Manga publishers raise anime royalty rates
Plus: Animator skills test launches; Bandai Namco tests digital banking for 'Idolmaster' fans; Anime studios collaborate on AI and digital tech; and more
This is the weekly newsletter of Animenomics, covering the business of anime and manga. Today is Wednesday, July 10, 2024.
In case you missed it: North American manga publisher and licensee
has acquired a license for the rights to RWBY, an American anime-inspired series that has also been adapted into Japanese productions.The future of the RWBY franchise had been in question after Warner Bros. Discovery shut down the Rooster Teeth production company that created it earlier this year.
Manga publishers claim a larger share of anime profits
Japan’s top manga publishers are among the biggest beneficiaries of the current anime boom, recording higher revenues and profits in recent years than a decade ago, says a new report by the Weekly Toyo Keizai business magazine.
Why it matters: As publishing industry revenues shrink, publishers are boosting their bottom line by increasing royalty fees for secondary use of manga properties in their portfolio.
How it works: When a manga title is adapted into an anime series, production committees pay publishers a fixed royalty fee averaging ¥200,000 (US$1,250) to ¥400,000 (US$2,500) per episode.
Royalties for secondary uses such as merchandising, streaming, and video games, however, aren’t fixed and will increase as more sales are generated.
Merchandising contracts typically call for licensors to pay a 15–20 percent royalty to publishers, but in some scenarios that share has increased to as much as 30–35 percent for high-value properties.
An unnamed anime studio executive interviewed by Toyo Keizai called such terms an “exploitation contract”.
What’s happening: Revenues related to sales of intellectual property (IP) rights have ballooned to 27 percent of all sales at Shueisha and 16 percent at Kodansha.
More than half of producers surveyed by Toyo Keizai said that titles serialized in Shueisha’s Weekly Shonen Jump are generally expected to become hits, so committees will concede to the publisher to secure those IPs.
What we’re watching: Publishers are also participating in production committees and becoming anime licensors, allowing them to generate revenue from licensing sales on top of the royalty fee.
Kodansha in particular has grown its rights management division from just a few people to more than 100 employees and also increased investment in anime productions.
Toyo Keizai reports the publisher is also considering entering the video game business, with a game based on the recent hit Wind Breaker in development.
Animator advocacy group launches skills evaluation test
The Nippon Anime & Film Culture Association (NAFCA), in an attempt to assist anime studios in hiring qualified animators, has launched a certification exam to evaluate the skills of animation workers.
Why it matters: Japan’s anime industry continues to face labor headwinds as the level of anime production today is 50 percent higher than a decade ago.
Studios hiring unskilled workers put more pressure on veteran animators to take up valuable time to make drawing corrections.
The details: NAFCA will certify six different levels of animation skills, though only certifications for the two lowest levels will be available initially.
For its first edition, the 4-hour exam will evaluate two animation skills: line tracing and animating off the peg bar.
Registration will open in August, with the certification exams to be held in November in five cities: Tokyo, Osaka, Nagoya, Fukuoka, and Niigata.
The organization will also release textbooks this summer to help applicants prepare for the exam.
The bigger picture: NAFCA officials believe the exams will serve as standards by which anime studios can evaluate technical skills.
Animators who receive passing results may be able to receive salary raises based on their recognized skill level, promoting wage growth.
Clippings: Bandai Namco partners on digital banking
Bandai Namco Entertainment will partner with Mitsubishi UFJ Financial Group to offer branded digital banking services to The Idolmaster mobile game players in 2025, the first such integration of an anime and game IP by a bank. (The Nikkei)
The Idolmaster, originally an arcade game simulating training of female idols, grew in popularity through anime and mobile games. In 2020, the series was estimated to be generating ¥60 billion (US$373 million) a year in sales.
Investment bank Mizuho Securities is partnering with financial technology firms Questry and Royalty Bank to form a content fund to invest in anime film productions. The size of the fund was not disclosed. (Tokyo FinTech)
Content funds were once popular among anime companies and the financial industry in the 2000s, says journalist Tadashi Sudo, but such entities largely ceased to exist because of the high-risk nature of film investments.
Singaporean sovereign wealth fund GIC is seeking to invest in Japanese anime and video game companies, which are expected to grow in digital sales thanks to their world-class IPs and content. (The Nikkei)
GIC is estimated to have more than US$700 in investment holdings, but the share of investments in Japan has fallen from 12 percent in 2019 to 6 percent in 2023.
Shueisha and Capsule Corporation Tokyo, the firm founded by former manga editor Akio Iyoku, remain at odds over who should ultimately manage the Dragon Ball IP months after Akira Toriyama’s death. (Weekly Toyo Keizai)
Anime studios collaborate on AI, digital technologies
“Currently, each company is working on AI and digital drawing tools. If that happens, production workflows will change. We are all looking for ways to create better things while exchanging such information. Our group is also cooperating with development companies as a technical collaborator, giving feedback from animators and advice on functions.”
— George Wada, WIT STUDIO president and Production I.G president
Context: Wada told the Real Sound web magazine that IG Port’s two main anime studios are exchanging information on developments in AI and digital technology with several other studios, including Trigger, MAPPA, CloverWorks, and CoMix Wave Films.
What he’s saying: “I believe the Japanese anime industry is in high spirits and hopeful for the future right now, so I hope that the entire industry will work together to advance these initiatives,” Wada added.
In addition to work on digital technologies, he also said that studios are also sharing knowledge to tackle challenges in human resources and information security.
Yes, but: A survey conducted last year shows that anime companies still face a bigger challenge in convincing the public that AI technology is beneficial to the industry.
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