Stock-buy strengthens Dentsu's ties with studio

Dentsu, Japan’s largest advertising agency, has taken a capital stake in studio Toho as part of deal between the two media powerhouses to partner in a range of areas, including film production.

Dentsu will spend Y2.4 billion ($20.5 million) on 1.1 million Toho shares for a 0.58% share. The agency already promotes and finances Toho films, but the stock-buy strengthens its ties with the studio.

Toho and Dentsu have worked together on the production consortiums of many films, but Toho long limited its own production to little more than installments in its trademark “Godzilla” series. That is changing now — and the partnership with Dentsu will speed the transition to full-scale production. Dentsu has committed to jointly producing films with Toho for release in the Toho chain of theaters.

The pair also will study joint activities, from film development to merchandising.

Separately Dentsu, Japan’s five TV nets and three other agencies are gearing up to launch a Webcasting service next month, which they hope to extend to cell phones.

Dentsu, which announced the project in November, has recruited Nippon Television Network, Tokyo Broadcasting System, Fuji Television Network, TV Asahi and TV Tokyo as investors and content providers. Also, the Hakuhodo, Asatsu-DK and Tokyu agencies will take stakes.

Capitalization has yet to be announced but Dentsu will reportedly take a leading 18% stake, with the nets each holding 12.5% shares.

The nets already have online services but profits have been elusive. By banding together they hope to attract more eyeballs and turn Webcasting into a paying proposition.

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