Thirteen years after Kazunori Kakihisa reopened a closed movie theater in Amakusa, Kumamoto Prefecture, he's getting close to screening his last reel on the big screen.
It will soon become impossible for his company to show new releases from the major distributors because they are abandoning film and exclusively going to digital.
"It's impossible for us to install digital equipment," says Kakihisa, president of Hondo Daiichi Eigeki. "We'll keep using film as long as we can."
All across Japan, theaters are transitioning from film reels to digital screens. Most of the major cineplexes will get rid of their film projectors this year. Since installing digital equipment costs about 10 million yen ($130,900), small theaters have to choose between making the switch or bringing down the curtain for good.
On Jan. 26, the Motion Picture Producers Association of Japan (MPPAJ), a federation of Japan's four major motion picture companies, announced that the number of movie theater screens declined for the first time in 18 years.
The sustained growth in cinema complexes has already saturated the market. With the continuing spread of digital theater screens, the permanent and temporary closure of older regional theaters is inevitable.
Last year, the number of screens was 3,339, 73 less than the previous year. This was partially due to the 40 screens that stopped operating after the March 11 Great East Japan Earthquake. Cinema complexes account for 2,774 of the screens in operation.
There was a rush to build cineplexes after the first opened in Japan in 1993, but last year that growth came to a stop when the number of cineplexes stayed about the same as the previous year. On the day of the announcement, MPPAJ Chairman Nobuyoshi Otani (also chairman of Shochiku Co.) said he was of the opinion that "the number (of cineplexes) has reached its peak."
Theater operators have built more screens to attract audiences and achieve the MPPAJ's stated goal of 200 million moviegoers a year. Now a battle for survival is heating up between the cineplexes.
Feeling the pinch even more are regional theaters run by independent operators. The Takatsuki Select Cinema in Takatsuki, Osaka Prefecture, closed last September.
"To protect their own cineplexes, the major distributors stopped giving us independent theaters hit films," says President Toshinori Kanda. "Then came the wave of digitalization."
Last year, cineplexes were able to keep digitalizing thanks to screening equipment leasing companies. However, more than a few regional theaters lack the wherewithal to lease.
"We get around 6,000 customers a year," says Isamu Horioka, president of Cinema Taurus in Tomakomai, Hokkaido Prefecture. "Leasing companies won't even talk to us if we don't have twice that."
"There are 50 movie theaters that will close because they are unable to switch to digital, with more likely to follow," predicts Shigeki Ito of the Japan Community Cinema Center, an organization that supports independent movie theaters.
The box office revenues for 2011 announced by the MPPAJ were 181.197 billion yen, down 17.9 percent over the prior year, collected from 144.726 million moviegoers, a 17 percent decline. The main causes were the effects of the March 11, 2011, quake and lackluster performance from 3-D films with pricey tickets that failed to turn into megahits. The amount of revenues used to expand the number of screens also turned downward.
A breakdown of revenues shows that those for Western movies dropped 20.3 percent over the prior year while those for Japanese films dropped 15.8 percent. In 2010, when revenues peaked at 220.7 billion yen, there were three major Japanese hits that sold more than 5 billion yen in tickets each, as well as three big Western hits that sold more than 10 billion yen in tickets. In 2011, neither genre produced such a hit film.
The presidents of Japan's major motion picture companies have spoken out on how difficult the steep decline has been for them.
"(Box office) revenues are the source of our profits," says Toho Co. President Yoshinari Shimatani. "We're taking it very seriously."
According to Toei Co. President Yusuke Okada, "Cineplexes have become commonplace and people may be getting tired of them."
Shochiku President Junichi Sakomoto says that customer behavior patterns have changed: "We have to accept that we have been on a downward trend since 2010 or earlier."
Film journalist Hiroo Otaka says, "3-D's effect on revenues is fading, and people are gradually getting tired of major productions led by the TV networks."
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