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Defying a slowly shrinking population and the rise of streaming platforms, Japan’s box office is spiking in 2019 thanks to rising wages, a shift in corporate culture and a strong lineup of local and Hollywood films. Box office revenue was up 16 percent in the first half of the year, with July alone surging 30 percent from the same corridor in 2018, per local entertainment news service Bunkatsushin.
It’s shaping up to be a banner year for Hollywood, which hasn’t claimed more than 50 percent of the Japan box office since 2007, when the country was the No. 2 moviegoing market in the world behind North America (it was overtaken by China in 2013).
This year was sparked by Bohemian Rhapsody, which topped the charts for two weeks in January despite having debuted Nov. 9. Karaoke singalong and cosplay (fans dressing up in elaborate costumes) screenings helped keep audiences coming back for more, and by the time the biopic had spent 27 weeks in theaters in mid-May, it had pulled in $115.7 million.
The country also has helped fuel Aladdin‘s $1 billion-plus global run, ponying up $110 million to date. Similarly, Toy Story 4 debuted in July, has logged $81 million and is still playing. Even controversy around the similarities between The Lion King and Kimba the White Lion by legendary manga artist and animator Osamu Tezuka hasn’t dampened enthusiasm for the 2019 reboot, which took over $9 million in three days after its Aug. 9 bow.
The combination of strong performances from Disney (which has long been strong in Japan and now includes Fox) and local giant Toho is driving the market, says Aya Umezu, founder and CEO of movie marketing and data analysis firm Gem Partners.
Toho was even more dominant than usual, posting record first-half box office of $392 million (¥41.3 billion), up 39 percent on 2019, and July up a whopping 122 percent. Adding to its always strong domestic slate were two Hollywood remakes of IP it has strong connections to, Pokemon: Detective Pikachu and Godzilla: King of the Monsters, which took $27 million and $25.4 million, respectively, making Japan their second-biggest international markets to China by a wide margin.
Underlying the moviegoing boom is demand for recreation amid government reform, says Tokyo-based Jefferies analyst Shinnosuke Takeuchi, who covers entertainment stocks, including Toho.
“Leisure time is also increasing as the Work Style Reforms being promoted by the government have led to a decrease in working times,” says Takeuchi, referring to measures designed to change Japan’s notoriously harsh corporate culture. The reforms came into effect in April and include encouraging employees to take paid vacation days (the average worker only uses half of their annual leave). A labor shortage has pushed unemployment down to 2.3 percent and wages up after decades of stagflation.
“People are looking for ways to spend time with friends and family,” says Takeuchi, “and going to the movies is still a preferred leisure choice for Japanese people.”
And the rise of Netflix, Amazon and local rivals isn’t yet putting a dent in theatrical earnings, agree Takeuchi and Umezu.
“Yes, the number of SVOD subscribers has been increasing, but it doesn’t seem to be keeping people from going to the cinema,” suggests Umezu, who says research by her company shows more than half of SVOD subscribers in Japan also watch movies in theaters.
Takeuchi, who predicted strong leisure growth in a 2017 research note, sees the good times continuing to roll for the immediate future.
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