TOHO Sets the Standard in Japanese Anime, Delivering Iconic Films and Series that Define the Future of Entertainment.
The Japanese entertainment industry has a deep-rooted tradition, spanning from Noh and Kabuki theater to its current status as a global powerhouse in cinema and music, with TOHO films playing a leading role. In your view, what is the key strength of the Japanese entertainment industry, and what factors have contributed to its success on the world stage?
This is a challenging question, and I’m sure opinions vary. However, when discussing the Japanese entertainment industry, it’s important to consider Japanese society as a whole. I believe Japan’s uniqueness lies in its homogeneity and the continuity of its history. Allowing its distinct culture to persist uninterrupted since the country's origins—so far back that even mythology plays a role in its foundation. These two factors are crucial to understanding Japan’s identity.
In the context of the entertainment industry, the government refers to it as "Japanese content," encompassing games, anime, motion pictures, television (including streaming services), and publishing. Each of these sectors is home to leading Japanese companies. While I haven’t conducted formal research, it seems unique that such a homogeneous society can produce such a diverse range of content. I believe this is due to Japan’s historical and cultural continuity.
For instance, Kabuki has existed for over 400 years. It began as popular entertainment and has since become a classical art form—just like Noh. Over time, Japan has developed new forms of entertainment while preserving and evolving its traditional ones. This ability to sustain and refine cultural expressions over generations is, I believe, the defining strength of Japan’s entertainment industry: its diversity within continuity.
You made an interesting point about Japan’s leadership across various entertainment categories. The global content industry is becoming increasingly competitive, with regional players like Korea and China gaining popularity. Given this landscape, what do you see as TOHO’s key strengths that will enable the company to remain competitive in this evolving and crowded market?
According to government data, Japan boasts the third-largest entertainment industry in the world, following the United States and China. Given Japan’s population size, this inotable achievement is quite remarkable—and the industry continue to expand, particularly in international markets which is a key trend that we must continue to build on.
I see two key strengths that position us well for the future. First, Japan excels at storytelling across various entertainment sectors. Great stories emerge from different sources—whether from games, manga, animation, or novels—providing a strong foundation for compelling content. This diversity of creative origins gives us a competitive edge.
Second, Japan has a proven track record of creating beloved characters. I am still serving as an outside board member for Pokémon, so I’ve seen firsthand the company’s exceptional capabilities. With over 800 creatures, the Pokémon IP continues to expand, making it the number one intellectual property (IP) company in the world. Japan is also home to globally recognized characters like Hello Kitty and Super Mario, and many of the top IP franchises originate from Japan. This combination—strong storytelling and the ability to craft enduring, lovable characters—sets us apart in an increasingly competitive global market.
You bring up an important challenge—Japan now has the oldest population in the world, and with a declining birth rate, the domestic market is shrinking. For the creative industry, this also means a smaller talent pool, which could impact the storytelling and character creation that have defined Japanese entertainment for so long. Looking ahead, how is TOHO addressing these challenges, and to what extent do you see internationalization as essential to the company’s future?
Before joining TOHO, I worked for its subsidiary, TOHO-TOWA COMPANY LIMITED. which distributes non-Japanese films and serves as the designated distributor for Universal and Paramount in Japan. Through that role, I occasionally attended global studio meetings. I remember one session, more than twelve or thirteen years ago, when an executive at Universal asked each country’s manager to present the current and future status of their market, including population trends. When I shared Japan’s population figures and the projected decline, they paused and asked, “How do you plan to do business in a country where the population is shrinking?” That question has stayed with me ever since, reinforcing the fact that globalization is not just an option for TOHO—it’s a necessity. We must expand our business beyond Japan.
I am grateful that TOHO has already established a strong domestic presence. As a distributor, we have approximately a 50% market share. In the cinema sector, our market share stands at around 30%. In addition, we are one of Japan's leading motion picture studios, and in our real estate business, the land we acquired 80 years ago puts us in a strong position.
While we are not yet the leading company in the anime industry, we are rapidly becoming one of the top companies in Japan. However, when a company has already achieved market leadership, it can be challenging to achieve further growth because competitors are constantly attempting to capture market share. Until approximately ten or eleven years ago, TOHO had minimal international presence. Since then, we have accelerated our global expansion, which is essential for our future growth. While we are committed to sustaining our presence in the Japanese market, we also recognize the importance of expanding our international operations.
