Market Insight

Retail group acquires Japanese multiplex circuit

August 18, 2014

Charlotte Jones Charlotte Jones Associate Director/Principal Analyst, Cinema, OMDIA
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United Cinema, the third largest cinema circuit in Japan, has been acquired by convenience store operator Lawson for a deal reported to be worth $100m. Under terms of the deal, Lawson, through its subsidiary Lawson HMV Entertainment, will acquire all shares in the holding company of United Cinema from existing shareholders including Advantage Partners LLP, a private equity fund. United Cinemas currently has 336 screens across 36 sites, including its partner circuits. Advantage Partners acquired its stake in United Cinemas back in 2012 from Sumitomo Corp.

Following the acquisition, Lawson will look to exploit synergies including the sale of music and video software at United Cinema complexes through its subsidiary Lawson HMV Entertainment, which in turn sells tickets to live concerts and events. It will also look to exploit cross marketing initiatives including giving customers of its Ponta point loyalty cards other privileges in its cinemas.

United Cinemas was one of the pioneers of multiplex screens in Japan having been spun out of the original UCI cinemas, a joint venture between Universal and Paramount. In 2005, it acquired the assets of AMC in Japan. Its most recent merger was with Cineplex Japan in November 2013. It is currently third ranked behind Aeon Entertainment and Toho Cinemas.

Our analysis

Traditionally cinema exhibitors have been keen to sustain the notion of windows in order to maximise box office revenues before a title is released on other windows, but a retail owner of a cinema circuit would also stand to gain from sales in subsequent release windows, particularly in Japan, where rental accounts for the vast majority of home entertainment revenues.

Lawson also has opportunities to increase the proportion of live or alternative content events in cinemas, by exploiting existing partnerships with rights holders through its ticketing division. Nature of the deal shows the retail group believes there there is scope to increase the overall theatrical admissions market through discounting or loyalty ticketing initiatives alongside opportunities for increasing sales of goods and related merchandise by expanding its retail sales platform to cinemas.

Other examples of a group with retail interests operating in the cinema space include Korean conglomerate Lotte Group and China's Wanda Group which operates department stores in China in addition to one of the largest cinema circuits in China and the US.


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