2009 Box Office Review - Japan - Part 1
Cumulative box office, total admissions, screens and ticket prices all rose in Japan this year, though the number of releases fell from 806 in ’08 to 762 in ‘09. Box office was up 66% to ¥206 billion for the year from ¥195 billion in 2008. Admissions also grew 5% to 169 million as compared to 160.5 million in ’08. Ticket prices had a slight increase from ¥1214 to ¥1217, though the walk-in price remains ¥1800. This was the first price increase since 2003.
The total number of screens in Japan increased to 3,396 from 3,359 in ’08 but there had been a 3.6% year-on-year construction rate throughout the rest of the last decade so new theater building is slowing.
With local films eclipsing the number of imported films at the box office since 2006, the changed domestic market peaked this year with 448 Japanese films in release. These Japanese films earned a 57% market share of gross box office. However, even with this year’s additional 30 releases over the prior year, market share was down 2.5% but represented ¥117 billion in earnings and a small growth from 2008’s ¥116 billion box office total for domestic films. The combined gross of Japanese films has risen more than 117% over the decade while box office tallies for overseas films fell 24% over that same time period. The relatively small increase in admissions this year suggests that former audiences of foreign films have simply switched over to watching Japanese films.
International titles including US films rose to ¥88.7 billion across 314 titles, up from last year when Hollywood recorded its lowest earnings of the decade. This increase benefitted from Fox’s “Avatar,” which released December 23 and generated ¥1.3 billion from 749 screens and will clearly make a lasting impact at the box office.
“Harry Potter and the Half Blood Prince” also collected ¥8 billion of the total. “Potter 6’s” 846 screen release had the fantasy title finishing at number two for the year.
One of the reasons that imported films have declined is primarily due to the disappearance of independent distributors who relied on acquisitions. Japan is the third largest box office market in the world, the second in terms of highest grossing and the world’s second largest economy.
Toho had the top three films this year with the ¥8.6 billion success of overall #1 ranked “Rookies” as the top earner, followed by sequels “Pokemon: Arceus and the Jewel of Life” at ¥4.7 billion and “20th Century Boys- Chapter 3” at ¥4.4 billion.
Chinese sequel and the highest grossing non-Hollywood foreign language film “Red Cliff Part II” earned ¥5.6 billion, followed by Sony’s music documentary “Michael Jackson’s This Is It” ” (¥5.2 billion) and Disney’s animated “Up” (¥5 billion) rounded out the top 5.
Klock Worx had the sixth best performing title in “Evangelion: 2.0 You Can Not Advance” with ¥4 billion in grosses after a June release followed by Roland Emmerich’s disaster film “2012” from Sony which earned ¥3.8 billion at the box office.
Toho controlled the next three top performing slots with “Amalfi” (¥3.7 billion), “Detective Conan: The Raven Chaser” (¥3.5 billion) and “Gokusen The Movie” (¥3.48 billion).
Sony had the next two titles in the top rankings with “Angels and Demons” at ¥3.4 billion and “Terminator Salvation” earning ¥3.32 billion.
Japan is a developed market where box office has been flat for many years and many films jostle for release with just over 50 titles usually breaking the ¥1 billion mark. Ticket prices are the highest in the world and Japanese audiences see an average of 1.3 movies each year.
Mainstream Japanese films and many foreign language acquisitions are generally financed by Japanese consortiums, which jointly invest in projects. In the case of the Japanese films, many of those projects have familiar original content such as manga, TV series and novels that consortium partners can cross-promote. With ad sales plummeting, TV networks are looking to films to plug the gap. Consortium partners often include a theatrical distributor, publisher, advertising company, television station and video company. Talent agencies, record labels, post-production houses and toy-makers also are often involved. Everyone in the consortium participates in the financing, distribution and/or promotion of the film, which can often complicate decision-making.
When smaller local theatrical distributors use this approach and one of the partners may falter, it creates somewhat of a domino effect for the others, which has happened to much consequence over the last year. In fact, several local distributors who were using this strategy including Movie-Eye Entertainment, Wise Policy and probably Xanadeu filed for bankruptcy this past year with several other local independents rumored to be in financial difficulty as well. There were 34 tracked Japanese distributors in ’08. That number has fallen to 30 in 2009 as many smaller distributors have been forced to close their doors.
Probably the most significant change in the global sales market in the last five years is the shift away from the acquisition of foreign films in Japan to the increase in Japanese local production. One international film seller suggested that in the past, one could expect some level of sales from Japan whereas today, the Japanese buyers either want the film or will completely pass. There’s no real middle ground. Consequently, many English language films can no longer rely on the fallback of a video or television sale here.
The DVD market has also had a tremendous impact on the overall economics for the territory as revenues plunged in 2008 by more than 11%. The video market has declined by more than ¥90.4 billion over the past five years.
Ellen Pittleman, http://hybridentus.com, is a veteran studio executive based in Los Angeles. Most recently, she served as SVP, International Co-Productions and Worldwide Acquisitions for Paramount Pictures. She also launched the DVD Premiere group there, with films including Jonathan Demme’s “Neil Young: Heart of Gold” and the sequel to the $100MM+ “Save the Last Dance.” Working from a marketing and distribution perspective, she consults on strategic planning, deal negotiation, acquisitions, film library valuation and feature development with clients from Rio to London to Beijing. She’s also currently developing a feature on George Foreman’s comeback years, among other projects.