New Wave of Media Restructuring

With apparent surprise, Japanese media reported a news that Nikkei would buy Financial Times with large headlines. That was because they believed that they had been excluded from international trend of restructuring in media business with no reliable reason. The news will be a wake up call for Japanese media corporations, especially newspapers, for new era of competition.

The news was reported as an announcement of Pearson, a British major corporation for education or publishing, that it would sell FT with \160 billion to Nikkei. Nikkei would buy not only FT newspaper, but also its web service, magazine and other businesses except stocks of Economist magazine. FT has been seeking the deal with a German media group, too. Pearson would be focusing its business on examination for English efficiency or textbooks.

Asahi Shimbun, which had suffered from scandal over its former reports of comfort woman and losing circulation as its consequence, reported the news at the top of the morning issue of Friday. It continued major report on Saturday that analyzed international trend for media restructuring. According to the report, the restructuring started with the purchase of Dow Jones, holding Wall Street journal, by News Corporation in 2007. Following that, major purchases are ongoing, as seen in Thomson’s buying of Reuters or Washington Post’s belonging to the founder of a web retail giant, Amazon.

Nikkei looks to be satisfied with the purchase. In the press conference, Chiarman of Nikkei, Tsuneo Kita stressed the beneficial side of the purchase. “It is necessary for our growth that concentration to the digital and global. FT is the best partner,” told Kita. FT is one of the most successful news media in digital communication. “FT is brilliant in client management and marketing. It will be very helpful for us,” said Naotoshi Okada, the president of Nikkei.

But as long as the purchase is big, its risk becomes greater. New challenge of Nikkei to seek its business growth in overseas will expose the company to a great international competition. It is possible that Nikkei will be a target of another restructuring by other media giants. There can be a cultural difference between Nikkei and FT in reporting against authoritative powers.

Japanese newspapers are suffering from reduction of circulation these years, not as hard as in United States or Europe. It is likely Nikkei’s purchase will be a litmus test for other major media corporations in Japan to find a way for survival.