Friday, December 05, 2008

Film business in the 21st Century, part one

Back in February, the Asahi Shimbun's monthly current affairs magazine Aera put out a special Japanese film issue introducing non-movie-savvy readers to a quite comprehensive selection of their country's active directors. Included was a series of three essays by veteran entertainment reporter Kanazawa Makoto explaining the current state of the local movie biz, which I've been meaning to translate for ages. Fortunately they've remained relevant, so here's the first instalment. Stay tuned for parts two and three.

Film business in the 21st Century
Part one: The advent of a Japanese film 'bubble'? Top dog Toho dominates

In 2006, Japanese films achieved a 53.2% share of the total market, marking the first time in 21 years that their box office takings exceeded that of foreign films. Overall box office revenue was 107.9 billion yen, with that of domestic films alone breaking the 100 billion yen barrier. 417 Japanese films were screened, which is 1.5 times more than 10 years earlier. Consecutively in 2007, local product recovered from a flat first half of the year to take a close to 50% share against foreign films. Going by these figures Japanese cinema would appear to have entered another boom period, but there are murmurs that it's merely a bubble while other voices cast doubts on the future.

Film companies that have ceased production concentrate on promotion and distribution

As cinema complexes with multiple screens have become standard, the overall number of screens is increasing. In 2006 they exceeded 3000 for the first time in 36 years. However audience numbers stayed at the 160 million mark while total industry revenue sat at around 200 billion yen, continuing to remain mostly unchanged. Earnings per film are not increasing.

With the market failing to expand and a large number of films fighting for a piece of the pie, an inequality has also become apparent. Of the Japanese films that ranked in the top ten box office successes of 2006 - "Tales From Earthsea" (4th), "Limit of Love: Umizaru" (5th), "The Uchoten Hotel" (7th), "The Sinking of Japan" (8th) and "Death Note: The Last Name" (9th) - only the latter was not distributed by Toho. Even looking back at box office receipts from 2001 to 2006, 44 of the 59 films that made over 2 billion yen were distributed by Toho, accounting for over 70%.

Since "Godzilla: Final Wars" in 2004, Toho has ceased in-house production and devoted itself solely to promotion. Thanks in part to its takeover of Virgin's chain of multiplexes in 2003, the number of screens owned nationwide by the Toho Group stands at 559 (as of March 1st, 2008), making it the industry number one. Other major film companies are also producing films primarily through the production committee system and releasing them through their own distribution networks, but Toho has the greatest ability to carry out large-scale releases.

Linkages with television stations, hits with adaptations

A characteristic of recent hit films is the technique of massive, intensive advertising campaigns that utilise the broadcasting reach of television networks through their involvement in production committees. Toho enjoys an unparalleled advantage in this area as well. This is largely attributable to its enduring relationship with Fuji Television, from "Antarctica" in 1983 to 2007's biggest hit Japanese film "Hero", as well as its sturdy linkage with Nihon Television for Studio Ghibli's films such as "Spirited Away" and collaborations like "Always - Sunset on Third Street 2".

Such a trend also points to an industry-wide decline in originality. Of the 27 Japanese films that Toho distributed in 2006, only three were not adapted from novels, manga, video games or television series. It feels as if film has taken on the role of processing material emerging from other media into celluloid. Film is essentially a powerfully original medium where creators' ideas are transformed into moving images, but the current situation makes it difficult for popular original cinematic stories and characters such as Godzilla to be born.

Conversely, this trend sees publishing companies and television networks actively participating in film production committees and using Toho's promotional muscle to generate greater buzz for their own products. "Crying Out Love, in the Center of the World" and "Densha Otoko" were huge hits. In 2008, the 2007 bestseller "The Homeless Student" will be adapted for Toho's cinema chain. Due to Toho's successes, other film companies are also producing their own adaptations of original works with audience-attracting potential.

At the same time, the number of multiplex screens is approaching saturation point. Warner Mycal Cinemas Higashi Kishiwada in Osaka closed in February of this year, citing slumping business due to intensified competition and ageing facilities. Its continued operation had become difficult due to the appearance nearby of several cinema complexes over the last few years.

In conjunction with the fierce competition between suburban multiplexes attached to large scale shopping centres, cinema complexes in urban centres have also increased in number. Some say the latter trend has accelerated customer churn away from these suburban multiplexes that have made such a contribution to increased audience numbers.

Searching for a balance between commerciality and creativity

The film industry at large is full of activity once more. But behind this is a model for developing media-mix1 products to secure a piece of the gimmicky 'safe pie'. There is also a strong case to be made that there has been a hollowing-out of quality in films. The power of film companies to make films and their facility for fostering creative talent are fading away.

What will happen if audiences begin to tire of these media-mix films? Despite the effort being put into advertising and promotion, audience numbers will cease to merely remain stagnant if there is a lack of attractive films that harness the intrinsic originality of the medium, such as the works of Kurosawa Akira. In the midst of this so-called boom, it's time for the industry as a whole to get serious and face up to that encroaching shadow.

*1: "Media-mix" is a term commonly used in Japan to describe entertainment properties that achieve a certain degree of success in one medium and are subsequently adapted for other media to capitalise on their popular recognition and maximise commercial gain. Currently, media-mix films are seldom the source of such phenomena and are mostly adaptations of subject matter that has originated from other media such as books or manga. See Wikipedia Japan's extensive article for more.


  1. Decent summary but not sure about the wording regarding 2007 -- imports took back the majority share at 52.3% last year. This year it looks to flop again, but as of end of Oct admissions and box office continue to be flat as a pancake.

    Probably wasn't known when this essay was written but DMC was the first major Toho in-house production in a while.

    I don't think the bubble will burst like Saitoh Morihiko's book says but sag and leak air. People will continue to see around 1.3 movies a year for a long time yet.

    2100 words to finish on this very topic by next week...

  2. I remember being a bit unsure when I translated that bit, so I might have messed it up. I'll check it against the original article tonight.

  3. He might've meant hoga earned 50% more in the second half of 2007, which is possible since HW's biggest titles came out in the first half and Japan's (almost all Toho distributed) in the back end.

  4. [...] Ryuganji a traduit la 1ère partie d’un article du journaliste Kanazawa Makoto présentant l’Industrie du Cinéma Japonais de nos jours. Dans [...]

  5. I did mistranslate that bit, and it's pretty much as Jason stated in his first comment and I've revised my text. Japanese films didn't outgross foreign product by 50% in 2007, they achieved a share approaching 50%. Sorry about that.

  6. [...] - Ryuganji translates a very long article in a Japanese magazine about the Japanese film business in the 21st century. Part one covers the overwhelming dominance of local distributor Toho. [...]