Part Two: Organizational Characteristics of Jimusho — Size and Keiretsu

In Part One we looked at labor relations within Japanese entertainment industry management companies. This time, we will look at the jimushos’ relations to each other. As we will see, the industrial field of Japanese entertainment offers less than perfect transparency, and our general understanding must come from a mix of industry accounts backed up by third-party verifications — where available.

Small size firms

For being so powerful within the entertainment industry, most jimusho are relatively small companies. For example, moderate-sized record label EMI Music Japan (formerly Toshiba-EMI) has over ¥1.667 billion in capital. Meanwhile, Burning Production — the management company said to dominate the industry — only has a mere ¥20 million (source here as the current corporate website for Burning lacks almost all company information). Burning Production itself has a very limited number of talent, almost none of whom are particularly young. It is almost fair to say that Burning’s talent list appears at first to be a bit underwhelming for an agency reputed to be so powerful.

Another key characteristic is that almost all jimusho are privately-held companies, with the exception of Avex, Hori Pro, Amuse, and Yoshimoto Kogyo (which the major TV stations will soon buy out together). Without being publicly-traded on stock exchanges, the companies have no legal impedance impetus to reveal information about earnings. We have no way of knowing how much money is coming in and out of these companies. For example, despite decades-long domination of the pop charts and television dramas, young male idol purveyor Johnny’s Jimusho still controls its image as a mysterious, family-run enterprise with only the slightest presence as a “business” — one with growth, acquisitions, etc.

So there are thousands of relatively tiny privately-held artist management companies across Japan, with Hiroshi Aoyagi (author of Islands of Eight Million Smiles) estimating 1,600 in Tokyo alone. Oricon Nenkan 2005 listed 975 operating in Eastern Japan. We can easily say there are around 1,000 in the country who do significant levels of business within the industry.

The keiretsu system

1,000 firms makes the Japanese entertainment management business sound like an industrial field with heavy levels of competition and diversity. This number, however, is a misleading figure. Although most of these companies appear to be independent, they are in reality organized into very hierarchical keiretsu-type organizations.

The keiretsu are the key to understanding the jimusho system, but unfortunately, this is also the most oblique characteristic of the field to measure and observe. While some jimusho openly admit formal subsidiaries (Topcoat, for example, is part of Watanabe Productions), in the vast majority of cases, there is no official or otherwise publicly-revealed relation between companies in the same keiretsu. This becomes a major problem for objective reporting and analysis. Insiders and insider publications like Cyzo refer to certain talent agencies as being part of the Burning Keiretsu, for example, but there is no evidence on paper or public pronouncements from Burning itself that this corporate group exists. And most actors and models within these agencies may have no idea that their small firm answers to a larger one.

Wikipedia Japan in the past had a long internal debate as whether to acknowledge the mythic “Burning Keiretsu” or not. In the end, Wikipedia editors killed the article as the mass media has never confirmed its existence. Yet, most industry insiders — and talent in my acquaintance within the jimushos alleged to be in the Burning Keiretsu — talk about the Burning Keiretsu being real. For example, Fujiwara Norika of agency Someday is widely understood to be part of the Burning group. Same goes for Nakayama Miho of Big Apple or Mizukawa Asami of Atlantis. Without this knowledge, all of these firms look to be independent, and therefore, in heavy competition. Yet, the real structure is that the boss at the main agency at top of the keiretsu doles out work to each of the subsidiaries and makes final decisions about which talents get what projects.

The best insider account of how these jimusho are organized into hierarchies was a website called Geinokai Sogo Kenkyujo. Unfortunately the site went dark a few years ago. (A cached copy here). Many of the site’s allegations about the Burning Keiretsu, however, can be confirmed by looking at publishing rights transfers or cataloging the specific jimusho who use Burning’s official subsidiary Proceed to build their web pages. On the other hand, many claims — such as the idea that Nagara Production controls a group overseeing most Visual-Kei bands and the Being/Giza group — have almost no public record and are essentially insider information that we must judge by our assessment of the author’s credibility.

