Case Study: Videonews.com (Japan)

Based on an interview made 24.03.2011 with Tetsuo Jimbo, Videonews.com founder.

The name of the publication and / or company

Video News Network, Inc.

Established

April 1, 1996

Web Address

www.videonews.com

Describe your site or business in few words.

Videonews.com is Japan’s first internet news television specializing in news, and was set up by Japan’s pioneering video journalist, Tetsuo Jimbo. Mr. Jimbo saw the need for a truly independent news television station that did not rely on advertising revenue.

The main program available on Video News is “Maru-geki Talk On Demand” and “News Commentary”, both anchored by Mr. Jimbo and sociologist Shinji Miyadai. Past guests have included such big names as Japan’s prime minister and cabinet members. Staff meetings are held to decide on what topics to investigate, but the lineup can be changed in the event a major news story comes up. In March 2011, a camera team was sent in to report on the devastation of the Japan Earthquake for a special report.

Form of the company

Business corporation (joint-stock company).

Staff numbers

Who’s creating the content

6 people in total.

How they make money

Revenue models and sustainability

What kind of advertising you sell?

No revenue from advertising, solely from membership fees. There had been a previous attempt to use AdSense, but it made no impact as advertising on news websites.

How does the membership program work?

As as way of avoiding commercial influence of sponsors, videonews.com charges subscription price, 525 yen a month.

All shows have free previews, giving people the chance to watch the first five to ten minutes of each content for free. Once logged into the members-only page, members have access to a “video news forum”, allowing them to voice their opinions about shows with other members.

In 2008, number of subscribers reached 8000, making the business sustainable. Number of subscribers stand 12,000 as of January 2012.

Yearly revenue / sales?

About 90 million yen, a bit over 1 million USD.

Where does your revenue go?

It takes about 7 million yen to run the company every month. Of this, 2.5 to 3 million yen goes to labor costs (including guest salaries), 1 million yen for equipment costs, 1 million yen for the computer server and any IT-related services, and the rest goes to costs for reporting.

Do you sell any of following services

DVD sales of past programs (2000 yen for 10 episodes)

”Maru-geki Talk” books sold through a publishing company

The company sells its own merchandise, including T-shirts and cups.

They sell some content. Most of the money comes from membership fees.

In order to produce good news reports that had not been manipulated by sponsors, a membership fee system was introduced in 2001.  The company charges members 525 yen (tax-included) per month to view part of their premium content.

All shows have previews, giving people the chance to watch the first five to ten minutes for free.

Once logged into the members-only page, members have access to a “video news forum”, allowing them to voice their opinions about shows with other members.

In 2008, member numbers had topped 8000, enough for the broadcasting station to sustain business itself. Although members have come and gone, new members continue to fill in their spaces and more.

What would be the most important thing on your road to sustainability?

Training capable and competitive journalists is absolutely the key to our success. Anyone can start a media business on internet and distribute contents, so what distinguishes a competitive journalism media form the rest is the quality of journalism. Fortunately, we have the gift of being free from government intervention nor advertisement because we receive no benefit from them. So, the remaining challenge is to gain trust of the civil society by maintaining quality reporting, and in order to do that, we need quality journalist, which are not only hard to find but rather close to non-existent in this country. I think videonews.com can grow if we succeed finding and training sound journalists and allow them to go out and exercise quality journalism, but if we can’t find them, this business is not going to be sustainable.