Assessment of NHK from Perspective of Audiences

FY 2011 Report—Summary—

June 2012Committee for Assessment of NHK from Perspective of Audiences

Contents

Forward P2

Purpose of ‘Committee for Assessment of NHK from Perspective of Audiences’

and action plans for FY 2011 P4

Main Assessment Committee activities in FY 2011 P5

Assessment yardsticks: Two pillars of audience trust and eight yardsticks P6

Basic policy of assessment and assessment methodology P9

≪FY 2011 assessment results≫

Trust in broadcasting and management (summary) P12

FY 2011 assessment results: Trust in broadcasting P14

FY 2011 assessment results: Trust in management P20

≪Overview of Assessment Committee activities in 2009-2011≫

Assessment of NHK from perspective of audiences: Overview of three-year assessment results P24

Ch ll d l f NHK P33 Challenges and proposals for NHK P33

Conclusion: Public broadcasting and audience perspective P42

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Forward

The Committee for the Assessment of NHK (Japan Broadcasting Corporation) from the Perspective of Audiences (the Assessment Committee) has assessed NHK’s broadcasting services and management activities on the basis of a set of “two pillars of trust and eight yardsticks”. This assessment framework was devised by the Committee established in 2009.

The Assessment Committee aims to ensure that NHK will generate higher value as a public broadcaster while maintaining high levels of audience trust in it. To that end, the Assessment Committee has researched and thoroughly analyzed audiences’ expectations and assessment of NHK and now compiles its findings in this FY 2011 ｒreport.

In its assessment of NHK in fiscal 2011, the last year of its term, the Assessment Committee applied the basic set of assessment yardsticks, as in the preceding two years to learn what expectations audiences of NHK’s services have and to what extent they thought NHK lived up to their expectations. With respect to documents and data we gathered and used in the last year, there was no major difference from those for fiscal 2009 and 2010 in terms of formats and characteristics.

Compared with fiscal 2009, there was an improvement in audiences’ trust both in NHK’s broadcasting services and in its management in fiscal 2010. However, the fiscal 2011 rating of audiences’ trust in NHK’s broadcasting services was almost unchanged from the previous year at 3.8 out of 5 points, while that in NHK’s management fell to 2.6. A scrutiny of audiences’ feedback regarding their trust in NHK’s broadcasting services shows year-on-year declines in some items. As part of its annual assessment endeavors, the Assessment Committee, using the first half of its fi l 2011 f h i bl f h d id h d hfiscal 2011 report, refers to what is to blame for such downside changes and what will have to be done in response to the situation.

The environment surrounding broadcasting in Japan has changed tremendously over the last three years. The Great East Japan Earthquake of March 2011 and the nuclear power plant accident in Fukushima put to the test not only the emergency broadcasting system but also the public broadcasting system. For its part, NHK immediately deployed massive resources to cope effectively with the emergencies. As a result, audiences’ expectations for NHK rose temporarily, as mentioned in the last year’s report, and audiences’ assessment of NHK remained relatively in favor of it. However, surveys conducted thereafter pointed to a subtle change in audiences’ expectations—their expectations were on the decline. At this stage, we do not know if the negative trend will continue. Nonetheless, we can say for sure that now is the time to look into what a public broadcaster ought to do in terms of enhancingtime to look into what a public broadcaster ought to do in terms of enhancing audiences’ expectations for broadcasting services.

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In addition, Japan completed a nationwide shift to digital terrestrial television broadcasting (DTTB) in 2011, a major epoch-making development that creates an environment where the broadcasting and communications spheres join hands to integrate their expertise for further technological development and utilization. Various surveys show that audiences’ “media behaviors” are changing. Such a change is likely

di ’ f b d i i h Al h h i i dto cause audiences’ awareness of broadcasting services to change. Although it is good news that the digital switchover has gone without major hitches, the change in audiences’ behaviors will entail compelling NHK to face a new challenge—the redefinition of broadcasting services in DTTB infrastructure. With the new environment in mind in the third and last year of its term, the Assessment Committee has taken a comprehensive look into a series of changes seen over the last three years, identified their structural aspects and focused on NHK’s new challengesidentified their structural aspects and focused on NHK s new challenges.

When we were asked three years ago to set up the NHK Assessment Committee from the Perspective of Audiences and engage in assessment activities, we thought that we were undertaking an unprecedented task. It was challenging, indeed, in that broadcasters anywhere in the world had rarely been subject to comprehensive assessment from the perspective of audiences After some trial and error we managedassessment from the perspective of audiences. After some trial and error, we managed to develop what we call an “NHK model” for assessing broadcasts, which we consider an achievement in line with our mission. However, the model is not perfect yet—it needs to be refined further. Though our team’s term comes to an end now, we sincerely hope that efforts to develop and refine the assessment model will be sustained in one way or another so as to help raise the value of public broadcasting servicesservices.

We acknowledge the cooperation extended by many people. Indeed, we are very grateful to those audience members, NHK employees and well-versed broadcasting technology experts who cooperated with us in our elaborate research. Our thanks also go to the President and other executive officers of NHK for adequately responding to questions—some of them harsh—and willingly disclose information to us. We hope that NHK will keep fostering Japan’s rich broadcasting culture in the future enablingthat NHK will keep fostering Japan s rich broadcasting culture in the future, enabling as many people as possible to benefit from it.

June 21, 2012The Committee for the Assessment of NHK from the Perspective of Audiences

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TANIFUJI Etsushi, Professor, Waseda University, ChairmanEGAMI Setsuko, Professor, Musashi University, Committee MemberYAMAUCHI Hirotaka, Professor, Hitotsubashi University, Committee Member

Purpose of ‘Committee for Assessment of NHK from Perspective of Audiences’ and action plans for FY 2011

（Purpose）

The Committee for the Assessment of NHK from the Perspective of Audiences (the Assessment Committee) was established on April 1, 2009, as an advisory panel of the President of NHK (Japan Broadcasting Corporation). It is independent of the Executive Board of NHK so as to objectively assess NHK’s activities.

The Assessment Committee first assigns itself to the task of studying the medium- and The Assessment Committee first assigns itself to the task of studying the medium and long-term role NHK should assume as a public broadcaster. Then it develops a set of assessment yardsticks and items on its own. Finally, it enters into the process of assessment with an emphasis on the “outcome” (e.g., scrutinizing the outcome of NHK efforts from the perspective of audiences). However, outcome-based assessment has its own limitation, given that NHK’s activities are not entirely visible to audiences (e.g., highly specialized R&D endeavors and the extent of staff “activation,” etc.). As a complementary step, some assessment approaches take into account “output” (the extent of relevant activities on the part of NHK), but even in such a case, the Assessment Committee holds fast to the principle of emphasizing audiences’ standpoint.

The Assessment Committee looks into and analyzes how audiences perceive NHK as of the end of March 2012, when fiscal 2011 ends, and palpably depicts the extent to which NHK lives up to audiences’ expectations.p p

Results of the Assessment Committee’s assessment of NHK are to be disclosed to the Executive Board of NHK and the public as well.

（Action plans for FY 2011)

As in fiscal 2009 and 2010, the Assessment Committee uses a set of assessment yardsticks and items of its own for its fiscal 2011 assessment of NHK.

As its three-year term comes to an end in fiscal 2011, it identifies challenges for NHK and offers approaches to solving them after scrutinizing three-year assessment results.

Role of Committee for Assessment of NHK from Perspective of Audiences

Business plans Input Output Outcome

・Setting goals・Preparing measures

・Management resources deployed

・Results of measures ・Audiences’ responses

The whole of NHK Audiences

NHK Assessment Committee from Perspective of Audience

Depicting NHK in a palpable way based on assessment yardsticks (perception of NHK) and assessment resultsConveying assessment results

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Assessing outcome from audience perspective

p

Grasping audiences’ expectations, needs and

opinions

Grasping activities

Main Assessment Committee activities in FY 2011

(1) Assessment Committee’s surveys and inspections

① Audience perception survey

To learn audiences’ perception of NHK, the Assessment Commitment conducted a nationwide survey in March 2012, using a set of assessment yardsticks developed on its own. The survey, employing the two-stage stratified random sampling method, covered 3,600 men and women aged 16 and over through the interviewing method and the placement method (questionnaires distributed). Valid responses amounted to 2,001 in the interviewing

i h th 1 888 lid i th l t th d Th lid t 55 6%version, whereas there were 1,888 valid responses in the placement method. The valid response rates were 55.6% for the former and 52.4% for the latter.

② Media usage online survey

A nationwide online audience survey was carried out in November 2011 to grasp the latest state of audiences’ media usage and what services they want local NHK stations to provide. The web-based survey covered men and women aged 16 and over with approximately 2,000 valid responses returned.

③ Survey of NHK program monitors③ y p g

The Assessment Committee held a web survey of NHK program monitors in February 2012 with 553 of them responding.

④ Survey of broadcasting technology experts

To learn what opinions experts with broadcasting technology savvy have vis-à-vis NHK, the Assessment Committee approached members on the Broadcasting Technology Research Committee of the NHK Science & Technical Research Laboratories (STRL) and the NHK Broadcast Technology Council. The Assessment C itt t ll t t d 28 f th b il f i il il d fi ll i d f 16Committee actually contacted 28 of them by mail, facsimile or e-mail and finally received answers from 16 members.

⑤ Survey of NHK employees

In February 2012, the Assessment Committee had an ASP.net web survey—a method in which respondents access the survey server and follow instructions to provide answers—of NHK employees. As of February 1, 2012, NHK had a total of 10,396 employees, excluding those who were on loan to other entities or assigned abroad. A total of 8,198 employees, or 78.9% of NHK’s staff returned valid responses.

⑥ Sessions to exchange opinions with NHK executive officers

The Assessment Committee held meetings in July 2011 and in March 2012 with the Executive Vice President and Managing Directors of NHK to exchange opinions.

⑦ Inspections of local NHK stations

Members of the Assessment Committee visited the NHK Hiroshima Broadcasting Station in December 2011 and the NHK Yamaguchi Broadcasting Station in January 2012.

⑧ NHK Assessment Study Group

The Assessment Committee has set up the NHK Assessment Study Group with a view to having it make further in-depth studies of the value NHK creates as a public broadcaster and producing suggestions useful for enhancing audiences’ appreciation of NHK.

(2) The Assessment Committee utilizes some existing NHK information, including:

Reports on audience services

“ i” ll 2011NHK “Fureai” call center report 2011

Quarterly business reports

Nationwide audience rating surveys

Nationwide media usage surveys, etc.