The development of intellectual property in the face of a shrinking pool of creative talent is a pressing issue that has begun to receive attention from the government. It is evident that the conditions in both the anime and film industries are not optimal. The government has acknowledged the necessity to enhance the working environment for creative professionals. However, it is crucial to recognize the reality of Japan's declining population. Many young creatives are gravitating toward games and manga instead of film or anime because those industries offer greater opportunities for success and financial reward. If you ask manga publishers, they’ll tell you that everyone wants to create manga or become a manga editor—it’s seen as a pathway to major success. The same applies to gaming. A hit game can generate enormous profits, and the working conditions in gaming are often better than in motion pictures.
In order to continue growing and attracting international talent, globalization is critical. We are making progress, but there is still much to be done. The government has now allocated a higher priority to this issue. This commitment is further demonstrated by the scheduled meetings with us in September of last year, with former Prime Minister Kishida, and in February of this year, with current Prime Minister Ishiba. Japan's content industry is currently valued at approximately JPY 5.5 trillion, which is comparable to the semiconductor and steel industries, but only about a quarter the size of the automotive industry. By 2030 or 2035, the government hopes to see the content industry grow to match the automotive sector. The specific support measures to be provided by the government are yet to be determined, and this will be the focus in the future. Historically, the entertainment industry, particularly motion pictures and live performances—has received minimal government support. But as a way forward, they see it as a sector with significant global potential. While we acknowledge this recognition, we are eager to see specific measures implemented to support our industry.
What is the main thing that the government needs to do to support the industry to help that globalization in order to reach their target?
I’m not speaking on behalf of the government, but I do believe they are focusing on supporting anime and film. There are two key areas where we expect or hope to see action.
First, improving working conditions in the film and anime industries is essential. Absent this commitment, the government is unlikely to provide any support. This means we, as an industry, must make a commitment, which would require an estimated 20% increase in budgets—a significant investment. There is an organization, the Japan Motion Picture Production Standards Association that certifies films based on working conditions, setting a minimum standard. However, only 15% of films produced last year applied for certification. At TOHO, we apply for every film we produce, and we see firsthand that meeting these standards raises budgets by about 20%. The commitment to these standards may be a factor in the decision of independent producers to opt out. It’s a classic chicken-and-egg problem: the absence of a mandate has led to hesitation among companies to increase costs. However, if improvements in working conditions were mandatory, larger companies might be better equipped to manage the transition, while smaller independent producers could benefit from financial support. I believe this is where the government should step in. Improving working conditions would lead to better pay and stability, ultimately attracting more talent to the industry. This is the most critical issue facing us.
Secondly, the government is encouraging the film industry to adopt a more global orientation. Anime has already achieved significant success in international markets, and the success of GODZILLA MINUS ONE demonstrated the potential for Japanese live-action films on the global stage. The government recognizes this success and suggests that if we continue producing films of that caliber, the increased costs for better working conditions can be recovered. However, implementing such strategies is challenging in practice.
The reality is that generating revenue outside Japan poses significant challenges. For example, we were able to distribute "GODZILLA MINUS ONE" ourselves, leaving much of the revenue and profit to TOHO. However, most companies depend on third-party distributors, who typically take about two-thirds of their revenue. The challenge lies in the limited capacity of Japanese companies to self-distribute internationally due to a lack of the necessary infrastructure.
This raises a significant question: Can the government support the development of distribution infrastructure for Japanese companies? This is a broader issue they are now considering. While the government may not implement a large-scale solution, it could provide some level of financial assistance or explore alternatives, such as establishing a third-party agency to support international distribution.
Japan’s population may be declining, but one thing that isn’t is the number of foreign tourists. Last year, the country welcomed 37 million visitors, and the government aims to increase this to 60 million. Many of these tourists are seeking unique cultural experiences. Have you noticed any impact from this surge in foreign visitors, and what opportunities do you see emerging from this tourism boom?
We have yet to fully capitalize on this opportunity. One of our most popular attractions is the Godzilla statue in Shinjuku, which draws a lot of attention, but we don’t generate any revenue from it. However, we do have Godzilla stores in Shinjuku and Osaka, and we’re considering adding more.
