Toho Co., Ltd.

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Toho Co., Ltd.

1-2-1, Yuraku-cho
Chiyoda-ku
Tokyo 100-8415
Japan
( + 81)3-3591-1221
Fax: ( + 81)3-3591-2414
Web site: http://www.toho-group.co.jp

Public Company
Founded :1932
Employees :1,474
Sales :¥83.84 billion (US$927 million) (1998)
Stock Exchanges :Tokyo
NAIC :51211 Motion Picture & Video Production; 51212 Motion Picture & Video Distribution

Toho Co., Ltd. is one of the top Japanese filmmakers and one of the oldest in that country. Known worldwide for unleashing Godzilla in 1954, Toho has grown steadily to become a nearly US$1 billion international entertainment company.

Founding, 1932

Toho was founded in 1932. From the start, it faced serious competition in the entertainment industry, notably Shochiku Company Ltd., Japan’s oldest cinema company, founded in 1895 to promote Kabuki theater. Undeterred, Toho wasted little time before producing some of Japan’s top films. In 1954, the late Akira Kurosawa directed smash hit Seven Samurai for Toho, starring the late Toshiro Mifune. Kurosawa would go on to direct such movies as The Hidden Fortress (1958), Yojimbo (1961), and Sanjuro (1962). Other important directors, including Masaki Kobayashi (Harakiri, 1962; Rebellion, 1967) and Kihachi Okamoto (Samurai Assassin, 1965; Sword of Doom, 1966; Kill, 1968), worked for Toho as well. Actors who first signed with Toho and later went on to stardom included Kumi Mizuno (Frankenstein Conquers the World, 1965; and several Godzilla movies, 1965-99) and Haruo Nakajima, who made a nice career, though his face was never seen until the 1970s, playing Gojira, or Godzilla.

In 1959 Toho released its 100th film, the three and a half hour epic Nippon Tanjou (The Birth of Japan). Known as the Japanese version of The Ten Commandments, the movie—directed by Hiroshi Inagaki—featured every major actor under contract to the studio, including Mifune, Mizuno, Ganjiro Nakamura, Hajime Izu, Akira Takarada, Akira Kubo, Eijiro Tono, Jun Tazaki, Yoshio Kosugi, Kyoko Kagawa, Akihito Hirata, and Takashi Shimura.

Calling All Monsters, 1954

Toho made another huge mark on the world when a giant prehistoric underwater lizard made his first appearance terrorizing Tokyo in 1954 in a Japanese movie called Gojira. Two years later, Godzilla —King of the Monsters appeared in the United States with new footage and featuring Raymond Burr (who went on to fame as detective Perry Mason). It was one of the first post-World War II Japanese films to commercially break through the U.S. market. Burr would reappear in Godzilla 1985 (1985), commemorating the 30th anniversary of the lizard’s debut.

In 1955 Godzilla Raids Again hit the world, but then Godzilla would not resurface for nearly eight years, when he began coming face-to-face with other famous monsters of filmland. Veteran monster King Kong put in an appearance in King Kong tai Godzilla (1963). Giant flying moth Mothra debuted when but a grub in Mosura (1962), and costarred with Godzilla in Mosura tai Godzilla (1964). Rodan, a prehistoric pterodactyl, appeared in Radon (1956) first, then costarred with Godzilla later in Kaiju Daisenso (1968). Ghidra, a three-headed monster from outer space, joined the lizard on screen in Ghidorah Sandai Kaiju Chikyu Saldai no Kessan (1964). Ebirah, an enormous lobster, appeared in Nankai no Kai Ketto (1966) and Godzilla’s son debuted in Gojira no Musuko (1966). Other monster costars appeared throughout Godzilla’s career, including a huge blob of sludge named Hedora (Gojira tai Hedora, 1971), Gigan (Godzilla tai Gigan, 1972), Megalon (Gojira tai Me garo, 1973), Mechagodzilla (Gojira tai MekaGojira, 1974), and Biollante (Gojira tai Bioliante, 1989). Just about everyone showed up in Destroy All Monsters (1968) for a monster mash.