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Assessment yardsticksAssessment yardsticks

Two pillars of audience trustand eight yardsticks

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Outline of assessment yardsticks: Two pillars of audience trust and eight yardsticks

Two pillars of audience trust in NHK—trust in broadcasting and trust in management NHK continues to exist as a public broadcaster, dedicated to serving the public, thanks to the trust in

Two pillars of audience trust

p , g p ,it of audiences receiving broadcasting services NHK create with license fees paid by audiences. From this point of view, the Assessment Committee regards audiences’ “trust” as the fundamental worth of NHK as expressed in the form of their assessment of the broadcaster.

The Assessment Committee assesses both NHK’s broadcasting services and every aspect of its activities supporting broadcasting operations. To that end, it looks into audiences’ “trust in broadcasting” as regards NHK’s broadcasting services and audiences’ “trust in management” of NHK with respect to activities across the whole of NHK.

Eight assessment yardsticks

Five assessment yardsticks for “trust in broadcasting”

・ Independence and impartiality

・ High quality

・ UsefulnessA di f i dli

…Is NHK making efforts to uphold its autonomy and independence and keep diverse and multi-dimensional value systems in place?

…Is NHK exerting itself to provide services of high quality and high dignity?

…Is information easily accessible and useful in livelihoods?A NHK’ i f i dl t di d id l d?

Three assessment yardsticks for “trust in management”

・ Audience-friendliness・ Contributions to society

…Are NHK’s services friendly to audiences and widely used?…Are NHK’s services contributing to the development of various

parts of society?

・ Integrity and transparency

・ Economy, efficiency and effectiveness

・ Response capability and flexibility

…Is NHK sincerely acting and keeping accountability in response to audience feedback and requests?

…Is NHK cost-effective enough to yield many achievements as possible?

…Is the structure of NHK flexible enough to respond to changes in audiences’ requests and its overall environment?

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flexibility audiences requests and its overall environment?

Diagram of assessment yardsticks: Two pillars of audience trust and eight yardsticks

Trust in broadcasting

Independence and impartiality

Autonomy and independenceFairness and impartialityDiversity-based programming

Pillars of assessment Assessment yardsticks Assessment items

Speedy, accurate news coverageConscientious newsgathering and programming Novelty and creativityHolding to journalistic principlesKindheartednessBroadcasts of high dignity

High Quality

Speedy, accurate emergency/disaster information UsefulnessProvision of livelihood-related information Provision of learning opportunitiesProvision of domestic and international newsDevelopment/provision of user-friendly services

Audience-friendliness Palpable broadcastsProvision of inspiring broadcastsUpdates on latest trendsEntertainment

Sharing information about social issues

Contributing to regional/community development

Contributing to development of culture and art

Archiving information for future generations

Contributions to society

Archiving information for future generations

Contributing to broadcasting technology progress

Providing news/information worldwide

Promoting digital switchover

Trust in management

Integrity and transparency AccountabilityMechanisms to reflect audience feedbackRobust compliance programs

Employee activation

Improving VFM*

Prompt decision-making and implementationEfficient and effective operations and services

Economy, efficiency and effectiveness

Response capability d fl ibilit

Environmental management

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p yand flexibility Long-term organization design/HR development

Long-term budget/project planningCrisis management

（*） VFM (value for money) means the outcome that is worth the cost. The VFM method is used to measure whether or not the VFM profile of the results of NHK’s efforts matches the costs the broadcaster pays.

Basic policy of assessment and assessment methodology

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Basic policy of assessment:Assessing the extent to which NHK lives up to audiences’ expectations

The Assessment Committee assesses whether NHK lives up to audiences’ expectations or whether the results are beyond their expectations.

Assessment scores are expressed in a 1-to-5 rating scale for “pillars of assessment,” “assessment yardsticks” and items on the “assessment checklist.”

According to the assessment criteria of the Assessment Committee, an assessment rating of 3 (necessary level) out of 5 indicates that there is no problem in providing broadcasting services as a public broadcaster.

A rating of 4 points (sufficient level) assigned by the Assessment Committee indicates that NHK’s services sufficiently live up to audiences’ current expectations and that, therefore, NHK deserves being recognized as a highly performing public broadcaster.

The highest rating of 5 (outstanding level) indicates that NHK creates trailblazing value e g est at g o 5 (outsta d g eve ) d cates t at N c eates t a b a g va ueaudiences have not recognized its worth yet.

Definition of ratings

Performing almost in line with

expectations

Performing below

expectations

Performing above expectations

as a trailblazerDefinition of ratings

● ●● ● ●

１ ２ ３ ４ ５Rating scale

▲Necess

▲Su

fficie

▲Ou

tstan

Levels as a public broadcaster ary

ent

nd

ing

broadcaster

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Assessment methodology:‘Base score’ set to reflect audience survey findings; Assessment Committee adjust final scores as required

The assessment process begins with the assessment of “items on the checklist” and then deals with “assessment yardsticks” before referring to “pillars of assessment.”

In assessing those items included in the assessment checklist, the Assessment Committee sets a “base score” for each of them and makes certain positive or negative adjustments to those “base scores” as required.

“Base scores” are worked out based on “expectations fulfillment rates (fill rates)” that become p ( )known in the audience survey.

Expectations fill rate ＝Expectations*

Fulfillment**

*）The term “expectations fulfillment rate” refers to the portion of those who answer in the audience survey “I have definite expectations” or “I have somewhat of expectations ”

Base scores of 1 to 5 points are assigned to each item on the checklist, depending on the quotients or fill rates.

audience survey I have definite expectations or I have somewhat of expectations. **）The term “fulfillment” refers to the portion of those who answer in the audience survey think “NHK lives up to expectations” or “NHK lives up to expectations more or less.”

How to work out “base scores”

Expectations fill rates ● ●●

≦５０％ ７５％ １００％

● ●● ● ●１ ２ ３ ４ ５

Base scoresIn this 1-to-5 rating scale, scores notch up or down with the minimum unit being 0.1.

● ●● ● ●

※ As for the assessment yardsticks regarding audiences’ “trust in management,” the extent of “expectations” and that of “fulfillment rates” stem solely from the audience survey. This is because the Assessment Committee has taken into consideration the fact that audiences do not necessarily have sufficient access to various kinds of management that would otherwise have been essential for thorough assessment in line with each assessment yardstick. Therefore, in the category of “trust in management,” “base scores” for assessment items are worked out through the across-the-board application of “expectations fulfillment rates” found in the relevant assessment yardsticks to the assessment items clustered with those assessment yardsticks

The Assessment Committee’s numerical rating adjustments are essential as a complementary measure to make NHK’s activities better reflected in the assessment outcome, considering that such activities are not necessarily fully visible to audiences. The Assessment Committee’s rating adjustments are limited to ±0.5 points or less.

The assessment of each assessment yardstick is carried out by comprehensively assessing the

items clustered with those assessment yardsticks.

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The assessment of each assessment yardstick is carried out by comprehensively assessing the relevant assessment items.

The assessment of each pillar of assessment is carried out by comprehensively assessing the relevant assessment yardsticks.

≪FY 2011 assessment results≫

FY 2011 assessment results

Trust in broadcasting and management

(Summary)

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FY 2011 assessment resultsTrust in broadcasting: 3.8 pts. (3.8 pts. in FY 2010 / 3.6 pts. in FY 2009)

Trust in management: 2.6 pts. (2.7 pts. in FY 2010 / 2.5 pts. in FY 2009)

The overall rating for audiences’ trust in broadcasting in fiscal 2011 was unchanged from fiscal 2010, but that pertaining management fell slightly. As for audiences’ trust in broadcasting and management, there was a slight downside trend in

audiences’ expectations and their perception that NHK has actually lived up to their expectations.

The rapidly changing environment surrounding media and a change in Japan’s social circumstances in the wake of the 2011 Great East Japan Earthquake have prompted audiences’ so-called media behaviors to diversify further and get more sophisticated Such a phenomenon has impactedbehaviors to diversify further and get more sophisticated. Such a phenomenon has impacted audiences’ assessment of NHK.

TRUST IN BROADCASTING: NHK’s profile in terms of “usefulness” scored a high rating of 4 out of 5 points. But the ratings for “high quality” and “contributions to society” decreased. The rating for “development/provision of user-friendly services” in the category of “usefulness” stood

at 4.3, up 0.4 points from 3.9 in FY 2010., p p

The ratings for “high quality” and “contributions to society” saw a 0.1-point fall each from fiscal 2010. The rating for “contributions to regional/community development” suffered a sharp year-on-year drop of 0.4 points from 3.1 to 2.7.

TRUST IN MANAGEMENT: The rating for “integrity and transparency” improved, but those for “economy, efficiency and effectiveness” and “response capability and flexibility” went down. There was a fall from fiscal 2010 in the portion of people having a positive image of NHK citing

potential for sustainable growth because of its “competent human resources,” “technological strength” and “innovation,” among others. Presumably, the decline in turn had an adverse effect on audiences’ assessment of NHK in terms of “response capability and flexibility” and “economy, efficiency and effectiveness.”

Employees of NHK do not necessarily think the Executive Board of NHK and the Board of Governors of NHK make decisions in a timely and adequate manner. The survey findings indicate that NHKof NHK make decisions in a timely and adequate manner. The survey findings indicate that NHK employees think the decision-making process at the executive level has become less visible.

Ratings for “trust in broadcasting” Ratings for “trust in management”

[4.0,3.9]

[3.5,3.2]

[4.0,3.7]

[2.6,2.7]

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※ Figures in parentheses are ratings for fiscal 2010 (on the left-hand side) and those for fiscal 2009 (on the right-hand side).

[4.0,3.7][3.7,3.4] [2.8,2.5][2.6,2.3]

≪FY 2011 assessment results≫

FY 2011 assessment results

Trust in broadcasting

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Trust in broadcastingIndependence and impartiality: 3.5 pts.(3.5 pts. in FY 2010 / 3.2 pts. in FY 2009)

INDEPENDENCE AND IMPARTIALITY: The 2011 assessment rating for this category stood at 3.5 points, unchanged from fiscal 2010. Of the five assessment yardsticks for measuring audiences’ trust in broadcasting, this rating was the lowest. Audiences have become increasingly conscious of “independence and impartiality” of NHK’s news coverage and broadcasts especially since the Great East Japan Earthquake. On this occasion, NHK is requested to think anew of the meaning of “independence and impartiality.” Autonomy and independence: The rating concerning this is measured by assessing whether NHK carries out news

coverage, programming and editing activities without being influenced by any kind of pressure or interference. In fiscal 2011, NHK repeated a poor showing as to this particular area. The fact that everyone now has easy access to a diverse and wide variety of information has increased the importance for NHK to strengthen news coverage and programming endeavors on its own. Against this background, NHK should continue pursuing “autonomy and independence” as a public broadcaster. Fairness and impartiality: Audiences pay tribute to NHK to a certain extent as regards this area as they “notice the

keenness on the part of NHK staffers to provide impartial broadcasting services.” Diversity-based programming: NHK keeps taking a wide variety of audience requirements into consideration.

