When East Consults West : Leisure: Japanese companies look to Southern California firms for advice on building amusement parks.
With help from a government pushing for citizens to devote more time to leisure, the Japanese are rushing to build Disney-style theme parks and entertainment centers.
The result has been a windfall for American companies, particularly the Southern California firms recognized as world leaders in the design and construction of theme parks and their attractions. To guarantee the parks’ success, many Japanese developers have forged partnerships or contractual relationships expected to generate $75 million in revenue this year for U.S. firms.
Their decision to seek theme park expertise in the United Sates reflects the fact that Japanese companies are willing to go overseas when they feel that foreign technology is superior to their own. Many Japanese say that American firms in particular have no equals in the creative side of park development--the overall design of a park and its attractions and entertainment.
Whether the Japanese will continue to use American theme park companies after they have developed their own expertise remains to be seen. Some in the industry think that one day they may compete with U.S. firms for overseas projects.
The theme park partnerships, which have often thrown together flamboyant American creative types with buttoned-down Japanese corporate managers, have not been without friction. But in most of the relationships, according to Americans involved in the projects, the early discord arising from the clash of cultures has dissipated as the sides learned to work together.
Landmark Entertainment of Burbank, the largest independent theme park developer in the world, has been driving much of the work in Japan.
The privately held company, which had more than $50 million in revenue last year, developed two large Japanese parks that opened in the past year--$630-million Sanrio Puroland in the Tokyo suburb of Tama and $160-million Oita Harmonyland on the southernmost island of Kyushu.
Although it planned the parks and oversaw much of the work, Landmark subcontracted with American specialty firms for many of the attractions. AVG Inc. of Valencia, for example, made 100 animated robotic characters for Puroland and 95 for Harmonyland.
But Japanese companies did most of the construction--and, in the case of Sanrio Puroland, their lack of experience building as intricate a project as a theme park was a major source of heartburn for Landmark because of missed construction deadlines and cost overruns, industry sources said.
“You have to understand . . . they had never built anything” like a theme park before, said Landmark CEO Gary Goddard.
As an example, Puroland contractors decided without consultation with Landmark to halve the number of power transformers that Landmark’s master plan called for. But with all their whirling mechanical do-dads, theme parks require much more electricity than, say, comparably sized office buildings. On opening day, with Puroland jammed, power plant employees were frantically warding off brownouts, sources said.
The Japanese construction companies “based many of their assumptions (including power requirements) on the rules they used for traditional building projects,” Goddard said.
He admitted that, as opening day neared, “there was some friction (between the American and Japanese sides) toward the end--you can imagine.”
But Puroland opened with all major attractions up and running--a distinction that few parks can boast, Goddard said. He hastened to add that the Puroland saga has a Hollywood-style happy ending: Landmark is continuing to work with the park’s owner, Sanrio Inc., on additional projects.
Landmark’s other major project with Sanrio, the smaller Oita Harmonyland, has been such a smash--crowds have been triple what was expected--that Sanrio is talking with Landmark about adding attractions, Goddard said.
Masanori Kaneda of the Japan Development Bank’s Washington office said Japan has nine other major theme parks besides Puroland and Harmonyland. Tokyo Disneyland is in a class by itself with 13 million visitors a year. Though most are doing well, none of the other parks has even a fifth as many visitors.
A key reason is what Etsuo Iida, executive vice president of Los Angeles-based Sanrio Inc., calls the TDK Syndrome--the fact that Tokyo Disneyland is less than an hour and 15 minutes by plane from the furthest reaches of Japan. Instead of going to parks closer to home, many Japanese hop on a plane or bullet train to see the granddaddy of them all.
Goddard thinks that Japan, which provided Landmark with half its work last year, may build as many as a dozen major theme parks in coming years. In addition, others in the industry say, scores of smaller parks, resorts and entertainment centers are likely.
Entertainment centers, which combine entertainment, shops and restaurants, are usually tucked between high-rises in a distinctly urban setting.
Japan’s theme park, resort and entertainment center work should mean steady income for Landmark and other American theme park consultants.
The Japanese are apparently intent on rectifying the inexperience with the parks that surfaced at Puroland and at Nippon Steel’s Japanese-designed Space World on Kyushu, where crowds have been disappointing.
A delegation of 200 Japanese are expected to attend the International Assn. of Amusement Parks & Attractions convention in Orlando, Fla., in November. In fact, the Japanese requested a special Japan Day at the convention so they could address their concerns in a more concerted fashion, IAAPA spokesman Peter Irish said.
Many Japanese companies without entertainment backgrounds are moving into the theme park and entertainment center arena partly because of a surprising white paper that the Ministry of International Trade and Development issued last year. The paper said the Japanese should devote more time to leisure because their long hours at work have been a key reason for the huge trade surpluses that have angered many of Japan’s trading partners.
The paper, which amounted to a call for the Japanese to develop a multifaceted leisure industry, was preceded by tax breaks and other incentives designed to jump-start the industry. They included a relaxation of duties on almost all leisure-related imports--a development that encouraged Japanese leisure companies to find American partners.
Like Landmark, Chief Executive Roy Aaron said Culver City-based ShowScan Corp. experienced some rough spots as it developed a partnership with the Takayama entertainment company.
At one point, negotiations on contracts for the thrill-ride-simulator theaters that ShowScan makes were intense, he said. But trust between the sides developed to the point that they now sign only three-page contracts.
Instead of requiring specific commitments from each side, as American contracts would, the Japanese-style contracts just say the partners will work together. In cases of disagreement, they say only that the sides agree to iron out the problem.
Aaron, a lawyer, says the significance of the simple documents is the goodwill they reflect. Takayama “has turned out to be a customer, a friend, a partner--all the good things that you could have with another company,” he said.
Takayama formed a subsidiary, Imagine Japan, that has ordered 10 of ShowScan’s dynamic motion simulator theaters. The theaters have seats that move in synchronization with a film to give viewers the feeling they are barreling along on a thrill ride.
Imagine Japan already is in the black, Aaron said--and its orders have ensured that 6-year-old, privately held ShowScan will be profitable this year for the first time.
ShowScan competitor Iwerks Entertainment got its chance to forge a partnership with Japanese camera giant Minolta in the niche market of planetarium theaters when another American rival’s product failed to live up to expectations.
The tie-up has worked so well that Minolta has become the exclusive distributor in Asia for Iwerks planetarium systems, said CEO Stan Kinsey.
Even as Japanese-American partnerships continue to be formed, some American companies believe that as soon as Japanese firms develop their own expertise, they will not only go it alone in Japan but begin competing with their former mentors for park projects overseas.
Others think that theme parks are too narrow a niche for most Japanese companies to bother with.
The Japanese are “very fast learners--I think they’re certainly capable of doing some of this work,” said David Hall, vice president of AVG, which earns 90% of its revenue from Asia. But they “tend to go after big (markets) . . . VCRs, automobiles, things like that.”
Play Time
The percentage of respondents in a seven-nation poll who said they had visited an amusement park at least twice in the previous 12 months:
Canada: 34.0%
U.S.: 30.8%
Japan: 26.0%
Britain: 25.9%
Australia: 24.3%
France: 21.5%
Germany: 19.2% Source: Hapan’s Leisure Development Center, Gallup International
Work Ethic
One reason that the Japanese government is promoting a leisure industry that includes domestic amusment parks is that Japan leads four other industrialized countries in the number of hours residents work.
Average work hours per employee in 1987:
Japan: 2,168
U.S. 1,949
Britain: 1,947
France: 1,645
Germany: 1,642 Source: Japan Ministry of Labor
