Shochiku Company Ltd.

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Shochiku Company Ltd.

4-1-1 Tsukiji, Chuo-ku
Tokyo 104-8422
Japan
Telephone: (+81) 3 5550 1533
Fax: (+81) 3 5550 1639
Web site: http://www.shochiku.co.jp

Public Company
Incorporated: 1895
Employees: 1,485
Sales: ¥9.61 billion ($836.20 million) (2005)
Stock Exchanges: Tokyo
Ticker Symbol: 9601
NAIC: 512131 Motion Picture Theaters, Except Drive-In; 512120 Motion Picture and Video Distribution; 711320 Promoters of Performing Arts, Sports, and Similar Events without Facilities

Shochiku Company Ltd. is one of Japan's oldest and largest vertically integrated film and theatrical production companies. With origins in traditional Kabuki theater, the company continues to operate the famed Kabuki-za Theater in Tokyo, Shochiku has long played a central role in the Japanese film industry, releasing the works of such cinema greats as Yasujiro Ozu, Hiroshi Shimizu, Nagisa Oshima, Takeshi Kitano, and Akira Kurosawa. The company is also behind the immensely popular Tora-san series, the world's longest running film series, with nearly 50 movies produced over nearly three decades. Film production remains a vital part of the group's revenues, representing some 20 percent or more of sales. The company's Kabuki theater operations, which include productions throughout Japan, account for an additional 10 percent of the company's sales, which topped ¥9.61 billion ($836.20 million) in 2005. Shochiku has adopted a vertical integration strategy in order to compete in the 2000s. The company not only produces films, it distributes them through its network of movie theaters. Through Shochiku Multiplex Theatres and other subsidiaries, the company operates some 300 screens in 50 theaters, including the Movix mulitplex theater chain. Shochiku, which owns one of Japan's most extensive film collections, produces television programming, including animated series such as the Gundam robots and Ultraman franchises. In 2005, the company created a dedicated animation division in order to increase its production of animated programming. Shochiku has also deepened its vertical integration through development of video and DVD production and distribution.

Kabuki Beginnings in the 19th Century

Brothers Matsujiro Shirai and Takejiro Ohtani founded a Kabuki theater company in Kyoto in 1895, combining the Chinese pronunciation of the first characters of their own names to form the company name Shochiku. The brothers quickly developed into prominent players in the Kabuki theater circuit, and by 1914 the company had taken over the Kabuki-za Theater in Tokyo. That theater was widely recognized as being Japan's most important Kabuki showcase. Into the beginning of the 2000s, the Kabuki-za continued to produce 50 shows per week.

Yet the 400-year-old Kabuki and Japan's other traditional theater forms had already begun to face a serious challenge from a new entertainment form: cinema. The first Japanese film production company had appeared shortly before World War I. At the same time, Japanese audiences were deserting the country's Kabuki theaters for the many films arriving from the United States. Shochiku recognized that its own future lay in adopting the new art form, and the company launched its own film production in 1920. The company built its own production studio in Kamata, in southern Tokyo. By the end of the year, Shochiku had already released its first film, Island Woman.

The company's entry into film production became all the more important after a fire destroyed the Kabuki-za theater in 1921. Shochiku began work on rebuilding the complex, which was completed in 1924. In the meantime, Shochiku's film production moved closer to its central role in the company's operations.

The success of the company's early film production led it to seek expansion, and in 1924 Shochiku listed on the Tokyo and Osaka Stock Exchanges. Shochiku also began attracting a number of talented directors who helped establish Japan as one of the world's film centers. Among the most famous of Japan's directors was Yasujiro Ozu, who joined Shochiku as an assistant soon after the company launched its own film production. By 1927, Ozu had been allowed to direct as well, completing his first film, Sword of Penitence. Ozu remained with Shochiku throughout his prestigious film career. Other noted contemporaries included Mikio Naruse, Heinosuke Gosho, and Hiroshi Shimizu.