Evidence of this is the continuous popularity of NHK’s morning drama serials, also known as “Morning Drama. ” Audiences gave the nod to NHK’s revamping of its satellite broadcasting in April 2011 when it consolidated three

0 20 40 60 80 100

satellite channels into two. Audiences said the change makes the satellite channels differentiate clearly from each other. Educational TV: Meanwhile, in the eyes of audiences, the importance of the NHK Educational TV (ETV) has

continued declining since fiscal 2009. NHK should seriously look into possible facelift measures for the ETV section.

Ratings for “independence and impartiality” Importance of NHK channels to audiences(%)

76.2%

45.1%

25.7%

24 8%

75.7%

51.7%

75.9%

55.2%

0 20 40 60 80 100

General TV

Educational TV (ETV)

BS1

24.8%

27.4%

13.7%

18.4%

32.3%

18.4%

22.7%

28.6%

18.1%

20 0%

BS Premium

Radio 1

Radio 2

FM

24.2%

22.2%

21.6%

20.0%

22.8%

21.4%

19.4%

BS-1 (no longer in service)

BS-2 (no longer in service)

BS-hi (hi-vision) (no longer in service)

FY 2011

FY 2010

FY 2009

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※ The percentages represent the combined portions of those who answered the relevant channels are “important” or “somewhat important” to them.(Source) Audience surveys

※ The asterisk (*) indicates that questions were modified in fiscal 2010.

Trust in broadcastingHigh quality: 3.9 pts.(4.0 pts. in FY 2010 / 3.9 pts. in FY 2009)

HIGH QUALITY: The 2011 rating for “high quality” was still high at 3.9, but it posted a 0.1-point fall from 4.0 in fiscal 2010. Scores for three of the six assessment items in this category—“speedy, accurate news coverage,” “kindheartedness” and “broadcasts of high dignity”—improved and surpassed the “sufficient” level of 4.0 each. However, scores for “conscientious newsgathering and programming,” “novelty and creativity” and “holding to journalistic principles” dropped. Speedy, accurate news coverage: NHK has provided speedy and accurate coverage of not only events relating to the

Great East Japan Earthquake but also those in other parts of Japan and the rest of the world. Conscientious newsgathering and programming: It should be noted that NHK has continued winning many awards g g p g g g y

at home and abroad, a commendable feat that has become possible only after tireless efforts on the part of its staff. Even now, NHK continues its conscientious coverage of events relating to the Great East Japan Earthquake, providing a diverse variety of programs including new features. Novelty and creativity: NHK has employed a series of innovative programming solutions. For example, some NHK

news and information programs now focus on certain themes or trends in which audiences accessing program homepages show interest. Likewise, NHK has run a program linking universities worldwide to exchange views on issues of common interest. Nevertheless, such efforts have not borne fruit yet in terms of raising audience assessment. The Assessment Committee wants NHK to continue persevering efforts for novel and creative programming development that will entail improving audience appreciation. Holding to journalistic principles: NHK has been continuously dispatching reports on reconstruction efforts and

other developments in the areas stricken by the March 11, 2011, quake and tsunami for domestic and international audiences. NHK has also been closely following developments relating the Fukushima Dai-Ichi nuclear disaster. The Assessment Committee wants NHK to take advantage of the presence of a vast network of overseas news bureaus as a way of enhancing its journalistic strength. Kindheartedness: NHK provides news and other programs that encourage many people and undertakes R&D efforts

to develop audience-friendly broadcasting technology. The Assessment Committee wants NHK to further and broaden

Ratings for “high quality”

such efforts by keeping in mind the fact that there are a growing number of people who need a diverse variety of support resources. Broadcasts of high dignity: NHK has been providing broadcasting services in line with broadcaster discipline and

broadcasting ethics. The Assessment Committee wants NHK to improve audience-friendliness while always maintaining high dignity as a public broadcaster.

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※ Questions in those assessment yardsticks with an asterisk (*) were modified in fiscal 2010. The assessment item with two asterisks (**) –”novelty and creativity”—was newly added in fiscal 2010..

Trust in broadcastingUsefulness: 4.0 pts.(4.0 pts. in FY 2010 / 3.7 pts. in FY 2009)

USEFULNESS: The rating for “usefulness” stood at 4.0 in fiscal 2011, unchanged from fiscal 2010. One of the five assessment items—“speedy, accurate emergency/disaster information”—remained very high. Compared with fiscal 2010, the rating for “development/provision of user-friendly services” was up and that for “provision of learning opportunities” was unchanged. The ratings for “provision of “livelihood-related information” and “provision of domestic and international news” declined. Speedy, accurate emergency/disaster information: NHK has improved its emergency and disaster coverage and

broadcasting systems in preparation for future emergencies and disasters by reviewing its services relating to the Great East Japan Earthquake and thoroughly revamping its emergency earthquake and tsunami reporting policyEast Japan Earthquake and thoroughly revamping its emergency earthquake and tsunami reporting policy. Provision of livelihood-related information: To enhance programs featuring livelihood-related information, NHK

launched new ones, including “Asaichi” (Morning Market), a weekday morning show, and “Sakidori” Trends & Business, a Sunday morning show. In this regard, as there have been some bitter viewer reactions, NHK should be careful enough to maintain a well-balanced programming policy. Provision of learning opportunities: NHK has revamped various programs catering to the needs of children or young

viewers and embarked on a new series of Japanese lessons for foreigners. But overall audience satisfaction levels regarding “educational programs” tend to decline. NHK should think of what to be done vis-a-vis educational programs on TV in an environment where people now have a great variety of learning tools elsewhereon TV in an environment where people now have a great variety of learning tools elsewhere. Provision of domestic and international news: In addition to the existing daily news programs, NHK has either

launched or reinforced daily programs on BS 1 to air international news and related “fresh” information. Viewers have requested that NHK expand those programs’ regional coverage. Provision of user-friendly services: NHK has strengthened Internet services, including “NHK NEWSweb,” and

improved its multi-device service infrastructure. As for “NHK on Demand,” a new paid video-on-demand service to retrieve past NHK programs from an archive, the number of subscribers has been on the rise, but the service’s revenue has stopped short of reaching an annual target. NHK should define and refine the purpose of each service from NHK’s overall strategic point of view.overall strategic point of view.

Ratings for “usefulness” Educational TV: Audience satisfaction

0 1 2 3 4 5

4.6

3.9

3 8

4.6

4.0

4.3

3.7

Speedy, accurate emergency/disaster

information*

Provision of livelihood-related information* 34.7%

0% 20% 40% 60% 80% 100%

3.8

3.6

4.3

3.8

3.8

3.9

3.6

3.4

Provision of learning opportunities

Provision of domestic and international news*

Development/provision of user friendly services

39.8%

38.4%

Educational programs

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※ The asterisk (*) indicates that questions were modified in fiscal 2010.

※ Figures for “audience satisfaction” represent the combined portions of those who answered they felt either “satisfied” or “satisfied a little.”(Source) Audience surveys

3.5user-friendly services

FY 2011 FY 2010 FY 2009 FY 2011 FY 2010 FY 2009

Trust in broadcastingAudience-friendliness: 3.7 pts.(3.7 pts. in FY 2010 / 3.4 pts. in FY 2009)

AUDIENCE-FRIENDLINESS: The rating for “audience-friendliness” remained unchanged from fiscal 2010—at 3.7 points. There was a yearly rating improvement in two of the four assessment items—“palpable broadcasts” and “entertainment.” But the ratings for “provision of inspiring broadcasts” and “updates on latest trends” decreased. Palpable broadcasts: The rating for this category rose in fiscal 2011. NHK received favorable viewer reactions

acknowledging easy-to-understand visual presentations of scientific and technical mechanisms of seismicity, tsunami and nuclear meltdowns, among other disastrous events. Provision of inspiring broadcasts: Despite a year-on-year rating fall, NHK has received favorable comments from

viewers, saying they were heartened, moved or impressed by NHK programs—dramas like the “Morning Drama” , y g y , p y p g gserials and “The Great Summits,” a series introducing spectacular scenes of the world’s famous mountains such as Mt. Everest. Viewers have also admired NHK’s coverage of disaster scenes because the broadcaster has been considerate of people in such areas. Updates on latest trends: NHK broadcast the FIFA Women’s World Cup 2011, which was clinched by “Nadeshiko

Japan (Japan’s national soccer team).” It has also aired timely programs featuring “people in the news” like Steve Jobs, the late former CEO of Apple Inc., and highly newsworthy events. NHK has been applauded by audiences for programs such as “NHK Special,” “Today’s Close-up”—a weekday nightly in-depth news analysis program—and “ETV Special” programs on NHK Educational TV, all of which regularly focus on high-profile themes. However, the rating did not improve. Entertainment: NHK has received favorable audience comments for its music programs designed to encourage people

in disaster-stricken areas by entertaining them with their favorite songs. Audience satisfaction also improved with respect to entertainment program genres such as “music and theatrical shows” and “variety shows.” NHK events: Various NHK events have resulted in higher audience satisfaction, proving that such public events are an

effective approach to getting audiences further on familiar terms with NHK and accessing the young generation as well.

Ratings for “audience-friendliness”

※ The asterisk (*) indicates that questions were modified in fiscal 2010.

