The rent that the box office could not shake: the real-estate model (1958)

Building an earnings base a bad film year cannot move

The heart of this decision was not making better films but rebuilding where the profit came from. As television emptied the cinemas after 1958, Masa Shimizu ran Toho’s prime-land theatres with the logic of a department store and a landlord: confine the screens to the lower floors and lease seven or eight tenths of the floor space to shops, restaurants and offices. A real-estate committee formed in 1958 turned idle theatre space into new buildings, and by the early 1960s a half-year profit of $1.4M (¥500m) to $1.7M (¥600m) could be covered by rents alone. The box office could swing without shaking the company.

What that bought Toho was time and independence. Where Shochiku, its old exhibition rival, was forced to sell its Ofuna studio in the 2000s, Toho — because the ground under the theatres earned steadily — never had to rush the cutbacks in film production. The same rent cushion, though, is the reason Toho stayed content for decades to be a landlord and a distributor clipping fees, slow to put its own money at risk as a producer. The model that guaranteed survival also set the ceiling the company would spend the next half-century learning to break through.