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ANNUAL REPORT 2008 NIPPON TELEVISION NETWORK 21 NTV_FH(E)_1021_master.indd 21 08.10.24 7:35:37 PM SSpecialpecial FFeature:eature: NNTV’sTV’s FFilmilm BBusinessusiness SStrategytrategy NTV’s Strengths in the Film Business Through its history, NTV’s film business has racked up a number of major successes with animation films produced jointly with Studio Ghibli. Hence, while other television stations adapt their television drama series to the big screen, NTV has built up the ability to plan and release box office successes from the start, which significantly differentiates the Company from other broadcasters and has become a major strength. Such efforts have led to a steady stream of hit films, such as ALWAYS—Sunset on Third Street and DEATH NOTE. Film Business at NTV An advantage of films is their long-term usability as a Company asset. NTV is working to enhance its film business, in accordance with the aim espoused in its new Medium-Term Management Plan of boosting non-broadcasting revenue. We also believe the film business contributes to the media value of terrestrial broadcasting. One clear difference between the film business and terrestrial broadcasting is in the larger implications of the term “capital contribution.” Secondary use of television programs is limited to popular shows, but drama series, animation series and movies have copyrights. Film copyrights, in particular, last 70 years, enabling them to generate value for an extended period. As our library of films grows, secondary revenues continue to increase each year. Also, as film content Seiji Okuda, Executive Producer, Content is naturally suited to multiple uses, there is still room for substantial growth. We will continue aggressive efforts to utilize such content in all sorts of ways. Film Production through the Production Committee System The production committee system is an excellent production system unique to Japan. Although NTV provides the primary capital and production resources for its film business, operations are carried out through a production committee system that brings together the capital infusions and copyrights of multiple media and content creation companies. The system grants the use of media platforms held by the participating companies, with the lead manager generally navigating production in consultation with the whole committee. Although our competitors may have production committees, in some cases the lead manager takes an exclusionary leadership position and dominates the copyright. At NTV, we work to ensure that the production committee acts as an overall enhancement to the films on which we head up production. In so doing, we recognize that if the work ultimately becomes a hit and we succeed as a production committee, the success will lead to profits for the Company. We therefore consider it very important to raise the morale of the production committee as a whole and to work together toward the overall goal of creating successful movies. We also believe that creators play a critical role in film production. Rather than hiding production and animation firms under the NTV label, we focus on building win–win relationships as equal partners, which is what I think attracts superior creative talent to the Company. 22 NIPPON TELEVISION NETWORK ANNUAL REPORT 2008 NTV_FH(E)_1021_master.indd 22 08.10.24 7:35:38 PM Overview of NTV Channeling Content Creation and Production Capabilities into Films Directed by NTV and Stakeholders Our Shareholders To the Film Business Employees We are making full use of our strengths as a leading content provider. For NTV’s film business, the power of media and capital that television makes possible is of In the fiscal year under course of considerable assistance, but the high-level expertise and production capabilities we review, NTV employees Nobuo Mizuta and Ryuichi have cultivated through creating television programs are also very powerful allies. I have found Inomata were in the spotlight. that film projects planned by television stations have an exceptionally high success rate. I think Both their films were well this is because the networks’ efforts in program creation hone their ability to keep their finger on received, with the June the pulse of social change, find the proper timing and select projects that would interest viewers. release of Mizuta’s Maiko For instance, the film DEATH NOTE incorporated sophisticated mechanisms in multiple elements Haaaan!!! grossing ¥2,080 of its release, distribution, production, broadcast and spinoff. The broadcast of the series was : NTV's Business Strategy Special Feature Film million at the box office and successful because of our status as a television station, and the planning succeeded because of the December release of our experience in television program planning. We continue to augment the scale of our film Inomata’s A Tale of Mari and business from the perspective of multiple uses. Three Puppies grossing ¥3,100 I also think there is a large pool of creative