Audience satisfaction comparison by program genre NHK events: audience satisfaction

18 (Source) NHK(Source) Audience surveys

Trust in broadcastingContributions to society: 3.9 pts.(4.0 pts. in FY 2010 / 3.7 pts. in FY 2009)

CONTRIBUTIONS TO SOCIETY: The rating for NHK’s “contributions to society” in fiscal 2011 stood at 3.9, compared with 4.0 in fiscal 2010. The decline reflects a year-on-year decrease in the ratings for four of the seven assessment items in this category—“sharing information about social issues,” “contributing to regional/community development,” “archiving information for future generations” and “providing news/information worldwide.” Sharing information about social issues: NHK has offered to share information about social issues with a diverse

variety of viewers and listeners via news and documentary programs. However, the rating regarding this assessment item remained low in fiscal 2011. Sharing information with audiences is a critically important prerequisite to serve as a public broadcaster. The Assessment Committee wants NHK to strengthen its commitment to providing programs featuring various social issues from NHK’s viewpoints. Contributing to regional/community development: The relevant rating in fiscal 2011 fell by 0 4 points from fiscal Contributing to regional/community development: The relevant rating in fiscal 2011 fell by 0.4 points from fiscal

2010 to be on a par with the 2009 level. This rating remained the lowest among the seven assessment items for “contributions to society.” In the audience survey, five questions relating to “contributions to regional/community development” were questioned. The assessment score for one of the questions—“Is NHK providing broadcasting services that help protect local people’s livelihoods from disasters, incidents or accidents?”—turned out to be high. But the remaining four were rated low (for details, refer to pp. 36-38). Contributing to development of culture and art/archiving information for future generations: NHK has

strengthened services relating to these categories. It has aired a number of programs featuring a wide variety of cultures and arts and staged related events. It has also improved and enhanced its archives such as “Michishiru,” an NHK archive that enables instant mapping-based access to TV contents featuring regional landscapes. As part of such efforts, the “the Great East Japan Earthq ake Archi e” has been la nchedGreat East Japan Earthquake Archive” has been launched. Contributing to broadcasting technology progress: On top of applied research in the “Super Hi-Vision” system, NHK

has showcased its “hybridcast” technology internationally, aiming to set a global standard for smarter TVs combined with the Internet. NHK is expected to keep spearheading the broadcasting sector’s quest of broadcasting technology research and development endeavors and present the latest R&D achievements to domestic and international peers. Providing news/information worldwide: The number of households abroad that are technically accessible to NHK

World TV continued to rise substantially in fiscal 2011 following a gain in fiscal 2010. Its programming has also improved. Nonetheless, the number of households actually viewing the round-the-clock English language news channel has hardly increased. NHK needs to develop more attractive content rich in originality and campaign further to raise overseas audiences’ awareness of the channel. Promoting digitalization: On July 24, 2011, Japan completed a nationwide digital switchover without major hitches,

except for the three Tohoku prefectures affected by the quake and tsunami where the digital transition was completed on March 31, 2012. The project can be described as a major success on the part of the Japanese broadcasting industry, including NHK, which undoubtedly played a leading role.

Ratings for “contributions to society” Audience expectations fulfillment5 questions about “contributions to society”

(%)

19

※ The asterisk (*) indicates that questions were modified in fiscal 2010.

(Source) Audience surveys

≪FY 2011 assessment results≫

FY 2011 assessment results

Trust in management

20

Trust in managementIntegrity and transparency: 2.8 pts.(2.6 pts. in FY 2010 / 2.7 pts. in FY 2009)

INTEGRITY AND TRANSPARENCY: The rating for this category rose to 2.8 in fiscal 2011. Accountability: In the case of NHK, the term “accountability” has two meanings—promotion of the license fee system

among audiences and management transparency. The erosion of audience support for the license fee system—the system to share the cost of running a public broadcasting service among audiences—has finally halted. On the other hand, management of NHK has not yet fully lived up to audiences’ expectations for due disclosure of and adequate explanations about management information. In lieu of simply disclosing management information, the Executive Board of NHK and the Board of Governors of NHK are obliged to talk directly to audiences to obtain the understanding of the public. Mechanisms to reflect audience feedback: Over the past three years, NHK has tended to put emphasis on its respect for p y , p p p

audiences’ viewpoints. However, there were signs that NHK became less enthusiastic about this particular policy in the latest year. The findings of the Assessment Committee’s survey of NHK employees show an increase in the portions of employees referring to measures to “improve awareness on the part of management” and “improve awareness on the part of managerial staff.” Robust compliance programs: NHK has continued to be plagued by irregularities. Whereas the portion of those who

answered in the audience survey of fiscal 2009 that they would refuse to pay license fees to demand NHK’s remorse declined, the comparable portion has not been shrinking since fiscal 2010. Further efforts are necessary to address the existence of discontented viewers. Environmental management: Despite some improvement in NHK’s energy consumption per unit, the organization has

not attained its overall annual energy saving goal. In the summer of 2011 when the government restricted electricity consumption in some parts of Japan, including Tokyo, NHK, too, reduced electricity consumption while keeping its broadcasting services from being affected. NHK keeps the across-the-board energy-saving program in place. Considering various factors such as the country’s energy supply and demand outlook in and beyond 2012, NHK should set a proper energy-saving goal, implement more energy-efficient equipment and rely more upon renewable energy.

Ratings for “integrity and transparency” Steps for more audience-oriented managementRatings for integrity and transparency Steps for more audience oriented management

（％）

2.8

2.5

2.5

0 1 2 3 4 5

Accountability

M h i 2.8

2.8

2.7

2.5

2.8

2 7

Mechanisms to reflect audience feedback

Robust compliance programs

2.8

2.7

2.7

2.6

p g

Environmental management

21

(Source) Employee survey

FY 2011

FY 2010

FY 2009 Parameter: the total number of employees who answered in the employee survey “NHK is not an audience-oriented organization” and “NHK is not an audience-oriented organization more or less.”

Trust in managementEconomy, efficiency and effectiveness: 2.5 pts.(2.8 pts. in FY 2010 / 2.5 pts. in FY 2009)

ECONOMY, EFFICIENCE AND EFFECTIVENESS: The rating for this category in fiscal 2011 decreased to 2.5 from 2.8 in the preceding year. Improving VFM: The rating fell to 1.71 in fiscal 2011 from 1.73 in fiscal 2010, reverting to the 2009 level. Prompt decision-making and implementation: The findings of the employee survey show a year-on-year decline in the

fiscal 2011 portions of employees answering that the Executive Board and the Board of Governors had “promptly” made decisions in an “adequate” manner. On the other hand, the portion of employees having “no ideas” rose sharply. Therefore, it is thought that the decision-making process at the Executive Board and the Board of Governors has become less transparent to NHK employees.

i di i h i l i h Efficient and effective operations and services: NHK is now proceeding with its 2012-2014 corporate plan with anelaborate monitoring and evaluation scheme attached. In tandem with the new plan, NHK has intensified its forward-looking management accounting practice. Also under way is an active review of operations of all of its departments and divisions. With respect to “prompt decision making and implementation” and “efficient and effective operations and services,” it is

necessary for NHK to make further efforts with a view to achieve improvement in a way visible to audiences.

Change in VFM of NHKRatings for “economy, efficiency and effectiveness”

3.5

2 0

3.5

3.5

0 1 2 3 4 5

Improving VFM

FY 2009 VFM＝ ＝1.71657.5 (billion yen)

1,122.6 (billion yen)

The CVM-based value generated by

NHK in FY20091

2.0

2.1

2.4

2.3

1.9

2.1

Prompt decision-making and implementation

Efficient and effective operations and services

FY 2010 VFM＝ ＝1 731,175.3 (billion yen)

The CVM-based value generated by

NHK in FY20091

Operating expenses in FY 20092

FY 2011 FY 2010 FY 2009

Have the NHK Executive Board and the Board of Governor made adequate decisions?

0% 20% 40% 60% 80% 100%

FY 2010 VFM＝ ＝1.73680.1 (billion yen)

Operating expenses in FY 20102

The CVM-based value generated by

NHK in FY20111

1 Th i l l ( t ) NHK t i t d b th f ll i

6.2

7.7

38.2

39.2

20.1

31.9

7.4

16.1

28.2

5.0

FY 2011

FY 2009

Y

FY 2011 VFM＝ ＝1.71677.3 (billion yen)

1,159.3 (billion yen)

Operating expenses in FY 20112

22

1 The numerical value (numerator) NHK generates a year is computed by the following calculation formula: (WTP unit value for terrestrial broadcasts) x12 (months) x(number of contracts for receiving terrestrial broadcasts) + (WTP unit value for terrestrial broadcasts + WTP unit value for satellite broadcasts) x12 (months) x (number of contracts for receiving satellite broadcasts as of end of fiscal year). Refer to Page 29 for details about WTP (willing to pay) estimates based on the contingent valuation method (CVM).2Annual expenses (denominator) are calculated as follows: (total operating expenses) + (depreciation) + (financial expenses) + (extraordinary expenses).(Source) Audience survey

Yes.

If anything, yes.

If anything, no.

No.

DK.(Source) Employee survey

Trust in managementResponse capability and flexibility: 2.5 pts.(2.6 pts. in FY 2010 / 2.3 pts. in FY 2009)

RESPONSE CAPABILITY AND FLEXIBILITY: The rating for this category dropped to 2.5 in fiscal 2011 from 2.6 in fiscal 2010. Employee activation: According to the findings of the 2011 employee survey conducted by the Assessment Committee,

NHK has retained high scores in terms of the liveliness of the workplace environment and employee passion. Yet, nearly 80 percent of its employees feel they are overloaded with work. An NHK survey, meanwhile, found NHK employees have a low level of enthusiasm about the future of the public broadcaster. The Assessment Committee wants NHK management to run the organization in a way of encouraging its employees to maintain a level of motivation and revamp the existing systems with a view to easing workload pressure. L t i ti d i /h (HR) d l t NHK d i f Long-term organization design/human resources (HR) development: NHK management deserves praise for

launching a new group in fiscal 2012 to facilitate the fusion of broadcasting and communications media. However, 48.9 percent of NHK employees surveyed by the Assessment Committee gave a negative reply to a question: “Do you think NHK’s structural changes and staff distribution practices are relevant to future changes in the environment surrounding the broadcasting industry?” In the 2009 survey, 51.0 percent of NHK employees had such a negative view. NHK needs to carry out future-oriented initiatives to review and improve its operations and services. Long-term budget/project planning: NHK employees have shown their understanding of and support for the public

broadcaster’s 2012-2014 corporate program. Nonetheless, given the low level of enthusiasm among its employees about the future of NHK, management needs to come up with a long-term vision besides the three-year corporate plan. Crisis management: NHK has been consolidating its emergency broadcasting capabilities in case of major disasters such

as a devastating earthquake occurring beneath the Japanese capital and similar Pacific quakes along central and southwestern Japan. Specifically, the NHK Osaka Broadcasting Station has strengthened its backup ability to function in support of Tokyo headquarters of NHK, while its broadcasting infrastructure in and around Tokyo, including information gathering, programming and transmission functions, has been strategically reinforced or deployed. NHK should continue thoroughly reviewing its emergency broadcasting services provided in the wake of the Great East Japan Earthquake. In such a process, management should get feedback from its staff directly involved in emergency broadcasting services and review NHK’s reporting lines and extreme burdens on employees. As such, NHK should further improve its crisis management measures.

2.4

0% 20% 40% 60% 80% 100%

g

Ratings for “response capability and flexibility” Do you feel you are overloaded with work?

2.6

2.7

0 1 2 3 4 5

Employee activation

27.4 51.7 15.9

2.7

Yes. Badly. If anything, yes.

If anything, no. Not at all.

2.4

2 5

2.6

2.4

2.1

activation

Long-term organization design/HR

development

DK.

