Interview with Jay Sakomoto, president and CEO, Shochiku Co., Ltd.
by Mark Schilling

Family dynasties are common in corporate Japan. Founder-presidents, especially, often
hand the business over to Son (rarely Daughter) Number One, even if junior has the
business aptitude of  day-old sushi.

But Shochiku, a studio that will celebrate its 110th anniversary next year, recently had the
rare experience of a president descended from its co-founder passing on the top job to the
grandson of Shiro Kido, a former studio head who steered Shochiku to the industry
summit in its postwar Golden Era. Jay Sakomoto may not share his famous ancestor's last
name, but since joining the company in 1998 after a stint in a Tokyo law office, he has
followed ably in Kido's footsteps.

A leader in a restructuring drive that brought Shochiku back from the brink and made it
among the most profitable companies in its sector, Sakomoto has been dubbed the
"Japanese Carlos Ghosn" by the Japanese press, after the Brazilian president of Nissan
who became a business legend after turning around the ailing car company in just two
In person Sakomoto has the bluff manner and husky physique of a successful sumo coach.
Instead of butting heads in the ring, however, he graduated from elite Keio University in
1978. He entered Shochiku that same year but left in 1991 to study law. He acquired a
law degree from UCLA in 1997 and spent the following academic year as a visiting
researcher at Harvard Law School. This legal background -- all but unprecedented in the
Japanese film business -- helped Sakomoto reform decades-old practices, while leading
Shochiku into the 21st century.

"By changing old ways and bringing in something new, you can build traditions, not just
tear them down," Sakomoto explains. "Traditions that are not just form but have real
substance, that are truly good."        

Over a six-year period, starting in 1998 when Sakomoto returned to the company as an
advisor and later vice president and COO, Shochiku sold a money-bleeding theme park
and studio, moved its corporate headquarters and flattened its organizational structure.
"(The last) is a very important point," says Sakomoto. "The pace of market change is
extremely fast. If you try to implement decisions in the old top-down manner, the
market's already moved on by the time you take action. Instead you have to transfer a
certain amount of power to everyone in the organization. In particular you have to give
the people closest to the market responsibility -- otherwise you can't keep up with

This restructuring drive, says Sakomoto, is now "98 percent complete," with the three
main components being the sell off of unprofitable assets, the paying down of debt and
the return to revenue growth. He is proudest achieving of the last through the acquisition
of such hits as I Am Sam, Dancer In the Dark and the Lord of the Rings trilogy, which
Shochiku distributed together with Nippon Herald, as well as the production of the
domestic hits , The Twilight Samurai, Quill and Casshern. "It's best for our customers if
we can provide them with a mix of entertaining foreign and domestic films," says

Through its Shochiku Multiplex Theatres subsidiary, Shochiku has also been revamping
its exhibition network, adding five new screens to its seven-screen Kyoto cineplex. by the
spring of 2005, while recently opening a new nine-screener in the Tokyo suburb of
Hashimoto. Another new site will open this September in Omiya and still another next
year in Akishima. Plans are also underway for sites in the Yokohama sub-district of
Sakuragicho, in cooperation with rival Toho, and in Yokohama in cooperation with
Tokyu Recreation. "We don't have any problem in joining together with other companies,
be they foreign or domestic, or even in different industries, as long as by doing so we can
serve our customers in the best possible way," comments Sakomoto.

Meanwhile, Shochiku is ramping up its a production slate. Yoji Yamada's The Secret
Sword -- The Devil's Fingernail, a follow-up to his hit period 2002 drama The Twilight
Samurai, will hit theatres this October. Also, Yojiro Takita's The Eyes of Asura Castle, a
big-budget samurai swashbuckler, is set for a 2005 spring release. "We are making films
with an eye on the foreign market," Sakomoto explains. "The bigger the market the better
the business and the easier it is to recoup. The two best are Europe and America and, after
them, Asia. It's relatively easy to appeal to Western film fans with period dramas, so we
are making a fairly large number of them."

But to finance these and other films, especially with money from abroad, Sakomoto
believe it is necessary to do business "clearly and transparently." This includes the
introduction of completion bonds, now a rarity in Japan, while assuming greater financial
risk as a company. "If we can do both we can open up all sorts of possibilities," says
Sakomoto has Hollywood-zed Shochiku's operations in other ways, including the launch
last year of a subsidiary, Shochiku Geino, that serves as a US-style talent agency. "Agents
are an important part of the business," comments Sakomoto. "They help us to develop the
talent we need."

But while working to make Shochiku a truly international company, Sakomoto is well
aware of the value of its heritage. To celebrate the 100th anniversary of Yasujiro Ozu,
who spent his entire four-decade career with the studio, Shochiku last year screened  new
prints of his films at major festivals in Europe, North America and Asia, while releasing
an Ozu DVD box set in Japan and broadcasting his entire oeuvre on an NHK satellite
channel. "Through these events we have been able to make people better aware of what a
truly wonderful library we have," commented Sakomoto. "That awareness will create big
business opportunities for us."