In a bid to boost the changeover to digital broadcasting and help smaller local TV and radio stations, Japan’s Telecommunications Ministry is to change its ordinances by April 2004 to allow such broadcasters to merge.

The rule changes will also permit larger broadcasters to acquire failed stations as subsidiaries and benefit the nation’s struggling satellite TV industry.

The current ordinances, designed “to ensure the diversity of public opinions”, restrict terrestrial TV broadcasters from transmitting their signals beyond their own prefectural boundaries – the sole exception to this rule being TV channels within metropolitan areas.

At prefectural level, mergers and acquisitions are forbidden and investment in other stations limited to a 10% holding. Tokyo-based broadcasters are allowed a maximum stake of 20% in rival companies.

All this is set to change, however, when deregulation kicks-in. Proposals on the drawing board will allow local stations from adjacent prefectures to merge or integrate within a holding company. The question of larger mergers, however, is still 'under study'.

Satellite broadcasters, currently scraping the barrel for new subscribers, will be permitted to sell a stake of up to 50% to major network stations. The current limit is less than one-third.

Meantime, Nippon’s sluggish move to digital broadcasting will get a shot in the arm from the proposed rule changes. The changeover will require heavy investment by media owners – estimated to be equivalent to six times the average annual profit of a local TV station, ¥4.5 billion ($3.84m; €3.50m; £2.39m).

Data sourced from: Asahi Shimbun; additional content by WARC staff