HISTORY OF TELEVISION PRODUCTION IN JAPAN
Sharp flat-screen TVs Sharp Corp. put the first domestically produced black-and-white TV set on the market in 1953, while Toshiba Corp. sold the first color TV set in 1960. When they first debuted, black-and-white TVs were well beyond the reach of ordinary households. Priced at around 175,000 yen, the TVs were about 30 times greater than the 5,400 yen average starting salary for high school graduates. [Source: Yomiuri Shimbun, May 19, 2012]
?TVs spread rapidly among ordinary households when Tokyo hosted the Olympic Games in 1964. Since then, TVs became a core product for the export industry, contributing to high economic growth. In 1968, Sony Corp. invented the first Trinitron color aperture grille CRT TV. Japanese TVs spread across the global market as a symbol of advanced technology. [Ibid]
?During the 1970s, there was a sharp increase in Japanese TV exports to the United States, causing friction in bilateral trade. In 1977, Japan set self-imposed restrictions on TV exports to the United States, limiting the number to 1.75 million units per year. Despite the self-imposed restrictions, Japan gained further momentum. Although there were more than 20 U.S. TV manufacturers in the early 1960s, most had fallen by the wayside.Meanwhile, Japanese CRT-based televisions dominated the global consumer electronics market. [Ibid]
?Japanese electronics companies dominated the global market for cathode ray tube televisions. However, the competitive landscape of the TV industry has significantly changed since early 2000s, when flat-screen liquid crystal and plasma display TVs began to replace CRT TVs as core products. [Ibid]
HDTV Television, Flat Screens and Japan
Japan is a leader in high-tech liquid-crystal display screens used on computers and cell phones. In 1996, Fujitsu and other Japanese electronic companies introduced the first flat screen televisions using plasma-technology panels. Early models sold for $10,000.
After being heralded as the next big and sucking up $8.3 billion in research and start up costs, analog high definition television (HDTV) was obsolete before it even fully reached the market. It lost out to digital HDTV, which, with the help of an inexpensive "smart box," could combine the function of a television and a computer. Analog uses radio waves to transmit information while digital uses a computer style code that is cheaper to broadcast.
The market for flat-screen televisions is very competitive and getting more competitive and less profitable all the time as production increases and prices come down. Things will get even worse for electronics companies in 2012 when several flat-screen television factories in China come online and increase output six time what it was in 2009. On top of that several Chinese companies plan to enter the market, taking advantage of increased supply capabilities. Some analysts say when that occurs there will be a glut of flat-screen televisions and this will result in a realignment of the television industry and exit of some companies
The price of a 42-inch flat-screen television sold in the United States fell from $917 in 2008 to $634 in 2010. When all the Chinese factories come on line analysts predict the price of a 32-inch LCD panel will fall about 40 percent from the $200 range in 2010 to about $120 in 2012.
The sale of flat screens televisions increased 95.3 percent in 2010. Japanese electronics companies were hurt by price cuts and sluggish sales of flat-screen televisions in the U.S. in late 2010. In Japan things were better. Shipments of flat-panel televisions in Japan totaled a record 25.19 million units in 2010, up 84.5 percent from the previous year. Sales were supported by the government’s ?eco-point? incentives. Blue-ray players and recorder-players also sold well.
Only two companies in Japan produce LCD panels: Sharp and Panasonic. Global LCD panel market: 1) Samsung (26 percent); 2) LG (25.9 percent); 3) AU Optronics, Taiwan (16.1 percent); 4) Chimei Innolux, Taiwan (14 percent); 5) Sharp (10.3 percent); 6) Other s (7.6 percent). [Source: U.S. DisplaySearch]
Global flat-screen television sales (market share in October -December 2010): 1) Samsung (21.4 percent); 2) Sony (14.2 percent); 3) LG
Flat screen television sales share in North America in 2009: 1) Samsung (26.9 percent); 2) Sony (14.3 percent); 3) Vizio (10.7 percent); 4) Panasonic (8.5 percent); 5) LG (8.3 percent); 6) Sharp (5.5 percent)
In February 2011, Toshiba and Mitsubishi said the would stop making television and blue-ray disc recorders that automatically skip commercials bowing to pressure from the National Association of Commercial Broadcasters in Japan.