In addition, we operate a Godzilla e-commerce site in the U.S., but our physical stores in Japan offer exclusive merchandise that fans love, and they tend to spend a lot on these limited-edition items. To attract tourists, it’s essential to have physical locations and offer unique products they can only get in Japan. We are exploring opportunities to expand our Godzilla store network to meet this growing demand.
In future, we are also considering opening an immersive anime café. These types of experiences appeal not only to tourists but also to Japanese fans, and we see them as a valuable way to enhance engagement with our properties.
Godzilla Store Daiba opened on Friday, March 14, 2025, TM＆©TOHO CO. LTD.
On a smaller scale, when we release a major film like GODZILLA MINUS ONE or a big anime feature, we identify opportunities to attract foreign tourists who might be interested in experiencing a Japanese film while they're in Japan. In urban areas where hotels are located near cinemas, we’ve worked with hotels to distribute fliers to their guests, informing them that a subtitled screening is available nearby. We believe many tourists would be interested in spending a couple of hours watching a film that isn’t yet available in their home country.
We have already implemented this approach in Shinjuku, Hibiya, and Hokkaido, with each location experiencing an increase in attendance. Given the positive results, we plan to continue expanding this initiative, as we see significant potential for further growth.
Your TOHOVision 2032 strategy outlines several key goals and midterm management plans, including financial targets such as achieving a JPY 75 billion profit and an ROE of 8%. Could you share more details on your strategic approach and what you see as the primary drivers of growth moving forward?
When TOHO Vision 2032 was developed, I had not yet assumed the role of president. The senior executives at the time gathered to develop this vision and a midterm business plan. This was during COVID-19, a period of great uncertainty when we had no clear signs of recovery. Setting ambitious goals under such circumstances was a bold move. However, we believed that the pandemic would eventually pass, and we began to observe strong momentum outside Japan—particularly in anime, which saw significant growth during that time.
Two key factors contributed to TOHO’s resilience during this period. First, while we had to temporarily close our cinemas and live stage performances, our real estate business provided a stable foundation for generating profits. This allowed us to continue paying dividends to our shareholders despite the downturn.
Second, the revenue and profit from anime and merchandising outside Japan surged during COVID-19. With people staying home, demand for streaming content skyrocketed, and platforms like Netflix experienced major growth. Fortunately, anime became one of the top content choices for audiences worldwide. The genre’s wide range of stories and styles attracted new fans, many of whom have remained engaged even in the post-pandemic era. This is why we established four strategic pillars three years ago: anime, IP, digital, and global expansion. These areas have been our primary focus.
After a thorough review of the past three years, we recognize that our execution hasn’t been perfect, but overall, we believe we’ve made strong progress. While we are aware of both our strengths and our limitations, we remain confident that our strategic direction is the right one to help us achieve our long-term goals.
You mentioned the different segments of TOHO’s business, which span a diverse range of group companies—from theater and real estate to anime and overseas expansion. Looking ahead, how do you plan to integrate these various divisions and maximize synergies between them to drive growth and achieve your strategic goals?
We appreciate your inquiry regarding this matter, as it highlights an area where we acknowledge the necessity for enhancement. We need to establish stronger connections between our different business segments. Historically, our business model was structured around three pillars: stage, motion pictures, and real estate. However, these divisions operated quite independently since their business models are fundamentally different.
When I was in charge of the live-action division, I was tasked with evaluating how we should manage the motion picture group, which also included anime at the time. This was during COVID, and after discussing with teams across the group, we decided that anime should be separated into its own division for two key reasons. First, the approach to anime is fundamentally different from live-action films. The film division primarily focuses on individual projects, working to ensure each movie is a major success at the box office. In contrast, the anime industry prioritizes the development of its IP. The process begins with the identification of a suitable project, which is often a television series. Once a robust fanbase has been established, a theatrical release is introduced. This strategy is characterized by a long-term perspective, as it fosters the growth of a dedicated fanbase, which in turn generates interest in multiple seasons of the same series, ensuring sustained engagement. Whereas live-action films typically operate on a one- to two-year timeline, anime often follows a ten-year business plan. Given these distinct strategies, separating the two made sense.
