TT-561 -- Nikkei Blogging Links Ban, ebiz news from Japan

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.

General Edition Sunday, April 11, 2010 Issue No. 561


- What's new
- News
- Candidate roundup/Vacancies
- Upcoming events
- Corrections/Feedback
- News credits

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Last week the Nikkei instituted a new policy regarding its
online content. Like Rupert Murdoch's News Corp and other
leading news publishers abroad, the Nikkei has come to the
conclusion that to make money, any online content other
than teasers will basically be behind a pay wall. In this
respect, the announcement was not particularly noteworthy,
as those of us who have been subscribers for years are used
to paying for the Nikkei's content. It's cheap enough that
paying for it is better than trying to troll for articles on the

No, it's not the pay walls that have drawn public reaction,
but rather the fact that the Nikkei has proclaimed that it
doesn't want bloggers linking to its articles.

Given that a lot of Web content revolves around bloggers
(including this newsletter) commenting on articles which
appear on various mainstream news websites, we think
the Nikkei's stance in banning blogger links is
short-sighted to say the least.

For a start, it is by now well established that so long as
a blogger is not blatantly copying content and does indeed
add their own analysis, and that they link back to the
originator of the news article, then the publisher of that
news is generally happy with the situation, as the link
serves as free advertising and drives readers to that
content. Web site operators know that new visitors are more
likely to subscribe to a pay walled website when a
respected and trusted blogger is telling them that
excellent content lies there waiting for them.

But the Nikkei now says that any linking to its articles
will be henceforth banned and that the company may take
to court those people who do. This is a surprising folly for
a media company whose online subscribers are
rising rapidly, and yet somehow it wants to blame falling
paper ad revenues on bloggers and the Web.

What the Nikkei's leadership is thinking no one knows, but
it seems that the company is either going to have to sue
some bloggers to find out the hard way how uncomfortable it
can be to be pilloried on the web. And/or, the negative media
coverage will cause casual readers of news to instead switch
to more accommodating competitors such as Yahoo Japan,
Impress, Newsweek Japan, and the Wall Street Journal
Japanese edition.

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[...Article continues]

As we have mentioned, the irony is that the Nikkei is in
fact doing well online, with subscriptions climbing
steadily. We know this because in the recent past senior
staff from the Nikkei web group have told us so. Not only
that, but they also know the value of bloggers sending
readers back to their pay walled articles. The fact is
that once a reader is stimulated by a favorite blogger's
commentary, they often want to read the original article.
Although they may be blocked by a pay wall on the first
visit and thus give up in disappointment, repeated strong
content from the blogger will sooner or later drive readers
to overcome their reluctance to pay for the original

Indeed, several years ago, while cleaning up some of our
internal corporate governance, we decided to contact the
Nikkei to ask them if would be OK to continue our 10-year
tradition here at Terrie's Take of commenting and linking
to several English-language articles (out of 5 TT articles
a week) on the Nikkei website. They responded by saying
that they couldn't enter into a legal agreement but that
they recognized that our mentions of them had indeed
helped them gain subscribers, so they were tentatively OK
with it. We've been following that formula ever since.

Above all, we wonder why the Nikkei gave such lame excuses
for its new policy. They tried to say that links from blogs
might compromise its pay wall and that reference to their
articles might be misused by non-Journalists. Our
experience so far is that their pay wall is very stout and
that any attempt to link to a page on the site brings up a
notice saying that the visitor needs to subscribe. So
what's the problem actually?

Then the red herring about articles being misused by
non-Journalists is especially amusing, given that the
Nikkei itself regularly serves up pure speculation as news.
One such case that we have first-hand experience over
came up about two years ago when the Nikkei ran one
of its "exclusive insider" news items saying that a
certain major UAE sovereign fund was going to invest in
a new hospital complex in Kobe. We ran a commentary
about the Nikkei piece, saying that we couldn't
understand why that fund would consider the project
when Japan's hospital system is in such a financial
mess. if they really wanted a stake here. Well, to our
surprise, the fund itself contacted us and said that the
story was a fabrication and that no such investment was
being considered. Oops...

We note with interest, also, that the Nikkei is requiring
anyone wanting to link to its site to write a justification
to the company. Besides putting most people off due to the
extra workload involved, we suspect that the Nikkei is
trying to identify easy targets and will issue them
warnings, surely the first step in a deeper legal process.
Further, if it actually does allow any linking, you can be
certain it will be by way of a contract, which of course
would help them overcome their otherwise weak legal stance
(in our humble opinion) if they go to court.

