Movie-making is one industry in which America still outclasses Japan. Hands down. Few Japanese films attract audiences, or much money, beyond the country's own borders. So it's not surprising that global-minded Japanese companies flush with cash want to buy a chunk of the United States' export gem--Hollywood's motion pictures.
For more than a year now, remarkably detailed rumors about impending Japanese takeovers in the film industry have swirled through Hollywood.
Last fall the electronics giant Sony, already the proud new owner of CBS Records, was reported to be interested in Columbia Pictures. By spring, the Sony rumor had focused on MCA-Universal. Nippon Steel and Fuji Sankei Communications are routinely said to be on the prowl. The sale of MGM/UA to the Australian company Qintex didn't quiet rumors that all or part of that studio could still wind up in Japanese hands.
But while Japan's huge conglomerates land in the headlines each time they covertly sniff out opportunities in Hollywood, dozens of other Japanese investors are moving into town on less ambitious terms, infusing millions of dollars into American movie production. (See accompanying story.) Most of them write checks to Hollywood producers and step out of the way, waiting for their profits to arrive once the finished product hits the screen.
Naofumi Okamoto has waded into deeper waters.
In January, the 42-year-old novelist and former TV producer opened the doors of Apricot Entertainment Inc., the first Japanese-financed movie studio in Hollywood. Okamoto plans to make an artistic, as well as financial, mark in Hollywood.
With a $50-million investment from a family friend, Okamoto is building a hands-on production house that will control the creative side of film projects from their inception. Unlike other Japanese knocking on Hollywood's doors, this ambitious producer is writing scripts, not just checks.
Okamoto stands at the forefront of the next wave of Japanese investors who invariably will seek more control over where their money goes. To do so, they will have to get involved in the creative process--finding scripts, hiring directors, recruiting actors.
The influx of Japanese money into Hollywood raises important questions for Americans: Will the Japanese ever play more than the role of banker to the Hollywood Dream Machine? Will they ultimately take a part in shaping the stories that shape our culture? Or will their voices be overpowered by Hollywood's long-entrenched style of doing business?
It won't be easy for the Japanese, as Okamoto is learning.
As Americanized as he is, Okamoto remains an outsider trying to operate in the ultimate insiders club. He doesn't have a copy of the club's bylaws, and he doesn't really want one. He prefers to play by his own rules and his own timetable.
Okamoto's experience provides insight into what's in store for those Japanese who do take the step from financier to movie producer.
In the six months since his studio opened for business, Okamoto has gone through several of Hollywood's difficult rites of passage--learning his place in the regimented social hierarchy, meeting with scores of producers and agents (some of them pushing their wares with the aggression of used-car dealers), and looking, always looking, for "material"--industry parlance for stories that will make compelling movies.
During a flight to the U.S. Film Festival in Park City, Utah, one January night, Okamoto was three parts glowing optimism, one part nervous caution about his three-week-old company's future. He said he was anxious not to repeat the experience of other American independent companies that self-destructed after gorging on high salaries, plush offices and pricey film projects.
Okamoto's salary is a relatively modest $150,000; he paid $4.2 million cash for a bare-walled, decidedly unglamorous working studio facility in Hollywood; and he intends to shy away from hugely expensive, big-name talent.
He pointed to Japanese investors who had lost money after handing blank checks over to American producers, and said he intends to eschew partners so that he can maintain complete control over his films.
But none of that, Okamoto knows, can guarantee success.
"Hollywood is a lot of people's fantasies," he says as the plane nears Utah and he prepares for another step in the long, tedious, and often disheartening search for film projects and talent.
"But it's a difficult business. That's for sure."
On a February night at his Hollywood studio, the tux-clad Okamoto looks very somber.
As the floodlights and balloons outside suggest, this is Apricot's opening party. It's also the night that Okamoto discloses Apricot's investor--Yutaka Tanaka, the chief executive of Shinwa Co., a privately held construction and cement company based in Osaka.
The walls of the lobby leading into the party are plastered with photos of Shinwa's operations--construction sites, gravel pits, cement mixers, restaurants in Japan and the United States. ("Cement!" one American guest mutters incredulously, shaking his head as he passes the photos on his way to the bar.)
Under less formal conditions, Okamoto is a shy but wisecracking man who favors Italian suits and Bally boots.
"He's an avid collector of jokes," says his friend Dick Cavett, who first met Okamoto when he was a guest on a Japanese morning news show that Okamoto produced out of New York called "Ohayo, America."
