The “Asahi Shimbun” Fights for Survival in the Digital AgeSociety Work Economy
The Asahi Shimbun, one of Japan’s leading dailies, is in dire straits. That much was obvious from flipping through the pages of the newspaper’s inhouse magazine, A-Dash. On the surface, the quarterly publication’s summer 2021 issue was a like other editions. There were stories on new business ventures and workplace topics, including a series of upbeat features on the efforts to bolster the paper’s digital offerings, an area in which it has lagged. But a closer look revealed worrying trends.
The first indication of trouble was the account of the June 2021 shareholders’ meeting. When presenting the fiscal 2020 accounting and business report, newly appointed president Nakamura Shirō made the shocking disclosure that the publisher Asahi Shimbun was a record ¥45 billion in the red for the year. This most certainly sent ripples through the gathering, but had no effect on the outcome of the meeting, which was quietly closed after all items on the agenda were voted on and passed.
Most of the remaining 60 pages of the magazine were devoted to articles on new digital endeavors aimed at transforming the company into one with a “sustainable future not solely reliant on printing newspapers.” The daily’s reluctance to tap into the burgeoning digital market has not been lost on employees, or former employees like myself, who welcome the belated shift.
Of equal interest was a regular section carrying photos and messages from people leaving the company. Typically covering two pages, the corner took up eight in the issue, with all 79 employees who were featured—the most to date—listing voluntary retirement as their reason for leaving. Taken together, the trio of topics—record losses, lagging digitization, and cuts in the workforce—bring the magnitude of the crisis at the Asahi into sharper focus.
I was one of the 79 employees featured in the issue. Like the others, I had opted for early retirement when management offered it to all workers aged 45 or older over a two-month period starting in January 2021. The company explained that it was looking to recruit some 100 individuals during the initial round of voluntary retirements, with the long-term goal being to reduce the 4,000-strong workforce by more than 300 by the end of fiscal 2023. The front office quickly got the ball rolling, holding online information sessions to explain such details as severance packages and conditions for receiving referrals to other jobs.
I left the Asahi in May 2021 mainly for health reasons. After 38 years on the beat, it was getting harder and harder to keep up with the demanding schedule. As part of the first wave of voluntary retirees, I flipped through the summer issue of A-Dash curious about who else had left. I was surprised at how many of the 79 faces I recognized. Many were from the editorial department, including quite a few editorial writers I had worked with, as well as a number of veteran columnists. Assuming that not everyone who left had contributed messages to the issue, I estimated the total number of people who quit at around 100. This is a painful number to consider, given that most would have retired with full benefits in a few years if the paper had stayed on an even keel.
Was cutting staff the only option, though? During the online information sessions, management had implored employees to accept the offer, citing unstoppable trends toward falling subscriptions and free-falling ad revenue and stressing that the only way the paper could stay afloat was by implementing emergency cost-cutting measures like overhauling employee compensation.
The call for voluntary retirement went out as management slashed bonuses by 40% and salaries by 10%, halted allowances, and trimmed benefits, among a list of other austerity measures. The labor union opposed the moves, although it put up little real resistance and forewent calling for a strike when top executives pushed ahead with their plans.
Along with pay cuts, reporters are barred from using taxis in most situations, even late at night and early in the morning when trains are not running, seriously hampering their ability to chase down scoops and to stay ahead of breaking news. Editing has become more burdensome as well, since the paper let go the army of university students it had employed part-time to help with the process. Money for business trips is also scarce, and people are even being asked to cut back on items like stationery.
Regional coverage has been especially hard hit. The Asahi previously had bureaus in all 47 prefectures that produced local editions of the paper. But starting last spring, management began closing these offices and laying off local reporters in an effort to consolidate everything into 18 regional blocks. For instance, the neighboring prefectures of Aomori, Akita, and Iwate in the Tōhoku region were combined into one block. Hires of new reporters have also been scaled back, increasing the workload of current staff, many of whom are getting on in years.
For a newspaper that prides itself on the strength of its brand and quality of its reporting, the Asahi might be expected to restructure its business around the idea of expanding its readership. But apparently, the crisis has not allowed for such long-term considerations. Instead, after previous CEO Watanabe Masataka stepped down as president to take responsibility for management failures, executives have instead taken a scalpel to the very backbone of the 142-year-old publication, the employees.
A Newspaper Industry in Peril
The crisis at the Asahi Shimbun takes place amid a broader decline in newspaper circulation in Japan. According to the Japan Newspaper Publishers and Editors Association, the total number of issues printed by general-interest newspapers has steadily waned since hitting a peak of some 53 million in the mid-1990s. Since the start of the 2000s, circulation has fallen by more than a third, dropping to a little over 30 million by the end of 2021.
The Asahi has been hit particularly hard. When I joined the paper in 1990, it boasted a circulation of over 8 million. This figure held relatively steady into the early 2010s, before plunging in the subsequent decade. In 2015, circulation hovered at around 7 million, but by 2018 had slipped below 6 million, a pace of 400,000 lost subscriptions a year, equivalent to the circulation of the most prominent regional newspapers. The trend has continued unabated, and as of September 2021, circulation stood at 4.68 million.