Now it is of course absolutely true that print publishers
are fighting a difficult battle over dropping revenues.
Not only is there a flood of increasingly good quality free
content online and consequently 59% of Japanese in their
twenties and 47% of those in their thirties getting their
news from the Web, but also due to the recession there is a
lower ad revenue yield. Dentsu reckons that publishers ad
revenues fell 18% in 2009 in Japan over the year before.

So are we going to stop carrying references to the Nikkei
site? Not unless we are specifically challenged by them.
Our reasoning is: i) we have been carrying references to
the Nikkei and links for over 13 years now and it was
never a problem for them in the past, so why the sudden
change, ii) there is no proof that our referencing them
causes them any damage (indeed, we have proof to the
contrary) -- so it would be difficult for them to get a
judgment for damages that would make it worth their while
suing us, iii) the rest of the Japanese Internet
establishes certain allowable usage of news content by
bloggers, and so the Nikkei's stance doesn't follow
societal standards and nore does it serve the common good.

More likely, if the Nikkei doesn't like us referencing
their articles, they will ban us from subscribing. If this
was to happen, perhaps we'd be forced to join up with other
bloggers and go to Kyodo to buy a news feed. Japan Today
already does this, and they make the news free in return
for traffic that they can monetize in other ways. The
size of the investment for a Kyodo feed is not huge,
being around JPY250,000/month. As bloggers we would quickly
make our money back on selling other content or services
alongside the news.

Either way it's a bad outcome for the Nikkei and for
the web and bloggers in general. We hope they reconsider
their stance.


Lastly, readers may have noticed that Terrie Lloyd (the
main writer of this newsletter) is collaborating with CCH
to provide a seminar entitled "What Non-Japanese Directors
Should Know" [about running Japanese companies]. Unlike
preceding seminars by CCH, whereby it tied the seminar
content much more closely to their legal texts for foreign
managers, this seminar will do away with the lawyers and be
more about the practical aspects of running a business in

Lloyd will discuss at length practical issues and how to
deal with them in a way that complies with the law and yet
takes care of the problem efficiently. Examples of the
challenges that he will discuss include structuring a
company at establishment so as to avoid business problems
later, handling employee firings, dealing with debtors and
law suits, and protecting yourself from the same as an
employee of a multinational company.

CCH is a company committed to demystifying Japan and the
Japanese legal system for non-Japanese managers, by virtue
of its ongoing publishing of English-language text books
on Employment, Tax, and Corporate law. Some of their
content can be a bit academic, but it's all indispensible
knowledge if you're taking on legal responsibility for your
company in one of these areas.

For more information on the seminar, go to

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+++ NEWS

- 25% surge in web stock trades
- Office vacancy rates at record high
- Unison buys majority of Usen's fiber business
- Graduates want escapist, safe jobs
- Japanese investors in Australia eclipse China

-> 25% surge in web stock trades

Individuals trading stocks are sensing that the markets may
have turned upwards for a prolonged period, and are now
re-entering the market enmasse. The Nikkei says that
trading values at the top five web brokers has surged 25%
to JPY8.5trn in March over February. Apparently this is
part of an overall steady recovery from a 5-year low last
November. ***Ed: The fact is that as government stimulus
spending works its way through the system, there is indeed
a recovery underway that will last at least while the
stimulis spending does -- maybe for the rest of this year?
This appears to be providing individual investors with
enough time to consider playing the market again. What
happens next year once the stimulus spending ends and
interest rates head upwards is of course anyone's guess.
Overall the markets will continue to be jittery as people
keep that in the back of their minds.** (Source: TT
commentary from, Apr 6, 2010)

-> Office vacancy rates at record high

Realtor Miki Shoji issued its monthly office vacancies
report last week and said that companies are still
retrenching and cutting costs, thus causing a slump in
office space demand. According to Miki, the average vacancy
rate for Chiyoda-ku, Chuo-ku, Minato-ku, Shinjuku-ku, and
Shibuya-ku was 8.75% in February, the highest since Miki
started recording office vacancy levels in 1989. Those
companies that are doing well are moving upmarket without
spending extra cash. This is apparently the case behind
Google's move from the Shibuya Cerulean Tower to Mori's
Roppongi Hills, where they are reportedly paying similar
rent. (Source: TT commentary from, Mar 29,

