At the 1990 American Film Market, a 60-member contingent from Gaga swept in and spent big – mainly on “B”-grade titles – to feed Japan’s voracious video market.

Those high-profile days, when Gaga did a lot of things for effect, are over now. The man who’s on the ground, appearing for Gaga at the world’s major markets with an ever-growing budget, is a quietly spoken operator who moves with a leaner, more purposeful team.

Kaz Tadashiki, president of Gaga’s international operations and film distribution division, is in charge of executing the company’s up-market shift toward A titles.

“Compared to seven or eight years ago, when the licensing division was our core business, theatrical distribution was hardly what you’d call mainstream – we used to exist as part of the promotional division,” says Tadashiki. “Now, we’re acquiring mainly A titles; we’re out there in our own right.”

The “core business” of eight years ago – acquiring rights to foreign films, mainly U.S. ones, for videos and then licensing to video shops and theaters – still turns a profit for Gaga, but these days it accounts for only 20% to 30% of its total revenues.

These days, Tadashiki easily spends more than $30 million (2.5 billion yen) at one film market or another, mainly on A movies for nationwide theatrical distribution in Japan.

Target marketing

“The licensing division is still separately acquiring B and even C titles from overseas, mainly from the U.S., Hong Kong and some in Europe,” he says. “But overall, we’re going more and more for the mainstream theatrical market.”

To show how things have changed, Tadashiki’s interest – and the bulk of Gaga’s acquisitions – seems to come from major film markets other than AFM.

“AFM is not as big for us anymore,” says Tadashiki. “We bought 25 titles this year – most were B or video-driven pix, but we couldn’t buy any A pictures. At the last MIFED (the Milan market), we bought more than double our budget, so by the time of AFM, we were quite relaxed.”

Gaga wants the hot films, but seems more interested in the sort of big gambles – and huge payoffs – that come from a choice like “The Mask.”

“It was clear from this year’s AFM that conditions for sellers are heating up price-wise,” says Tadashiki. “I decided before AFM not to enter bidding wars for the big glamour titles – though I guess without MIFED, we would have had to change that attitude.”

Acquiring “The Mask” and “Johnny Mnemonic” (or “JM,” as it’s titled in Japan) as both Tadashiki and Gaga president Tetsu Fujimura readily admit, was as much due to luck as anything else.

But there’s as much wisdom in Gaga’s recent big-ticket acquisitions as luck – partly due, perhaps, to the company’s maintenance of a full-time office in Los Angeles to collect and feed industry information back to Tokyo. The company also boasts its online data base, which Fujimura boasts is the most comprehensive in Japan and can produce detailed analyses of the track records of actors, directors and films.

Increasingly, though, Gaga’s purchases are being made elsewhere. “The sources of acquisitions in the U.S. are becoming very limited,” says Tadashiki.

“There are many projects, but not many are actually being realized before they’re ready to buy. We committed to ‘Mask II’ before the script was even written.”

Tadashiki has strong expectations for Cannes: “I think there’ll be more A titles coming up, and our budget’s increased to reflect that.”

Gaga will go to Cannes with a budget of $20 million to $30 million and more than 15 reps. “Maybe we’ll buy 20 to 25 titles, including small ones. But last year at Cannes, we spent only $12 million for 23 titles.”

The company’s acquisitions’ budgets reflect its changing priorities. In 1992, Gaga acquired 109 titles, for a total of 3.6 billion yen ($30 million) In 1993, there were 86 titles for $33 million. In 1994,110 titles were acquired for about $47 million.

A change in Gaga’s strategies is a direct result of its recent successes – and a big upward shift in the company’s position in Japan. “The key for us is to keep good market connections with distributors, foreign firms and the TV market,” says Tadashiki.

In America, where Gaga still acquires 80% to 90% of its foreign films, the company’s recent successes also have helped.

“Because it’s really tough to package the deals – only a few big companies can really package the big titles, it means that from now on, we’re going to strengthen our relationships with those companies – like New Line and MDP Worldwide,” says Tadashiki.

“Our competition is very segmented. In theatrical distribution, there’s just the big three (Toho-Towa, Nippon Herald, Shochiku/Fuji), then there’s only us,” says Tadashiki. “No other company can distribute theatrically worldwide. A distributor has to have a licensing area, such as the video field, and with the competitors we’ve got, there’s no comparison.”

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