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Kadokawa at 70 Mines its Deep Vault for Film Future

Kadokawa Corp. is a major Japanese film company, but hardly a typical one. Unlike the other three members of the Motion Picture Producers Assn. of Japan — the organization that represents Japan’s film industry to the world — Kadokawa does not operate  a big theater chain.

Also, its lineup of foreign and domestic films does not top the box office charts with the same frequency as those of rivals Toho, Shochiku and Toei. Last year only one Kadokawa release, the World War II film “Fury,” earned the ¥1.0 billion ($8.3 million) traditionally considered the mark of commercial hit in Japan.

But the company, which traces its history back 70 years to 1945 when literary scholar Genyoshi Kadokawa launched it as a small independent publisher in Tokyo, is engaged in a wide variety of media-related businesses, with publishing still as a core.

That is, unlike other association members, Kadokawa can draw on a huge backlist of bestselling novels and comics, as well as exploit its films and animation over a range of media platforms. One is the popular Niconico video-streaming and live-broadcast site operated by Dwango, a telecommunications and media corporation that integrated with Kadokawa in October 2014 to form the holding company Kadokawa Dwango.

And as the rights-holder of films from the Daiei studio, an industry power from its founding in 1942 until its bankruptcy in 1971, Kadokawa boasts an extensive library of classic titles. It also has its own long list of hits going back to 1976, when then-president Haruki Kadokawa ventured flamboyantly and successfully into filmmaking as a producer and, later, director.

Haruki Kadokawa’s strategy of pairing book sales and movie releases was innovative for the time. The nearly 60 films he produced, from whodunnits to splashy period blockbusters, may not have pleased critics, but they were hits with audiences — and were credited with saving the Japanese film industry during a severe slump. In 1994, however, Haruki was arrested on a drug charge and his younger brother Tsuguhiko took over as president.

After that, the company temporarily stopped film production (since resumed), while embarking on series of acquisitions and restructurings that left it with a overstuffed organization chart, with some subsidiaries duplicating each other’s functions. In 2013, however, it pruned that structure by merging nine subsidiaries, while leaving eight of them as branded companies. Then in April it did away with the inhouse company system entirely, though the brands remained.

“We are steadily increasing the number of Japanese films we are making.”
Shinichiro Inoue

“It’s become simpler,” says Shinichiro Inoue, Kadokawa rep director and senior managing executive officer. “The various publishing companies that we merged were doing similar things, but separately. Now we’ve built an organization with teams that specialize in each genre, such as comics and young-adult fiction.”

In the midst of this revamp, Kadokawa has not neglected its film business. “We are steadily increasing the number of Japanese films we are producing,” Inoue says. “We were making just three or four a year, but … next year we’ll be upping the pace and releasing various types of films.”

Kadokawa’s lack of a big theater chain, although it has branded theaters Shinjuku, Yurakucho and Okazaki, will be no barrier to distributing a larger slate, Inoue says. “Our representatives negotiate with other (film) companies and together we develop a release strategy for our films.”

This approach, he adds, gives Kadokawa a flexibility it might not have by operating a chain itself: “We can make a good film without needing to program it into an entire chain.”

Flexibility is becoming more important as the Japanese market continues to split between big-budget domestic releases, usually based on bestselling comics or other hot media properties, and low-budget arthouse films. Mid-sized releases on between 100 and 200 screens, once a Kadokawa mainstay, are finding it harder to recoup. For the past four years, Kadokawa has avoided this not-so-sweet spot by making more genre films, including horror, softcore erotic, action and music, while keeping both costs and the number of screens down.

“We’ve been trying to recoup steadily not only through box office revenue but also through DVD releases and (VOD) streaming,” Inoue says.

Now the company is again making bigger-budget films. One is “Sailor Suit and Machine Gun: Graduation,” an actioner that Kadokawa’s film arm, Kadokawa Pictures, is producing to celebrate its 40th anniversary.

Starring newcomer Kanna Hashimoto as a high school girl who once ran a yakuza gang, the film is a sequel to a 1981 Kadokawa hit by Shinji Somai, well-remembered for a scene of the sailor-suit-wearing heroine spraying a roomful of gangsters with a sub-machine gun.

Another is “Grasshopper,” a revenge thriller with a cast headed by hot young star Toma Ikuta and veteran Tadanobu Asano , who has worked with a long list of internationally known directors such as Takeshi Kitano, Takashi Miike and Kiyoshi Kurosawa, while appearing in the Hollywood movies “47 Ronin” and “Battleship. Based on a Kadokawa novel by Kotaro Isaka, “Grasshopper” is set for a November release by Kadokawa and Shochiku.

“We’re the only publisher in Japan with such a large video production division,” Inoue says. “Kadokawa is unique.”

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