Comments from the President

Summary of Press Conference (December, 2022)

  • On the Establishment of NHK Media Holdings and the Merger of Incorporated Foundations

    (Comments by MAEDA Terunobu, President)

    I would like to officially announce the establishment of two affiliates of NHK. One of them was established today, December 1st, and is a holding company called NHK Media Holdings. The other is a general incorporated foundation called the NHK Foundation, created by merging four separate general incorporated foundations. NHK has been working toward the reform of its operations, receiving fees, and governance – the trinity of reforms, so to speak – by moving forward with a range of related measures. The establishment of these two organizations is a major step toward building a “leaner and stronger NHK group,” which is a pillar of the reforms.
    NHK Media Holdings will control five subsidiaries that are involved in content production, including NHK Enterprises. The five companies will effectively operate as one, under NHK’s corporate policy. In the first fiscal year, it will halve the total number of executives of its subsidiaries and proceed with improving operational efficiency and with streamlining overlapping operations and back office functions. By fiscal 2026, the final year of the next corporate plan, we will cut existing outsourcing expenses paid to the five subsidiaries by over 20 percent, or more than 20 billion yen, compared with the planned figure published in fiscal 2020 – before the outbreak of the coronavirus pandemic. NHK and the holding company, as well as the holding company and its subsidiaries, have a 100 percent parent-subsidiary relationship. Therefore, the parent will have a firm grip both financially and operationally and will be able to create a leaner and stronger system.
    Until now, many of the subsidiaries’ executives were former employees of NHK. NHK’s income from receiving fees rose steadily, and it expanded its satellite broadcasts one after another, created many affiliates, and outsourced many operations. This led to criticisms, which I felt were justifiable, that NHK was becoming bloated. We believe that assigning current executives of NHK to the roles of president or director at the subsidiaries and putting them in charge has improved information sharing between the parent and the subsidiaries, and it has enabled us to manage the entire group as it should be managed. With the establishment of the holding company, we would like to push ahead with reforms at once.
    NHK Foundation will be established in April next year by merging four of our general incorporated foundations. The NHK Symphony Orchestra, Tokyo, popularly known as N-Kyo, will become a subsidiary of the new consolidated foundation to take advantage of its status as a public interest incorporated foundation. By combining N-Kyo’s brand power with the strengths of each of the incorporated foundations, we will increase our social contribution operations and proceed with making the consolidated foundation leaner and more efficient. Despite the general incorporated foundations’ social contributions, they were on a small scale and not well-known. N-Kyo is well-known, but it cannot be said to have a solid business foundation. Therefore, we decided that consolidating the five incorporated foundations into one and combining their strengths would better enable us to contribute to society.
    Establishing the two affiliates will bring about a major change to the structure of the NHK group. The number of affiliates until now has been as high as 65, but by April, there will be just 22, or around one-third of the former figure. The establishment of the holding company and the consolidation of the incorporated foundations, for the purpose of reform, could be seen as merely form without substance. But if it is without substance, it would be meaningless. I would like NHK Media Holdings and NHK Foundation to lead the NHK group in becoming a leaner and stronger organization. At the same time, as the environment surrounding the broadcasting industry undergoes major changes, we hope that establishing the two affiliates will enable us to further strengthen our initiatives to create high-quality content unique to a public service media organization, and give back to society in ways other than our broadcasts by utilizing NHK’s content and know-how.