Online video is experiencing a burst of life in Japan’s mature TV market, driven by telcos looking for a bigger slice of a burgeoning mobile entertainment sector as well as greater attention from domestic broadcasters, making more of their shows available for rising subs-based VOD services.

By contrast, free-to-air advertising seems to have hit a ceiling, projected to crawl along at a ~0.5% CAGR during 2014-19. Japan’s pay-TV subs base, meanwhile, appears stuck at around 30% of TV households.

Paid online video on the other hand has picked up steam over the last few years, as telcos bundled SVOD services with new data plans to differentiate themselves on the back of rising smartphone and tablet penetration. Japan’s SVOD market ranks as the largest in APAC, with just under seven million subs.

D-Video – a three-year-old JV between telco NTT Docomo and Avex, a digital rights company – has the biggest subs base, and is looking to protect its lead with a fresh injection of content and marketing.

Other telcos want a bigger slice of the pie too. Softbank, which already operates another SVOD JV with Avex called Uula, has unveiled a second offering called BBTV Next, which is also open to non-Softbank subs.

The service to watch in 2015 could be platform-agnostic Hulu, now owned in Japan by broadcast network Nippon TV, itself part of Japan’s largest media conglomerate Yomiuri Group. Hulu had fallen behind domestic rivals, but Nippon TV is fortifying the former US offshoot with local content and financial support – both key ingredients as the competitive tempo increases.

This article also appears in the Q4 2014 edition of Media Business Asia magazine.