Televisions Selling Well in the late 2000s, But Profits are Low
In May 2011 Etsuo Kono wrote in the Yomiuri Shimbun, ?Major manufacturers of home appliances have seen remarkable increases in the number of flat-screen TVs they sell, but ever-intensifying competition with South Korean rivals has pushed prices down, making it difficult--sometimes impossible--to see a profit.In their settlement of accounts for the fiscal year ended in March, home electronics giants Sony Corp. and Panasonic Corp. were unable to achieve their goal of going into the black in their TV divisions. [Source: Etsuo Kono, Yomiuri Shimbun, May 28, 2011]
?The number of flat-screen TVs sold domestically has continued expanding, even after the scaling back at the close of 2010 of the government-backed eco-point program, which rewards purchases of energy-saving appliances with points exchangeable for various goods. If profitability remains low, market pressure could prompt a realignment of the TV divisions of major consumer electronics companies, industry sources said.” "We have no hope of posting a profit in our TV division [in the year ending March 2012]," Masaru Kato, Sony's chief financial officer, said. Kato said Sony's TV division will most likely stay in the red for an eighth straight year in fiscal 2011 because of the fierce price-cutting competition. [Ibid]
?The No. 1 TV maker in Japan, Sony increased its domestic shipments of flat-screen TVs to 22.4 million units in fiscal 2010, up 44 percent from a year before. It expects shipments in fiscal 2011 to reach an all-time high of about 27 million units. However, increases in unit sales have not boosted earnings for the past seven years, keeping the company "busy without profit," a Sony official said. Panasonic also has been losing money in its TV division, which saw its third straight year in the red in fiscal 2010. Panasonic sold 20.23 million units domestically last fiscal year, the second most after Sony, and is seeking to increase this number in fiscal 2011. However, prospects are "very slim" of its TV division making a profit, according to Makoto Uenoyama, a managing director of Sony. Sharp Corp. "narrowly managed to be in the black" in fiscal 2010, the first time in two years, the company said. It had the third-highest unit sales: 1.48 million TV sets in the domestic market. ? [Ibid]
?According to research agency BCN, the average price of flat-screen TVs in the domestic market has plunged to less than 60,000 yen per unit since March this year. The average domestic price stood at 54,100 yen in April, the agency said. In the North American flat-screen TV market, the average price for a 40-inch TV has recently been equivalent to less than 60,000 yen, compared to more than 80,000 yen two years ago, BCN said.” [Ibid]
?Major Japanese TV manufacturers have lagged far behind their South Korean counterparts, Samsung Electronics Co. and LG Electronics Inc., which hold a combined 35.8 percent share in the global TV market. Sony holds a 12.4 percent share, followed by Panasonic with 8.4 percent, Sharp at 7.4 percent and Toshiba Corp. at 5.7 percent. It seems "nearly impossible for Japanese makers to catch up with their South Korean rivals," an industry analyst said. Even if Japanese makers put new TV models on the market, they find it extremely difficult to secure profits, the analyst noted.” [Ibid]
?A major home appliance company executive said, "We can hardly make any profit on TVs, but we have no intention of withdrawing from the market, since TVs are pivotal goods that consumers use in combination with such devices as DVD players and video cameras." Japanese makers are poised to increase their procurement from overseas, as well as overseas production of TVs and liquid crystal displays, according to the analyst. Some manufacturers are going on the offensive in newly emerging economies, a principal battlefield for home appliance manufacturers. Sony, for example, is expanding its sales networks in India and elsewhere, and Toshiba has been stepping up its marketing strategies in newly industrializing countries.” [Ibid]
The price of 32-inch flat-screen televisions fell from ¥52,700 to ¥ 45,300 in July 2011 as the switch from analog TV to digital TV was made in Japan. Flat-screen TVs were previously considered a luxury item because their price was about 10,000 yen per inch. Technical developments and improved production reduced their prices and they have appeared in many households. The current price-per-inch of about 1,000 yen is making it difficult for TV manufacturers to turn a profit.
in August 2011, the Yomiuri Shimbun reported, ?Toshiba Corp., Hitachi, Ltd. and Sony Corp. have basically agreed to jointly establish a company to manufacture small and midsize liquid crystal display (LCD) panels by year-end in a bid to compete with South Korean and Taiwan rivals, it has been learned.
