JIN-502 -- When the chips are down there's no business like show business

[jin at mailman.japaninc.com]

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J at pan Inc Newsletter
The 'JIN' J at pan Inc Newsletter
A weekly opinion piece on social, economic and political trends
in Japan.
Issue No. 502 Wednesday March 04, 2009, Tokyo

I’ve become somewhat numb to the majority of Bloomberg’s headlines
these days. After a quick scan of the morning’s offerings on the Japan
page I find myself heading to the fairer weather of the movie pages.

Actually, if we’re sticking to business, you could do a lot worse than
be in the movie industry at the moment. It’s strange that after a few
years of the death knells being tolled as the pirates swarmed in from
their cesspits of geekdom (read: the bedrooms of every 10-year-old in
the world), now the whole thing doesn’t look so bad.

While most people see the movie business more like a huge slot machine
rather than a vehicle for safe investment. Recently some within the
industry are simply pointing to the stock markets, then pointing back
to empty DVD shelves at the local video rental store, to prove their
point.

Meanwhile, in the world of stocks, new benchmarks continue to be set.
As mentioned, I’ve started to switch off to a lot of the headlines I
see each day but on Tuesday we saw another significant “worst.” The
Yomiuri carried a brief saying that the Nikkei had dropped 162 points
in early trading to 7,117.66. That would be the lowest level since the
bubble burst in the early 1990s. Of course the drop was from far
loftier heights but it was again significant.

As mentioned in a previous JIN, Nintendo was one of the few companies
that weren’t hit too badly by the economic downturn. People turn to
cheap entertainment in times like these, so movies and games companies
are likely to do well. A while back, the New York Times ran an article
talking about some of the ways that some small operators are going
about making investment within the industry less of a hit-and-miss
affair.

One New York-based company managed to reduce risk through a variety of
ways including pre-selling its films to foreign distributors, casting
commercially tested actors and taking advantage of state tax
incentives for filming. By doing this the company was able to promise
its investors a risk floor of 70 percent on the chance that none of
the company’s films succeeded. When the article was published, the
company was projecting at least a 15 percent return for investors and
maybe as much as 40 percent.

It must be stated that the company was a small independent operator
rather than one of the big studios. The structure of film financing
often changes and the industry is notorious for creative budgets and
escape clauses. But, if investors are happy they’ll keep investing.

It’s a somewhat rare position for the entertainment industry to find
itself in. But the numbers Nintendo were putting forward a while back
were hard to argue with when compared with the likes of Toyota and
Nissan. Meanwhile production houses in places like Australia are again
back to the position they were in when movies such as the second Star
Wars trilogy and the Matrix movies were being made at Fox Studios
Sydney due to the weak Aussie dollar.

So, there are some good stories to be found out there. A couple of them
can be found in the latest edition of J at pan Inc. This week the spring
issue of our mag hits the shelves. On the front cover we’re leading
with James Gow and his Internet forex trading company FXOnline. The
company made headlines in the financial press around the world when
87.5 percent of it was sold for 21.9 billion yen to IG Group late last
year. Now Gow, who stayed on as CEO, is ready to launch the company’s
new contract for difference (CFD) platform with the backing of IG. It
could be a big year for FXOnline as it continues its conquest of the
Japanese market. It’s a great story of a company built from the ground
up in a foreign land.

Another story worth checking out is an analysis of Digimom, a venture
set up by female entrepreneur Norkio Teramoto. Author Dr. Marilyn
Helms from Dalton State University and Dr. Shiho Futagami from
Yokohama National University examine the importance of female
entrepreneurship in the Japanese economy. Digimom was set up by
Teramoto after she was not offered her job again after maternity
leave. It shows how Teramoto and her team used their situations to
their advantage to build a company from scratch with few resources.
It’s a great read and never more timely.

Of course, there are plenty more great articles and essays to be read
in the new issue, so pick one up from the usual outlets or go to
www.japaninc.com.

Michael Condon
Editor-in-chief

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東京マラソンランナーの皆さん！
がんと闘っている子供たちとその家族をサポートする非営利団体タイラー基金の
"シャインオン チャレンジ"の募金を募ってます。
オリンピックランナー山口マーラさんは、"シャインオン チャレンジ"の
メインサポーターです。

詳しくは： www.tylershineon.org/

Tokyo Marathon Runners! We need help!
Raise funds for children with cancer and their families.
Join the Tyler Foundation's "Shine On! Challenge".
supported by Olympic Runner Mara Yamauchi.

More info: www.tylershineon.org/

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Our Entrepreneur Handbook Seminar is obviously filling a
need in the community right now, as many people look at
their employers and see the writing on the wall. We had a
sell-out audience of 35, and still more people wanting to
attend.
So, we have decided to re-run the seminar this
month for those people unable to make it last month.
The new date will be Saturday March 21.

Details will be posted on the website shortly, at:
http://www.japaninc.com/entrepreneur_handbook_seminar

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