This plummeting readership has wreaked havoc on Asahi’s bottom line. Looking at annual reports over the last 10 years, consolidated sales have fallen some 40% from ¥467.2 billion in fiscal 2012 to ¥293.8 billion in 2021. The decline was gradual for most of the decade, with sales staying above ¥400 billion into 2016. However, the onset of the COVID-19 pandemic has accelerated losses, driving down sales by ¥60 billion in 2021 alone as readers moved away in droves. This figure more than anything shows just how serious the situation is.
The Asahi is certainly not alone in its plight. Other traditional media platforms like radio and television have also been impacted by the shift in how society consumes news. The changing media landscape, driven by the rise of the smartphone, has seen established outlets of all sizes fall on hard times and resort to cost-cutting measures to stem the flow of red ink, a situation that has only been exacerbated by their delay in joining the digital age.
The Challenges of the Online Shift
One area where the decline of print media has been apparent is with commuters. Newspapers used to be a staple of the morning commute. But since smartphones started taking off in Japan in the early 2010s, the devices have overtaken newspapers on trains and buses. Young consumers have led the charge, with data from the Ministry of Internal Affairs and Communication showing that as early as 2016, 90% of Japanese in their twenties and thirties owned a smartphone.
The Asahi Shimbun was quick to provide digital content at no cost, launching its online platform, Asahi.com, in 1995. Although access grew in tandem with the spread of the internet, netizens grew accustomed to reading the news for free. As a result, there was only tepid interest when the Asahi started offering paid digital subscriptions. Smartphones have only exacerbated this trend, driving sales progressively downward.
Newspapers have struggled to adapt their digital offerings to readers’ changing tastes. While focused on setting up their own designated online news sites, they failed to band together to create portal sites that could compete with the growing number of news aggregators that began popping up. Subsequently, websites like Yahoo News now dominate the online news scene in Japan, raking in ad revenue that might have otherwise gone to the media outlets actually producing the content. Cut off from this lucrative source of income, the newspaper industry continues to weaken.
The Nikkei (Nihon Keizai Shimbun) was the first Japanese paper to venture into the digital realm starting in the second half of the 1990s, and other papers like the Asahi soon followed suit. However, experts point out that compared to American media giants like the New York Times that have been able to carve out a share of the market, leading Japanese newspapers came late to the game and have subsequently struggled to distinguish themselves with their content. To have any hope of increasing revenue from online subscriptions, papers need to boost their digital offerings, a bleak proposition for many media juggernauts. The Nikkei has had some success wooing readers to its online edition, but it is one of the few newspapers to see a positive return on its digital ventures.
Desperate to improve its finances, the Asahi in July 2021 made the difficult decision to raise its subscription rates for the first time in 27 years. Management justified the move to employees with a piece in the paper’s in-house magazine that cited factors like changes to the newspaper industry since the onset of the internet, the rising costs of covering and delivering the news, and the growing importance of papers in countering the rise of fake news. However, given the uncertain economic situation facing the country, it remains to be seen whether such reasoning will persuade customers to renew their subscriptions.
The move seems to be having positive benefits so far, though. According to Asahi’s interim consolidated financial reports for September 2021, raising rates succeeded in putting the paper ¥3.1 billion in the black compared to a year earlier, when it logged a deficit of ¥9.3 billion, despite a year-on-year drop in sales. However, a mood of uncertainty still prevails at the company. Many employees view the rate hike as only a temporary fix, saying that at the speed the newspaper is losing customers the Asahi will be right back in the same financial situation in a few short years. Ultimately, the paper will need to initiate sweeping reforms if it is to have any hope of changing the situation for the better over the long run.
How to Win at the Digital Game
The Asahi Shimbun is pinning its hopes on achieving a digital transformation of its business. In this undertaking, it can look to leading US media outlets like the New York Times as models. Around a decade ago, the paper found itself in dire straits following the global financial crisis. Labor is one of the largest costs for media companies, and like the Asahi, it took the unavoidable first step of reducing staff, with over 100 members of the editorial department taking voluntary retirement from 2009 to 2012.
What saved the New York Times were a slew of bold reforms under new CEO Mark Thompson, the former BBC director-general, that refocused resources to accelerate the paper’s digital transition. The paper has bounced back in impressive fashion by providing readers with investigative reports on vital topics like the goings-on of the Trump administration, the COVID-19 pandemic, and the #MeToo movement. As a result, the paper sold more than 10 million digital subscriptions in 2021.
Can the Asahi chart its own V-shaped recovery? This remains to be seen, but things are not looking hopeful at the moment. Executives remain focused on emergency measures like reducing staff, and efforts to bring about a digital transformation seem to be going slowly, in part because the paper’s free news offerings, aimed at vertical social networks populated by readers with specific interests, continue to undercut paid content.
The New York Times and other outlets have shown that even amid the shifting media landscape, quality reporting and a stable business model can go hand in hand. The survival of American and Japanese print media companies alike hinges on offering customers digital content that is worth the price. If the Asahi is to successfully rebuild, it will have to spend the time and resources to hash out a formula that truly works for its audience.
(Originally published in Japanese. Banner photo: The Tokyo headquarters of Asahi Shimbun. © Jiji.)