Anime market outside Japan up 18% in 2023
Plus: Anime industry group criticizes Netflix payment model; 2.5D musicals set record attendance in Japan; Light anime named a top consumer trend; and more
This is the weekly newsletter of Animenomics, covering the business of anime and manga. Today is Wednesday, November 13, 2024.
A word of preface: I previously wrote about Ikebukuro’s emergence as a modern anime mecca to rival world-famous Akihabara, but I was still blown away by the scale of anime’s presence there during my trip to Tokyo the last two weeks.
Anime industry revenues abroad overtake home market
Overseas revenues of the Japanese anime industry climbed 18 percent last year to overtake the size of the domestic market for the first time since 2020, preliminary data from the Association of Japanese Animations reveals.
Why it matters: Anime’s revenue growth accelerated last year both domestically and abroad, an indicator that things are pointed in the right direction for Japan to achieve ¥20 trillion (US$130 billion) in content exports in the next decade.
By the numbers: Anime’s overall market expanded 14.4 percent, with overseas anime revenues recorded at ¥1.72 trillion (US$11.2 billion) in 2023, ahead of the ¥1.62 trillion (US$10.6 billion) for Japan’s domestic market.
Overseas revenues on a United States dollar basis saw 10 percent growth after a small decline in 2022, a reassurance that export value is still growing.
Domestic revenues grew 10.6 percent, the third highest rate in the last 20 years when excluding the COVID-19 pandemic dip and recovery.
Zoom in: Domestic streaming saw a large revenue surge, climbing more than 50 percent to an estimated ¥250 billion (US$1.63 billion).
Yes, but: Anime still isn’t growing fast enough in order to meet Japan’s content export ambitions, says Hiromichi Masuda, the lead author of the AJA’s annual Anime Industry Report, at this year’s Tokyo International Film Festival Content Market.
“If you do a simple calculation, an increase in sales of more than ¥500 billion per year is needed. This is equivalent to building one Disneyland overseas every year,” Masuda said in his presentation of the latest AJA data to TIFFCOM attendees.
“Even if we want to triple our sales, we can’t triple the number of productions we currently make,” Shin-ei Animation CEO Michihiko Umezawa echoed. “To do this, we need to create higher quality works and raise the price of each work.”
Zoom out: As previously reported by Animenomics, the studios that make anime also saw record revenue growth last year, according to data from credit reporting agency Teikoku Databank.
However, there is also a growing profitability gap as not all studios receive the revenue windfall equally.
What we’re watching: The AJA’s annual Anime Industry Report, with more detailed analysis of each market segment, will be published at the end of the year.
Netflix payment model frustrates anime industry group
The Association of Japanese Animations has come out in criticism of Netflix’s model for compensating the creators of anime titles streamed on its platform at a copyright policy committee meeting of the Japanese government’s Agency for Cultural Affairs.
Driving the story: Presentation materials submitted by the AJA last month include shortcomings of a global streaming platform’s payment model to makers of anime.
The materials don’t specifically name the streaming platform, but sources have told Animenomics that the details match Netflix’s unique payment model.
Why it matters: Netflix offers creators a unique payment system that differs from traditional broadcast licensing models by paying upfront the production cost of its titles, plus additional markup.
This payment model appealed to cash-strapped anime studios at first, but many have re-evaluated their relationships since Netflix reported subscriber losses for the first time two years ago.
What they’re saying: The AJA contends that Netflix doesn’t give creators additional share of revenue when the work becomes a breakout hit.
This diverges from the traditional anime business model where the bulk of revenues often come from sales of secondary rights like merchandise licenses.
The intrigue: The AJA also went so far as to label Netflix as “stingy” with its payments, which are made in installments over the period of the contract.
Because of the ebb and flow of expenses during production, studios may find that they need to cover certain costs themselves before the next installment is paid.
The other side: “Paying upfront, something that Netflix actually pioneered, benefits creators, and it benefits Netflix,” co-CEO Ted Sarandos told Netflix investors during the company’s third quarter earnings call, defending the payment model.
“We have been, we continue to be, and we are open to more bespoke deals where talent is interested,” Sarandos added. “They rarely happen because typically the talent chooses the upfront model, so we think that we have the right model, and we are not looking to change it.”
Clippings: 2.5D musicals set record earnings, attendance
Japan’s 2.5D musical theater adaptations of anime, manga, and video games earned ¥28.3 billion (US$184 million) domestically last year, up 7.9 percent from 2022. A record of 236 productions were performed. (PIA Research Institute)
Attendance at 2.5D musicals climbed to 5 percent to 2.89 million, exceeding the pre-pandemic peak set in 2018, thanks in part to efforts by the Japan 2.5-Dimensional Musical Association to attract foreign visitors.
Japan’s inaugural animator certification exam organized by the Nippon Anime & Film Culture Association, an animator advocacy group, was attended by 350 test-takers across four cities. (Oricon News)
NAFCA has also launched a crowdfunding effort to publish an English-language edition of the exam’s textbook, which covers two of six levels of animation skills.
Film production giant Toho established a new subsidiary in Singapore to serve as a Southeast Asia base of operations for developing and licensing Godzilla and anime IP content and products. (Animation Business Journal)
Paying digital manga readers now make up approximately 41.6 percent of Japanese users of digital manga platforms, up three points from last year, driven by increases in paying readers in their 20s and 60s. (Oricon News)
Anime apparel maker Cospa plans to begin selling its iconic designer anime T-shirts and wearables outside Japan as domestic sales have risen rapidly with foreign tourists buying products in bulk to bring back home. (Fashionsnap)
Light anime shows named top consumer trend for 2025
Light anime, a low-cost anime production method that adds motion to manga and webtoon panels, has been named by the Nikkei Trendy business magazine as one of Japan’s top emerging consumer products for 2025.
Why it matters: Light anime can be produced six times as fast as a traditional anime series and at one-tenth the cost, says a recent Nikkei Marketing Journal report.
Creators of the technology behind light anime contend that it reduces the burden on human resources and speeds up the publishing industry’s ability to bring new IPs to the anime market.
Rewind: As previously reported by Animenomics, light anime emerged out of a collaboration between printing giant Dai Nippon Printing and video production studio Imagica Infos.
What’s happening: Nagoya-based Chubu-Nippon Broadcasting (CBC) has already aired three light anime works with episodes about ten minutes long and is lining up a fourth series for early next year.
Light anime allows regional broadcasters like CBC to invest in the growing anime market without needing to license top-tier titles like national TV networks.
Our thought bubble: Light anime is innovative in Japan’s domestic anime market, but it remains to be seen whether it will gain traction abroad, where viewers expect more flashy animation.
Motion comic-style anime, like the Netflix-funded The Way of the Househusband, aren’t new to the market, but they are often produced using traditional methods.
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