FOCUS: Subscription Services Evolving in Japan

Tokyo, Jan. 24 (Jiji Press)–New forms of subscription services have expanded beyond the realm of entertainment in Japan, branching into industries such as gaming, hotels and cars amid a shift in consumer attitudes. The business model, in which subscribers pay a monthly or yearly fee for access to services, has spread throughout Japan, initially in the form of video and music streaming services. In 2019, the word “sabusuku,” a Japanese shorthand for subscription, was nominated as a buzzword of the year. “The idea of shifting from ownership to access has become widespread,” Naoko Kuga of NLI Research Institute said, explaining one reason for their popularity. With consumers adopting a more conservative view of spending amid inflation, subscription services are viewed as “rational and smart consumption,” Kuga said. Challenges for Content Providers in Japan The COVID-19 pandemic spurred moves in Japan to take various operations online, including remote work and food deliveries, and a rise in stay-at-home demand. In terms of entertainment, subscriptions for mainly video streaming services have taken hold in people’s daily lives. The global streaming market is dominated by players such as Netflix Inc. and Spotify AB. In its New Cool Japan Strategy released in 2024, the Japanese government said that video and music distribution platforms are “heavily dependent on major overseas operators.” It is therefore difficult for businesses trying to spread Japanese content to “strategically cultivate overseas demand based on their own judgment.” The government noted that there is a need for such businesses to either create their own content distribution channels or secure existing channels mainly through investments. To boost exports, the focus now is to secure distribution channels both in and outside the country. Trends in Japan Long-time content providers U-Next Co. and Sony Group Corp. are among the major Japanese streaming service providers. Aside from its music streaming services, Sony Group also offers gaming subscription services for its PlayStation consoles, providing subscribers with limited-edition content and other perks. Tokyu Corp. has attracted attention for its hotel subscription service, which allows people to choose accommodation plans based on their lifestyle and needs. The service also helps revitalize surrounding areas, improves employee benefits and reduces business travel costs. Kinto Corp., a car leasing affiliate of Toyota Motor Corp., offers a car subscription service. Business has been booming, with the company posting a net profit of 795 million yen in the year that ended March 2025, its first-ever black ink. Subscriptions provided by individuals offering their knowledge and experiences have also become popular. Blog platform provider Note Inc.’s membership function enables members of the general public to easily start their own business as subscription content creators. The number of content creators earning income from their subscriptions as of October last year has doubled from a year earlier, highlighting a rise in moves among individuals to profit off their own value, according to the company. NLI’s Kuga said that such moves among individuals reflect “a change in the way people work and in the way they earn a living.” Business Sustainability According to a digital economic report released by the industry ministry, the subscription economy offers higher revenue predictability than the traditional purchase-based economy. Converting monthly revenue from subscriptions into an annual balance based on annual recurring revenue would allow business operators to predict future cash flow, enabling long-term financial planning and business decisions, the report said. “Subscriptions bring ongoing relationships to businesses that previously relied on one-off transactions,” Kuga said. “We could say that a business scheme involving continued efforts by a company to provide good services is a form of sustainable business,” she added. Looking Ahead On the future of the subscription market, Kuga said, “We’re at a stage where there’s a need to enhance the quality of these services, including providing subscriptions that best suit people’s preferences and interests and are tailored to user history.” The key will be creating services based on subscription usage, as there is a significant gap between people who use their subscriptions to the fullest extent and those who do not. This will require a business design that garners high user satisfaction, including elements such as ease of subscribing and unsubscribing to these services. While the real world offers people “serendipitous” encounters, such as finding gems while browsing bookstores, it is not yet clear that artificial intelligence will provide an element of unexpected discovery, despite its recent eye-catching developments. “There’s still room for creativity for service providers to develop services aside from those offering efficiency and rationality,” Kuga said. END [Copyright The Jiji Press, Ltd.]