（Source）Employee survey

2.5

2.5

2.6

2.6

2.3

2.3

Long-term budget/project

planning

Crisis management

23

2.3

FY 2011

FY 2010

FY 2009

≪Overview of Assessment Committee activities in 2009-2011≫

Assessment of NHK from perspective of audiences

Overview of three-year assessment results

24

Overview of three-year assessment resultsPillars of assessment

“Trust in broadcasting” and “Trust in management”: The overall ratings for the two pillars of assessment have hardly improved. Over the last three years, the ratings for “trust in broadcasting” and “trust in management” have

edged up—from 3.6 to 3.8 and from 2.5 to 2.6, respectively. However, the rating for the former in fiscal 2011 stood at 3.8, unchanged from fiscal 2010, whereas the rating for the latter in fiscal 2011 shed 0.1 points from fiscal 2010.

It should be particularly noted that the rating for “trust in management” failed to reach a scale of It should be particularly noted that the rating for trust in management failed to reach a scale of 3 or the “sufficient level” under the assessment criteria set by the Assessment Committee. With audiences now looking at NHK with an increasingly critical eye and their standpoint on the license fee system changing, it is necessary for management of NHK to make more efforts than ever to have audiences’ assessment of NHK improve.

Ratings for “trust in broadcasting” and “trust in management”

3.6 3.8 3.84

In general audiences’ expectations of NHK have been on the decline

2.5 2.7 2.6

0

1

2

3

Trust in broadcasting Trust in management

FY 2009

FY 2010

FY 2011

In general, audiences expectations of NHK have been on the decline. The overall mean levels for audiences’ expectations of NHK and those for expectation

fulfillment have shown a downward trend over the last three years. This is a worrying trend indicating that the importance of NHK in Japanese society is waning.

In recent years, consumers have been offered an increasingly diverse variety of platforms for obtaining information—there has been a dramatic increase in the volume of information available to consumers, though the terrible gap in the quality of information has inevitably become apparent The circumstances surrounding society have been drastically changing in thebecome apparent. The circumstances surrounding society have been drastically changing in the wake of the Great East Japan Earthquake, the nuclear accident in Fukushima and the global economic doldrums, among others. The decline in audiences’ expectations of NHK is thought to have reflected the diversification and sophistication of consumers’ expectations of what they expected to be offered by media.

Overall mean levels of audiences’ expectations of NHK

Overall mean rates of expectation fulfillment

(%) (%)

79.3 77.6 76.1

72.7 71.869.1

2030405060708090(%)

65.3 66.6 64.9

48.1 49.447.7

2030405060708090

Broadcasting

(%)

25

※ The overall mean levels for expectations of NHK and expectation fulfillment in the category of “trust in broadcasting” represent the average rates of audiences’ expectations as expressed in those assessment items relating to “trust in broadcasting.” Likewise, the overall mean levels for expectations and expectation fulfillment in the category of “trust in management” represent the average rates of audiences’ expectations as expressed in those assessment yardsticks relating to “trust in management.”(Source) Audience survey

010

FY 2009 FY 2010 FY 2011 01020

FY 2009 FY 2010 FY 2011

Management

Overview of three-year assessment resultsTrust in broadcasting (1)

“Independence and impartiality,” “usefulness and audience-friendliness”: The ratings for these categories have improved, but some problems associated with them have emerged. It is praiseworthy that the ratings for “independence and impartiality” have improved amid the

public’s growing needs for fair and just information seen following the Great East Japan Earthquake. However, the ratings for “autonomy and independence,” an assessment ingredient of the “independence and impartiality” category, have remained low.

The rise in the ratings for “usefulness” is thought to reflect audiences’ appreciation of NHK’s enhanced digital infrastructure such as Internet-based services and data broadcasting. The improvement coincides with the fact that a majority of NHK employees believe the public broadcaster has met audiences’ expectations.

The improvement of the ratings for “audience-friendliness” reflects audiences’ appreciation of NHK’s new programming efforts aimed at breaking with the time-honored image of NHK.

Since fiscal 2009, audiences have seen a constant decline in the importance of NHK Educational TV (ETV). Also, audiences’ satisfaction with ETV programs has been on the decrease. NHK, therefore, should redefine the raison d’etre of ETV and its learning methods.

Changes in ratings for “trust in broadcasting” and NHK employees’ perception

(Source) Employee survey (for the chart on the right-hand side)

Pillars of assessment Assessment yardsticks FY 09 FY 10 FY 11

１．Independence and impartiality 3.2 3.5 3.5 0.3 59.7２．High quality 3.9 4.0 3.9 0.0 66.6３．Usefulness 3.7 4.0 4.0 0.3 73.8４．Audience-friendliness 3.4 3.7 3.7 0.3 61.5５．Contributions to society 3.7 4.0 3.9 0.2 71.7

FY 2009-11changes

Portions of staff believing NHK hasmet audiences’ expectations (%)

Trust inbroadcasting

Ratings

“Speedy, accurate emergency/disaster information,” “promoting digital switchover,” “development/promotion of user-friendly services,” and “palpable broadcasts”: NHK has made a good showing in these categories. Of all the assessment items, the highest level of audiences’ expectations of NHK services has

been recorded in the category relating to “speedy, accurate emergency/disaster information.” When the country was hit by the Great East Japan Earthquake, NHK did play an extremely y y p q p y yimportant role as a public broadcaster to help protect human lives and properties.

With regard to its role in “promoting digital switchover,” NHK has contributed to the complete shift to digital terrestrial television services without major troubles.

The ratings for “development/provision of user-friendly services have improved sharply thanks to its active drive for the diffusion of what NHK dubs as “3-Screens” smart services, distributing its content on television, personal computers and mobile communications systems.

To provide more “palpable broadcasts,” NHK has more often and effectively utilized computer graphics technology as well as various types of models and reflected suggestions from a wide variety of experts in news and other programs.

26

Overview of three-year assessment resultsTrust in broadcasting (2)

“Contributing to regional/community development,”“novelty and creativity,” “sharing information about social issues,”“autonomy and independence” and “entertainment”: The ratings for these categories have remained low. The rating for “contribution to regional/community development” once showed an

improvement in fiscal 2010 but its 2011 showing fell back to the 2009 level. NHK has been undertaking a nationwide campaign titled “Hosokyoku no Chikara” (Power of the Broadcasting Station) to help revitalize regional areas. Audiences have begun appreciating this effort. Yet, the campaign has not yet borne fruit fully.

NHK’s endeavors with regard to “novelty and creativity” have not yet resulted in heightening audiences’ appreciation. The Assessment Committee wants NHK to keep making an all-out effort in seeking further “novelty and creativity” to gain audiences’ recognition.

For “sharing information about social issues,” the Assessment Committee wants NHK to closely follow social developments from a broad viewpoint and dig issues worth reporting inclosely follow social developments from a broad viewpoint and dig issues worth reporting in programs of originality so that the public broadcaster will be able to serve as a forum for various audience strata and thus help revitalize society.

As for “autonomy and independence,” NHK needs to strengthen newsgathering and programming endeavors of originality to meet the increasingly sophisticated needs of audiences. NHK also needs to give due heed to the fact that matters concerning management of the organization affects the assessment of it in terms of “autonomy and independence.”

To raise audiences’ recognition of NHK in terms of “entertainment ” the public broadcaster To raise audiences recognition of NHK in terms of entertainment, the public broadcaster should continue a host of programs aimed to encourage residents in the areas stricken by the Great East Japan Earthquake. It also should keep advancing and refining its programming expertise to meet the entertainment-related needs of different generations.

Changes in ratings for “trust in broadcasting”

Assessment yardsticks Assessment items FY 09 FY 10 FY 11

1-1 Autonomy and independence 2.8 3.0 3.2 0.4１．Independence and

Ratings FY 2009-11changes

y p1-2 Fairness and impartiality* 3.4 3.7 3.6 0.21-3 Diversity-based programming 3.3 3.7 3.7 0.4

２．High quality 2-1 Speedy, accurate news coverage* 4.4 4.4 4.4 0.02-2 Conscientious newsgathering and programming* 4.1 4.3 4.2 0.12-3 Novelty and creativity** － 3.0 2.9 －2-4 Holding to journalistic principles* 3.1 3.5 3.4 0.32-5 Kindheartedness 4.0 4.2 4.2 0.22-6 Broadcasts of high dignity* 4.2 4.3 4.4 0.2

３．Usefulness 3-1 Speedy, accurate emergency/disaster information* 4.3 4.6 4.6 0.33 2 Provision of livelihood related information* 3 7 4 0 3 9 0 2

pimpartiality

3-2 Provision of livelihood-related information 3.7 4.0 3.9 0.23-3 Provision of learning opportunities 3.6 3.8 3.8 0.23-4 Provision of domestic and international news* 3.4 3.8 3.6 0.23-5 Development/provision of user-friendly services 3.5 3.9 4.3 0.84-1 Palpable broadcasts 3.7 3.8 4.0 0.34-2 Provision of inspiring broadcasts 3.7 4.0 3.9 0.24-3 Updates on latest trends 3.2 3.7 3.5 0.34-4 Entertainment* 3.1 3.3 3.4 0.35-1 Sharing information about social issues* 2.7 3.2 3.0 0.35-2 Contributing to regional/community development 2.8 3.1 2.7 -0.1

４．Audience-friendliness

５．Contributions tosociety

27

※ In the “ratings” column, scores of 4.0 or more are expressed in white letters against colored backgrounds, while the cells containing scores of 3.4 or less are meshed. The “FY 2009-11 changes” column shows the 2009-2011 differences with the sections posting a three-year gain of 0.3 points or more expressed in white letters against colored backgrounds.

5-3 Contributing to development of culture and art 4.0 4.2 4.2 0.25-4 Archiving information for future generations 4.2 4.4 4.3 0.15-5 Contributing to broadcasting technology progress 4.6 4.7 4.7 0.15-6 Providing news/information worldwide 3.7 3.8 3.7 0.05-7 Promoting digital switchover* 4.0 4.6 4.6 0.6

Overview of three-year assessment resultsTrust in management

Over the three years, the ratings for “integrity and transparency” and “response capability and flexibility” have improved, but those for “economy, efficiency and effectiveness” have remained unchanged. Compared with fiscal 2009, the 2011 ratings for “integrity and transparency” and “response

capability and flexibility” went up by 0.1 points and 0.2 points, respectively. As for “response capability and flexibility ” audiences are thought to have gave higher scores to NHK for itscapability and flexibility,” audiences are thought to have gave higher scores to NHK for its high response capability shown following the Great East Japan Earthquake and a spate of innovative technology thrusts such as the enhancement of Internet and digital services.

The ratings for “economy, efficiency and effectiveness” have been unchanged for the recent three years. Although NHK has launched the reassessment of operations of all of its departments and divisions and enhanced the forward-looking managing accounting system, a long-term, continuous effort toward the improvement of “economy, efficiency and g , p y, yeffectiveness” is indispensable.

