Reading about the financial status of anime studios made me think of the many CGI companies in Hollywood that worked with Marvel, and how Marvel just kept pushing for everything to get cheaper and cheaper, ultimately pushing many of the better companies out of business.
But what you're describing is something different, given that the studios are owned by companies like Aniplex. What are the practical implications for the members of the studio? If they are run as cost centers, that isn't necessarily a bad thing, right?
Asking about the practical implications for the studio members is the right question. Aniplex commissions anime both from its own studios and external studios (like Ufotable for Demon Slayer). Obviously, there is no obligation for Aniplex to only send work to its own studios even under vertical integration.
But what does it say about Aniplex if it earns a lot of profit from a project, yet its own studio posts a net loss despite working on the same project. Could there have been room for Aniplex to adjust the production budget for rising costs? Could a higher production budget create a more sustainable working environment for studio members so that they won't have to cut corners in production? Can higher budgets lead to more palatable salaries for the average animator and those looking to enter the industry?
I think these are important questions to consider, especially as the Nikkei reported just today that production costs for the average 30-minute TV anime series have gone up 50 percent since 2020 as fan expectations for high-quality visuals have increased. (https://www.nikkei.com/article/DGXZQOUB119920R10C26A6000000/)
Re Aniplex operating revenue and profits. Cloverworks, while posting a loss is not in danger of bankruptcy surely? They’re essential to the Aniplex content funnel. Why would Sony let a studio that delivers premium content that they and their subsidiaries derive so much value from fail? Fans shouldn’t read too much into the earnings reports for any Aniplex owned studio. It’s just an accounting exercise.
What I think is interesting is that the studio that is by far the most important within the Aniplex ecosystem is Ufotable. A studio they do not own, but which they pay out hefty back-end percentages to on Demon Slayer’s anime derivative copyright. They must be coining it.
It makes business sense for Aniplex’s own studios to make a loss. Better for the balance sheet.
Yes, my point isn't that the anime studios owned by Aniplex are at risk of bankruptcy. Their cumulative retained earnings are still in the positive, so they aren't going to be insolvent any time soon.
What I intended to highlight for readers not as knowledgeable about the business of anime is that today's anime production economics doesn't guarantee that an anime studio will be profitable at the end of the year, even for large primary contractor studios associated with a large conglomerate like Sony and Aniplex. At the end of the day, the studios simply become cost centers while profits flow up to the parent company that holds all the licensing rights.
Why do you think brands like Cloverworks and A1-Pictures are more or less held at arm's length from Aniplex, rather than being absorbed wholly into them and becoming "Aniplex Studio" or something like that? Is it branding? Is it management? Is it accounting?
I am asking out of a place of tremendous ignorance. ;D
For a long time, A-1 Pictures was the indeed "Aniplex Studio". CloverWorks was spun off from A-1 Pictures in 2018 because the team that made up that studio started to develop its own creative personality. Kevin Cirugeda has a good write-up about this at Sakuga Blog: https://blog.sakugabooru.com/2018/04/02/2018-exciting-new-anime-studios/
My guess is Aniplex is generally happy with the outcome of the split with the two studios having their own management styles that are conducive to maintaining the separate creative personalities and having separate industry relationships than what A-1 Pictures has.
We see this a little bit at Kadokawa as well where they're keeping Doga Kobo and Kinema Citrus independent from the management consolidation of the publisher's five other anime studios.
Reading about the financial status of anime studios made me think of the many CGI companies in Hollywood that worked with Marvel, and how Marvel just kept pushing for everything to get cheaper and cheaper, ultimately pushing many of the better companies out of business.
But what you're describing is something different, given that the studios are owned by companies like Aniplex. What are the practical implications for the members of the studio? If they are run as cost centers, that isn't necessarily a bad thing, right?
Asking about the practical implications for the studio members is the right question. Aniplex commissions anime both from its own studios and external studios (like Ufotable for Demon Slayer). Obviously, there is no obligation for Aniplex to only send work to its own studios even under vertical integration.
But what does it say about Aniplex if it earns a lot of profit from a project, yet its own studio posts a net loss despite working on the same project. Could there have been room for Aniplex to adjust the production budget for rising costs? Could a higher production budget create a more sustainable working environment for studio members so that they won't have to cut corners in production? Can higher budgets lead to more palatable salaries for the average animator and those looking to enter the industry?
I think these are important questions to consider, especially as the Nikkei reported just today that production costs for the average 30-minute TV anime series have gone up 50 percent since 2020 as fan expectations for high-quality visuals have increased. (https://www.nikkei.com/article/DGXZQOUB119920R10C26A6000000/)
A killer edition. Have a blast at AX.
Re Aniplex operating revenue and profits. Cloverworks, while posting a loss is not in danger of bankruptcy surely? They’re essential to the Aniplex content funnel. Why would Sony let a studio that delivers premium content that they and their subsidiaries derive so much value from fail? Fans shouldn’t read too much into the earnings reports for any Aniplex owned studio. It’s just an accounting exercise.
What I think is interesting is that the studio that is by far the most important within the Aniplex ecosystem is Ufotable. A studio they do not own, but which they pay out hefty back-end percentages to on Demon Slayer’s anime derivative copyright. They must be coining it.
It makes business sense for Aniplex’s own studios to make a loss. Better for the balance sheet.
Yes, my point isn't that the anime studios owned by Aniplex are at risk of bankruptcy. Their cumulative retained earnings are still in the positive, so they aren't going to be insolvent any time soon.
What I intended to highlight for readers not as knowledgeable about the business of anime is that today's anime production economics doesn't guarantee that an anime studio will be profitable at the end of the year, even for large primary contractor studios associated with a large conglomerate like Sony and Aniplex. At the end of the day, the studios simply become cost centers while profits flow up to the parent company that holds all the licensing rights.
Why do you think brands like Cloverworks and A1-Pictures are more or less held at arm's length from Aniplex, rather than being absorbed wholly into them and becoming "Aniplex Studio" or something like that? Is it branding? Is it management? Is it accounting?
I am asking out of a place of tremendous ignorance. ;D
For a long time, A-1 Pictures was the indeed "Aniplex Studio". CloverWorks was spun off from A-1 Pictures in 2018 because the team that made up that studio started to develop its own creative personality. Kevin Cirugeda has a good write-up about this at Sakuga Blog: https://blog.sakugabooru.com/2018/04/02/2018-exciting-new-anime-studios/
My guess is Aniplex is generally happy with the outcome of the split with the two studios having their own management styles that are conducive to maintaining the separate creative personalities and having separate industry relationships than what A-1 Pictures has.
We see this a little bit at Kadokawa as well where they're keeping Doga Kobo and Kinema Citrus independent from the management consolidation of the publisher's five other anime studios.