Japan Expands Location Production Incentive Scheme

Japan has unveiled details of a location production incentive scheme that it hopes will attract more film and TV shoots to the island nation.

The scheme offers reimbursement of up to 50% of qualifying expenditure in Japan, with an upper limit of JPY1 billion ($6.4 million) on the disbursement.

The scheme is the product of the Ministry of Economy, Trade Industry and two agencies, the Visual Industry Promotion Organization, described as the program operator, and the Japan Film Commission, described as the program coordinator.

The scheme is open to “large-scale international film and television projects.” These must have either minimum direct production spending in Japan of $3.2 million or, in the case of projects distributed in ten or more countries, have Japanese production spend higher than $1.1 million.

Additionally, all projects must fulfil four other criteria: benefit to the Japanese content industry through employment or use of studios; shoot in Japan; promote the location where the filming took place; help the global appeal of Japanese works.

Significantly, the guidelines make no reference to the eligibility of post-production or visual effects work conducted in Japan. Nor do they explain the treatment of salaries paid to foreign talent.

The actual amount of funding “will be determined by the secretariat after consideration of the application content and number of applicants by an expert committee.” And applications for the current round of funding must be received this month (September).

While hailed as a new product, the scheme appears to be the expansion of an initiative introduced by METI and VIPO in May 2019 with so little fanfare, and Japanese-only instructions, that some in the industry questioned the intentions of the organizations behind it. It was later explained that the 2019 scheme was a “research project.”

The Japanese film industry has been notoriously insular for many years. Its commercial film output is largely dominated by production committees, which are risk averse pacts between Japanese media, finance and advertising companies. On the other extreme, many of its independent films are made on budgets substantially below those of other highly-developed nations. Japan has few international co-production conventions, though a younger generation of filmmakers are increasingly participating in festival-operated project markets and film development initiatives without use of government-to-government treaties.

While those factors may have lessened Japanese participation in international filmmaking and reduced the number of inbound productions, two other factors are currently working in Japan’s favor.

The Japanese currency is close to a five-year low against the US dollar, at 146 Japanese Yen to the dollar. That makes the country a low-cost destination for inbound travelers and investors. Japan is already enjoying a surge in tourist arrivals, due to the weak currency.

The other factor reflects the growing influence of multinational streaming companies within the Japanese content industry. With its large population and affluence, Japan is among the largest subscription video markets in Asia and streamers such as Netflix have announced plans to increase their spending on Japanese content. The streamers have also underlined the exportability of certain genres of Japanese content, notably game shows and anime.