By Mark Schilling
Shochiku is commemorating its 110th anniversary this year with retrospectives and other projects dedicated to its most famous director, Yasujiro Ozu. It is also celebrating its resurgence as a major studio, distributor and exhibitor that lives up to its tradition as a leader and innovator. There is no other company like it in the Japanese film industry in not only longevity but corporate strengths.
After devoting the first decades of its corporate life to the management of Kabuki troupes and theaters, a business that still accounts for nearly half its revenues, Shochiku began film production in 1920 and quickly moved to the top of the studio ranks.
In 1931 it released Japan's first talkie, Hideo Gosha's The Neighbor's Wife and Mine, and in 1951 its first color film, Keisuke Kinoshita's Carmen Comes Home. Shochiku also nurtured many of Japan's leading actors and directors, including Ozu, who spent his entire professional career at the studio.
Today Shochiku and its affiliates operate one of Japan's two largest theater chains, with a total of 236 screens. In addition to Shochiku's own line-up, the chain books films from both independent distributors and Hollywood majors.
Shochiku also acquires and distributes its own foreign titles, including Lord of the Rings trilogy, which it co-released with Nippon Herald (total gross: $246 million), I Am Sam ($32 million) and Dancer In the Dark ($22 million) -- both co-releases with Asmik Ace.
It's own films are making a large and growing contribution to its bottom line, including Yoichi Sai's Quill, a heartwarming drama about a seeing-eye dog and its cranky middle-aged master that grossed $20 million domestically in 2004 and was a hit throughout Asia, and The Twilight Samurai, the Academy-Award-nominated period drama by Yoji Yamada whose critical kudos and $11.4 million take spurred a genre revival. Yamada, a studio pillar for much of his four-decade career, is best known for his Tora-san series about a romantically inclined peddler that, with 48 installments from 1969 to 1996, set a Guinness Book record.
With Hollywood hits becoming harder to find and its own films doing better at the box office, Shochiku has been scaling down acquisitions, scaling up production. "If we find a good foreign film, we're still going to buy it," says Shochiku president Jay Sakomoto. "But we are becoming more selective. We want major films -- mid-range titles are becoming too risky."
Shochiku acquires everything from Hollywood blockbusters to Korean films, with the numbers shifting from the former to the latter in the wake of the current hanryu ("Korean wave") craze for all things cultural from Japan's neighbor to the north. For its bigger titles Shochiku often joins with other distributors for acquisition, distribution and promotion. It newest partner is Buena Vista Japan, with whom it is releasing Memoirs of a Geisha and The Legend of Zorro this New Year's season. "We're fifty-fifty partners, though Buena Vista will take the lead in handling Memoirs of a Geisha; Shochiku, in handling The Legend of Zorro," comments Shochiku acquisitions manager Kaz Moriguchi.
The main reason for such partnerships, says Moriguchi, is "to spread the risk," which is weighing heavily on all independent distributors as minimum guarantees soar. Although a $5 million minimum guarantee marks a film as major in the Japanese market, Shochiku and its competitors have been bidding titles to $10 million and beyond, reaching a peak of $15 million for such films as Martin Scorcese's The Aviator, which Shochiku released in March with Nippon Herald. "Hollywood films can do well at the box office here, but still not make money for the distributor because the minimum guarantees are so high," comments Moriguchi.
To control costs and Moriguchi and his acquisitions team try to prebuy Hollywood films at the script stage. "The most important factor is the script," says Moriguchi. "I want to see a hook we can use to sell the film. I also want to have a clear idea about the target audience. The story has to be good, of course. After the quality of the script comes the quality of the director, producer and cast."
Other factors also come into play in the buying decision: Sequels, franchises and remakes tend to do well in Japan ("People don't want what theyre unfamiliar with," says Moriguchi), while comedies do not ("Japanese don't have a custom of paying for comedy," Moriguchi notes). A star able to attract the mass media (local hero Ken Watanabe being one example) is desirable. A star able to open a film is the rarest jewel of all. "Tom Cruise is the only one who can do that -- he's in a class by himself," says Moriguchi. "Johnny Depp has a strong following here as well."
Under Sakomoto -- a grandson of Shochiku uber-producer Shiro Kido and a UCLA-trained lawyer -- and other leaders of a corporate restructuring drive, Shochiku has revamped not only its acquisitions strategy, but its entire business. "The goal is a company with a good balance between production and acquisitions," says Sakomoto. "We promote our domestic films with the same commitment we give to our foreign slate."
This year Shochiku has been ramping up production, from the 16th installment of its Free And Easy series about a fishing-crazy salaryman, to Shinobi, a ninja action film partly financed through a new scheme that allows ordinary punters to share the risks and rewards of filmmaking, investing as little as Y100,000 ($900). "It's not just us -- everyone in the industry is making more films," comments Sakomoto. "The (production studios) are so busy that they have no open slots."
The parallel he draws is with the Japanese music industry: "When I was a student everyone was listening to American and European sounds. But kids today know little but J-pop (Japanese pop music). I see the same trend today in the film business."
In addition to its proven genres -- drama (both period and contemporary), salaryman comedy and animal films -- Shochiku has been successfully branching out into the distribution of animation, long a company weak point. "We want to work with the best comic artists and studios," says Sakomoto. Recent releases include Full Metal Alchemist, The Prince of Tennis and Mobile Suit Zeta Gundam -- Heir to the Stars. "All of these films finished in the black, none in the red," Sakomoto commented. "From now on, we intend to actively distribute and produce animation."
Shochiku, Sakomoto says, wants to offer audiences "a mix of the unchanging, like the Free and Easy films, and the changing -- that is, films that reflect new trends on the Internet and elsewhere. We need a good balance of both sort of contents."
Exhibition sidebar
Shochiku's exhibition network encompasses 36 theatres with 226 screens. Of this total the company directly operates 14 sites with 69 screens, mostly in downtown entertainment districts. Shochiku affiliates account for the remainder, with one, Shochiku Multiplex Theatre (SMT), managing 14 multiplex sites with 136 screens.
Shochiku also operates four multiplexes in partnership with its distribution rivals, including Toho and Toei subsidiary T-Joy. The company plans to open three more sites over the next several years, while SMT intends to launch six, all in suburban areas. "As long as the demand for local production keeps growing, the demand for theatres will keep growing as well," says Sakomoto.
But unchecked expansion, he adds, "is not good for anyone," particularly now that weaker sites are already being pushed to the edge. "The limit is about 3,000 screens," he says. By the end of 2004, Japan already had 2,825 -- so the limit is not far away, though "the danger of a US-style multiplex bubble is small" Sakomoto believes.
He also does not foresee a mass abandonment of big screens for small ones as digital flat panel sets become the norm. "Japan never had a strong movie-going culture like the West," he explains. Meaning that the natural couch potatoes are already on the couch.
To ensure that it holds the audience it has, Shochiku is studying the introduction of digital projection systems in its theatres. High costs, a lack of contents and industry wrangling over a common format have made it hesitate, however. It can, however, point to MOVIX Kyoto, a 12-screen site in which Shochiku is a principal investor that uses a DLP (digital light projector) to screen films and Cinema Kabuki -- Kabuki performances shot with HD cameras to commemorate Shochiku's founding. In other words, Shochiku's past meets its future, 110 years on and still going strong.