Shochiku also played a key role in the modernization of Japanese cinema. In 1931, the company released Japan's first "talkie." Called Madam to Nyobo, roughly translated as "Proprietress and Wife," the film was seen as an allegory for the film industry's, and the country's, own acceptance of the trend toward modernization. Madam to Nyobo was a critical and popular success for Shochiku, firmly establishing the company as one of Japan's top two film producers in the prewar period.

While Shochiku continued to produce silent films for several more years, sound clearly represented the future of Japanese cinema. In order to develop its sound technology, Shochiku built a new production studio, at Ofuna. That facility was completed in 1936, at which time the Kamata studio was closed down. The Ofuna studio remained Shochiku's primary production facility until the turn of the 21st century.

Postwar Development

Shochiku continued to produce films during World War II, but soon fell foul of the country's military authorities, which judged that the company's film lacked appropriate nationalistic fervor. Shochiku fortunes fell during the war years; the success of the film 47 Ronin, a costume drama directed by Kenji Mizoguchi, helped saved the company from financial ruin.

In the aftermath of World War II, the Japanese film industry was more or less dismantled, with many of the country's film production companies put out of business. Shochiku remained one of the few survivors of this period and joined in with two other feature film producers, Toho and Dai Nippon, as well as several makers of short films, to create a voluntary industry oversight body, the Union of Motion Picture Producers.

Shochiku was able to return to film production by the end of the decade. In 1949, the company relisted its stock, now on the Tokyo, Osaka, Nagoya, Fukuoka, and Sapporo Stock Exchanges. In the meantime, the company was also forced to rebuild the Kabuki-za theater again, which had been bombed during the war. The theater reopened in 1951. That year also saw a new advancement for Shochiku and the Japanese film industry in general, when Shochiku released the country's first color film, a comedy called Carmen Comes Home. The film was not only the first color film in the country, it also used the very first stock of color film produced by Fuji, setting the stage for Fuji Film's emergence as a world leader in that market.

Shochiku faced difficulties in the late 1950s and early 1960s. The Japanese cinema market focused primarily on the country's major urban centers. Theaters, however, were often owned directly by the film producers who showed only their own films or films by partners. In this way, Toho had managed to secure the exclusive rights to much of the output of the Hollywood studios. Shochiku searched for its own partners in order to maintain its competitiveness. In 1960, the company created a partnership with Tokyu Recreation, which was a prominent real estate holder and cinema operator. The agreement gave Shochiku access to Tokyu's cinema network, which meant access to its audience as well.

The partnership played a role in Shochiku's survival during a severe industry downturn in the late 1960s, as film attendance began to decline with the growth of other forms of entertainment, especially television. Shochiku managed to weather this period, bolstered by the huge success of its first Tora-san film in 1969. Directed by Yoji Yamada and starring Kiyoshi Atsumi, the Torasan film series was to become the world's longest-running film franchise, with 48 films produced between 1969 and 1995, the year of Atsumi's death. The Tora-san series represented a steady and important revenue source for Shochiku.

In 1975, Shochiku completed its Togeki headquarters building in Tokyo. The new headquarters featured a view of the company's Kabuki-za Theater. From there, the company oversaw its development through a new boom period for Japanese cinema, which peaked between the mid-1980s and early 1990s. In 1987, the company distribution business received a lift with the construction of the Mullion shopping center and entertainment complex in Tokyo. That building was one of the first to feature several cinemas in the same complex. Of the three theaters in the Mullion center, three were owned by Shochiku.

Vertical Integration for the 2000s

The Mullion complex paved the way to a revolution in the Japanese film industry. In 1993, the legendary Hollywood studio of Warner Bros. teamed up with local partner Mycal to open Japan's first multiplex theater. The new type of theater, which featured 12 screens or more, represented a dramatic transformation of the Japanese film distribution market. One significant change was that the new theaters tended to open in the country's suburban market, a radical departure from the traditional focus on the country's main urban centers. In addition, the availability of multiple screens encouraged distributors to seek films from a variety of film producers. This trend was further encouraged by the creation of partnerships among film companies, often a necessity due to high real estate prices, to build and operate the new multiplex theaters.