According to industry sources, the envisaged company, intended to integrate the three companies' businesses in the field, will be partly financed by the Innovation Network Corporation of Japan, a private-public investment fund established in 2009 to support next-generation businesses. The new company's global market share is expected to be the world's largest, as the three companies' combined share in the field in 2010 was 21.5 percent, exceeding Sharp Corp.'s leading 14.8 percent share.
Domestic TV Production Facing Crisis
Makoto Miyazaki and Ryosuke Yamauchi wrote in the Yomiuri Shimbun: ?Toshiba Corp.'s announcement that it had ended its domestic production of flat-screen televisions has brought to the fore the possibility that domestic output of TVs could be on the brink of extinction.Some analysts fear Japanese electronics makers could abandon the TV production business altogether in the future, ending not only domestic but also overseas production. [Source: Makoto Miyazaki and Ryosuke Yamauchi, Yomiuri Shimbun, May 19, 2012]
?With sharp drops in domestic TV sales after a surge in demand following the shift to digital terrestrial broadcasting in 2003 and the erosion of international competitiveness due partly to the strong yen, domestic TV production by the nation's electronics giants has been severely limited. Japan's TV business, which dominated the global market for decades until the latter half of the 2000s, has undoubtedly entered a phase in which its very existence is at stake. [Ibid]
With Toshiba out of the TV-making business and Hitachi, Ltd. having announced in January that it will end its domestic TV production this September, only four electronics firms that produce TVs domestically remain: Sony Corp., Panasonic Corp., Sharp Corp. and Mitsubishi Electric Corp. [Ibid]
?The TV businesses of the nation's electronics companies have been under increasing pressure due to price wars with their South Korean counterparts. Ironically, amid such fierce price competition, the more units the Japanese makers produced, the greater losses they suffered. [Ibid]
?The "Big Three" electronics firms--Sony, Panasonic and Sharp--that have made huge investments into building plants and facilities to produce liquid crystal displays, posted after-tax losses of 1.6 trillion yen ($20.3 billion) in their consolidated settlements of account for fiscal 2011, due primarily to slumps in their TV businesses. [Ibid]
?The decline of Japan's TV businesses, one analyst said, is attributable to such factors as "errors at the management level that led to a failure to foresee the consequences of the rapid progress of technologies involved and changes in what consumers want."Panasonic, for instance, started operating in 2009 the Amagasaki No. 3 plant in Hyogo Prefecture--the latest type of factory for producing plasma TV panels--at a cost of about 200 billion yen. The company, however, had no choice but to halt production there in the business year that ended this March. [Ibid]
?In their rollback bids, the Japanese manufacturers are poised to ramp up efforts to shift their TV production operations to foreign companies. Sony has been in talks with Taiwan's major LCD panel maker, AU Optronics Corp., to have it produce panels for organic EL (electroluminescence) TVs, which are seen as promising next-generation flat-screen televisions. [Ibid]
?Annual domestic shipments of TVs, which logged a record high of more than 25 million units in 2010, are expected to slide to 9 million units from 2012. The technological superiority of Japanese electronics makers, once the greatest in the global market, has also been eroding. "Fewer customers are concerned with the difference in quality between Japanese and foreign-made TVs," an official of a home appliance discount sales company said. [Ibid]
?Although TV sales are expected to continue to grow in emerging economies, prospects for domestic sales are dim, especially following the end of increased demand brought on by the nation's shift to digital terrestrial broadcasting. Panasonic has also been engaged in price wars, especially with South Korean makers, and the average price of its TVs has dropped 30 percent in 2011. [Source: Etsuo Kono and Kiminori Kurihara, Yomiuri Shimbun, October 21, 2011]
Japanese TV Makers Being Outperformed by South Korean Rivals
Japanese electronics companies are now overshadowed by South Korean manufacturers. Initially, Japanese manufacturers held an advantage over foreign producers in the flat-screen TV market. For example, flat-screen TVs produced at Sharp's Kameyama plant in Mie Prefecture--known as the "Kameyama model"--became synonymous for a high-quality TV. With this success, Sharp once held the largest global market share for flat-screen TVs. [Source: Yomiuri Shimbun, May 19, 2012]