talent at television stations who have sharpened million. In secondary usage, their skills by producing vast numbers of drama and other programs, and would be valuable DVD sales of the films have in the motion picture industry. For example, Nobuo Mizuta and Ryuichi Inomata, who directed been brisk since their release. last year’s Maiko Haaaan!!! and A Tale of Mari and Three Puppies, respectively, are both NTV Mizuta is also the director of employees who earned their experience directing drama series, and both received high praise 252 Survivors, to premiere in for the films. It seems to me that these employees use their directorial instincts to create December 2008. works that viewers—their customers—enjoy, which is why they produce hits so readily. Furthermore, NTV’s film business has many excellent producers, each of whom is able to capitalize on the expertise they have cultivated in program production to singlehandedly Review of Operations progress and coordinate multiple works at one time. People from Studio Ghibli and other outside sources fully utilize superior knowledge and personal networks to demonstrate their capabilities. I think these human resources have been an important factor in enabling NTV to release hits such as DEATH NOTE, ALWAYS—Sunset on Third Street and A Tale of Mari and Three Puppies, and in the substantial growth of the Company’s film business in the past five years. Planning and preparation for films to be released in 2009 and 2010 are now proceeding in tandem with current releases. Such tremendous efforts are made possible by the talented producers at NTV. I believe our personnel maintain the strength of our film business and will be a powerful driving force in the business’s ongoing expansion. Maiko Haaaan!!! © 2007 Maiko Haaaan!!! Film Partners Continuing to Evolve to Continuing Tasks Ahead and Business Development The motto of our film business, “Our audience is the world,” has become a reality. One of our future challenges is bolstering overseas sales. This year we sold all three parts of the new film Twentieth Century Boys in Asia and all over the world. NTV’s brand power is growing worldwide on the success of our output thus far. Many attendees of the May 2008 Cannes Film Festival gathered to see NTV previews. I think this was because they were expecting NTV to show them something entertaining. We will leverage this brand strength to ramp up our overseas development as we endeavor to capture this enormous market. Another challenge is adapting television drama series to film. We have already had great success with animated and live-action films, so a hit film adaptation of a television series would Section Financial be icing on the cake. In light of this situation, we are now considering bringing popular television A Tale of Mari and Three Puppies drama programs to the big screen. © 2007 "A tale of Mari and three puppies” Film Partners We also intend to advance cost cutting in motion picture production. Viewers can look forward to more successful films that capitalize on the planning ability NTV possesses as a television station. ANNUAL REPORT 2008 NIPPON TELEVISION NETWORK 23 NTV_FH(E)_1021_master.indd 23 08.10.24 7:35:42 PM Special Feature: NTV’s Film Business Strategy Multiple Usage of Content Originating from Films © Tsugumi Oba, Takeshi Obata/Shueisha Deployment Befitting a Television Station DEATH NOTE was designed according to a business scenario premised on multiple uses. The idea was to link film, terrestrial broadcasting, DVDs and overseas sales in a multi-faceted manner while enhancing synergies among these channels, culminating in one giant movement. The film was produced for release in an experimental two-part sequence, wherein the prequel aired during Friday’s Movie time slot before the theatrical release of the sequel to induce greater box office turnout. With the unusual timing of the terrestrial broadcast of the prequel four months after its theatrical release, it achieved high ratings on Friday’s Movie and helped the sequel double the box office receipts of the prequel. The film also recorded an initial shipment of one million units for DVD sales. © 2006 DEATH NOTE FILM PARTNERS 2007 2006 ¥5.2 billion Box office income for sequel ¥2.9 billion l Box office income for prequelpreque Film releases Terrestrial broadcast 24.5% of animated version Terrestrial Terrestrial broadcast ratings for prequel Initial shipment: broadcasts Cumulative sales: 450,000 DVDs VideosVideos and DVDs DEATH NOTE World premiere of g Overseas sequel in Hong KongKon deployment Deployment to Terrestrial Broadcasting After the theatrical release of the sequel, NTV began terrestrial broadcasts of the DEATH NOTE animated series. Whereas the ending and other elements of the motion picture differed from the original story, the animated series stands apart from the film by faithfully reproducing the original. Despite being aired late-night on a weekday, the series attracted healthy ratings and also substantially contributed to the box office success of the sequel.