Updated as of September 2005

Advertising Remains on a Slow Burn.

Total advertising expenditures in 2004 amounted to 5,857 billion yen, up 3 percent from 5,684 billion yen in 2003. Expenditures have stayed at about the same level over the past five years, around the 6,000 billion yen level, reflecting slow growth in the general economy for the past decade since the bubble economy burst, starting in 1992.

The breakdown of expenditures by types of advertising for the past three years maintained the same trend in which the share of advertising in mass media (TV, newspapers, magazines, radio) was 63.0 percent in 2002, 63.1 percent in 2003, and 62.7 percent in 2004, while the share for SP (special promotion), events and other miscellaneous media was 34.7 percent in 2002, 34.1 percent in 2003, and 33.3 percent in 2004.

Breakdown among advertising expenditures by four mass media (TV, newspapers, magazines, radio) followed relatively the same trend for the past several years and will remain flat until satellite and Internet media surge more rapidly.

The success of Japanese editions of such major publications as Newsweek, Forbes, Science, etc., and of TV broadcast programs on CNN, BBC, FOX, Discovery, etc., through cable and satellite broadcasting are only a few examples attesting to the greater flow of information carried primarily by American media in Japan. U.S. financial information providers, such as Bloomberg and CNBC, are also extending their reach in the Japanese market primarily through cable/satellite TV as Japan's financial market liberalization lures more international banks and brokerage firms to claim their share in the world's second largest economy.

In the U.S., major Japanese newspapers, such as the Nikkei, the Asahi and the Yomiuri, are also increasing their penetration in Japanese language with the help of satellite printing and Web sites. Japanese television programing is also broadcast over the air or transmitted via cable or satellite in major metropolitan areas of the U.S. and Europe. Though most programs are for the local Japanese population and expatriates, some have been broadcast in English or with English subtitles. These include US Nippon in New York which broadcast all programs bi-lingual, and partially by Fuji-Sankei and TV Japan.

In Japan, foreign investment in these businesses is slowly but steadily increasing, most by satellite broadcasting companies. Sky-B, used to be jointly owned by News Corp, Softbank, Sony and Fuji TV; PerfectTV, owned by a group of Japanese trading companies; and DirecTV, controlled by Hughes Electronics and Matsushita Electric, but all eventually merged to form "SkyPerfectTV." This new entity constitutes the largest direct satellite broadcasting company in the nation with around 1 million plus subscribers. As of 2005, providing national and international entertainment/sports programs were further increased.

The arrival of Soccer World Cup 2001 in Japan and Korea expanded Japan's overseas TV broadcasting all over the world. The broadcasting or cable/satellite transmissions of U.S. Major League baseball games has also become an almost daily event on Japanese cable and satellite TV, with the Japanese star players such as Ichiro Suzuki, Hideki Matsui, Kazuo Matsui, Hideo Nomo and Tadahito Iguchi as regular players in these games.

Thus, cross-border penetration by major media is becoming the reality of daily life and is bound to further expand.

As the world increasingly becomes integrated by new technologies, such as the Internet and digital communications, American and Japanese media and advertising companies are entering into the new information-driven global market. More and more multinational corporations that used to depend on local advertising are discovering the effective global advertising service offered by multinational ad agencies.