?However, during the mid-2000s, South Korean manufacturers such as Samsung Electronics Co. began to catch up to Japanese manufacturers, making it difficult for them to differentiate themselves from their South Korean competitors in terms of technology. South Korean companies took the initiative and opened up markets by boosting production capacity and productivity through aggressive large-scale investments. Additionally, a weak won has helped South Korean companies increase their price competitiveness, while the strong yen has hurt Japanese companies' ability to compete. [Ibid]
?In 2005, the Japanese share of the global TV market was about 48 percent, far exceeding the 21 percent held by South Korean firms. In 2010, however, Japanese companies' share fell to 38 percent, while the share of South Korean rivals rose to 36 percent and now surpasses Japan. Japanese makers no longer lead in technology and find it difficult to keep up with South Korean companies making large capital investments. [Source: Etsuo Kono and Kiminori Kurihara, Yomiuri Shimbun, October 21, 2011]
In 2011, Samsung held the largest global market share for TVs at 23.8 percent, followed by LG Electronics Inc. at 13.7 percent. Japanese makers came far behind, with Sony at 10.6 percent; Panasonic Corp. at 7.8 percent; and Sharp at 6.9 percent. [Ibid]
Reuters reported: “Some analysts say the $100 billion LCD TV market peaked in 2010 and forecast it will shrink 3 to 4 percent annually, as consumers in advanced countries have already traded in their bulky cathode-ray tube TV sets for flat screens, while the LCD market has been in a glut since last summer. Global TV manufacturers are restructuring their businesses and outsourcing production as cut-throat competition and weak demand squeeze margins. Analysts have criticized Sony for failing to aggressively take on the competition in the TV market from South Korean rivals Samsung and LG Electronics Inc, the largest and second-largest players, respectively. [Source: Reiji Murai and Hyunjoo Jin, Reuters, December 26, 2011]
Blue-Ray Versus HD-DVD
In the early 2000s a Betamax-VHS-like battle developed which format would be the standard in video disc player. Sony and Panasonic developed the Blue-Ray disc while an alliance of NEC and Toshiba developed the HD-DVD format. In 2005, Sony and Toshiba discussed a unified DVD format. But in the end decided to go their separate ways. By that time Samsung, Sharp, and Apple supported Blue-Ray.
The outcome of the battle depended a lot on which Hollywood companies would back which format. Disney, 20th Century Fox, and Sony supported the Blue-Ray DVDs while Warner Brothers, New Line Cinema, Paramount and Universal said they supported HD DVDs.
The Blue-Ray holds 50 gigabytes of data, five time more than HD-DVD. The picture quality is said to be six time better than that of standard DVDs. Comparing a Blue-Ray disc movie of Cars with a standard DVD, Jan Turnbow wrote in the New York Times, ?A tractor in the background in the opening shot went from fuzzy to insignificant on DVD to sharp , vibrant, scenery on Blue-Ray. A smooth piece of canvas turned out to be richly textured fabric. Every pebble, every blade of grass, every hair on every rat’s back?it was all just stunning in comparison.”
Competition between Blue-Ray and HD-DVD formats made consumers wary and delayed delivery of either system. Machines that played both formats were introduced in mid 2006. They sold for about $1,200. Around the same time Warner Brothers announced that it developed discs, called ?Total HD Discs?, that played both Blue-Ray and HD-DVD formats and played on both Blue-Ray and HD-DVD players. As of late 2007 about 1 million players using both of the formats had been sold.
blue ray player In February 2008, Toshiba announced it was abandoning the HD-DVD discs, meaning that Blue-Ray would be the standard for the next generation high-definition of video recording.
Investors applauded Toshiba for its decision. Shares of the company rose 6 percent. Sony’s stock rose by 1 percent. For Sony it was redemption for its loss in the VHS-Betamax battle in the 1970s. Consumers also applauded the decision. They could now buy a single machine to cover all products, with competition bringing down prices for machines.
Before the decision was announced more and more Hollywood companies and big U.S, retailers including Warner Brothers, Amazon and Best Buy were supporting Blue-Ray. The nail in the coffin for HD-DVD came in early February 2008 when Wal-Mart announced it was picking Blue-Ray. It is widely thought that Sony CEO, a former CBS executive, was able to persuade movies distributors to back Blue-Ray.
In April 2008, the sale of Blue-Ray recorders exceeded those of ordinary DVD recorders in Japan for the first time.
With conventional 3D the television project different images to the viewer’s right and left eyes at high speed, and 3-D images are reconstructed in the brain. Using 3-D glasses a viewer cannot see an image intended for the right eye with the left eye and vices versa. The system creates stereoscopic images. In May 2010, the Economy, Trade and Industry Ministry set 3-D guidelines in part to standardize the industry and deal with problems such as eye strain and queasiness caused by the technology.