According to industry contacts, membership to a keiretsu can also be set by a simple phone call: the “boss” from the parent company calls a new management company and asks whether the new jimusho is in the group or out. Most subsidiaries, however, are formed by managers inside the group branching out and opening up their own agency.

What does a small company get in return for being in a part of the keiretsu? Being in a keiretsu means use of the larger company’s network and power — at a price. Without any formal capital relations, we can only speculate on the nature of “payback” to the parent company — anything from complicated “consulting service” schemes to cash in envelopes to the more common and (completely legal) transferral of publishing rights. This is not to say that the relationship is necessarily illegal, but we in the public have little way to measure how the companies interact.

Proving the keiretsu exist

So how can we prove the insider accounts that these keiretsu do exist? The most effective way is to look at the transfer of publishing rights in the record industry. Many small companies alleged to be part of a larger organization will give their talens’ publishing rights to the “parent” company. Oricon shows that most of the alleged members of the Burning keiretsu did give Burning Publishing their rights back in the 1980s. (For whatever reason, this practice stopped or stopped being recorded by Oricon in the 1990s.) Southern All-Stars’ jimusho Amuse famously gave the band’s early publishing to Burning, which was speculated as a way to be “let inside” the industry. Amuse is no longer part of the Burning keiretsu, but Burning still owns the rights to “Katte ni Sinbad” and other early SAS songs.

Let’s take the example of Avex Trax — the incredibly popular record label with a management company wing. Geinokai Sogo Kenkyujo alleged that Avex was a member of the Burning Production keiretsu, which seems odd in that Avex is a much larger company than Burning on paper. Why would Avex need to be in Burning’s group? This seems like a ludicrous claim when viewed from outside the industry.

The publishing rights database on JASRAC, however, shows reveals how the relationship between the companies may possibly work. Burning owns an enormous number of songs from artists in the Avex management company, including mega-hits from Hamasaki Ayumi and Every Little Thing. (Here is a list of all the artists Burning owns publishing from.) From a purely rational business perspective, Avex should have no reason to give up publishing rights, in that it has its own highly-profitable publishing company. This transfer of rights best makes sense as a “tribute” to the top company in its hierarchy. (Another strange thing is that Burning’s ownership of these Avex rights has never been disclosed on the Oricon charts, which always prints the owner of publishing during the time of the song release.)

The “odd” behavior of keeping firms small and separate

So why do the major jimusho in the industry work in this non-transparent, small-firm structure rather than just expanding the size of their own firms? This is not behavior seen in most industries where firms want to grow in size, hold an IPO to raise cash, and possibly acquire other firms.

The small size has certain perks. In a private email exchange, Néojaponisme commenter Mulboyne pointed out that the Japanese tax code generally encourages company formation rather than corporate expansion and that the service sector suits a multiple-company structure. Having this structure helps the main company avoid paying tax. This does not necessarily mean that the companies are engaging in tax evasion, but it lessens the tax burden. This, however, puts them on a different level of corporate legitimacy than, say, Sony, Toyota, or Nintendo.

This structure also allows the major jimusho to control the industry without audiences having any idea of what is happening. For example, the three main models of magazine CanCam during its peak in 2007 all came from the K-Dash keiretsu, but on paper Ebihara Yuri and Oshikiri Moe were from Pearl while Yamada Yu was from K-Dash proper. This arrangement made it look less like a monopoly to people outside of the industry.

The small size also fits with the somewhat unique jimusho culture of avoiding the public eye. In general, the giants of the industry, who sit atop the keiretsu structure, rarely give interviews to the media, show up in front of the camera or otherwise leave traces of their existence. There are basically zero public photographs of Suho Ikuo, the head of Burning Productions and so-called “don” of the industry. (Lately, a single grainy image has appeared on the net.) Same goes for Tetsuo Taira, once of Rising Production (now Vision Factory), who spent some years in jail for tax evasion. Johnny Kitagawa of Johnny’s Jimusho is also famously reclusive. (Tatsuo Kawamura of entertainment group K-Dash — and pro wrestling management — tends to appear in public more often than his peers.) These business leaders tend to fit the image of the kuromaku — the man behind-the-curtain. This is a very different culture than Hollywood’s extravagant industry moguls like David Geffen. But even holding for American ego-centricism, there is something a bit eerie that the Japanese industry’s most powerful men (and they are almost always men) work so hard to make sure the public does not know who they are.

