00:00Why is Japan, Japanese products, Japanese IP so popular in the world?
00:05Well, Japanese products are popular around the world not simply because they're well-made,
00:08but also, I believe, because they answer questions that a lot of the outside world hadn't thought to ask yet.
00:14Japan hit certain milestones of what you might call post-industrial nations
00:19ahead of the societies outside of the world in the West.
00:22And so the products that it started to make in the post-war era,
00:25the karaoke machine, Walkmans, video games for adults, comic books, manga, anime,
00:32all of this sort of thing appealed to audiences that were not being served well in the Western markets.
00:39Everything that you listed right now, manga, video games, this IP, everything related to Hello Kitty,
00:46how viable is this intellectual property in an age of artificial intelligence
00:51when anybody can just fake it out there?
00:54There are grave dangers to the Japanese content production sector now posed by AI.
01:00And fortunately, in Japan, the authorities have taken note of this.
01:04Even though the Japanese government has stated that they want to make Japan
01:07one of the world's most friendly countries to AI development,
01:10they know that they can't do this without putting protections in place for the creators
01:14that make the content that are becoming a sort of pillar for the Japanese economy right now.
01:19So there are being guardrails put in place to preclude AI companies from training on Japanese content
01:25or producing content that resembles too closely things coming out of Japan.
01:30But it is a fact right now that many of the big AI companies are training their large language models
01:37on Japanese content.
01:38And this is a global issue, isn't it?
01:41This is absolutely a global issue.
01:42Which needs more coordination with other governments as well.
01:45How well has Japan done that also in terms of distributing their products and content overseas?
01:53I think Japanese companies are very good at finding partners abroad
01:57who understand the local sorts of environments where the products are sold.
02:02Traditionally, that's how the Japanese content producers have handled this.
02:05They've taken a largely hands-off approach.
02:07That's been changing in recent years.
02:09We've seen a lot of consolidations in the Japanese entertainment sector
02:13with companies such as Toho acquiring distributors abroad
02:16and making pipelines so they can deliver the content directly to consumers abroad.
02:21I think this is one of the biggest shifts in what you might call the Cool Japan delivery strategy
02:26where we're specifically seeing Japanese companies reaching out to foreign audiences with nobody in between.
02:34Matt, it's really interesting because I remember a time where it was really the heyday of J-pop
02:41and then K-pop kind of took over and then we're seeing a bit of a resurgence in J-pop
02:46at the moment.
02:47Talk to us about perhaps how these two differ in a way or are there similarities?
02:54Well, I think one of the biggest differences between Japan and Korea in this front
02:59is that the Korean government is much more aggressive about supporting its content production industries than Japan is.
03:04And then you also see other issues.
03:06In Japan, traditionally, content rights owners would actually have content taken down from places like YouTube.
03:13So there wasn't a way for consumers abroad to really consume J-pop in the way that they could K
03:18-pop.
03:19Now we're seeing a really interesting resurgence of Japanese pop music
03:22in the form of the background music and the title songs for animated series.
03:27So there's a kind of backdoor that these Japanese musicians and content producers are using
03:34to get and win hearts and minds abroad.
03:38So with that in mind and perhaps some of the challenges related to IP for Japanese companies,
03:44how do you think they can strategize and exactly expand, capitalize on their culture capital, so to speak?
03:55I've spoken to a lot of content producers in Japan in the film, television, manga, anime, and toy production worlds.
04:02And one of the number one things that I have heard is to focus on the home market first.
04:08People love things from Japan because they're Japanese.
04:11And so when Japanese creators try to appeal to Western audiences, they often slip up.
04:17So you're seeing now a kind of, in a good way, an inward focus, a focus on the internal market
04:23and what Japanese audience is like tends to be what foreign audience is like now
04:28because audiences around the world who have been raised on so much Japanese pop culture
04:32have now synchronized their tastes with the Japanese marketplace.
04:35So I think there's a very fertile ground for expansion abroad with Japanese producers
04:40doing exactly what they've been doing for the last 50 to 60 years.
04:43How supportive is the Japanese government in helping all of that?
04:46Because you mentioned how the Koreans are doing it very well.
04:49But when it comes to not only just IP, but the entertainment industry overall,
04:54even production of movies, for example.
04:56Well, Prime Minister Takeuchi has pledged to raise the amount of money
05:00that the Japanese government is using to help promote Japanese products.
05:03And we are seeing this not only in the form of the promotion of the products themselves,
05:08but also in the support of all of the businesses that go into making the products,
05:12such as not only animating, but translating, localizing, all of these sort of ancillary services.
05:18So finally, the Japanese government seems to have woken up to the fact that
05:21if you don't fertilize this garden, so to speak, it won't grow.
05:26The issue with trying to promote your country's products is also that
05:31when your country has geopolitical issues with other countries, they're at risk.
05:36How effective has the separation been when it comes to geopolitics,
05:41the tensions with China, with just the cultural content of Japan?
05:45Or have they been hit together?
05:48Well, if you put all of your eggs in one basket, so to speak,
05:52and you are using tourism as one of your main pillars of economic growth,
05:57anything that you do that upsets people around you has a potential to kind of damage that growth.
06:03And in particular, Japan has, I think, succeeded in a big way by staying out of the headlines in a
06:09lot of ways.
06:10Japan used to be, in the 1980s, when I was growing up, a kind of economic tiger.
06:15In my country, in my home country of America, there was a lot of what was called Japan bashing.
06:19But after the Japanese economy crashed and the bubble burst, Japan kind of faded out of the headlines.
06:24And that turned into, ironically, a great strength of Japan.
06:28It became this blank slate that people could project their own attitudes and values upon.
06:33The more Japan manifests itself in the geopolitical sphere,
06:36the more that Japan starts to take an active role in military, economic, and geopolitical sorts of strategies and things
06:44like that,
06:44the bigger a danger there is that it is going to lose its soft power,
06:49that it is going to lose the kind of cultural charisma that it's built up over the years.
06:52It's a very delicate balance.
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