In its economic heyday of the late 1980s and early 1990s, there was a curious phenomenon of Hollywood celebrities showing up in Japanese commercials: Arnold Schwarzenegger hawking instant noodles, Harrison Ford pitching Kirin beer. To this day, Tommy Lee Jones still appears in a long-standing series advertising canned coffee.
However, you do not see much of this generation of Hollywood stars — no Dwayne Johnson promoting Toyotas, no Ryan Reynolds plugging energy drinks. That is not just because Japanese firms do not have the market budget they once had — Johnny Depp recently advertised Asahi beer — but because of a growing, often ignored fact: In Japan, Hollywood is not the draw it used to be.
The US share of the world’s third-biggest box office has been dropping for years, a phenomenon that predates the COVID-19 pandemic and has only been aggravated by it. Four of the top five grossing movies this year are domestic hits, with Hollywood’s only representative being the 1980s throwback Top Gun: Maverick.
It is part of a broader decoupling between Hollywood and Japan, but unlike the woes studios face in China, this is no ideological departure.
Japan is a free market, with no equivalent of the quota Beijing places on US movies, nor censors stepping in to prevent their release on moral grounds. Neither is it a pandemic phenomenon. Japan is one of the few countries that largely kept cinemas open during the global COVID-19 outbreak.
Instead, Japanese audiences are favoring domestic fare, a trend accelerated by an increase in big-budget animated movies. Every other film, except Top Gun, in the top five this year is Japan-made and uses animation, led by One Piece Film: Red and Jujutsu Kaisen 0: The Movie.
Even James Cameron is not immune. His Avatar: The Way of Water debuted at a disappointing third place in Japan, behind two animated motion pictures that have been on screens for weeks.
Some estimates say it is the only market where Avatar failed to debut at No. 1.
While the first Avatar was a box-office hit in Japan and the country’s 12th-highest grossing movie of all time, tastes have shifted in the decade-plus since.
The phenomenon is epitomized by the success of Demon Slayer: Kimetsu no Yaiba — the Movie: Mugen Train, which despite opening in the midst of the pandemic became Japan’s biggest-ever box office hit, toppling a record held since 2001 by Studio Ghibli’s Oscar-winning Spirited Away.
There is no single reason behind the audience’s changing tastes, but one must be the rising quality of domestic movies. The days of reusing animations and dragging the same action scenes out for episode after episode are over. Japanese animation these days is a big-budget affair, illustrated nowhere better than by the hits from director Makoto Shinkai, the creative force behind Your Name, the 2016 tale of body-swapping teens that is Japan’s fifth-biggest box-office blockbuster.
Shinkai’s recently released Suzume no Tojimari, a disaster-themed animated fantasy that is one of the movies that beat Avatar last weekend, is nearing ￥10 billion (US$75.4 million).
Meanwhile, the same pressures that affect the movie industry elsewhere also affect Japan. The rise of streaming means that films need to be tent-pole events to get people in seats. Animation directors such as Shinkai or Studio Ghibli alum Mamoru Hosoda have become brand names unto themselves, with budgets to match.
That pressure for success encourages making movies of established franchises such as One Piece, the long-running pirate series that is Japan’s all-time top-selling manga, or perennial high-school basketball tale Slam Dunk, a movie adaption of which beat Cameron to the top of the box office last weekend.
The rise of high-quality movies from the pages of comic books also means there is less room for Hollywood’s equivalents. Another reason for its shrinking share is the limited audience for the now-ubiquitous superhero movies.
With a few exceptions, such as Avengers and Spider-Man, consumers have not taken to them in the way they previously flocked to franchises such as Harry Potter or Pirates of the Caribbean.
While Black Panther might rank globally as the 10th biggest-grossing movie of the past decade, it scored just US$14.7 million in Japan. This year’s Thor: Love and Thunder earned a paltry US$9.8 million.
Even Walt Disney Co’s animation hits seem to be struggling. While 2013’s Frozen grossed nearly US$250 million in Japan — 20 percent of its total — recent entries have done startlingly poorly.
Last year’s Encanto earned just US$6.8 million, Raya and the Last Dragon US$3.3 million and Strange World, released a month ago, less than US$1 million.
For a Disney-crazy country, that failure should be concerning. Notably, remakes of previous hits such as Aladdin and Beauty and the Beast seem unaffected by this disinterest, a further indication that it is the properties themselves, not the hassle of going to the theater, that is turning audiences off.
Japan’s success in capturing audiences at home is to be applauded. There is no question of protectionism here, but it is hard not to feel a little troubled if the trend continues long term. Among certain generations, despite a lack of a common language, it is easy to bond over a shared love of Arnie blockbusters or the early career of Leonardo DiCaprio. For that to disappear entirely would be to lose something precious.
Of course, there is always the alternative: Japan could better export its increasingly high-quality products. Anime already scores highly on Netflix Inc worldwide, with more than one generation of Westerners having grown up watching Japanese cartoons.
Sony Group Corp’s purchase of anime streaming service Crunchyroll also bears close attention.
It will be interesting to see if the second season of the Japan-produced Netflix show Alice in Borderland, released this week, resonates with audiences. The first season largely sank without a trace abroad, only for the similarly themed South Korean Squid Game to become an international phenomenon.
Instead of aging Hollywood stars in Japanese commercials, it might be Japanese stars, real or otherwise, hawking products on Western screens.
Gearoid Reidy is a Bloomberg Opinion columnist covering Japan and the Koreas. He previously led the breaking news team in North Asia and was the Tokyo deputy bureau chief.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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