What the keiretsu structure means

If we go ahead and assume that the industry is run in these keiretsu groups, we then can understand how there can be heavy oligopoly even in a field with a large number of firms. Essentially, only the top jimusho groups have access to placing talent on TV shows, in commercials, and in other high-profile work. As I stated above, the main bosses of about a dozen groups dictate to the media and advertising agencies whom from their keiretsu they want used rather than having an open audition process, where even small firms can provide upcoming talent. (Even the bit roles in Japanese TV shows are usually fleshed out by junior members of the stars’ agency.) The keiretsu arrangement allows the jimusho to control access to hundreds of celebrities, which in turn gives them market power in transactional relationships between themselves and the media. If the media does not want to use a new star, the boss can then threaten to pull all of his talents from use in that media.

The end result is that new stars who score big advertising campaigns or TV spots for their debut singles almost exclusively come from one of the big jimusho groups. This means that independent jimusho who are not aligned with one of the big keiretsu are essentially locked out of the more lucrative parts of the industry system. There are always spots on TV for “popular” talent who come from outside the keiretsu system but they are always “last hired, first fired.” In other words, they only get access to the media after they have proven success at a grass-roots level, and they are not invited back if they cease to show popularity.

The end result is that innovation or change in talent type must come from the big groups, and ultimately, the men at the top of those few companies make the decisions about which entertainers appear in the industry. Deductively-speaking it does not make sense that the jimusho would launch stars who would pose a threat to their business model.

Next time, we will look why the jimusho have become so powerful and how the system’s needs — rather than the market’s — determines what kind of star the jimusho pushes.

Tokyomango: Summary of Joi and Lisa’s session about Japanese obsessions at Foo Camp

Joi Ito and Lisa Katayama are two of the most influential voices on Japanese culture for a global audience, but I was a bit troubled by some of their analysis of otaku for the O’Reilly Foo Camp.

In trying to explain the obsessiveness of otaku culture, they were quick to whip out “cultural explanations” — Zen Buddhism, the Tokugawa caste system, and ukiyo-e. Apparently Japan, despite massive social changes over a thousand years, has somehow retained the same “spirit” over time, which oddly manifests not in the middle of society, but in its strangest marginal outcast subcultures.

The danger of using the blunt “culture” explanations, however, is that it neglects to look at the actual and specific mechanisms which maintain or change culture. In most cases, these mechanisms are political or economic, and values shift according to structural situations. And most importantly, those within the system are often actively fighting against it. For example:

For generations, people have been taught to be happy perfecting their role in society, without necessarily viewing social or financial gain as a measurement of their success—it’s the shokunin culture in which focusing on one job allows one to obsess with abandon until they reach perfection on a very local level.

During the Tokugawa era, the rigid class system attempted to keep society stable by dividing society into four classes (five if you count the burakumin). At the bottom of society, however, the merchants actively worked against the system by pushing further and further with financial success. And you can make a case that this uneven financial gain of those at the bottom of the caste system led to the system’s downfall. Furthermore, when this class system was abolished in the Meiji Restoration, there was a huge rush of farmer’s and merchant’s sons successfully increasing their station in life — despite some kind of eternal Japanese “taboo” against this. In other words, there is no straight line of social stratification from the 17th to 21st century, and plenty of people have fought against the pre-determination of social class.