The second reason for the split was to enhance transparency for shareholders. Investors frequently pointed out that anime was experiencing strong growth but expressed concerns that we weren’t clearly distinguishing how much of the motion picture division’s revenue was coming from anime versus live-action. To address these concerns and provide greater clarity on the business performance of each segment, we established a separate division.
Following this restructuring, we established an entertainment unit that now encompasses motion pictures, anime, and live stage performances, with myself overseeing the group. Since then, we’ve been holding regular meetings, exchanging information, and fostering more collaboration between the divisions. As teams work more closely together, relationships strengthen, and new opportunities emerge. An illustration of this collaborative effort is Spy x Family. It started as a TV series, which then led to a theatrical film, and now our theartrical division has produced a musical adaptation. This kind of cross-platform integration is exactly what we want to continue fostering to maximize the strengths of each segment.
TOHO's Cross-Platform Series, SPY×FAMILY
©遠藤達哉／集英社・SPY×FAMILY製作委員会
We are now in a position to approach publishers and present ourselves as a one-stop service. If they entrust us with a project, we have the capability to handle everything—from producing a TV series to developing a motion picture and even creating a stage musical.
Furthermore, these stage productions can be international in scope, transcending the traditional boundaries of Japan. We have the potential to bring them to international markets like London or Shanghai, further expanding the reach of our content. This ability to seamlessly integrate different entertainment formats under one umbrella is a key strength of our group, and we need to continue leveraging it to create even more opportunities.
You have established new segments for IP and animation alongside overseas partnerships with Legendary Pictures and GKIDS to strengthen distribution in North America, as well as numerous collaborations with companies in Japan. Are you actively seeking new partnerships, and if so, what key areas are you focusing on when looking for potential partners?
Until three years ago, before we introduced our new strategic vision, TOHO had done almost no mergers and acquisitions (M&A) in the latter half of its nearly 90-year history, except for the acquisition of Virgin Cinemas—which turned out to be a very successful deal. While we were never opposed to M&A, we weren’t particularly aggressive about pursuing acquisitions either.
Around ten years ago, we had approximately 36 or 37 group companies, but that number eventually decreased to around 30. More recently, we are back to around 40, which represents a significant shift in a short timeframe. Of course, not every M&A deal is guaranteed to be successful, but each deal is carefully considered to align with our strategic objectives. For us, the primary objective is IP—its creation, ownership, and production.
Anime is a prime example of this growing trend. In recent years, external anime studios have been so busy that they haven’t had the capacity to take on additional work, making it necessary for us to establish our own studio.
Our partnership with GKIDS followed a similar rationale. When we self-distributed GODZILLA MINUS ONE in North America, we achieved remarkable success. However, we had internal reservations about the sustainability of this success, and we sought to understand whether it was a one-time phenomenon or the result of specific conditions. Around that time, we learned that GKIDS was looking to expand its operations, so we reached out and started discussions. Now, we feel confident that GKIDS will be a strong distribution partner for our films—as well as others’—in North America.
In terms of new partnerships, our primary focus is on infrastructure, albeit not on a significant scale, and IP—including its creation, ownership, and production. Until three years ago, we weren’t involved in M&A, but since then, we’ve completed around ten deals, including three international ones. Interestingly, since we’ve become more active in this space, we’ve started receiving a lot more inbound inquiries, and our team is currently engaged in reviewing numerous opportunities.
We recognize the need to be selective, but we are becoming more experienced with the process. Initially, we lacked substantial M&A knowledge, but we have progressively developed the expertise necessary to evaluate and identify suitable partners.
As the president of TOHO, what message would you like to share with our readers, and how do you hope TOHO—and yourself as a leader—are perceived in the global market?
From our perspective, TOHO is well known and holds a strong position in the Japanese entertainment industry. However, outside of Japan, many people are still unfamiliar with us.
We are committed to changing this. Gaining recognition globally will not only strengthen our brand but also create new opportunities for business and creative collaboration. We are actively working to engage with fans worldwide and build stronger connections beyond Japan. Our message is straightforward: We invite you to get to know us. We are excited to share our stories, our characters, and our creativity with audiences everywhere.
For more information, please visit their website at: https://www.toho.co.jp/en/company/info/profile
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