In the book, "A Hundred Years of Japanese Film," authors Donald Richie and Paul Schrader state that World War II stunted the progress of Japanese films. The imperial regime banned most films. After U.S. occupation, General Douglas MacArthur imposed laws regulating film production and banned pro-Imperial Japanese films. Many of those films were destroyed in bonfires. It wasn't until after U.S. occupation that characters such as Godzilla started to appear in films. These films explored how the Japanese felt about occupation and the impact of nuclear weapons.
Between the 1950s and 1990s, most Japanese films didn't appeal to Western audiences because of the cultural differences in storytelling. As Richie and Schrader explain, Japanese traditional narrative (called the suji), "emphasizes sequential flow, connection, association," whereas Western plot structure "stresses occurrence, causality, and responsibility." UNIJAPAN explains that the film industry was suffering locally as well.
The three major film conglomerates, Toho, Shockiku, and Toei, began investing in grocery stores and unrelated ventures, neglecting the film market. That opened the door for television companies to get involved in film. Television companies backed new directors whose visions revitalized the industry. According to UNIJAPAN, International Promotion Department television shows inspired movie productions because they already had built-in audiences. These studios gave directors creative freedom, which allowed the cultivation of unique styles and points of view.
The first Japanese film to ever win an Academy Award as Best Foreign Language Film was "Departures" in 2009, in spite of 15 previous nominations of Japanese films dating back to 1956, when the category was first introduced. "The Guide to Japanese Film Industry & Co-Production" says Japan has an answer to the Cannes Film Festival, called the Tokyo Film Festival, which has been celebrated every October since 1985. Participants from more than 60 countries showcase 600 or more films to win the Tokyo Sakura Grand Prix.
The popularity of Japanese films forced Hollywood to pay attention, especially with horror films. Richie and Schrader explain that this genre is often called J-horror, which features ghosts as women or children and doesn't need to explain the reason for the ghosts or the amount of blood and gore these ghosts inspire. Japanese films that have been remade for an American market include "The Ring," "The Ring 2," "Dark Water," and "The Grudge."