Culture Convenience Club (CCC), the company behind Japan’s largest video rental chain Tsutaya, has acquired a 33.4% share in Taiwanese film and video distributor Deltamac, a subsidiary of optical media giant CMC Group. 

CCC purchased the stake for $8.16m in a partnership agreement signed on June 25, marking the first stage of a long-term strategy for both territories to expand their businesses in Asia.

Deltamac is a major player in home entertainment distribution of Hollywood, Taiwanese and other Asian titles and one of Hong Kong’s larger theatrical distributors. Sister company CMC Entertainment is a major theatrical player in Taiwan where it distributed Taiwanese epic Warriors Of The Rainbow: Seediq Bale.

Through the partnership with CCC, Deltamac aims to both strengthen its acquisition of Japanese and Asian contents and the export of Taiwanese films. Deltamac also looks to implement Tsutaya’s digital distribution and platform creation know-how.

Deltamac executive Maggy Tsai commented on the deal: “It will help both sides grow their acquisition power and distribution channels in the Taiwanese, Chinese and Japanese markets. We aim to offer a wider variety of contents to Taiwanese consumers and secure foreign sales rights to Japanese and Asian contents, expanding our business to the rest of Asia.”

In Japan, Tsutaya holds an overwhelming market share in the video and music rental sector with 1470 directly managed and franchise video and book shops across the country. Successful Netflix-style home DVD rental (Discas) and VoD (Tsutaya TV) services plus a point card usable at convenience stores and restaurants have helped continue to boost revenues year-on-year.

The Deltamac deal follows a recent membership tie-up between Tsutaya and Yahoo! Japan resulting in a combined total of 90 million user accounts.

Nonetheless, CCC and other Japanese contents companies are feeling the growing necessity to expand beyond the domestic market, particularly into China.

CCC CEO Muneaki Masuda also spoke about the partnership: “Through the synergy created by the adoption of our DVD and VoD infrastructure in Taiwan and the ongoing partnership with CMC Group, who are also active in Hong Kong and China, we want to expand our business throughout Asia.”