The Case of the Disappearing Market, 1960-96

Toho continued attracting talent into the 1980s. The late director Juzo Itami debuted in 1984 with The Funeral, and filmed nine other movies—almost all starring his wife, Nobuko Miyamoto—including Tampopo (1985), A Taxing Woman (1987), and The Gentle Art of Japanese Extortion (1992).

The number of movie screens in Japan dwindled over the period from 1960 to 1990. By 1991 there were only about 2,000 screens in the entire country, some 600 of which were reserved exclusively for Japanese films, most of which were produced and/or distributed by Japan’s Big Three: Toho, Shochiku, and Toei Co. Ltd. (which allied itself with Shochiku for greater distribution). At the time, Japan’s film business resembled the U.S. market during the 1930s-40s, when five Hollywood-based studios controlled 70 percent of first-run theaters (in a market in 1946 which sold 4.7 billion tickets). The near-monopoly caused the Justice Department to force U.S. studios to sell off the theaters they owned and distributors to sell movies on a theater-by-theater/movie-by-movie basis.

The chokehold on the limited number of screens, and the split caused by the “cinema warfare” of Toho vs. Shochiku/Toei, made it very difficult for foreign filmmakers to show their movies at all, and never at both Toho and Shochiku/Toei theaters. U.S. blockbuster Back to the Future II opened on only eight theaters in Tokyo and 160 throughout Japan. Even giant Japanese corporations Sony (which owns Columbia Pictures) and Matsushita (which owns MCA) bowed to the iron grip of Toho and Shochiku. Matsushita began working with Shochiku to open video theaters in which to show its films. Sony, on the other hand, made a saber-rattling gesture of fighting back, opening its own independent theaters starting in 1984, but the 100-seat theaters were created to show mostly Japanese films, not intended for major international distribution.

In the spring of 1991, Time Warner Inc. allied with Osaka-based Nichii Co.—renamed MYCAL Corporation, one of Japan’s largest retail companies—to construct 30 multiplex theaters in Japanese suburbs, each featuring six to 12 screens. With US$12.50 ticket prices, and with U.S. movie rentals bringing US$236 million from Japan, it was hoped the new theaters would capture more of the huge Japanese market. However, even Time-Warner located its theaters in areas where they would not directly compete with Toho- or Shochiku-owned theaters. By the end of 1991, Toho had turned total sales revenues of US$1.2 billion, while closest competitor Shochiku topped US$400 million. Toei allied with Saban Entertainment to produce the hit television series “Mighty Morphin’s Power Rangers” and the subsequent movie. They also diversified into real estate.

In 1992 Toho—which then owned 158 theaters—sold the rights for a Godzilla movie to U.S. filmmaker TriStar. The following year, Steven Spielberg’s Jurassic Park, with its computer-animated thunder lizards, was the most successful movie ever to date. Toei expanded slightly, building ten new theaters, and creating Sun Stripe Pictures for coproduction of movies with U.S. companies. Nikkatsu went under in 1993.

Toho flexed its huge legal tail in 1994 when it swatted Kia Motor Co. with a lawsuit for using a giant monster lizard resembling Godzilla, clawing its way through power lines in its ads, along with the slogan, “There’s only one thing more frightening to Japan. Aaaaaaaaaaaaaaagh! A well-made car for under $9,000.” The fact that Kia also supplied dealers with 25-foot-tall inflatable reptiles during the advertising campaign did not help. Toei and Saban allied that year with Italian broadcaster RTL Television to coproduce “V.R. Troopers” and “Cybertron,” companion shows to “Power Rangers.” Toei Animation allied with DIC Productions for domestic syndication and merchandising rights to the half-hour animated strip “Sailor Moon,” a US$1.5 billion Japanese entertainment phenomenon featuring a 14-year-old female action hero.

The Death of Godzilla, 1995

In 1995 Toho made one last domestic Godzilla film, Godzilla vs. Destroyer, killing off the monster. Speculation abounded about whether this was truly the end of the great lizard, a media fascination surpassed only by the death of Superman in the same decade. Toho capped 1996 with US$953.8 million in total revenue and US$5.4 million net income.