He chain-smokes Salem Lights and drives a Jeep Cherokee. If you suggest dinner, he'll insist on Korean barbecue. His first marriage was to an American woman; his favorite city is New York. He loves American thrillers and cites David Mamet's "House of Games" as an "amazing" screenplay. He has produced a bilingual musical off-Broadway and a "Grand Sumo" wrestling tournament in New York's Madison Square Garden. He's been in this country 15 years and he's lucky if he gets back to Japan for an annual visit.
Tanaka isn't investing in Hollywood so much as he's investing in Okamoto.
The cement and construction millionaire is not a movie buff (though his wife, acting as translator, says he does admit to being a "Rambo" fan), and he doesn't seem particularly interested in talking about the dynamics of the business. But for years before offering his money, Tanaka had listened to Okamoto talk about his dreams for building a movie studio in the heart of Hollywood.
By the time the talking got serious, Okamoto was in New York, producing shows for Fuji Sankei Communications, a huge entertainment conglomerate.
But show business was not his original calling. The son of an art and history professor and a language teacher, Okamoto discovered as a teen-ager growing up near Osaka that he had a gift for tennis. He began playing competitively and in college ranked 36th in the country. He had hopes of playing on Japan's Davis Cup team, but one of his knees gave out.
While struggling to decide what to do with the rest of his life, he started watching soap operas on TV and became convinced he could write classier material than what he was seeing. A TV station hired him to produce his own scripts about a blackmail case that threatens to ruin a respectable Japanese family.
Every day at 1 p.m., Japanese housewives tuned in to watch Okamoto's soap opera unfold. At 24, Okamoto had already become a successful TV producer and was convinced he would soon conquer the entertainment world.
"I was an SOB," he recalls. "I thought this was so easy."
So with dreams in his head and not much money in his pocket, he packed off to Hollywood in 1971. It was a rude awakening.
He spent six months here, working in a car wash, learning English at night at Hollywood High School and trying--without success--to break into the business.
He returned to Japan, dejected, and worked briefly as a production assistant there for a couple of Paramount productions. He finally landed a job at Fuji Sankei, which packed him off first to San Francisco and later to New York to find programming for Japanese TV.
Okamoto came here from New York last year, after Tanaka agreed to an initial investment of $50 million in Apricot Entertainment, named for Okamoto's family crest. Tanaka has also said he could raise $200 million more from fellow investors if Okamoto decided to augment his operations by buying other film-related companies.
During his career with Fuji Sankei, Okamoto continued to write fiction on the side. Most recently, he wrote a thriller called "Buck Fever" about the orphan of an American GI and a Japanese woman who comes to San Francisco and gets involved in a kidnaping case. The story was serialized this year in a Japanese newspaper.
He also spent several years working on an outline for a book, called "The Chrysanthemum Covenant," about Japan's role in spiriting some Jews out of Germany and into Manchuria during World War II.
But tonight at Apricot's opening party, Okamoto the novelist looks more like a nervous producer. Everywhere he goes, he carries a schedule--written in Japanese and English--that breaks the three-hour-long evening into 15-minute segments.
He has personally chosen the food and recruited the entertainment, a group of young Japanese drummers from San Francisco. Tanaka has hand-painted 300 haiku scrolls for his guests; the haiku roughly translates as: "When you see this cloud, something wonderful is about to happen."
Okamoto's meticulously detailed schedule calls for the emcee to introduce any movie stars in attendance at 8:15. There are none. A few had said they were coming, but the only figure there who qualifies as a "celebrity" is Dick Cavett, and he has already spoken. And no major Hollywood insiders such as top studio executives or agents are there.
"We got snubbed," Sergei Goncharoff, Okamoto's Czech-born right-hand man, would say later.
This evening, Okamoto is learning Hollywood Lesson No. 1: It is not easy for an outsider to break into this cliquish world without a track record, corporate billions in the pocket or a big-name sponsor. To date, most Japanese investors are taking the latter route: Venture capitalist Shigeru Masuda is making movies with Vestron. Shochiku-Fuji linked up with American producer Edward Pressman and British producer Jeremy Thomas. Fuji Sankei has teamed with former Columbia chief David Puttnam.
But Okamoto doesn't want a Hollywood partner.
"If you invest partially in a movie, it's almost impossible to trace (your money)," Okamoto has said. "That's the biggest mistake the Japanese have made." He says he learned an important lesson when CST Communications--a consortium formed in 1985 by C. Itoh & Co., Suntory Ltd. and Tokyo Broadcasting System--bought a $15-million stake in three movies produced by MGM/UA--"Fatal Beauty," "Bright Lights, Big City," and "Betrayed." All three bombed, and CST officials have complained about being too far down the ladder when it came time to split the meager profits.
