Japan's Shochiku has signed a $5m three-year, first-look distribution deal with Leonardo DiCaprio's production company Appian Way.

In return for Shochiku's $5m, to cover Appian's project development overhead costs, for the next three years it will have first negotiation rights to distribute Appian Way films in Japan.

Appian Way was established in August 2001 in Los Angeles by DiCaprio and financed by the US sales and production company Initial Entertainment Group. Shochiku has a close relationship with Graham King, CEO of IEG. Together with Nippon Herald, the company will co-distribute Martin Scorsese's Gangs Of New York, which IEG co-financed with Miramax, and Michael Mann's Ali, which IEG co-financed with Columbia Pictures, later this year.

The deal is part of Shochiku's new business plan to focus more closely on foreign film distribution. "We would like to distribute more Hollywood blockbuster films and good quality European films," explains Shinobu Suzuki, Shochiku international acquisitions manager.

Shochiku has been distributing foreign films for two years, often in partnership with other distributors to minimise risk. Though relatively new to the business, Shochiku has enjoyed a string of successes, most recently with Lord Of The Rings, which it is co-distributing in Japan with Nippon Herald. The film has grossed $21.6m (Y2.7 billion) in two weeks since its release on March 2 on 580 screens nationwide. Also the company co-distributed the smash hit Dancer In The Dark with Asmik Ace, which earned $18.7m (Y2.4 billion) in 2001.

Among Shochiku's upcoming releases are It's All About Love, Dust and Iris.