Market Changes and the Resurrection of Godzilla, 1997

In 1997 television networks and book publishers moved visibly into movie production. Mononoke Hime {Princess Mononoke) was produced by Studio Ghibli Co.—one of two film production companies affiliated with Tokuma Shoten (Publishing) Co. (the other being Daiei Co.). Directed by one of Japan’s best-loved animated filmmakers, Hayao Miyazaki (My Neighbor Totoro, 1993), Mononoke —distributed by Toho—made over US$108 million in its first seven weeks. Two previous Ghibli releases—Pom Poko (1994) and Whispers of the Heart (1995)—brought in US$22.8 million and US$16 million, respectively, making them huge successes. Disney consequently picked up Ghibli’s list for worldwide distribution. Toei distributed Kadokawa Shoten (Publishing) Co.’s scifi feature Evangelion in 1997, which made nearly US$13.8 million in four months. Spielberg’s The Lost World: Jurassic Park opened on more than 300 screens in Japan, along with a huge merchandising deal with MYCAL. Toho posted total revenue of US$905.4 million and net income of US$6.7 million.

By the end of 1998, over 153 million movie tickets were sold in Japan, topping the 150 million mark for the first time since 1986, and domestic box office revenues for the year reached an all-time record high of ¥193.4 billion (compared to the U.S. market in 1996: 1.3 billion movie tickets sold and US$26 billion in revenue). Things were looking up for the Japanese film industry as a whole.

This was not the case, however, for veteran film house Shochiku. In an attempt to diversify its holdings, and as a centenary celebration of its founding, Shochiku opened theme park Kamakura Cinema World in 1995. Dismantling part of its Ofuna Studio, the ¥15 billion park was a dismal failure, finally closing in December 1998. Father-and-son management team Toru and Kazuyoshi Okuyama were fired, and the company began moving away from production of “artsy” films, focusing more on commercially oriented movies. Shochiku lost over five percent of its workforce that year, and 6.3 percent of total revenue from 1997, falling to US$463.4 million, and posting a net loss of US$120.2 million. In an effort to revitalize itself, Shochiku began an extensive restructuring effort which included selling its headquarters building in Tokyo in February 1999 and naming Executive Vice-President Nobuyoshi Ohtani, a grandson of the company’s founder, to the top post. The following month, the company announced cutbacks in its film production schedule, slashing the number of films to be produced in 1999 and 2000, to about five or six per year, with Shochiku veteran Yoji Yamada (the “Tora-san” series) directing most of them. Shochiku, in a bold move, also announced that it would abolish its block booking policy, allowing affiliated movie houses to show foreign movies as well as its own.

Toei was also struggling in 1998, cutting over seven percent of its workforce and posting total revenues of US$600.9 million, a 14.5 percent loss from the previous year. Net income climbed just over five percent to US$6.1 million. Toho, however, had a fabulous year, with hit movies for 1998 including Odoru Daisosasen (Bayside Shakedown), produced in affiliation with Fuji TV based on the latter’s hit television police series. The company did reduce its own in-house production schedule, though, and began buying movies from other distributors, and commenced refurbishment of its affiliated movie houses.

Their big hit came that year when TriStar Pictures brought the 54-year-old lizard, and veteran of 22 Japanese films, back to the big screen in the United States with Godzilla, written by Dean Devlin and directed by Roland Emmerich, the duo behind blockbuster film Independence Day, starring Matthew Brode-rick. Since then, the company has been rolling in the proceeds. Godzilla’s own web site appeared (www.godzilla.com) and the licensing frenzy began: toys, lunchboxes, action figures—all of which Toho had been producing for years—now hit the U.S. market with a vengeance, along with video games. Toho closed 1998 with total revenue of ¥83.84 billion (US$927 million), up 2.4 percent from 1997, with net income jumping 33 percent to US$4.5 million. The company also added dramatically to its workforce, topping out at near 1,500 employees, a 178 percent growth rate.

By mid-1999 Toho had no plans to abolish its block booking system, but the Godzilla-sized monster Japanese filmmaker, standing tall in its industry like the Colossus of Rhodes, could be forced to as the Japanese market changed in the 21st century. Whether or not Toho changed its theater policy, Godzilla would return to the silver screen in December 1999 in Godzilla Millennium, propelling the lizard into another century of fame.