-> Unison buys majority of Usen's fiber business

Over-expansion during the boom years of the late 1990's and
lack of a clear business plan have meant tough times for
cable media company Usen Corporation. This has caused the
company to start divesting itself of assets, one of which
appears to be a core one, its Ucom Corporation fiber
carrier operation. Usen is selling an additional 38.99% of
Ucom to Unison for JPY5bn, providing Unison with 77% of the
company and a plan to eventually buy up the rest over time.
Unison says it is looking to consolidate operations and
turn Ucom around financially. (Source: TT commentary from, Apr 8, 2010)

-> Graduates want escapist, safe jobs

Recruit has released its annual survey of the most popular
companies for college graduates to work for. In the survey,
leisure and entertainment companies scored highly, with
travel agency JTB coming out on top. The operator of Tokyo
Disneyland, Oriental Land was 6th, and toy maker Bandai was
8th. Apart from escapist industries, highly stable
companies were also popular, with Central Japan Railway and
East Japan Railway coming in at 2nd and 3rd respectively.
***Ed: It's interesting to see how the commercial
environment so influences college graduates choices of
employers. One would think they would be more idealistic
since they're still able to aim high and have nothing to
lose.** (Source: TT commentary from, Apr 8, 2010)

-> Japanese investors in Australia eclipse China

While all the focus is on China and impending takeovers of
Australian resources and food companies, in fact the real
M&A wave for Down Under is coming from Japan, accordingly
to a report in The Australian newspaper. Japanese direct
investment during 2008 amounted to Au$36bn, far outweighing
the Au$3.05bn in direct investment by the Chinese. A review
of investments would include Kirin's takeover of Lion
Nathan (Au$3.3bn) and National Foods (Au$2.9bn), Asahi's
takeover of Schweppes Australia, Suntory's takeover of
Frucor, and numerous significant stakes in uranium, gas,
coal, oil, utilities, and paper. ***Ed: This of course
confirms what we speculated on last year, that Japanese
companies are seen at least in part by most Australian
firms as being more desirable partners/owners than are the
Chinese. While this may not be fair, it certainly gives
Japanese firms safe haven to grow abroad, not that their
home markets are stagnant.** (Source: TT commentary from, Apr 8 2010)

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.


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- Establishing Companies in Japan - Challenges & Solutions
- Managing a Company in Japan - Challenges & Solutions
- What are the Pros and Cons of a Branch versus
establishing a Kabusiki Kaisha?
- What is the most efficient way to understand and handle
Japanese registration documents?
- How to manage HR issues as a director
- Major differences between Japan and Western countries
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- Case Studies from consulting experience

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In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to

=> We had some interesting responses to our TT559 -- Flip
Side of Metabolic Syndrome, where we discussed the
spreading fad of excessive weight loss amongst Japanese
women. Two such comments follow:

Reader A: As always an interesting article, which prompts a
comment. I think that there are likely many other health
consequences of being too thin, beyond the extreme cases of
eating disorders. For example, it is well-known that being
underweight adversely affects a woman? fertility. So
perhaps this passion for thinness is one of the
contributing factors to Japan's low birthrate.

Our Response: Indeed, doing research on that article, the
issue of lowered fertility did come up, as does overall
lowered life span. Drawing the connection to a lowered
birthrate could well be a good one. We do know already that
another big reason for low fertility in Japan is the
prevalence of untreated venereal diseases. We were told
this by a Japanese female gynecologist some years ago, and
at that time she told us it was an epidemic amongst
teenagers in particular.

Reader B: Most interesting article on Eating Disorders! You
might be interested to know that one of the contributing
factors could well be zinc deficiency – now recognised as
the most widespread mineral deficiency in the Western world
– 2 billion worldwide at last estimate... Have a look at:

Our Response: Denatured food is almost a Japanese invention
(think rice crackers and ramen), but in the past has been
eaten in moderation. However, what with a depressed economy
and lack of nutritional education, more and more people are
turning to convenience at the cost of their health. It
would be interesting to see a goernment-level study done
which connects fast food with depression and eating
disorders. It would be even more interesting if, in the
name of economizing on future hospital bills, the
government did something to regulate what fast food
companies are allowed to serve.


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