And so Okamoto stands at the podium on his opening night, a man with complete control over his money and projects, but an outsider in Club Hollywood.
"This is the realization of my dream," he says, first in Japanese, then in English, to an audience of about 300 standing on the sound stage upstairs from his office. "I promise to work very hard for Mr. Tanaka, who made this all possible. And who knows? Maybe someday we can win an Academy Award."
The young producer sitting on Naofumi Okamoto's couch looks as if he's mentally spending the $300,000 fee he would pocket if Apricot makes his movie. Okamoto thinks the script he is peddling is good. Very funny. Slick, too.
"We're not picking up scripts one by one," Okamoto explains. "We are trying to establish a lineup. I like your script. We are going to consider it."
Then the Japanese executive sits back and lights up a Salem. Click, click, he snaps the lid of his cigarette lighter.
The producer leans forward like a car that insistently revs ahead without anyone pressing the gas pedal.
"What's your process of deciding?" he wants to know.
Click, click. Okamoto begs off with another reference to the Apricot lineup. Then he pulls out his notes on the script.
The setting for the story is a U.S. military base in Japan in the 1950s; Okamoto says he wants a contemporary backdrop. No problem, the producer assures him. And, Okamoto adds, he wants more interaction between Japanese and American characters. No problem, the producer insists after they discuss the changes.
"What do you see spending on this picture?" the producer asks.
"What do you see?" Okamoto asks. Click, click.
"I see two different budgets: an independent budget of $6 million, and a studio budget that would start at $13 million. There have been a lot of actors interested in this. Several years ago John Travolta wanted to do it. John Cusack has wanted to do it. Eddie Murphy was interested in it at one point. . . . Now, tell me, what time schedule would you see on this?" Click, click.
Goncharoff, Okamoto's deputy, has a few of his own questions: He wants some details on the history of this project. He wants to know how much it cost.
"So," Goncharoff says after hearing a recitation of numbers and investors already attached to the script, "what you're really hovering around is half a million just for the story."
"I'd say, yeah, it's close to that."
By the time of this meeting, Apricot has been in business only a few months. But Okamoto and Goncharoff have already sat through scores of similar meetings. Goncharoff estimates that so far they have rejected 60 scripts.
It's clear that this project stands head and shoulders above others they've seen. But it's equally clear that Okamoto and Goncharoff don't like some of the baggage attached to it.
"I think this is a grossly overpriced project," Goncharoff says after the producer has left. "And frankly I fear a young producer who has not done a theatrical picture, who has a bit of a Sammy Glick streak. That may not necessarily be something we want to work with."
Okamoto's strategy is to focus his effort on searching for good scripts and to shy away from material that may be weak but has important stars attached.
"I don't chase big-name talent" is Okamoto's constant refrain. "It's got to be the story first."
That's not the way most studio executives do business. One Hollywood credo holds that expensive big-name stars pay for themselves several times over by attracting audiences.
But plenty of films top-heavy with high-salaried stars have flopped. Okamoto's strategy is closer to that of Disney, which made a mint at the box office by finding great stories and filling them with medium-sized names.
But, lacking Disney's magical name and its savvy execs, Okamoto clearly has a tougher path.
Which raises Hollywood Lesson No. 2: Newcomers to Hollywood get to scrape the bottom of the barrel in their search for material. Okamoto has rejected scripts that could have been written by 12-year-olds, mediocre scripts attached to expensive talent and projects that have bumped from one studio to the next for the better part of a decade.
Okamoto loves this producer's script, but like other projects that have been recycled through studios without being produced, the price rose each time a new studio attached overhead costs to it, paid the author to rewrite it, or incurred legal fees by restructuring the deal.
Now the cost of this script is prohibitive for a small studio like Apricot. Besides, Goncharoff, who has produced a few small films and served as film editor on many others during his 20 years in the business, figures that for the same $500,000, Apricot can hire one of Hollywood's top-notch writers.
Weeks later, Apricot will turn the project down. "Too many middlemen involved," Okamoto will say simply. Too often, he adds, good scripts come into his office with "lots of attachments--producers, agents, the agent's wife, his sister, a cousin. . . . And all of them want to be paid."
As the two young agents from William Morris take their seats in his office, Okamoto mentions that he has met Norman Brokaw, the agency's president. It's an ice-breaker too good to resist, and one of the agents jumps into an anecdote about the legendary Brokaw, known for his uncanny ability to turn political figures into celebrities who can command seven-figure advances on books and five-figure fees for speeches.