Regarding the “prompt decision-making and implementation” category, management of NHK should be mindful of the facts that its employees do not give management high marks as to the speed and adequacy of decision making and that the decision-making process has become increasingly invisible to employees.

Changes in ratings for “trust in management” and NHK employees’ perception

Pillars of assessment Assessment yardsticks FY 09 FY 10 FY 11

Ａ．Integrity and transparency 2.7 2.6 2.8 0.1 57.6Ｂ．Economy, efficiency and effectiveness 2.5 2.8 2.5 0.0 51.6Ｃ．Response capability and flexibility 2.3 2.6 2.5 0.2 50.3

FY 2009-11changes

Portions of staff believing NHK hasmet audiences’ expectations (%)

Trust inmanagement

Ratings

Changes in ratings for “trust in management”

(Source) Employee survey (for the chart on the right-hand side)

Assessment yardsticks Assessment items FY 09 FY 10 FY 11

A A t bilit 2 5 2 5 2 8 0 3

Ratings FY 2009-11changes

Ａ I t it d A-a Accountability 2.5 2.5 2.8 0.3A-b Mechanisms to reflect audience feedback 2.8 2.7 2.8 0.0A-c Robust compliance programs 2.7 2.5 2.8 0.1A-d Environmental management 2.6 2.7 2.8 0.2B-a Improving VFM 3.5 3.5 3.5 0.0B-b Prompt decision-making and implementation 1.9 2.4 2.0 0.1B-c Efficient and effective operations and services 2.1 2.3 2.1 0.0C-a Employee activation 2.4 2.7 2.6 0.2C-b Long-term organization design/HR development 2.1 2.6 2.4 0.3

Ｃ．Responsecapability and

Ａ．Integrity andtransparency

Ｂ．Economy,efficiency andeffectiveness

28

※The “FY 2009-11 changes” column shows the 2009-2011 differences with the sections posting a three-year gain of 0.3 points or more expressed in white letters against colored backgrounds.

g g g pC-c Long-term budget/project planning 2.3 2.6 2.5 0.2C-d Crisis management 2.3 2.6 2.5 0.2

p yflexibility

Overview of three-year assessment resultsWTP value of NHK’s broadcasting services

The monetary value audiences willing to pay (WTP) for broadcasting services provided by NHK has declined. The value of NHK’s broadcasting services—the amount audiences are willing to pay for such

services has been calculated, based on the findings of the fiscal 2011 audience survey. According to the computation, the 2011 WTP value per audience member for receiving terrestrial broadcasts stands at 1,899 yen per month, while the monthly WTP for satellite broadcasts amounts to 1,220 yen.* The value for terrestrial broadcasts is lower than that for fiscal 2010—the first year-on-year decline since fiscal 2005 when the WTP calculation based on the current method was launched.1

(*) The current monthly license fees are 1,345 yen for terrestrial services and 945 yen for satellite services.

The aforementioned decline is thought to have been caused by the worsening of socioeconomic conditions in Japan and the diversification and sophistication of audiences’ expectations among other negative factors A close analysis indicates that WTP levels areexpectations, among other negative factors. A close analysis indicates that WTP levels are sensitive not only to NHK’s broadcasts but also to the extent of audiences’ trust in management.

NHK plans to continue the WTP estimation in the years ahead. In doing so, NHK needs to improve the objectivity of its WTP calculation further and conduct multifaceted analyses of various WTP factors.

CVM-estimated WTP value of NHK (per audience member per month)CVM-estimated WTP value of NHK (per audience member per month)

348 443482

426 389136

127132

140 12573

4555

4837

86 6774 71

63

1,400

1,600

1,800

2,000FM

Radio 2

Radio 1

Educational TV588

299 344 379 373

1000

1200

1400

BS-hi (hi-vision)

BS-2

BS-1

BS Premium

1,8991,964

1,9221,8141,780

1,2201,268

1,2691,2691,245

（Yen） （Yen）

1,137 1,132 1,1781,279 1,284

348

400

600

800

1,000

1,200 General TV

632523 500 499 514

423 425 391 380

200

400

600

800BS1

The WTP value for each media is calculated by dividing the WTP sum by the media-by-media percentages of usage found in the audience surveys.(Source) Audience survey

1 In fiscal 2005, the NHK Promises Assessment Committee, which existed from fiscal 2005 to fiscal 2009, embarked on a project to estimate the monetary value of broadcasting services provided by NHK. The panel applied the contingent valuation method (CVM)（※）for the first estimation of the kind. The Committee for the Assessment of NHK from the Perspective of Audiences, which came into being in fiscal 2009, has taken over the CVM-based estimation project.

0

200

FY 2005FY 2007FY 2009FY 2010FY 2011

0

200

FY 2005FY 2007FY 2009FY 2010FY 2011

29

※CVM: The contingent valuation method (CVM) is a method used to assess the monetary value for goods and services that are not traded in an actual market by assuming that they are sold and brought in such a market. It is often used to establish the value of environmental amenities and public service. For example, the method is used to calculate the monetary value of public services like ambulance services—citizens are directly asked what the maximum amount they would be willing to pay for such services and how much they would demand for compensation for not receiving public services.

In the case of NHK, a “price” already is in place in the form of license fees, but it is a public service fee—it has not been determined in the process of dealing with audiences. Furthermore, unlike gas and electricity rates that are paid to use gas and electricity at home, license fees are not necessarily a charge paid for viewing or listening to broadcasts. Therefore, as a way to let audiences gauge the value of NHK’s broadcasts on their own, they are asked in surveys how much they would be willing to pay for NHK’s existing services. As such, the monetary value of NHK’s broadcasting services is measured based on the findings of those surveys. BBC of the U.K. and other public broadcasters abroad use similar methods to assess the value of their broadcasting services.

Overview of three-year assessment resultsToward the future (1)

NHK now is at a major turning point. It is increasingly important for NHK to equip itself with greater “response capability and flexibility.” The completion of the digital switchover means a further change in the landscape of media.

What is more, society is inevitably entering an era of reforms as the whole of society now has a greater sense of crisis due to the Great East Japan Earthquake and the world’s socioeconomic situation is less stable Against such a backdrop NHK has reached a turningsocioeconomic situation is less stable. Against such a backdrop, NHK has reached a turning point where the way the public broadcaster ought to be is being question, a situation where the organization needs to have greater “response capability and flexibility.”

Audiences’ assessment of NHK in terms of “response capability and flexibility” has improved over the recent three years. But its year-on-year comparison shows a decline in the rating from fiscal 2010 to fiscal 2011. In fact, the portion of audience members optimistic about NHK’s medium- and long-term sustain has been on the decline.

NHK employees show a certain level of understanding of the public broadcaster’s latest three-year corporate plan, but they have a vague sense of crisis and anxiety about the long-term future of the organization. Furthermore, not a few employees feel they are terribly overloaded with work.

Employee morale at NHK would inevitably decline should the situation in which employees, feeling anxious about the future, feel overloaded daily with work be left unattended too long.

f l d k h d di f di b h i hManagement of NHK also needs to seek the understanding of audiences by showing them what direction NHK will be heading in the medium and long term as a public broadcaster. It is increasingly necessary for NHK to create a new corporate vision and show it to the public at home and abroad.

NHK is still on the way of transforming itself into a highly efficient group. The A C i NHK b l i ff d l i i i fAssessment Committee wants NHK to bolster its effort toward total optimization of group management so as to maximize the value of the organization as a public broadcaster. NHK has been promoting an organization-wide structural reform to realize efficient group

management by realigning or consolidating its affiliate and introducing more competitive business practices for transactions with its affiliates. Anyway, it is halfway through the reform ffeffort.

NHK now is at a major turning point as a public broadcaster amid a changing social landscape. To maximize its value as a public broadcaster, it is increasingly necessary for NHK to reshape itself as a more mobile, efficient and effective group. The Assessment Committee wants NHK to spare no efforts in pursing the optimization of group management.

30

Overview of three-year assessment resultsToward the future (2)

Management of NHK is recommended to spearhead the organization’s effort to implement corporate measures sensitive to the perspective of audiences. In its “Corporate Plan for 2009-2011, NHK emphasized its commitment to audiences. It has

since made every effort to reflect the perspective of audiences in its operations and services. The Assessment Committee’s employee survey found that employees think organization-wide efforts conscious of the perspective of audiences have made progressefforts conscious of the perspective of audiences have made progress.

Meanwhile, an NHK survey showed a constant improvement in employee satisfaction from fiscal 2007 to 2010 as to “management with due respect to the perspective of audiences.” The same category posted a year-on-year decline in fiscal 2011.

There has been progress in its endeavors to reflect audiences’ viewpoints in its operations and services little by little. The Assessment Committee wants NHK to spare no effort in enhancing audience-oriented operations and services. In this connection, management of NHK should

1.1

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

audience oriented operations and services. In this connection, management of NHK should keep taking the initiative in the effort.

Changes over three years in extent of NHK’s emphasis on audience-oriented operations

19.1 53.9 25.2

0.6

Parameter: all respondents (8,198 samples)

(Management) putting emphasis.

Putting emphasis more or less.g p

No change.

Putting less emphasis.

