Abstract: Using a home market economic model, this article explains the changing competitive balance between the U.S. and Japanese film industries. I test the hypothesis that the domestic movies' market share in Japan has decreased because consumer movie spending has increased more rapidly in the United States than in Japan. The results of using information from a database (1955-2000) of media industry development in the United States and Japan generally support the economic hypothesis.

Key words: film trade, economics, Japanese film industry