Japanese Film Industry Case Study

Policies to increase competitiveness of Japanese film Industry globally

Cooperation, Outbound FDI and Technology Transfer:

In the Global Logic of Strategic Alliance, Kenichi Ohmae suggests that due to the dispersion of technology, firms can increase their technological knowledge by cooperation with other partners. Indeed the Japanese did this early on, working with the Americans and Europeans to gain experience in new filming techniques and technology. For example, the Franco-Japanese film Typhoon over Nagasaki, Madame Butterfly (Italian-Japanese), and Geisha Girl (American-Japanese). Japanese firms have also been active in outbound FDI. For example, in 1989 Sony purchased Columbia pictures for 4.8 billion USD, including TriStar Films and the Loews Cinema Chain. Later, to expand its film arm, Sony also acquired MGM. In fact, for such outbound FDI by Japanese firms, they are able to benefit from a stronger yen as they

This is because while it requires a lot of resources to film a movie, marginal costs of downloading and distributing it via optical media is low, much less if distribution occurs via digital download. However this is a 2-sided sword, for pirating of popular Japanese movies is easy and happens often, thus exerting negative pressure on the Japanese economy’s earnings in this manner.

However, where the external economy of Japan’s film industry fails, it carries other benefits which benefit the economy indirectly. The largest reason might be the relatively large size of the domestic market and the reluctance of major companies to take the risks and costs of selling their products overseas, while small independent companies have difficulties raising funds even for production. In addition, for further export promotion, countermeasures against piracy, modification of products for different overseas market, and deliberate marketing strategies are necessary.