Company Perspectives:

About Shochiku: Founded in 1895, Shochiku functions as a highly-tuned, vertically integrated entertainment entity, encompassing feature film and television production, theatrical distribution of Japanese & foreign motion pictures, worldwide sales, exhibition, DVD and home video distribution and the Kabuki Theater.

Shochiku created a dedicated theater subsidiary in 1996. Called Shochiku Multiplex Theaters, the new subsidiary began building and managing theaters for the company. Shochiku opened its first multiplex in 1997, making it the pioneer Japanese company in this enterprise. The company created its own theater brand, Movix, which became its flagship distribution vehicle. By 2005, the Movix chain included 13 multiplexes with a total of 124 screens. Shochiku itself directly controlled its 13 traditional theaters, with a total of 33 screens, while three other subsidiaries operated an additonal 27 screens.

Led by Toru Okuyama during the 1990s, Shochiku made an attempt to diversify its film production business, which had long favored so-called "middle class dramas." In an effort led by Okuyama's son Kazuyoshi, the company began producing a new range of films, including action films such as Sonatine, released in 1993. The new range of films was also designed to increase Shochiku's penetration of the foreign market, as Japan's action films, especially its "ninja" films, began building a worldwide audience.

Yet the Okuyamas' aggressive strategy clashed with the company's more conservative board of directors, which ousted the pair in 1998. The Okuyama's were in part victims of a new downturn in the Japanese film industry. The rise of the video game market, coupled with the explosion of the Internet, the arrival of satellite, and other new entertainment forms, began draining off Japanese moviegoers. With its financial position once again falling, Shochiku underwent a restructuring at the beginning of the 2000s, adopting a new vertical integration strategy.

The company now sought to expand its operations not only in film production and distribution but also in related areas such as video and DVD production and distribution, as well as venturing into the sales of ancillary products such as toys and T-shirts. Shochiku also boosted its range of television programming, particularly its production of lucrative animated series. This latter category represented a vast new market, given the huge global demand for Japanese anime movies and the corresponding market for licensed toys and other products. In order to capitalize on its own successful animated production, such as the Gundam robot series and the Ultraman series, Shochiku established a dedicated animation division in 2004.

Shochiku's fortunes were once again on an upswing. Buoyed by its renewed box office success, the company sales neared ¥10 billion ($950 million) for the first time in 2005. Celebrating its 110th anniversary that year, Shochiku remained the leading steward of Japan's Kabuki tradition as well as one of its most important film groups.

Principal Subsidiaries

Shochiku Aruze Communications (50%); Shochiku International; Shochiku Multiplex Theaters.

Key Dates:

1895:: Brothers Matsujiro Shirai and Takejiro Ohtani found Shochiku as a Kabuki theater company in Kyoto.
1914:: Shochiku takes over the famous Kabuki-za Theater in Tokyo.
1920:: The firm establishes a film production company, opens Katama studio, and releases its first film, Island Woman.
1924:: The company goes public on the Tokyo and Osaka Stock Exchanges.
1931:: Shochiku produces the first Japanese talking motion picture.
1936:: A new studio, in Ofuna, is built.
1945:: Shochiku cofounds Union of Motion Picture Producers to help rebuild the Japanese film industry.
1949:: The company relists its stock on the Tokyo, Osaka, Nagoya, Fukuoka, and Sapporo Stock Exchanges.
1951:: Shochiku releases the first color film in Japan.
1960:: The company forms a distribution partnership with Tokyu Recreation.
1969:: The first installment of the Tora-san series is released.
1975:: The company moves into a new headquarters building in Tokyo.
1987:: Shochiku opens three of six theaters in new Mullion shopping and entertainment complex.
1997:: The company opens the first Japanese-owned multiplex theater.
2004:: Shochiku launches a dedicated animation division.
2005:: Shochiku celebrates its 110th anniversary.