The real question, which these issues do little in addressing, is why otaku in particular tend to go to extremes of perfection. Surely there are cultural factors at work, but this kind of behavior is almost universal for subcultural units: in which participants tend to push further and further within accepted codes in order to show dedication to the group. There were surely British mods in the ’60s who were identical to otaku in their obsession with mastering their subcultural language of fashion signifiers. Some factors of Japanese culture make this more extreme, but there must be something about the unique social position of the otaku — and their birth in the high consumer years of a mature post-industrial capitalist economy — that serves as the best explanation.

Lisa mentioned that, when she was interviewing people for her 2D love story in the NY Times magazine, several sources likened the ability to fall in love with a body pillow to the Buddhist practice of mindfulness training.

I am sure if I openly loved an inanimate object, I too would be desperate to justify that love with some kind of ancient Japanese spirituality. I am not sure, however, that we are supposed to take this self-diagnosis seriously. Is there a way to demonstrate a path between these Buddhist values and a fringe sexual subculture? How did the pillow-humper access these Zen Buddhist principles? Are they just in the “ether” of Japanese society? Then why doesn’t everyone hump pillows? Again, the question about the otaku is less about their adherence to Japanese values, but their reason for anti-social and mostly frowned-upon behavior.

But this one bothered me the most:

While young Japanese people might have the outward appearance of rebellion, the majority follow a certain set of social rules. They will probably wait in line to get on the train just like any other good citizen. For example, Joi once bumped into a guy wearing a button that said “fuck off and die.” The guy promptly bowed, apologized, and walked away.

Note that the button did not say “Fuck Off and Die” in Japanese. And Joi did not run into a yankii guys who told him「死ね!」. The fact that the button was in English explains everything.

Now, I am sure the guy wearing the button generally understood the meaning of the statement, but we have to think about the actual mechanics of foreign culture importation in Japan. Punk culture —from which the button’s attitude comes — came to Japan explicitly through consumerist mass media in the late ’70s and early ’80s, mostly marketed to and read by the upper middle classes. This process automatically tends to purge the signifier of its original meanings and turn it into pure “fashion.” The media in which the message was spread in general does not spread or advocate a real “punk” view of society. Punk kids — whether in the UK or US “punk” mold — have always been primarily drawn from the consumer classes, and this consumer activity is correlated with higher placement in the social ladder. This ironically means that punk attitude has a real social risk for those most likely to buy punk fashion.

Japan’s real punks — the yankii, the bosozoku — are not a part of this consumerist world and embrace a “punk” attitude as part of their lifestyle. They would not bow to you if you accidentally bumped them.

So the reason that “rebellious-looking” teens follow the set rules is because they have imported a “rebellious” look as a look. Otherwise, their values are aligned with other members of middle-class society. This explanation that “punks are really polite,” however, only accounts for middle class teens. Working-class delinquent teens, who are not officially パンク系 but are punks in the broadest sense, are less likely to follow social rules.

I don’t mean to suggest that nothing in Japan can be explained by cultural heritage, but there are always enough exceptions and breaks in the straight timeline to warrant closer scrutiny. Furthermore, Japanese people themselves tend to use cultural tradition as a way to justify their own actions. This is basically true everywhere in the world. In the U.S., conservatives and liberals constantly fight over who has the most accurate interpretation of the Constitution and the Founding Father’s values. It’s officially our job to not take culturalist claims at face value, or at least, to discover the engines and pathways that make culture continue throughout time. Some of the otaku’s behavior is very Japanese. But in the end, they probably have little or nothing to do with Zen Buddhism.

A proposed design for a train station kiosk for Néojaponisme harking back to the work of early Japanese graphic designers and architects as much as Constructivistists. The kiosk would dispense a highly curated selection of printed ephemera, music, and offer fresh coffee/light banter/scathing criticism to the curious.

Unearthed outside of the city of Sano in Tochigi-ken, this portrait photography series documents Japan as it engaged with modernization and commercial photography in the Meiji and Taishō Periods.

Unearthed outside of the city of Sano in Tochigi-ken, this portrait photography series documents Japan as it engaged with modernization and commercial photography in the Meiji and Taishō Periods.