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What the recent comedian scandal teaches us about business in Japan

Japanese businessmen

by CarterJMRN

5 Lessons on business in Japan

Japan’s entertainment scene was shaken last month when Yoshimoto Kogyo Co. said it terminated its management contract with 49-year-old Hiroyuki Miyasako. Yoshimoto is Japan’s largest entertainment agency, with several 1000 talento (Japanese for entertainers) under contract, while Miyasako is one of Japan’s most popular comedians. The agency suspended him and 12 other comedians in July for attending a party hosted by a crime syndicate in 2014 without prior consultation with their agency. The scandal reveals deep lessons on how business is done in Japan.

What we can learn from the Yoshimoto Kogyo & Miyasako scandal about business in Japan

While this in itself was enough to make it onto the front pages of the tabloids, the scandal soon widened as it became clear that much more was behind the Miyasako and Co.’s misstep. Entertainers in Japan are chronically underpaid, at the mercy of their agency, and often face harassment. These lessons from the Japanese entertainment industry also apply to the wider market in Japan.

1) The reason is not the real reason

When the scandal became public, the media and the agency focused on the fact that the comedians had attended a party by an organized crime ring. While it is clearly scandalous to do business and take money from mobsters, the comedians were not aware of this at the time of the event, and believably so. Moreover, the yakuza affiliation was a welcome excuse for Yoshimoto Kogyo to portrait Miyasako and his cohorts in bad light.

They were distracting from the fact that the main reason for laying the comedy stars off: It was not hanging out with the wrong crowd but the fact that they engaged in what is known as yamieigyo (literally dark, or side business) in Japan. The agency was simply unnerved that the celebrity comedians went behind their back for some cash in hand to bolster their meager salaries.

This is something you might encounter in Japan frequently: a “no”, a contract canceled or a business relationship ending might be explained to you, but usually with the most convenient reason that is least likely to rock the boat. While you can try to enquire with your counterpart for what the real reason is, it is unlikely that they would be so direct and tell you the truth if it would paint them in a bad light or embarrass you. The answer will probably be somewhere there between the lines, and it takes a Japanese person or someone who has been in Japan for a very long time to extract it for you.

2) Japanese companies offer security, not riches

Concentrating on the fact that the comedians performed for mobsters conveniently distracted from the fact that performers, even celebrity ones, get very low salaries while in Japan, talent agencies take the lion’s share of money. 50% is common for e.g. models and other entertainers. And even up to 80% of a gig’s pay gobbled up by the agency, not the performer, is not unheard of. Unbeknownst to the public, many Japanese celebrities, ranging from girl band members to comedians, live on salaries that mirror those of low or middle rank office workers.

While this would certainly be considered outrageous in the Western world, it is not talked about in Japan. Agencies here don’t promise their talento to make them rich, but connections and to keep them in the show biz. Connections and relationships are paramount in business in Japan–entertainment or other–and corporations expect their salaried workers to be eternally grateful for the security and opportunities they offer them.

On the other hand, Gaishikei, or foreign corporations, are known to offer better salary packages than domestic companies and this can give you an edge over your local competition when attracting talent.

3) In Japan, most industries are dominated by one player

Besides the fact that “things have always been this way”, there is another reason why little protest has surfaced against such conditions. Most industries in Japan are dominated by one big player, who can get away with murder, as they control the market and set the agenda.

Miyasako likely has nowhere to go after Yoshimoto Kogyo agency laid him off. The agency manages around 6,000 comedians, athletes, and actors and has contracts with almost every comedy and variety show on Japanese TV.

However, things are slowly changing. SMAP, Japan’s most successful boy band sensations of all times, has left Johnny’s & Associates entertainment, the Nippon factory of beau singing troupes. And they are sure suffering the consequences now. Despite being immensely popular superstars, especially with the females of the Dankai and Baby Dankai generations, their old agency successfully, and illegally, blocked them from landing jobs and contracts. The SMAP members recently came out regarding the slights the suffered from their former agency and it caused a mild outcry amoungst their fan base and in the yellow press of Japan for the first time – a gentle sign that times might be changing?

Re-setting the agenda in an industry is a long and windy road, but in Japan, especially foreign corporations coming in as a wild card have a good chance at successfully changing the narrative of a whole industry – if they first gain a true understanding of the market in Japan.

4) Harassment is common

Not only SMAP were harassed by their former agent Johnny’s Entertainment, but also Miyasako and his colleagues have come out regarding the harassment they lived with for years at Yoshimoto. At a press conference the comedians gave, the public learnt that the entertainers were gagged by their former employer and not allowed to disclose any details on the scandal. In a textbook blackmail case, their agency threatened that if one of them would speak up, not only he would suffer the consequences of being fired, but all his colleagues with him.

Harassment cases are common in Japan, and have also led to scandals surrounding sumo wrestlers last year. For the average Joe or Jane, harassment in Japan can take the form of anything between power harassment to sexual harassment and even maternity harassment. Enforced overtime, known to slave some workers to death, is closely intertwined with this. Yet, things are stirring with the new laws designed to limit overtime and karoushi (death by overworking), and more importantly, less acceptance within the younger generation of such conditions.

International corporations are known to offer a better deal when it comes to HR management and Generation Reiwa is seeking them out. Offering the right treatment and conditions can ensure that you will attract the most desirable talent in Japan.

5) Teary apologies accepted

Yet, everything can seemingly be washed clean with tears in Japan. The president of Yoshimoto gave a teary apology after the public tide had turned against the agency and onto the comedians’ side. To show his sincerity, he even announced that he is taking a pay cut for the next 12 months.

Self-flagellation is common in Japan. Seemingly unforgivable mistakes can be undone by bowing deeply, shaving your head, or similar sacrifices if you are in the public spotlight.

Showing your remorse and accepting consequences is expected, should you do your Japanese business partners wrong somehow. A brief “my bad, mate” won’t do in Japan and well-selected local staff or an advising agency can help you find the right way of how to salvage your image and show integrity, as preserving harmony is crucial in Japan.

Doing business in Japan is different – but things are changing

The comedians surrounding Miyasako gave their own press conference, which shifted public blame onto the agency, despite threats. SMAP walked away and made their plight public. And the average Japanese worker is also less and less willing to work overtime and face harassment and now demands terms and conditions they see their Western counterparts enjoy, like paternal leave without harassment.

Foreign companies have the power to re-set the agenda and status quo and can offer real benefits that young Japanese demand as they are in a better position on the job market than their parents were. However, an in-depth understanding of Japanese consumers and workers forms the base of such an endeavor, best undertaken with guidance from a local team of experts.

Photo by Banter Snaps on Unsplash