TOHO rising: Leading Japanese circuit maintains strong performance

For movie buffs, the name TOHO is synonymous with the iconic movie monsters Godzilla, Rodan and Mothra, and such Golden Age Japanese film classics as Seven Samurai, Throne of Blood and Woman in the Dunes.

But these days, within Japan, TOHO is just as recognized as the brand name of one of the top theatre circuits in the country. Boasting 62 sites with 567 screens, including five sites with 56 screens managed jointly with other exhibitors, TOHO Cinemas last year recorded its highest profits since its founding in 1997. That remarkable performance has spurred CineAsia to honor Kazuhiko Seta, TOHO Cinemas’ president, head of sales, internal control and corporate planning, with the “Exhibitor of the Year” Award at the 2013 convention in Hong Kong.

“It is a great honor to be able to single out the achievements of TOHO Cinemas and Kazuhiko Seta,” stated Robert H. Sunshine, the show’s co-managing director. “Despite many demographic obstacles, TOHO Cinemas has emerged as Japan’s leading cinema by employing the latest technologies and putting the customer first.”

Those obstacles Sunshine refers to include a decreasing birth rate, an increasingly older audience and a shrinking population, plus the rising popularity of video-on-demand services. Still, TOHO Cinemas in 2012 attained its highest market share of the last five years.

“The film exhibition business in Japan has been standing still, while business in the rest of the world has been in relatively good shape,” Seta notes. “Therefore, we know that we must work hard to increase attendance.”

3D blockbusters have played a key role in TOHO Cinemas’ recent success. As Seta explains, “We introduced 3D projection facilities to all of our sites in 2010 when Avatar was released. As many of our competitors had not introduced the system yet, it helped us expand our share enormously. As 30% of our screens are already equipped with 3D systems, which is higher than the other theatre chains in Japan, we can better cater to the needs of our customers.”

Streamlining of cinema operations also helped TOHO Cinemas’ bottom line. “When we introduced digital projection,” Seta recalls, “we decided that we could operate the system from the office without having any staffers in the screening room, utilizing the Theatre Management System… We built a system that distributes cinema advertisements and trailers from the laboratory directly to the cinema servers via dedicated lines, which contributed to reducing the labor pertaining to print assembling and disassembling at cinemas… And by introducing ticket-vending machines, we drastically cut down the number of staff in the office and box office. We also made some tickets electronic and slashed some administrational labor.”

TOHO Cinemas has also kept up with the current vogue for extra-large screens. “Our unique and original large-screen format named TCX™, or TOHO Cinemas Extra Large Screen, has a wall-to-wall screen, which is 20% wider than the screens of the same sized auditorium,” Seta reports. “Also, the floor, walls, ceiling and seats are all in dark colors, so that the dark auditorium reflects no light, like a darkroom. Further, many of our sites have a ‘Premier Screen’ which is smaller than regular auditoria but has wider reclining seats and/or pair seats. There are many regular customers who wait for the films to be shown in these auditoria.”

This month, TOHO Cinemas also introduced the first Dolby Atmos audio installation in Japan, and Seta says the circuit is also exploring IMAX and 4DX options.

Projects in the works include new theatres in the Nihonbashi district of Tokyo and the Kuzuha district of Osaka, both eyeing a spring 2014 opening, plus theatres in the Shinjuku and Ueno sections of Tokyo, slated for 2015 and 2017, respectively.

TOHO Cinemas does not have any in-theatre dining operations, but “we set tables and sofas in the lobbies of many sites so that the customers can enjoy food and drinks from the concessions,” Seta notes. The Roppongi Cinema in Tokyo, however, does feature a restaurant.

At the concession stand, “popcorn is our main food item,” Seta affirms. “In addition to the standard salt and caramel flavors, we provide additional flavors such as curry and cinnamon. We also sell rice burgers. As for sweets, we have received enthusiastic reaction to pancakes, which are now very popular in Japan. Regarding drinks, we recently introduced new, original flavors that add fruit-flavored syrups such as orange and apple to colas and iced teas—they’ve been very well-received.”

Seta reports that 56% of the films playing at TOHO cinemas in 2012 were Japanese productions. Hollywood output accounted for 28% of its fare, with 11% from Europe and 5% from the rest of Asia. The circuit is also expanding its programming to include such alternative attractions as opera, kabuki plays, musicals, and sporting events such as soccer and professional wrestling.

As for the audience breakdown, Seta explains, “Each area has its own unique customer demographic. For example, the main customers for cinemas in suburban areas are families, while youngsters gather at cinemas near train stations, and cinemas in cities welcome elderly people and adults. We enjoy a wide customer base, and therefore any film can work for us. However, when compared with our competitors, as we have more cinemas in urban areas, we enjoy a higher market share for films for youngsters, seniors and adults, as well as for artistic and academic films.”

Seta is humble about CineAsia’s recognition of his circuit’s outstanding record of success. “I trust this esteemed award is bestowed upon me on behalf of my predecessors who worked ever hard for the betterment of this company and the Japanese cinema. It is a great honor, and I would be elated if this award could encourage the 3,800 employees of the company who are working tirelessly even now to provide our credo, ‘Good Memories,’ to our customers."