Anime films gain institutional investors
Plus: Think tank projects decline in anime production volume; Moms in Japan spend big on anime characters; Sony details AnimeCanvas software; and more
This is your weekly Animenomics briefing, covering the business of anime and manga. Today is Wednesday, July 24, 2024.
Situational awareness: San Diego’s Comic-Con International starts tomorrow, showcasing media based on comic books and, increasingly, anime and manga.
Case in point, Adweek revealed that Crunchyroll chose this year’s Comic-Con as the venue to launch a brand refresh.
Anime content funds return despite checkered history
Investments in anime film productions are expected to grow with a new fund by Mizuho Securities that seeks to raise ¥1.5 billion (US$9.7 million) to ¥2.5 billion (US$16.2 million) for anime films, Bloomberg reports.
Why it matters: Mizuho’s anime film fund builds on a recent trend of anime and manga gaining the attention of global investment firms.
In May, the operator of Japan’s Mecha Comic digital manga platform was sold to the global private equity firm Blackstone.
How it works: Shuichiro Tomihari, director of financial solutions in the global investment banking division, told Bloomberg that Mizuho will sell securities for ¥50 million (US$323,000) a unit.
Mizuho plans to seek investments from financial institutions and corporate investors. The firm may also recruit overseas investors.
Once the securities are pooled together, Mizuho will invest about ¥800 million (US$5.2 million) per movie.
Yes, but: Out of 73 anime films released in 2023, only about a dozen earned more in box office sales than what Mizuho plans to invest in each movie.
What they’re saying: “The most crucial aspect of this challenge is not the amount of money raised or the number of funds created, but the content produced through this framework,” Questry president Tomonobu Ibe says in a statement.
Questry and Royalty Bank, a sister company, are assisting Mizuho with planning the content fund and facilitating royalty transactions.
Zoom out: As Japan seeks new alternatives to the production committee system that funds anime productions today, the film industry is experimenting with new funding models.
Earlier this month, the Nikkei reported that Singapore-based PhillipCapital will sell digital securities to retail investors to help Toei and Sony Pictures raise 25 percent of a film’s ¥1.3 billion (US$8.4 million) production cost.
Rewind: Content funds have a history in the anime industry of not being able to recoup investments, Tadashi Sudo writes in the Animation Business Journal.
In 2004, anime studio Gonzo raised ¥240 million (US$1.6 million) from retail investors through a content fund for the production of Basilisk, but sluggish DVD sales yielded a disappointing return of ¥184 million (US$1.2 million).
Anime industry faces supply-side risks in coming years
Shrinking animator ranks in Japan due to population decline and high attrition rates in studios will result in a 9–10 percent decline in anime production volume by 2030, according to a new estimate by the Japan Research Institute.
Why it matters: With the Japanese government seeking to quadruple the export market for entertainment content, the anime industry will need to significantly increase the market value of its content.
The industry can’t generate this revenue simply by producing more anime because of the shrinking animator workforce.
By the numbers: Japan produced 111,462 minutes’ worth of anime serials and films in 2022, according to the most recently available data from the Association of Japanese Animations.
Animenomics calculates this production volume has been declining by an average rate of 1,000 minutes, equivalent to 40 anime television episodes, a year for the last decade.
Citing data from the Japan Animation Creators Association, Japan Research Institute senior economist Yosuke Yasui also estimates that the number of animators will decline to about 5,600 in 2030 from 6,200 in 2019.
Between the lines: Raising animator wages can stave off this decline, but studios already allocate an average 88 percent of their income toward labor wages.
Across all Japanese industrial sectors, the average labor share of income is lower at about 50 percent.
Correcting for this disparity requires changes to the production committee funding scheme or the introduction of government subsidies.
Clippings: Japanese moms spend on anime characters
Three in five Japanese mothers participate in activities supporting their favorite celebrities and anime characters, called ‘oshikatsu’, according to the results of an online survey conducted by Interspace, which operates the Mamasta information website for mothers with 12 million monthly active users. (Jiji Press)
Zoom in: Nearly one-third of respondents who take part in oshikatsu spend more than ¥50,000 (US$320) a year on such activities.
“Oshikatsu seems to allow mothers who are busy with child care and might be alienated from society to spend time for themselves and relieve stress,” an Interspace official told Jiji Press.
Character merchandising and copyright sales in Japan grew 2.2 percent last year to ¥2.7 trillion (US$17.4 billion), according to data compiled by the Yano Research Institute. (ITmedia Business Online)
Anime streaming platform Crunchyroll removed the ability for users to add and view comments on news articles and anime episodes. The feature was an early differentiator against competitors. (Anime News Network)
Light novels’ shrinking print market in Japan is resulting in some bookstores dedicating less shelf space to historically popular titles like the Haruhi Suzumiya series, The Familiar of Zero, and Shakugan no Shana. (Real Sound)
Mobile Suit Gundam: Silver Phantom, a virtual reality anime film made by Bandai Namco Filmworks and Atlas V, will compete for the Venice Immersive Grand Prize at the 81st Venice International Film Festival. (Oricon News)
Sony details development of anime production software
“This isn’t just about improving the efficiency of key animation, in-between animation, and coloring. I think the way we create anime as a whole and how we use our time will change.”
— Akira Shimizu, A-1 Pictures and CloverWorks anime studio president
Context: In an interview with entertainment news portal Branc, Shimizu and two Sony representatives provided new details about AnimeCanvas, the software that Sony is developing for its anime studio subsidiaries to improve anime production quality and efficiency.
The details: AnimeCanvas’s primary function is simplifying the drawing tools used by animators. “The drawing software we are currently using is more of an illustration software,” Shimizu told Branc.
It will facilitate tracking of correction instructions by animation directors and also digitize timesheets, 90 percent of which are done by paper today.
Sony also intends to include coloring software in AnimeCanvas, improving upon existing digital coloring tools used by the anime industry today.
Bottom line: “I hope that this software will be able to overcome the difficulty felt by those who have avoided digital until now,” says Shimizu.
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Wow this is super interesting! I’d never heard of oshikatsu before, but it’s defo got me thinking...
In my head they are the most loyal customers & super fans, and I’d love to know more about this as a whole, to get a larger scale picture. The implications this can have on business for example are quite vast!