagging behind other countries.
(Incidentally, Comidia, a company launched under Speedy Group at that time, currently has the largest market share in Japan in terms of the volume of electronic comic books produced!)
As physical sales areas (e.g., bookstores) continue to decline, we hope to create a system where we can make a profit by publishing just 2,000 copies per title by drawing on our IT capabilities as much as possible. The books in our lineup will also be translated into English and Chinese so that they can reach an audience of 4 billion people out of the 7.5 billion people around the world.
Even if we publish e-books, it is not easy to build a brand (and its reputation). However, if we own a physical publishing company, we can proudly participate in the Frankfurt Book Fair. In this regard, it is the same situation as with art galleries, where the world still values physical works more than their virtual counterparts.
Thus, I bought a publishing company so that we can gain the trust of authors and create the necessary infrastructure to compete in the world.
*Also, I expect this publishing company to shift to publishing e-books exclusively in the near future.