MCA Goes Head to Head With Disney in Bid for Asia’s Entertainment Dollars

TOKYO — On a shelf in Yoji Yamamoto’s office sits a binder with the instructions for reproducing Woody Woodpecker, right down to the correct shade of Dai Nippon paint used to color his bright red topknot.

That binder is one piece of MCA Inc.’s strategy as it moves into Japan--true Mickey Mouse territory and the most lucrative foreign market of the powerful Walt Disney Co.

Yamamoto, who was raised in this Mickey-worshipful society, knows there is little room for mistakes if he is to succeed in turning Burbank-based MCA into a household name here. After all, this is a country where young mothers bundle their babies in Mickey and Minnie infant wear and old-timers recall when their government-sanctioned English lessons came from Disney’s animated films.

Which is why Yamamoto is moving at warp speed through Japan--hawking Woody Woodpecker and friends as mascots for prestigious corporations, exploring new ways to spin off consumer products from the latest MCA film properties and, most important, overseeing the birth of MCA’s first major international venture, a $1.6-billion theme park in Osaka.

“We can’t afford to sit back, because between where we are and where we should be, there are just too many things to do,” said Yamamoto, a former international business consultant now running MCA Enterprises Japan.

By the time Universal Studios Japan brings Jurassic Park and E.T. The Extra-Terrestrial theme park rides to Osaka five years from now, MCA is betting it can find some weak spots in the Disney corporate mystique.

Here in Japan, Disney enjoys an almost religious reverence among shoppers, who are expected to spend $4 billion this year on its consumer products and make Tokyo Disneyland yet again the most popular theme park in the world.

And about the same time the new Universal Studios opens in Osaka, Disney and its Japanese partner, Oriental Land Co., are to open a second, water-oriented theme park--DisneySea--next to the 13-year-old Tokyo Disneyland.

The two companies are no strangers to theme park turf wars, having gone head to head in Southern California and Orlando, Fla.

Though the new MCA venture in Japan is more than 300 miles from the Disney complex and the two arguably won’t be stealing Japanese customers from each other day in and out, both companies are expected to launch an all-out marketing blitz to command this nation’s attention before the new attractions open their doors.

The longer-term competitive stakes are even more interesting.

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To an increasing degree, other Asian nations are looking to Japan as a source of entertainment and cultural inspiration. Karaoke, Japanese television dramas and animated cartoons are finding receptive audiences throughout the region.

This makes Japan a good springboard into the exploding Asian market for U.S. companies. And MCA figures Disney doesn’t have a lock on, say, Indonesia, where Mickey Mouse isn’t a household word--yet.

John Dreyer, a Disney spokesman, wouldn’t comment on the prospect of doing battle with extraterrestrial beings and sharp-clawed raptors other than to say, “It’s a very large market and we have different themes.”

Guy Aelvoet, president of Walt Disney Enterprises Japan, the consumer products arm, said, “We’ve got history behind us.”

It isn’t just these two U.S. entertainment giants jockeying for the attention of the Japanese, who last year spent $5.6 billion on amusement parks and more than $2 billion on videocassettes and laserdiscs of American movies.

Although no Japanese company offers the same sweep as Disney and MCA, giant Japanese toy makers such as Namco, one of Japan’s biggest video game makers, and Sanrio, creator of the popular Hello Kitty empire of character-goods stores, have opened small amusement parks.

And last week, Marubeni Corp., the giant Japanese trading company, announced it will invest in Paramount Pictures’ filmmaking ventures in exchange for the rights to broadcast the movies or create spinoff products in Japan. Its first project is an adventure movie called “The Relic,” which is scheduled to hit U.S. theaters this summer.

Other U.S. companies are also testing the Japanese market. Warner Bros., which is captivating Japanese teenagers with its Tiny Toon cartoons, has just opened the first of several stores in the Tokyo area. Kansas City, Mo.-based AMC, the theater company, last month opened a 13-screen theater in Fukuoka, the largest in Japan, and plans a 16-screen theater near Tokyo Disneyland in 1998.