Brokaw, the agent recalls, was in Moscow with his client Armand Hammer when he ran into Robert P. Gale, the UCLA physician who offered his help to the Soviets after the Chernobyl disaster. Only minutes into their conversation on a Moscow street, Brokaw signed Gale as a client, promising a $1-million book contract.
"He literally made the agreement right there on the sidewalk," the agent says incredulously.
It is probably the wrong anecdote to start off this particular meeting. Since Apricot announced its opening in the trade press a few months earlier, a slow but steady stream of agents have moved through Okamoto's offices, trying vainly to get him to make a fast commitment to projects.
"There's real pressure to make a sell," Goncharoff explains later. "It's a deadly game: One wrong yes and you can be wiped out."
These two agents--here today simply for an introduction--are savvy enough to pick up on Apricot's aversion to a fast-sell.
"I think what you're saying is that you want to go in slow, to have control," one of the agents says halfway into the meeting.
"Your competitors are very aggressive about pushing packages," says Goncharoff, referring to often high-priced projects that come in the door with stars and directors already attached.
"They see there's money here," one of the agents says.
"We don't have to show a profit in a short period of time," Okamoto explains. "We're looking at five to 10 years. We took out that big ad in the trades. Then we'll be quiet for a while. We may draw criticism for that.
"But we'll go slow, we don't want to be in a big rush to make big movies. That's why we bought this building. We could have rented offices in Century City and gotten in and out of the business fast."
Hollywood Lesson No. 3: This is a town where deals can be made and broken in the time it takes a waiter at Morton's to bring the coffee. So Okamoto's plodding, cautious style--a trademark of Japanese doing business in the United States--is out of step in the hyperactive movie business.
True, it can take years for a film to go into production. But the competition among studios for box office stars and quality scripts is fierce and getting fiercer. So most of the town's producers and agents put a premium on speed and flexibility.
But Okamoto is acutely aware of the financial risks that also come with moving quickly. He knows this business is a gamble--and that he's playing his cards with a friend's money.
"They're learning," says producer Pressman, who is familiar with Okamoto's plans. "They're not going to take the world by storm. It's longer-term thinking."
"Okamoto can afford to lose some money," says Jack Dwosh, Apricot's attorney. "'It's his success or failure over the long run that is vitally important to him."
As Okamoto searches for film projects, he is mindful of audiences here, but also in Japan and Europe, where the growth of cable TV and direct broadcast satellite will provide whole new outlets for motion pictures. China too, he predicts, will become a major new market for film producers.
It's this search for film projects that can cross national borders that contributes to Okamoto's cautious pace. Six months after Apricot's doors opened, the studio's lineup of films is only beginning to take shape. And it is heavily laden with Okamoto's own creative input, rather than scripts procured from Hollywood writers or based on best-selling books. It also is still short on actors and directors.
"Buck Fever," Okamoto's serialized novel, will be produced next spring, and Apricot is searching for a screenwriter. "The Chrysanthemum Covenant," Okamoto's outline for an epic World War II escape story, is slated for 1992, at a budget of more than $20 million and with plans to shoot in Europe and China.
Apricot's first film, "Beware the Moon"--a low-budget horror film that Okamoto says he is making as a "dress rehearsal"--was written by writer-actor Fred Long, but Okamoto had a strong hand in shaping the story. Long doesn't seem to mind.
"He's brilliant," Long says of Okamoto. "He's good at coming up with background stories for people and imaginative scenarios." To direct, the studio has hired John Buechler, known for his special effects in horror films as well as for directing "Friday the 13th--Part VII." Filming is set for August.
Apricot is also gearing up to produce a baseball comedy called "Beisu Bouru," starring the Japanese actor Sho Kosugi, known for his martial arts films. The film, to go before the cameras in the summer of 1990, will have a budget of about $8 million. Rights to other projects are still being negotiated.
During an interview last week, Okamoto talked about his first six months in the business, and how his style of movie-making differs from that of mainstream Hollywood.
"The Hollywood system tries to force me to judge films in the categories of budgets," he said. "Before anyone is willing to talk about the story, they want to know how much money we'll spend.
"It's always money, money, money. Sometimes it seems like no one cares about quality."
But Okamoto is astute enough to know that, as much as he dislikes it, he'll have to play by the home town's rules--at least for now.
"I'm not going to break Hollywood's rules," he said. "But I am going to bend them. After all, Hollywood is bigger than me. "