Stopping putting emphasis.(Source) Employee survey

Employee assessment of “NHK management in terms of audience-oriented approaches”

2.27

2.62 2.68 2.702.56

1

2

3

31

(Source) NHK document

0

1FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Full results of 2009-2011 assessments

Trust in broadcastingFY2011: 3.8 points[3.8 in ’10 & 3.6 in ’09]

Independence and impartiality3.5 [3.5 & 3.2]

Autonomy and independence: 3.2 [3.0 & 2.8]

Fairness and impartiality*： 3.6 [3.7 & 3.4]

Diversity-based programming: 3.7 [3.7 & 3.3]

Speedy, accurate news coverage*： 4.4 [4.4 & 4.4] High quality3.9 [4.0 & 3.9]

Pillars of assessment Assessment yardsticks Assessment items

Speedy, accurate emergency/disaster information*： 4.6 [4.6 & 4.3]

Conscientious newsgathering/programming*： 4.2 [4.3 & 4.1]

Novelty and creativity* * ： 2.9 [3.0]

Holding to journalistic principles*： 3.4 [3.5 & 3.1]

Kindheartedness： 4.2 [4.2 & 4.0]

Broadcasts of high dignity*： 4.4 [4.3 & 4.2]

3.9 [4.0 & 3.9]

Usefulness4 0 [4 0 & 3 7]4.0 [4.0 & 3.7] Provision of livelihood-related information*： 3.9 [4.0 & 3.7]

Provision of learning opportunities： 3.8 [3.8 & 3.6]

Provision of domestic & international news*： 3.6 [3.8 & 3.4]

Development/provision of user-friendly services： 4.3 [3.9 & 3.5]

Audience-friendliness3.7 [3.7 & 3.4]

Palpable broadcasts： 4.0 [3.8 & 3.7]

Provision of inspiring broadcasts： 3.9 [4.0 & 3.7]

Updates on latest trends： 3.5 [3.7 & 3.2]

Entertainment*： 3.4 [3.3 & 3.1]

Sharing information about social issues*： 3.0 [3.2 & 2.7]

Contributing to regional/community development： 2.7 [3.1 & 2.8]

Contributing to development of culture and art： 4.2 [4.2 & 4.0]

Archiving information for future generations： 4.3 [4.4 & 4.2]

C t ib ti t b d ti t h l ： 4 7 [4 7 & 4 6]

Contributions to society3.9 [4.0 & 3.7]

Contributing to broadcasting technology progress： 4.7 [4.7 & 4.6]

Providing news/information worldwide： 3.7 [3.8 & 3.7]

Promoting digital switchover *： 4.6 [4.6 & 4.0]

Trust in management2.6 [2.7 & 2.5]

Integrity and transparency2.8 [2.6 & 2.7]

Accountability： 2.8 [2.5 & 2.5]

Mechanisms to reflect audience feedback： 2.8 [2.7 & 2.8]

Robust compliance programs： 2.8 [2.5 & 2.7]

Environmental management： 2.8 [2.7 & 2.6]

Employee activation： 2.6 [2.7 & 2.4]

Improving VFM： 3.5 [3.5 & 3.5]

Prompt decision-making and implementation： 2.0 [2.4 & 1.9]

Efficient and effective operations and services： 2.1 [2.3 & 2.1]

Economy, efficiency and effectiveness 2.5 [2.8 & 2.5]

Response capability and flexibility 2.5 [2.6 & 2.3]

Long-term organization design/HR development： 2.4 [2.6 & 2.1]

Long-term budget/project planning： 2.5 [2.6 & 2.3]

32

Crisis management： 2.5 [2.6 & 2.3]

※Questions in those assessment yardsticks with an asterisk (*) were modified in fiscal 2010. The assessment item with two asterisks (**) –”novelty and creativity”—was newly added in fiscal 2010.

※ The left-hand and right-hand ratings in parentheses are those for fiscal 2010 and 2009, respectively.

Challenges and proposals for NHK

33

Challenges and proposals for NHK

1. Changing media landscape and public broadcaster (1)

The media landscape is diversifying so rapidly that television alone cannot afford to cater to the need of consumers. Television remains to be the dominant media platform people rely most heavily on in their

livelihoods. However, there has been a growing tendency among people, especially the young demographics, to access news online via full-service portal giants such as Yahoo! and Google In terms of media usage search giants outperform the TV platform by a largeGoogle. In terms of media usage, search giants outperform the TV platform by a large margin as to male users in their 20s and 30s.

Consumers are now offered an infinite variety of digital multimedia choices to get information and entertainment applications online as in the case of the fast diffusion of smart phones and tablet terminals. Consequently, the role of television is on the decline. Against this backdrop, NHK needs to look into the current state of broadcasting and Internet-based services and redefine what and how it should provide to audience.

Consumers’ choice of media for news consumption

Frequency distributions

TVNewspaper

s or magazines

Radio

General portals like

Yahoo!, Google

Niche news sites like ITmedia

Websites of newspapers,broadcaster

s

SNS like mixi,

Facebook

BBS like “2-Channel”

Miniblogging platforms like Twitter

Blogs (run by

celebrities, individuals)

Other Internet outlets

Overall 2,000 81.7% 52.6% 16.5% 62.8% 5.7% 14.2% 7.1% 7.3% 5.1% 4.5% 10.0%

Males in 20s 165 69.7% 44.2% 15.8% 78.2% 15.8% 12.1% 19.4% 23.0% 10.9% 9.7% 11.5%

Males in 30s 220 69.1% 38.2% 14.5% 75.5% 12.3% 18.2% 7.3% 9.1% 8.2% 3.6% 6.4%

Males in 40s 203 81.3% 49.8% 21.7% 65.0% 10.3% 19.7% 5.9% 11.8% 5.9% 5.9% 11.3%

Males in 50s 196 84.2% 64.3% 19.4% 63.8% 4.6% 18.4% 1.5% 3.6% 2.0% 1.0% 14.3%

Males in 60s 215 87.9% 73.0% 28.8% 56.3% 4.2% 22.3% 1.4% 3.7% 1.9% 5.1% 17.2%

Females in 20s 159 77.4% 32.1% 6.9% 60.4% 2.5% 6.9% 22.6% 9.4% 15.1% 7.5% 5.7%

Females in 30s 214 80 8% 36 4% 7 9% 66 8% 4 2% 7 5% 8 4% 7 0% 3 3% 4 7% 6 1%

With regard to NHK’s approach to the fusion of broadcasting and communications

(Source) Web survey on media usage

Females in 30s 214 80.8% 36.4% 7.9% 66.8% 4.2% 7.5% 8.4% 7.0% 3.3% 4.7% 6.1%

Females in 40s 200 82.5% 54.0% 11.0% 59.5% 0.0% 9.0% 3.5% 3.5% 2.0% 2.5% 7.5%

Females in 50s 199 88.4% 65.3% 12.6% 58.8% 2.0% 13.1% 4.5% 3.0% 3.5% 3.0% 9.0%

Females in 60s 229 92.1% 62.4% 22.7% 47.2% 2.2% 12.2% 2.2% 2.2% 1.3% 3.5% 10.0%

With regard to NHK s approach to the fusion of broadcasting and communications services, about 70 percent of its employees harbor a sense of crisis. The Assessment Committee’s survey of employees at NHK found that about 70 percent of

them harbor a sense of crisis the public broadcaster’s Internet service strategy. In the survey, many of them cited “lack of effective in-house infrastructure,” “scarcity of human resources equipped with necessary expertise,” “blurring of the distinctions between paid and free online services” and “lack of content to be provided on the Internet ”online services and lack of content to be provided on the Internet.

34

Challenges and proposals for NHK

1. Changing media landscape and public broadcaster (2)

Sense of crisis among employees over NHK’s Internet strategy

32.6 36.9 16.4 6.1 7.9

0% 20% 40% 60% 80% 100%

Employees’ anxieties

(Source) NHK employee survey

Yes, I have a sense of crisis. Yes, somewhat.

No, somewhat. No, I have no sense of crisis.

DK.

Parameter: 5,704 samples from those NHK employees who answered in the employee

To enable itself to keep functioning as a vital lifeline, NHK has to urgently strengthen its multimedia capabilities to handle and provide information in case of emergencies and disasters. Audiences count very much on NHK for information in case of emergencies. It is an urgent

(Source) NHK employee surveysurvey that they had a sense of crisis and that they did so more or less.

y g gtask for NHK to strengthen its capabilities to provide emergency information by effectively choosing transmission platforms—terrestrial and satellite channels, radio and the Internet. This is indispensable for NHK to keep serving as a vital lifeline in case of emergencies and disasters. It also needs to extensively discuss how the cost of enhancing emergency response infrastructure should be borne.

The Assessment Committee wants NHK to build its position as a reliable provider of information even in the Internet sphere by figuring out a long-term public broadcasting model. NHK needs to redefine its role as a public broadcaster from a long-term perspective—by

thinking beyond the existing statutory limits—in the digital age in which the fusion of broadcasting and communications services has come true

35

Challenges and proposals for NHK

2. Public broadcaster contributing to communities (1)

Over the last three years, there has been little change in the portion of audience thinking NHK has lived up to their expectations. It has stayed at low levels. As for rates of fulfillment of audiences’ expectations of NHK, one of the five components in the

assessment item of “contributing to regional/community development” has shown an improvement. It relates to NHK’s effort “to help revitalize local communities with events and other related activities.” The fill rates for the other components in fiscal 2011 fell back to the p2009 levels after registering gains in fiscal 2010.

Audiences have begun appreciating NHK’s nationwide campaign titled “Hosokyoku no Chikara” (Power of the Broadcasting Station) to help revitalize regional areas. Yet, the campaign has not yet borne fruit fully.

NHK’s region-focused efforts: Audiences’ expectations and fulfillment of expectations

(%) (%)Percentage of audiences’ expectations Expectation fulfillment rates

(Source) Audience survey

Audiences have high expectations of regional broadcasting stations of NHK as to their respective region-focused activities. In its audience survey, the Assessment Committee referred to a series of 11 specific examples

of efforts on the part of NHK to improve audiences’ assessment of regional broadcasting to know their expectations and the extent to which they thought NHK had met their expectations. The survey subsequently found that audiences have high expectations of NHK as its regional b d ti i

36

broadcasting services.

In the survey concerning regional broadcasting, there was a wide gap between audiences’ expectations and expectation fulfillment rates. The gap was seen in the role of NHK to act as “a watchdog over regional governments and private-sector corporations” and “provide information about ｉｍｐａｃｔｓ on regions of events ｏｒ ａｆｆａｉｒｓ in other parts of Japan or abroad.” With regard to these areas, NHK has not met audiences’ expectations yet.

Challenges and proposals for NHK

2. Public broadcaster contributing to communities (2)

NHK’s regional services: Audiences’ expectations and expectation fulfillment(%)

According to the Assessment Committee’s survey findings, it is clear that what audiences perceive as a “local area” is typically smaller than an area covered by NHK’s regional broadcasting services.

(Source) Audience survey

g g When asked what audiences’ definition of a “local area” was in geographical terms, 71.6 percent

of respondents referred to a city, a ward, a town or a village—depending where they live. This means “local areas” are smaller or narrower than the actual areas covered by NHK’s regional broadcasting services. The findings indicate that audiences are interested in getting information about relatively small areas around their places of residence.

It is important for NHK to map out the needs of audiences in detail and reflect in its regional programming. When asked in the survey whether local information NHK provided was what audiences wanted

to actually receive, it became known that there was a clear tendency for NHK to provide audiences with information they were interested in knowing particularly. Nevertheless, as the percentage of audiences who thought they sufficiently got local information was low, NHK

37

needs to devise an efficient way of gathering local information from audiences and various types of organizations so as to cater better to the needs of audiences.

An efficient system to gather local information from audiences and various kinds of organizations should be in place to meet the detailed needs of audiences.

