Netflix Leasing Toho Studio Space in Tokyo as Japanese Content Expands

Netflix is to lease two sound stages at Toho Studios in order to help the streaming platform expand its production of original Japanese content.

The move was announced Thursday (local time) in a blog post by Ozawa Teiji, Netflix’s manager for production management and live action in Japan.

The streamer will have access to both Stage 7 and Stage 10, and several in-studio facilities within Toho Studios, which is located in central suburban Setagaya Ward in Tokyo. The facilities have previously been home to Kurosawa Akira’s “Seven Samurai,” and the Godzilla film series.

The deal kicks off from April and was described as running across “several years.” Upcoming shows “Yu Yu Hakusho,” a live action series derived from a manga about a teenager and an underground detective, and “Sanctuary,” a gritty look into the underbelly of professional sumo, will be the first to occupy the studios.

Netflix has previously signed supply deals with more than half a dozen Japanese animation producers, putting it on course to become a powerful force in anime. Volume production of live action Japanese content is a more recent development.

The company says it expects to release 25 Japanese original titles across both live and animated segments this year. These include the movies “Ride or Die,” “We Couldn’t Become Adults” and “Asakusa Kid”; new series including season 2 of “The Naked Director,” and new, unscripted format “Creator’s File: Gold.”

Pumping up the production volume reflects the growing importance of Japan, a latecomer generally to subscription video, both to the wider streaming industry and to Netflix.

A recent study by Singapore-based research house Media Partners Asia forecast that Japan is set to overtake Australia by the end of this year, and to emerge as Netflix’s largest revenue generating market in the Asia-Pacific region. It will also be the firm’s largest Asian market by subscribers.

As take-up of premium video in Japan has surged, Netflix has risen to become the leader in the market, overtaking the Nippon TV-owned Hulu Japan, which has been operational since 2011. Netflix has achieved that with lower levels of content investment and far fewer original Japanese shows than its comparable efforts in Korea.

Media Partners Asia calculates that Netflix’s recent success in Japan has been driven by price increases; continued customer growth and engagement from its strong telco partnerships (such as that with KDDI); and consumption across Netflix of local and international originals, anime, Korean content and its international library.

The researcher estimated that Netflix will spend $1 billion on local content production and acquisition in Asia in the current calendar year, with the lion’s share in Korea, India and Japan. Netflix itself has confirmed plans to spend close to half that sum in Korea.

Within Asia, Netflix has sufficient production volume to justify block booking physical production facilities only in South Korea. Elsewhere in the world, the streamer occupies studios in Canada, the U.K. and Spain.

“Since opening doors in 1932, we’ve welcomed a wide variety of filmmakers, streaming projects and commercial creators from around the world. We’re thrilled that Netflix is joining our roster of amazing talent at Toho Studio,” said Shimada Mitsuru, president and CEO of Toho Studios.

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