The Studio System and the Five-Company Agreement｜How Six Major Studios Controlled Everything from Production to Exhibition

Today we use the term “film company” loosely, to mean a company that makes films. Yet the term once referred to something on an entirely different scale.

A film company back then owned the factory where films were made, the distribution network that carried them, and even the shops that sold them. From raw material to shop counter, the whole line belonged to a single company. That is what the major film companies of the era were. Like bean-to-bar chocolate, film in those days went straight from its source to the customer, in a structure that tied one consistent producer directly to its audience. Without understanding this structure, one cannot feel the weight of a term that matters greatly in the history of Japanese film, “independent production.” So this time I will begin with the largest structure of all.

Postwar Japanese cinema was run by six companies, Shochiku, Toho, Daiei, Toei, Shintoho and Nikkatsu. To begin with, each of them owned its own studios.

◯ Shochiku | Ofuna (Kamakura, Kanagawa Prefecture) and Kyoto (moved from Shimogamo to Uzumasa in 1952, closed in 1965)
◯ Toho | Kinuta (Setagaya, Tokyo; later Toho Studios)
◯ Daiei | Tokyo (Tamagawa, Chofu, Tokyo) and Kyoto (Uzumasa)
◯ Toei | Tokyo (Oizumi, Nerima, Tokyo) and Kyoto (Uzumasa)
◯ Shintoho | Kinuta (Setagaya, Tokyo; built on Toho’s Second Studio)
◯ Nikkatsu | Chofu (Somechi, Chofu, Tokyo; newly built in 1954)

In fact, directors, actors, screenwriters and cinematographers alike were all salaried employees, hired by the company and belonging to it. This is hard to grasp today. It was not a structure like the present one, in which freelance directors are brought together project by project, and however much a film earned at the box office, none of it went back to the director, for the simple reason that he was a company employee. Put simply, you joined the company, started as an assistant director, worked on set for close to ten years, and only then were promoted to director and allowed to shoot your first film. The studio was a place where films were made, and at the same time it was a company through and through.

Yet their greatest distinguishing feature was that each company held a chain of cinemas across the country. This was decisive, because Shochiku cinemas showed only Shochiku films and Toei cinemas showed only Toei films. This is called block booking. Rather than negotiating with theaters film by film, each company filled its programs in advance with its own pictures. There was no room for other companies, and no room for independent filmmakers.

Put the other way around, a program that is filled must be kept filled.

After all, the programs changed every week. And after Toei launched its system of double bills of new films in 1954 and the other companies followed suit, every run required two new productions. Films were shown in double features in those days, and one ticket let you see two of them, much like the A side and B side of a record. Toei, incidentally, was the company that excelled above all at mass production. The studios, in other words, had taken upon themselves the obligation to keep turning out films without a break. The body of work “mass-produced” under this system is what is known as the program picture.

Just how many were they making? In 1960, Japan produced no fewer than 547 films, the most in its history. Divided simply, that comes to more than ten new releases every week. And since films were being produced in such quantity, there was naturally an audience to match. In 1958, cinema admissions in fact reached 1,127,450,000. With Japan’s population then at about 92 million, that means each person went to the cinema more than twelve times a year. It is hard to believe today, but in the golden age of film before television, there was a time when film shone this brightly.

A vast audience and a vast number of films meant, naturally, that the number of cinemas linking the two grew as well, until it peaked at 7,457 in 1960. Traveling around Japan today, I still come across, now and then, an abandoned cinema in some declining town, a typical relic of the golden age of Showa cinema. If you want to actually watch a film in one of these relics, my personal recommendation is Takada Sekaikan in Joetsu, Niigata Prefecture. It opened, remarkably, in 1911, the forty-fourth year of Meiji. It is a precious cinema that still carries the atmosphere of the Meiji and Taisho periods, and volunteers who love film continue to hold regular screenings there.

At the time, moreover, there were only about 1.5 million television sets in the entire country. When film was called “the king of entertainment,” it was no exaggeration.

Why, then, did so finished a system begin to fray? This happens not only in film but in every industry, and it is so interesting that I want to look at it closely.

It started with an agreement. On September 10, 1953, five companies, Shochiku, Toho, Daiei, Shintoho and Toei, signed what came to be called the Five-Company Agreement. It was triggered when Nikkatsu, which had concentrated on running cinemas after the war, decided to return to production, built a studio, and set out to lure directors and actors away from the other companies. The agreement, which governed the directors and actors under exclusive contract, was concluded to prevent exactly that. Ironically, in September 1958, Nikkatsu itself joined, turning it into the Six-Company Agreement, and the “three nos” were proclaimed, no lending, no borrowing and no poaching. When Shintoho went bankrupt in 1961, it became a five-company pact again, and it faded away of its own accord in 1971.

Put into words, it was a gentlemen’s agreement within the industry. But for those who worked under it, it meant something entirely different, because the choice to leave one’s company became the same thing as vanishing from the film world. In today’s terms, you were frozen out, and this is where that practice began. If a director left Shochiku, for example, Toho could not hire him. If an actor fell out with Daiei, there was nowhere else to go. When what they wanted to make collided with company policy, they had only two choices, to give up or to leave the industry. And directors, actors and others really were driven out of the industry in the process.

Yet in every company, the front office and the shop floor run at different temperatures. However firmly the office shut the exits with the Five-Company Agreement, it could not hold down the heat on the studio floor. And so, in an era when supply and demand were perfectly matched, a deep fissure opened between the companies and their impassioned filmmakers. What matters is that this fissure did not arise in that moment. It appeared at the far end of a line that had been extending for some time.

That line began with the Toho labor disputes, which broke out in three waves between 1946 and 1948, right after the defeat, and were the largest labor disputes of the postwar era. In the midst of the second dispute, stars of the day, among them Kazuo Hasegawa, Isuzu Yamada, Setsuko Hara and Hideko Takamine, formed the “Society of the Ten Flags” and broke away, and Shintoho was born from Toho’s Second Studio.

In the third dispute, things went so far that the reserve units of the Metropolitan Police and even the US military were sent in to seize the studio, and armored vehicles surrounded it. A remark from those days has come down to us, “The only thing that didn’t come was a battleship.” Tanks had come to a film studio.

Why was the film world boiling over like this? Or rather, why had things reached the point where even the US military was sent in? Beneath it lies the fierce ideology of the time, which is hard to see from where we stand today.

Next time, then, I will look at the history of the harsh repression that swept through the film world.