Box office takings in Japan weredown 8% in 2005 with initial estimates pegging the box office for the last 12months at close to $1.82 billion. Technically there was not a single $100mgrosser though Howl's Moving Castlecontinued to perform well, following its first place ranking in 2004 of morethan $180m with an additional $50m that ranked ahead of all local releases lastyear. And the fourth installment of the HarryPotter series has now entered into the nine-figure arena after finishingsecond to Star Wars: Episode III - Revenge of the Sith at calendar's close on December31.

The prior year had recorded four $100mmovies and it is only the volume of product and the glut of films thatperformed well but shy of blockbuster levels that staved off a double-digitdecline. As in the United States, the Japaneseproduction sector is in the thrall of remakes and sequels and the audienceattitude toward recycled fare has translated into diminishing returns. Animatedseries are in the vanguard of this low risk gestalt but the live-action Bayside Shakedown series saw two new entries(Negotiator, The Suspect) in 2005 with combined box office that amounted to about45% of BS2's record gross for a non-animated local production.

The cautious, tentative view in film-makingmay also account for the abrupt decline in new cinema construction. Japanremains the most under screened of all the major markets and despite industryacknowledgement of the necessity to open new venues outside of the major urbancenters; exhibition continues to drag its feet about extending its reach.

Toho once again emerged as the topdistributor, nearly doubling the market share of its closest rival. It andother long-standing local companies are virtually reliant on indigenousproduct. However, the dominance of Japanese and American movies saw theincursion of a Korean film (A Moment toRemember) among the year's top 20 grossers andother films from that country finding strong commercial acceptance. Alsosignificant was the ascendance of Gaga over such stalwarts as Shochiku and Toeiwith a mixed slate of mainstream and specialized movies both local and foreign.It's a model that's likely to inform the future of the Japanese marketplace.

Japan -Top Grossers 2005

Title Distrib Gross US$

Star Wars: Epi III - Revenge of

the Sith Fox 82,698,529

Harry Potter and the Gobletof Fire WB 70,275,614

War of the Worlds UIP 53,877,295

Howl's Moving Castle * Toho 50,217,663

Charlie and the ChocolateFactory WB 47,439,665

The Phantom of the Opera Gaga 38,382,380

Pokemon 2005 Toho 36,924,081

Negotiator Toho 36,243,850

Ocean's Twelve WB 35,142,667

Nana Toho 34,829,772

Suspect MuroiShinji Toho 33,587,031

Densha Otoko Toho 32,960,335

Mr. AndMrs. Smith Towa 27,223,080

A Moment to Remember Gaga 25,149,153

Constantine WB 25,147,082

Year One in the North Toei 23,586,447

April Snow UIP 22,594,178

Always - Sunset on Third Street Toho 22,435,515

Shall We Dance' Gaga 22,062,355

Lorelei Toho 21,842,619

* does not include 2004 revenues

JapanMarket Share 2005

Distributor MarketShare

Toho 25%

Warner Bros. 12.70%

UIP 8.70%

Fox 7.80%

Gaga 7.60%

Shochiku 6%

Toei 5.70%

Buena Vista 4.40%

Asmik Ace 3.20%

Columbia/TriStar 2.60%

Other * 16.30%

* none greater than 2%