3-D televisions went on sale in Japan in April 2010. The first ones to go on sale were 50- and 54-inch plasma modes made by Panasonic that sold for $4,650 and $5,750. Toshiba, NEC and Fujitsu have all unveiled a 3-D desktop personal computer
Among the biggest attention-getters at the CEATEC technology and electronic trade show in October 2010 were the latest 3-D technologies, including a 3-D theater that simulated being in a futuristic city, Toshiba’s 3-D television that doesn’t require glasses.
Sony and Victor released 3-D video cameras in early 2011. The release was partly intended to help boost sluggish sales of 3-D televisions.
3-D televisions made up only 5 percent of sales in 2010. One reason for poor sales is the shortage of 3-D movies and TV programs.
See electronics, video games.
Toshiba’s Glasses-Free 3-D TV and the Woman Who Created It
Hiroko Tabuchi wrote in the New York Times, ?It is the Achilles? heel of 3-D television: the clunky glasses that viewers must wear to see images pop out in 3-D. A 3-D Toshiba TV at the Consumer Electronics Show. Instead of using glasses, the screen directs images to the appropriate eye.” Toshiba started selling its glasses-free 3-D televisions in Japan in October 2010 and introduced them to North America and Europe in 2011. [Source: Hiroko Tabuchi, New York Times, January 17, 2011]
Rieko Fukushima, a researcher at Toshiba, developed a way to do away with the glasses of 3-D television. ?I?d be lying if I said it wasn’t tough as a woman,” said Mrs. Fukushima, 39, who led Toshiba’s effort to develop the world’s first ?naked eye? 3-D TV. The project began nine years ago, when she had just returned from maternity leave. “Sometimes, I?d see it in my colleagues? expressions,” she said ? ?What? A woman? This age? In charge?? ? [Ibid]
Mrs. Fukushima’s success, Tabuchi wrote, has therefore been welcomed as an inspirational tale of what can happen when things fall into place: a driven woman, a supportive family, and a company trying to diversify its work force. ?As a researcher, her ideas are cutting edge,” Yuzo Hirayama, the head researcher at Toshiba’s TV research unit, told the New York Times. ?Her communication and networking skills also never cease to astound me.” [Ibid]
?It was in 2002 that Mrs. Fukushima, after maternity leave for her first child, helped set up a new research and development team to explore the possibilities of 3-D displays,” Tabuchi wrote. At the time, there was skepticism at Toshiba over whether 3-D technology could be commercialized. Still, Mrs. Fukushima saw the potential in an early prototype. From the start, she was convinced that the viewing glasses that accompanied most 3-D technology would have to go.” [Ibid]
?In conventional 3-D TV technology that uses glasses, images for each eye are rapidly displayed one after the other. Filters in dedicated glasses flash on and off in sync with the TV, so that the right eye sees one image, then the left eye sees the next image, creating the illusion of 3-D. But Mrs. Fukushima proposed a new approach: developing an algorithm that draws on a Toshiba imaging processor called the Cell to display nine images for each frame. A sheet on the screen angles each image so that the right eye sees only images meant for the right eye, while the left eye sees only images meant for the left eye. The biggest challenge was making a TV that displays 3-D images even when viewed from wider angles. Toshiba has not entirely solved that problem: its TVs work best when viewed from within a 40-degree zone.” [Ibid]
?Designing a mass-production setup to keep costs down also posed difficulties, something Mrs. Fukushima tackled by building a network of experts from around the company. But pressure mounted as the project progressed. ?When I was just a researcher, a setback would only reflect badly on myself. But now that I was leading a team, I had to make sure nobody lost faith,” she said. ?I needed to think things through harder than anyone else,” she said. ?I often felt overcome with worry, but I tried not to show that at meetings.” [Ibid]
Image Sources: 1) 2) Sony 3) NEC 4) 5) Fujitsu 6) Canon 7) xorsyst blog 8) Sharp 9) Panasonic 10) Sanyo
Text Sources: New York Times, Washington Post, Los Angeles Times, Daily Yomiuri, Times of London, Japan National Tourist Organization (JNTO), National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, Lonely Planet Guides, Compton’s Encyclopedia and various books and other publications.
© 2009 Jeffrey Hays
Last updated October 2012