These U.S. firms hope Japan will be merely the first of many Asian countries to succumb to the influence of Mickey Mouse, Woody Woodpecker, Tiny Toons and the likes of Harrison Ford, one of the more popular U.S. film stars in Japan.

Disney President Michael Ovitz toured China last month talking to officials interested in importing Mickey’s magic. At the same time, Frank Stanek, president of international new-business development for MCA Recreation Group, was in China and Southeast Asia, investigating potential deals.

“We see great opportunities for growth throughout the region,” said Dreyer of Disney.

The U.S. entertainment companies already have an enthusiastic, if unauthorized, following in these developing markets. China’s illegal copying of foreign films, music and software-- which now threatens to trigger a U.S.-China trade war--has accelerated the spread of U.S. entertainment culture throughout the region.

Whether they are harried Singapore office workers seeking a respite from a 12-hour workday or Chinese factory workers looking for an escape from their dormitories, Asian consumers represent a lucrative new frontier for American entertainment companies hawking fantasy and fun.

“I’ve been going to Japan for the last 21 years and I thought I was doing business in Asia,” said Stanek, who worked for Disney before joining MCA. “I wasn’t. In the last six months, I’ve discovered a whole new part of Asia and now we’re asking ourselves, ‘Where do we want to go?’ and ‘What kind of entertainment product do they want to buy?’ ”

But first MCA had to convince itself that it could avoid the mistakes of Euro Disney, whose French theme park opened in 1992 to a flood of red ink and harsh criticism about the invasion of crass American commercialism. That experience raised red flags for others mulling such ventures.

The problems associated with Disneyland Paris--which was crippled by a recession in France and other woes before turning profitable last year--convinced MCA that it needed local government and company officials on its team to succeed in Japan.

In 1992, after evaluating several sites, including one near Tokyo Disneyland, MCA decided that Osaka, about 340 miles east of Japan’s crowded capital city, offered the right combination of space, location and government enthusiasm.

Osaka, one of Japan’s major manufacturing centers, needed a boost. In the 1960s, the city was home to four major shipbuilding companies and seven steelmakers. Now only one steel manufacturer remains.

The proposed site was in the center of Japan’s second-most populous region--40 million people within 150 miles--and 15 minutes from downtown Osaka’s main railroad station. Visitors arriving at the new Kansai International Airport are just a half-hour boat ride away.

And America-phobia hasn’t been a problem here for decades.

“After World War II, we embraced American culture and we transformed everything into something uniquely Japanese,” said Osaka Mayor Takafumi Isomura, an economics professor who studied at John Hopkins University. “We are not as nervous as the French people.”

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However, it was a less than auspicious beginning. Japan’s Matsushita Electric Industrial Co., which was then in the midst of a rocky five-year corporate marriage with MCA, was reluctant to push ahead with the high-cost venture, given the financial risks and soft Japanese economy.

MCA finally got the green light last year when Seagram Co. purchased an 80% share of MCA and began promoting a global agenda. Under its new management, MCA is placing more emphasis on international markets. In addition to Japan, it is exploring sites in Europe for a theme park.

Matsushita, which still owns 20% of MCA, refused to be interviewed for this story.

The city of Osaka has taken the lead role in USJ Corp., the developer of Universal Studios Japan, and holds a 25% stake in the project. MCA and Rank Organization, a British firm involved in Universal’s Orlando park, each own 17%. The remainder is shared by an investment consortium that includes the project’s seven major landowners.

City officials also negotiated long-term land leases, relocated affected companies and passed a waterfront redevelopment act to streamline the government approval process. They also persuaded the railroad to relocate a railway line and build a station at the theme park’s doorstep.

Financing is expected to come from the Japanese government and private banks, which have already offered to provide low-cost loans.

And Osaka’s ambitions don’t stop at the park’s boundaries. The city is working with MCA on plans for Universal City Osaka, a 1,200-acre urban redevelopment project featuring resorts, retail, high-tech office space and housing.

