TOKYO -- Rakuten, an e-commerce company that has had tremendous success in Japan but receives only 20% of its overall revenue from overseas, is stepping into the movie business in a bid to grow its activities in other sectors and to gain more global recognition.
It has partnered with The H Collective, a movie production company based in California, partly to create intellectual property that Rakuten can adapt into manga, games, character goods and other merchandise that can be sold at its online marketplace.
"Owning our own intellectual property will create a significant impact in expanding our 'ecosystem,'" said Makoto Arima, Rakuten's group executive vice president. In addition, "we want to distribute the movies we produce globally."
Rakuten and The H Collective will each hold 50% in the coming Rakuten H Collective Studio. The two companies in May established Rakuten Distribution, which will sell H Collective films to Japanese theaters.
With the studio, Rakuten also plans to start streaming original programming over its online video platform Rakuten TV, which will offer some movies ahead of rival services.
In addition, Rakuten intends to leverage its future movie library to help its cellphone service provider gain traction. Rakuten enters the carrier business in October and plans to roll out a 5G network sometime in 2020.
It will strive for additional synergies as well. Rakuten Travel, for instance, plans to offer tours to locations featured in the movies. The production of TV commercials based on scenes from Rakuten movies is also under consideration as a way to boost its advertising arm's revenue to 200 billion yen ($1.88 billion) by 2021. That is double what it was in 2018.
Some of The H Collective's works, such as the horror movie "Brightburn" released in the U.S. in May, have attracted attention within the industry. The company also has a strong presence distributing films in China, where the movie market continues to grow.
Rakuten's movie strategy comes after a foray into European soccer. In 2017, Rakuten signed a sponsorship deal with the Spanish soccer team FC Barcelona. Last month, it organized the Rakuten Cup, inviting FC Barcelona and the English team Chelsea FC to play in Japan.
But staging exhibitions is one thing; succeeding with a global strategy that rests on producing global blockbusters is another.