Challenges and proposals for NHK

2. Public broadcaster contributing to communities (3)

Correlation between portions of audiences interested in getting genre-specific information and those satisfied with NHK’s provision of such information

80%

90%

Percent

provisiom

embers in Local weather and traffic

40%

50%

60%

70%

tage of portions of audienceon of inform

ation (parameter

nterested in getting informati

information

Local news and social events

Local disaster information

Local festivals and community events

Information about local

Local sports information

Linear approximation curve

Local business information

0%

10%

20%

30%

s satisfied with N

HK

’s r: sam

ples of audience ion about specific m

atters)

Information about local retailers and restaurants

Information about local celebrities and unique

local featuresOthers

The Assessment Committee wants NHK’s regional stations to define their respective

(Source) Web survey on media usage

0% 10% 20% 30% 40% 50% 60% 70%

Percentage of portions of audiences interested in getting information about specific matters (parameter: all samples)

region-specific strategies and concentrate resources on their missions, contributing to the development of regions. As audiences’ needs greatly vary, it is not practical for NHK to think of meeting their needs

entirely, given that each regional broadcasting station’s resources, including personnel, are limited.

Against such a backdrop, it is important for NHK to study and grasp specifically what audiences g p, p y g p p yin each region are interested in learning and clearly identify its regional missions that are suited to circumstances peculiar to each region. Then, it should concentrate resources on their missions.

NHK should also strengthen its in-house systems to let regional stations share highly successful experiences and let regional “hub” stations support local stations in their areas.

In this connection, NHK headquarters should compile a comprehensive strategy that will

38

facilitate the improvement of audiences’ trust in NHK as a whole through enhanced contributions to each region.

Challenges and proposals for NHK3. Audience perception of license fees paid to public broadcaster

Audiences are increasingly value-conscious—they are more inclined to demand an equitable sharing of the license fee burden. The downward trend in the portion of audiences thinking “as NHK is a public broadcaster, all

of us have to share its costs” has come to an end since fiscal 2010.

More than half of audience members think “we have to pay license fees in exchange for viewing NHK programs”—an indication that a majority of audiences are strongly value-

iconscious.

Over the recent three years, there has been an upward change in the portions of audience members seeking the equitable sharing of the license fee burden. Specifically, they think: “To ensure equitable burden sharing, punitive measures should be meted out to those who refuse to pay license fees” or “if other audience members do not pay license fees, I also want to stop paying license fees—if possible.”

To facilitate audiences’ understanding about the license fee system, it is important for g y , pNHK to make an easy-to-understand disclosure to audiences to show how license fees—revenues—have been spent while providing high-quality broadcasts. Given the changing social environment, it is inevitable to see people become increasingly

value-conscious. Therefore, it is crucial for NHK to provide broadcasting and Internet services that can convince audiences of the importance of the role NHK plays and the significance of its existence.

0 10 20 30 40 50 60 70 80 （%）

Furthermore, NHK is requested to do its utmost in keep audience sufficiently informed of its effort to adequately spend license fees paid by audiences and keep improving the efficient use of revenues.

Audiences’ perception of license fees (time-sequence method)

62.4

55.9

63.6

61.6

54.5

65.1

60.7

56.5

61.4

64.0

56.7

65 2

67.5

64.1

66.2

56.5

(1) As NHK is a public broadcaster, all of us have to share its costs.

(2) We have to pay license fees in exchange for viewing NHK programs.

(3) We have to pay license fees as stipulated by l

36.5

47.0

50 5

34.8

46.2

31.8

44.2

65.2

38.8

49.7

70.0

40.9

43.1

63.0

44.8

38.1

law.

(4) To ensure equitable burden sharing, punitive measures should be meted out to those who refuse

to pay license fees.

(5) The government ought to bear all of NHK’s costs with the state budget because it is a public

broadcasting system.

FY 2011

FY 2010

FY 200950.5

27.6

49.1

28.4

46.3

26.4

52.8

31.7

50.7

36.2

47.5

35.4

(6) If other audience members do not pay license fees, I also want to stop paying license fees—if

possible.

(7) I refuse to pay license fees as a way of having NHK feel remorse.

FY 2009

FY 2008

FY 2007

FY 2006

39(Source) Audience survey

Challenges and proposals for NHK

4. Value enhancement as public broadcaster (1)

Pursue NHK’s well-balanced mission as a public broadcasting corporation by emphasizing the importance of its ubiquitous role and the exploration of new audience strata. Proving high-quality broadcasts far and wide is precisely what it should pursue universally.

On top of that, it is important for NHK to exert itself to explore new audience strata.

NHK is urged to keep pursuing its well-balanced mission as a public entity in line with the changing environment surrounding the organization. In this process, it should give due consideration to the two initiatives mentioned above.

Create a new sphere of public broadcasting on the Internet. In the age of multimedia, people are offered a greater variety of digital options to gatherIn the age of multimedia, people are offered a greater variety of digital options to gather

information they need—a situation in which the provision of a reliable sphere for online information consumption in Internet infrastructure now is a must.

The Assessment Committee wants NHK to create a new information sphere for public broadcasting on the Internet by employing various innovative solutions while articulating the interest of the public in Internet infrastructure.

Reinforcement of staff with a strong sense of mission as a public broadcaster. NHK owes its success as a public broadcaster to its staff with a strong mission-oriented

mindset. To keep enjoying audiences’ appreciation, NHK should spare no effort in fostering human resources capable of carving out a bright future for public broadcasting. In no way should NHK weaken the proven competence of its staff who have cultivated knowledge and skills and maintained a strong sense of social responsibility. g p y

To enable employees to continue to have a strong sense of mission, it is important for management of NHK to implement measures to help alleviate staff fatigue and stress.

NHK needs to make further efforts to transform itself into an organization free from irregularities. It has introduced a set of compliance measures. To make the compliance program more effective, NHK is urged to conscientiously carry out compliance management at each department and division on a daily basis. The Assessment Committee wants NHK’s corporate culture further refined with greater transparency.

40

Challenges and proposals for NHK

4. Value enhancement as public broadcaster (2)

Pursue management methods relevant to a broadcasting service. In compiling a three-year corporate plan, NHK has introduced a new quarterly management

evaluation method—the PDCA (plan, do, check, act) cycle model. The Assessment Committee judges the continual process improvement initiative has begun bearing fruit to some extent.

NHK has been refining its management accounting model an effective solution in terms of NHK has been refining its management accounting model—an effective solution in terms of improving efficiency and effectiveness of management. From now on, it should take advantage of management accounting to realize adequate and effective cost distribution and enhance the efficiency and effectiveness of the model. It should also keep audiences informed—in an easy-to-understand way—of the outcome of management accounting. In this connection, NHK’s management needs to be mindful enough not to impede efforts toward creativity and downgrade the quality of services.

Show audiences a long-term vision future public broadcasting. As a public broadcaster sustained by the license fee system, NHK is responsible for pursuing

and fulfilling the public broadcaster’s mission relevant to changes in circumstances by taking into consideration the changing media landscape and people’s awareness of the interest of the public. To fulfill its responsibilities, NHK should come up a long-term vision, full of p p , p g ,foresight, as a public broadcaster, in addition to the implementation of triennial corporate plans.

In its approach to such a long-term corporate vision, what NHK can do will be limited if it sets the existing statutory framework as a premise for discussions on the vision. Instead of simply waiting until the end of procedures for revamping the legal aspects concerning NHK, the organization should draw a vision for future public broadcasting on its own and encourage

ti ti i ti f di d NHK l i d b ti th i iactive participation of audiences and NHK employees in debating the vision.

NHK management’s initiative to map out a clear long-term vision is important in that their determination will surely become instrumental in helping raise its staff’s sense of responsibility as employees of a public broadcaster and their motivation to attain what the vision will envisage.

41

Conclusion: Public broadcasting and audience perspective

The Committee for Assessment of NHK from the Perspective of Audiences (the Assessment Committee) came into being in fiscal 2009, taking over the duties of the NHK “Promises” Assessment Committee that was active from fiscal 2005 to 2008. The Assessment Committee was commissioned to make an independent, third-party assessment of NHK.

As the NHK Promises Assessment Committee mentioned in its fiscal 2008 report, over a three-year period from fiscal 2005 to 2007, NHK restored audiences’ trust that had been lost due to a host of irregularities involving NHK employees In fiscal 2008 the public broadcasterhost of irregularities involving NHK employees. In fiscal 2008, the public broadcaster, therefore, was about to move on to the next stage as an organization vis-à-vis audiences. Launched in fiscal 2009, the Assessment Committee immediately embarked on activities with a view to supporting NHK in its fresh voyage from the perspective of audiences.

The Assessment Committee followed in the footsteps of the NHK “Promises” Assessment Committee as to some assessment methods. Specifically, the Assessment Committee took over a 21 component gauge for assessing value from the perspective of audiences and anothera 21-component gauge for assessing value from the perspective of audiences and another methodology for measuring audiences’ expectations of NHK and the fulfillment rates of such expectations. Utilizing those assets of the 2005-2007 committee and other approaches, the Assessment Committee developed a model of its own, comprising “two pillars of audience trust” that include “eight assessment yardsticks,” to assess NHK. It is the first model of its kind articulating what role a public broadcaster ought to play. The model is aimed to clarify to NHK from the perspective of audiences what should be done to raise the value of the organization as a public broadcaster and ensure that it is deeply trusted by audiences. At the same time, the p p y ymodel is designed to provide audiences with the outcome of NHK’s endeavors in an easy-to-understand way.

Over the past seven years, management of NHK has made significant advances in transforming itself into an audience-oriented organization. Management incorporated into the “NHK Corporate Plan for 2012-2014” parts of the Assessment Committee’s model, comprising an elaborate set of assessment yardsticks and assessment items, and related quantification y , qmethods. NHK thus has reached a new stage where it implements a self-assessment practice. However, it should be pointed out that self-assessment always has the risk of ending up giving lukewarm ratings. Management of NHK is urged to continue its improvement effort by always paying respect for audiences’ objective assessment of the organization.

The audience-oriented assessment does not mean catering to the wishes of audiences. In this regard, it is important to keep proactively creating new value by continually think of the meaning of the interest of the public. This approach should go in tandem with an effort on the part of management of NHK to grasp what could be expected of NHK from the perspective of audiences and what should be done to meet their expectations.

What is the interest of the public? The concept of the interest of the public tends to evolve with the passage of time. Especially now that Japan has completely shifted to digital terrestrial television broadcasting, the media landscape is expected to change rapidly. Against such a backdrop, now is the time to distinguish between what should be preserved and what should be changed. In this context, it is necessary for NHK to move boldly forward together with

di i li NHK d fi h i f h bliaudiences in a way peculiar to NHK to define the interest of the public

Finally, the Assessment Committee would like NHK, a public broadcaster that always goes together with audiences, to grow without becoming less enthusiastic about its respect for the perspective of audiences. To that end, it is urged to keep redefining what the audience perspective means to it and set the outcome of such efforts as the most important guideline for broadcasting services and management.

42