ASIAN-US Co-Production Guide: What You Need to Know
- Global Connects
- Sep 25
- 4 min read
Co-productions between Asian and American companies offer compelling advantages: shared risk, combined expertise, and content that can work in both markets. But cultural and business differences make these partnerships more complex than many realise. Here's what you need to know before structuring an Asian-US co-production.
Why Co-Produce?
The appeal is obvious. Japanese partners bring distinctive creative vision, strong IP, and technical expertise in animation and effects. American partners bring distribution relationships, market knowledge, and often larger production budgets.
When it works, you get content that feels authentic to both markets and has built-in distribution in two major territories. When it doesn't work, you get compromised creative that satisfies no one and budget overruns from coordination failures.
Decision-Making Authority Is Everything
The single biggest mistake in Japan-US co-productions is failing to clarify decision-making authority upfront. Who has final cut? Who approves key casting? Who signs off on major budget decisions?
In my experience at Warner Bros, Japanese partners often expected collaborative consensus on every decision, while American partners expected clearer authority delineation. Neither approach is wrong, but mismatched expectations create endless friction.
Successful co-productions establish decision domains at the contract stage: "Japanese partner has final authority on character design and voice casting; American partner has final authority on distribution strategy and English adaptation." Get this wrong, and you'll be mediating disputes throughout production.
Budget and Financing Structures
Co-production budgets need careful structuring. Are both parties contributing cash? Is one side contributing services in-kind? Who handles overages?
A common model: Japanese partner finances production in Japan, American partner finances production in the US, and both share distribution revenues proportionally. But this requires detailed budget breakdowns showing exactly what each territory is responsible for and what happens if production moves faster or slower than planned.
Currency fluctuations matter too. If you're working on an 18-month production schedule, a significant yen-dollar exchange rate movement can materially impact economics. Sophisticated co-production agreements address this exposure upfront.
The Creative Development Process
Japanese and American creative development processes differ fundamentally. Japanese studios often develop extensively before committing to production, creating detailed character designs, story bibles, and world-building documentation. American studios are more comfortable moving into production with broad strokes defined, then refining during production.
These different approaches create tension in co-productions. American partners may feel Japanese partners are overthinking early development and delaying production. Japanese partners may feel American partners are rushing into production without sufficient planning.
The solution is agreeing on milestone-based development with clear approval gates. But recognise that Japanese partners may need more time in pre-production than you're used to, and American partners may want more flexibility to adjust during production than you're comfortable with.
Distribution Rights Allocation
Co-productions must clearly split distribution rights from the start. Typical structures include:
Territory Split: Japanese partner controls Asia, American partner controls North America and Europe
Platform Split: Japanese partner controls theatrical and broadcast, American partner controls streaming
Joint Control with Approval Rights: Both parties must approve all distribution deals
Avoid vague "we'll work it out later" provisions. As the property becomes successful, distribution disagreements become acute. Structure a clear decision framework upfront.
Also consider: what happens if one partner wants to exploit rights in a way the other partner opposes? Does one partner have buyout rights? Are there minimum revenue guarantees? These questions become disputes if not addressed in the initial contract.
Cultural and Communication Differences
Business culture differences matter more than many acknowledge. Japanese business culture emphasises relationship building, consensus, and indirect communication. American business culture is more transactional, hierarchical, and direct.
Practical implications:
Japanese partners may view contracts as starting points for ongoing relationship discussion; American partners view them as binding
Japanese partners may avoid direct "no" even when they disagree; American partners expect clear objections
Japanese partners may need to consult Tokyo extensively; American partners may have more local authority
Neither culture is superior, but unmanaged differences create misunderstandings that poison partnerships. Having cultural translators on both sides—people who genuinely understand both business cultures—is as important as having language translators.
Legal and Tax Considerations
Co-productions involve two legal systems, two tax regimes, and potentially multiple intellectual property frameworks. Get experienced entertainment lawyers in both countries involved early.
Key legal issues include:
Where is the production entity domiciled and why?
How are IP rights owned and controlled?
What happens if one party wants to exit the partnership?
How are disputes resolved and in which jurisdiction?
Tax considerations are equally complex. Co-productions may qualify for tax incentives in both countries, but structuring the production to actually capture those benefits requires sophisticated tax planning.
Making It Work
Successful Japan-US co-productions share common elements:
Clear governance: Decision rights and approval processes defined before production starts
Cultural awareness: Team members who understand both business cultures and can translate
Experienced counsel: Legal and business advisors who've done co-productions before
Realistic timelines: Built-in buffer for coordination and cultural communication differences
Relationship investment: Face-to-face meetings in both countries to build trust before problems arise
Co-productions offer real value for the right projects with the right partners. But they require more planning, clearer contracts, and better cross-cultural communication than domestic productions. Invest in the structure upfront, and you'll avoid expensive problems downstream.
About the Author: Doug Montgomery spent over 15 years at Warner Bros negotiating and managing international co-productions and distribution deals. He now advises Japanese and American companies on cross-border entertainment partnerships through Global Connects Media.
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