TOKYO — Japan is the world’s second-largest film market; Tokyo, with a metro area of more than 20 million people, is that market’s thriving hub. Only in Tokyo are cinephiles likely to hit cinemas more than once or twice a year.

The city, particularly its entertainment centers of Shinjuku, Shibuya and the Ginza, is home to more arthouses than probably anywhere else on the planet.

Shibuya alone boasts 23 theaters and 37 screens within a 12-minute walk of the central train station, most of which are showing indie films, including European, Asian and Japanese titles that rarely play in North America outside a film festival or rep house.

And while total box office was down overall 6% in Japan last year due to a lack of successful tentpoles, Japanese pics made 3% more at the B.O.

Also, the number of these venues — called mini theaters in Japan — has been growing this decade. Among the newest — and oldest — is Eurospace, which in January opened a new two-screen venue in a Shibuya neighborhood that is a mix of trendy clubs and not-so-trendy “love hotels,” where the guests rent rooms in three-hour blocks.

Eurospace started business at its old location near Shibuya Station in 1982, when there were only a handful of arthouses in the city. It developed a loyal following with pioneering screenings of films by Wong Kar-wai, Abbas Kiarostomi and Kazuo Hara, as well as work by acclaimed younger filmmakers like Kenji Uchida (“A Stranger of Mine”) and Naoko Oginome (“Barber Yoshino”).

But Shibuya is changing — and Eurospace decided to change with it. “Our old facilities were too cramped,” explains Eurospace manager Masato Hojo. “Also, we had been paying rent for more than 20 years — we wanted to own our theater.”

The new location is not only on cheaper land but, Hojo explains, it is also part of the Shibuya Ward government’s 10-year area redevelopment plan.

In other words: Bye-bye cheesy love hotels; Hello new theaters — like Eurospace 1 and 2. With state-of-the-art DLP projection and Dolby sound systems, such theaters are no longer luxuries in the arthouse business, but necessities.

“Baby boomers would put up with crappy facilities because that was the only way they could see certain films; younger audiences don’t have the patience for that,” Hojo explains.

They are, however, flocking to the new theaters that have popped up in Shibuya in recent years, including the 40-seat “mini-minis” like Uplink X, Rise X and Cine La Sept that are annexes to larger, more established venues Uplink, Cinema Rise and Cinema East West.

To Hojo, however, the current boom has the look of a bubble. “Audiences have been turning away from foreign artfilms for about five years now,” he notes. “These new theaters exist mostly because the Japanese industry has been making more films and needs more places to show them. But now there’s a glut — there are actually fewer good Japanese films than before.”

The numbers back him up: In 2001, the Japanese film industry released 281 films; in 2005, 356 — and may of them end up in Shibuya. Among Eurospace’s recent hits is “Who’s Camus Anyway?” a drama by veteran Mitsuo Yanagimachi that screened in the 2005 Cannes Directors Fortnight.

But the theater’s schedule is also filled with films from elsewhere, including the currently playing Hong Kong toon “McDull — Prince de la Bun” and music docu “Touch the Sound.”

The same is true of other arthouses in Shibuya, which find space for “Brokeback Mountain” and “Hotel Rwanda,” but often join Eurospace in scheduling films from Europe and Asia that may play nowhere else in Japan.

“Shibuya is more adventurous than Shinjuku or the Ginza,” says Hojo. “They haven’t had the type of theater boom we’ve have here — their business culture is more conservative.”

And Tokyo as a whole? “You can see more movies here than anywhere else in the world,” he says. “That’s not going to change soon.”