Shochiku Co., one of Japan’s biggest exhibitors and theatrical distributors, unveiled June 6 an aggressive three-year strategy to build about 100 new screens and location-based entertainment sites across the country.
The company hopes to emulate the successful example of Warners Bros. in its multiscreen joint venture with local partner Mycal in several secondary cities.
Describing itself as the “first Japanese major to announce a development strategy of this scale,” Shochiku said it had launched the first phase of a long-term plan to develop multiplex theaters and LBE in key Japanese cities as well as in suburban areas. The projected budget for the program, excluding land costs, is about 8 billion yen ($94 million) – a staggeringly large investment, even for a major such as Shochiku.
The first site, according to company officials, is in Kobe, the south-central city that was devastated by an earthquake in January. Shochiku had just begun construction on its first multiplex, a seven-screener, at the time of the quake. The structure “managed, amazingly to ride it out, unscathed,” said a spokesman. But chaos ensuing from the quake had set the opening date back to about March 1997, he added.
With its vast network of cinemas throughout Japan’s major cities, Shochiku has a definite advantage over its American competitors in the choice of sites for its new multiscreen complexes. Proposed locales include major cities such as Kyoto, Osaka and Yokohama. Many of the sites feature Shochiku cinemas that are in need of renovation. Under the new program to build an average eight screens-plus per site, the Shochiku-style multiplex is destined to be a high-rise affair. “There’s no question – on existing sites we’ll be going upward rather than outward,” said a spokesman.
Warner-Mycal, just like American Multiplex Cinemas and United Cinemas Intl., two other American firms now planning to build multiplexes in Japan, has so far found Japan’s top nine cities virtually impenetrable. Those nine cities account for the vast majority of nationwide box office revenue, but permits to build multiplexes in the largest urban centers are virtually impossible to acquire, according to the U.S. reps.
Warner-Mycal already has seven multiplexes operating in secondary cities and suburban areas. AMC announced plans in December to build a 13-screener to open early 1996 in the western city of Fukuoka. UCI, the Paramount-Universal co-venture, meanwhile, is starting construction of its first two Japanese multiplexes this year.
Shochiku also plans to build a multiplex in Fukuoka. But so far, the Americans are not worried about the Japanese.
“The way we look at it, Japan is a fantastic market with great potential and a population base of 125 million,” said Rein Rabakukk of Warner-Mycal.
“There’s plenty of room for many, many companies here. We certainly welcome the competition because the market here is limitless and has certainly proven itself over two years. Warner-Mycal intends to be as aggressive as Shochiku in its expansion plans. The beneficiaries will be the Japanese public,” he said.