Tokyo: Japan’s New Production Incentives Risk Doing as Much Harm as Good

Japan has rejigged its incentives scheme for international productions as part of the bold IP360 national strategy to boost its content sector. But a raised minimum budget requirement risks squeezing out mid-sized productions, preventing local crews and producers gaining valuable experience on international projects, says Tokyo Vice producer Alex Boden. Meanwhile, ongoing opacity around criterion hampers decision making for location shoots of every scale.

Replacing the previous JLOX scheme run by the Japan Film Commission, the new program will be overseen by the powerful Ministry of Economy, Trade and Industry (METI), which is taking the lead on the IP360 initiatives. Although it offers a generous uncapped 50 percent rebate on spend in Japan for international projects, the new minimum budget of 800 million yen – $5.1 million at current exchange rates – excludes most independent films and many co-productions.

A Japanese production partner is still required but few have worked with budgets of that size, which is well above the average for domestic productions.

“There are hardly any producers in Japan who have had production experience well above the $5 million mark… So, who would you even go to?” Boden told The Hollywood Reporter, talking the day after his keynote speech at the annual Motion Picture Association (MPA) seminar at Tokyo International Film Festival.

Many European productions also don’t have budgets of that scale.

“There are a lot of European projects, including from countries Japan has recently ratified co-production treaties with, that now won’t be able to come to Japan. Instead of doing half the production here, or the whole shoot here, they’re having to change completely: spend less here, do maybe five or ten days, and try to do the rest overseas,” added Boden.

Those lower and mid-budget films are where most in the industry build skills and knowhow, noted Boden, who began his own career on just such productions.

As part of the IP360 plan to raise overseas sales of Japanese content to $127 billion (20 trillion yen) by 2033, the government has allocated $222 million (35 billion yen) for subsidies to content-related business in the current fiscal year. And there is the same 800 million yen/$5.1 million minimum budget for domestic live-action productions as there is for international projects shooting in Japan, suggesting the target is tentpole films and shows.

There also appears to be a shift in emphasis from attracting overseas productions to Japan to more focus on export of local content.

“It doesn’t need to be either/or at all, and it shouldn’t be. One should help the other,” said Boden, underlining a recurring theme in the MPA seminar that local crews, producers and actors all benefit from exposure to international projects, and vice-versa.

The lack of transparency in the incentives’ application process, alongside excessive bureaucracy and uncertainty, remain issues, although Japanese industry folk have similar complaints about applying for export support.

“Why would you be secretive about an incentive scheme that’s supposed to be about overseas revenues? Making it completely opaque, and not translating it, I think is very unusual when you’re trying to attract international productions. I think more openness is the headline here,” said Boden, who was meeting with ministry officials while in Tokyo to discuss the program.

METI has established a taskforce to work on the incentives scheme, though its membership has not yet been publicly announced.

Boden was chair of the Production Guild of Great Britain for four years while the UK increased the number of international productions shooting there. Specialist lawyers, accountants and producers were all closely involved in reforming the UK tax credit system, pointed out Boden.

“The schemes that are working all have one thing in common: they’re transparent and they’re very clear about their guidelines,” said Boden.

International shoots bring more than just the immediate spend, putting locations on tourist itineraries and generating ongoing revenue. However, Japan is experiencing a record inbound tourism boom and some related overtourism problems. Those include overcrowding and some disruptive behavior at sites made famous in movies, anime and manga, and the government seems to have cooled on its film-tourism push – something Boden believes is a mistake.

“I love that people are still going to the Park Hyatt Tokyo [from Lost in Translation] 25 years on. It’s quite incredible, even though it’s been renovated, the fact that continues,” said Boden, speaking a couple of blocks from where Sofia Coppola shot the iconic hotel bedroom and bar scenes. “That’s just the power of film tourism. It puts Japan on the map. And I think a big city like Tokyo cope with it.”