Longtime civic leader Kazuhiko Yamashita believes Universal Studios, which is building a small working studio on the theme park site, can be a magnet for a high-technology Asian entertainment center that melds Japan’s Silicon Valley with Hollywood’s creative magic.

“I call it Siliwood,” said Yamashita, a top advertising executive, repeating a term in vogue in California’s multimedia community.

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Part of the spark would theoretically come from people such as Steven Spielberg, who is serving as the new park’s creative consultant and whose “Jurassic Park” and “E.T. The Extra-Terrestrial” are the highest-grossing films in Japanese history.

“If Mr. Spielberg came here once every five years, if he produced a film which would be loved around the world, this could lead to the creation of a new type of thinking about Osaka,” Yamashita said.

But it remains to be seen whether Universal Studios Japan, whose target is 8 million visitors in the first year, will be able to capture the imagination of a Japanese public that might well be suffering from entertainment overload.

“Universal Studios will have to satisfy people who have experienced eyes,” said Masafumi Noyama, a spokesman for Osaka-based Yoshimoto Kogyo Co., one of Japan’s best-known entertainment companies.

Still, Noyama hopes this infusion of Hollywood pizazz will attract greater attention to Japanese traditional and pop culture. He is seeking a partnership between MCA and his firm, which delivers a modern version of manzai, a traditional form of Japanese comedy theater, in the unique Osaka dialect.

The time has long since passed to worry about the Americanization of Japan, according to Noyama. After all, he and his friends spent their childhood Saturdays watching such popular American television programs as “I Love Lucy,” “Bewitched” and “Father Knows Best.”

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When Universal Studios Japan finally opens its doors, the popular Earthquake ride will not join Jurassic Park’s raptors, the Back to the Future ride and the Wild Wild Wild West Show. For a region still reeling from last year’s nearby Kobe quake, there is little amusement in the ground shaking and sirens wailing.

But little else will be different at the park, which is importing its Hollywood culture and cowboys intact. There will be a Japanese restaurant added to the traditional American culinary lineup. And thrill seekers may notice a little less rocking and swaying, particularly on the water rides, because the Japanese tend to dress more formally and therefore don’t like to get wet.

Theme parks in Japan also place greater emphasis on unadulterated consumerism to satisfy the appetite for buying omiyage, or gifts, for friends, relatives and co-workers. The average visitor to Tokyo Disneyland parts with nearly $100 a day, significantly more than in the United States.

To help fill the park’s kiosks, MCA settled on Woody Woodpecker, the sassy bird created by legendary cartoonist Walter Lantz in 1941.

Woody lacks the softness and innocence of Mickey Mouse or Sanrio’s round-faced Hello Kitty characters. One Japanese advertising executive suggested the creature might be too “sarcastic” to capture a huge following here, given the love of things kawai, or cute.

But MCA hopes the wisecracking Woody will appeal to the older teens and adults who are its target market at home and abroad, in contrast with Disneyland, which provides a more family-oriented fantasy experience.

A few major Japanese companies, anxious to get a seat on the MCA bandwagon, have adopted Woody as an advertising mascot. Sumitomo Bank included the bird in a new credit card campaign. Matsushita used him last Christmas in a marketing blitz for its new multimedia computer.

MCA also signed up a few Japanese companies to manufacture and sell its movie- and cartoon-related products, which are just starting to show up in stores in Tokyo and Osaka.

In just two years, MCA Enterprises Japan has collected $2.5 million from its woodpecker. Woody’s nephew and niece, Knothead and Splinter, and Baby Huey, the oversized baby duck, are next in line to be marketed.

But the battle for shelf space will be brutal. One clerk in the toy section of Isetan, the large Tokyo department store, got Woody Woodpecker confused with Woodstock, of Peanuts fame.

Makiko Inoue of The Times’ Tokyo bureau contributed to this report.