Tokyo Film Festival: Why Japan Will Be a Key Battlefront in the Netflix-Disney+ Streaming Wars

'The Naked Director' still - H 2019
Courtesy of Netflix

Japan, the world's third largest economy, was the first Asian market where Hulu, Netflix and Disney launched their streaming services. Now, the country's rich creative legacies and love of Hollywood IP are expected to make it a hotbed for streaming growth.

When Netflix debuted in Japan in September 2015, local media compared the streaming giant's launch to the ‘Black Ships’ fleet of Commodore Perry, which forced the country to open its borders to trade in the mid-19th century after 250 years of isolation. But the streamer and its rivals have since won local hearts and minds, investing heavily in Japanese-language content, getting embraced by the Tokyo International Film Festival, and making inroads into the world’s third-largest entertainment market.

Japan has become the go-to test market for streamers in Asia, a region with massive SVOD growth potential. Hulu’s first international expansion was its Japan launch in 2011, though after struggling it sold its local platform to Nippon TV in 2014. Japan also was Netflix’s first Asia foray, while the global bow of Disney+ has been preceded by a Japan-only Disney Deluxe streaming service launched in April.

As Netflix's fate becomes increasingly reliant on international subscriber growth, content-loving Japan — the world's third largest economy — will remain a major battleground as the streaming wars get underway in earnest, analysts say. 

Disney Deluxe is the latest combatant in the local landscape, where its rivals also include a slew of domestic platforms. For $7.20 monthly, slightly cheaper than Netflix’s basic plan, viewers can access content from the full Disney catalog. With Disney having a long and deep appeal in Japan — Tokyo Disney Resort was the company’s first theme park outside the U.S. and remains its most profitable worldwide, while Aladdin took $112 million at the local box office this year (second only to North America) — the potential for the House of Mouse to build a major streaming business in Japan is clear.

“The number of Disney Deluxe subscribers is quickly increasing, based on research for our report on SVOD services, due to Disney IP fans in Japan … and probably the joint promotion campaign with Docomo, Japan's largest mobile service provider,” says Aya Umezu, CEO of entertainment marketing and data analysts Gem Partners.

Disney has yet to reveal its intentions for Disney Deluxe once Disney+ launches internationally — whether the two services will be combined, or run in tandem somehow — but the head start in habituating Japan's aging population to streaming its Disney content can hardly hurt. 

Meanwhile, Amazon Prime Video has steadily grown since launch in 2015 on the back of its Prime service (which costs $45.80 annually) and the popularity of its local variety and comedy shows, according to Vivek Couto, executive director of Media Partners Asia.

“Japan is a market of depth where no one has become a clear leader yet,” says Couto, who estimates Netflix, Amazon and Hulu account for a total of 40 percent of SVOD revenues.

The total local SVOD market was worth nearly $1.6 billion in 2018 and is predicted to top $2.1 billion by 2023, says Umezu.

This represents solid growth in an economy dogged by a shrinking youth demographic. Helping to fuel the expansion is a burgeoning library of original Japanese content from Amazon and Netflix. As well as multiple original anime productions, which also have significant overseas appeal, Netflix scored a surprise global hit with its Terrace House reality show, co-produced with Fuji TV. The Japanese period sex comedy The Naked Director also generated international attention, while a special Tokyo-set mini-season of Netflix's flagship Queer Eye reality series goes live next week.

The streamer is also making classic local content accessible globally, including Katsuhiro Otomo’s seminal 1988 anime Akira, which will screen at this year’s Tokyo film festival.

Not every festival has welcomed Netflix, Cannes being the most high-profile example, but Tokyo is literally rolling out the red carpet. Following its screening of Roma last year, the festival will show two Netflix originals in this edition. The inclusion of Tokyo-set Earthquake Bird, produced by local outfit Twenty First City and Scott Free Productions, will see star Alicia Vikander bring some much-needed international glamour to the event's red carpet. Martin Scorsese’s postwar mob epic The Irishman will get a 4K screening to bring festivities to a close on Nov. 5.

“Streaming platforms are not a threat: they give filmmakers the chance to make artistic films with a big budget, though I understand why there are doubts and fears in the industry,” says Tokyo programming director Yoshi Yatabe, who adds he would happily consider a Netflix production for the festival’s main competition.

The festival is certainly not turning its back on tradition, however, opening with veteran Yoji Yamada’s reboot of his 50-film Tora-san series, Tora-san, Wish You Were Here, and holding a gala screening of Talking With Pictures from Masayuki Suo (Shall We Dance?), a tale of a silent film narrator.

Festival director Takeo Hisamatsu believes festivals, cinemas and the streamers will ultimately find a way to peacefully co-exist, “Like with Roma, which had a theatrical release, I think it is good for moviegoers to be given an opportunity to see good films on a big screen regardless of the platform they are made for.”