Chinese streaming platforms slow anime spend
Plus: Copyright infringement activity definitions updated; TV Tokyo creates new IP in China; 'Gundam' fans accuse Bandai Namco of queerbaiting; and more
This is the weekly newsletter of Animenomics, covering the business of anime and manga. Today is Wednesday, August 9, 2023.
In case you missed it: The First Slam Dunk has surpassed US$1 million in box office earnings in North America.
Streaming slowdown dampens China’s anime spending
Once touted as a challenger to Japanese anime, the Chinese animation industry is experiencing an investment slowdown as the country’s streaming video platforms that have spent huge sums of money on content continue to operate at a loss.
Why it matters: Slowdown in China’s domestic animation market is also spilling over to the content acquisition business as Chinese companies are poised to sign fewer anime contracts this year, writes Kota Takaguchi for the President business management magazine.
By the numbers: Chinese contracts for anime content peaked at 355 in 2016, but has fallen to 199 as of 2021, according to data reported by the Association of Japanese Animations, or AJA.
What’s happening: Streaming platform Bilibili, which regularly acquires anime series releases from Japan and invests in anime productions, faces an uncertain road toward profitability.
Bilibili and competitors iQIYI and Tencent Video spent heavily on content like anime and dramas in the mid 2010s, but production costs and license fees often exceeded sales.
Platforms believed that in the battle for market share they would be able to recoup costs once they become dominant, but cooling investment sentiment in the Chinese tech sector since 2020 has made it harder for them to make up for spending deficits.
A report published by Tebon Securities last year found the share of Bilibili’s spending on professional productions like anime and dramas decreased from 60 percent in 2018 to less than 30 percent in 2022, while spending on content by social media influencers has increased.
Yes, but: China has not stopped making animation, and the spending trend has instead shifted from serial content for streaming to theatrical productions.
The number of domestic animation films exceeding 1 billion yuan (US$139 million) in revenue is growing, and anime films such as Suzume and The First Slam Dunk have also been popular with Chinese audiences.
Chinese animation productions have also increased in quality, with many titles being exported to Japan and dubbed in Japanese by popular voice actors.
Rewind: The AJA’s Anime Industry Report in 2017 welcomed Chinese platforms’ “shopping spree for Japanese animations” with excitement but warned of the risk of market fluctuations “since politics always prevail in China”.
Takaguchi also points out that censorship in China may make it difficult for Chinese studios that produce animated films that resonate with international audiences, preventing them from replicating anime’s performance overseas.
The same enthusiasm for Chinese investment is nowhere to be found in the 2022 edition of the AJA report.
Japanese gov’t updates definitions of content piracy
An update to a handbook for combating copyright infringement, published earlier this year by the Agency for Cultural Affairs, has expanded the Japanese government’s definition of content piracy in response to recent court cases.
Driving the story: The 2023 edition of the handbook specifically calls out “manga spoiler sites” and “fast movies” as two examples of new, sophisticated methods of piracy.
Last year, a Tokyo court awarded 13 major film production companies ¥500 million (US$3.5 million) in damages in a civil suit involving a man and a woman who uploaded abridged versions of films on video sharing websites.
What they’re saying: Attorney Hiroyuki Nakajima, who sat on the committee that published the handbook, told Comic Natalie that “fast movies” can cost the film industry up to ¥95 billion ($665 million) annually in damages if left unchecked.
Manga spoiler sites, which republish text versions of manga dialogue with only a few pages of manga art, have also grown in number with the increased crackdown on peer-to-peer manga sharing sites.
“No matter how you look at it, the purpose of such websites is to publish the contents of the work as is, which is completely different from impressions and reviews,” Hiroki Wada, editor-in-chief of Shogakukan’s Manga One app, told Comic Natalie last year.
What to watch: Keen observers will note that “fast movies” aren’t a new concept in the anime fandom and have lived in the gray area of copyright on the Internet.
Parodies such as Yu-Gi-Oh!: The Abridged Series and Dragon Ball Z Abridged have been around for more than a decade, and their creators have often come into conflict with Japanese rights-holders of the original shows.
Clippings: TV Tokyo launches new IP for Chinese market
TV Tokyo is launching a new anime, webcomic, and mobile game IP through its Chinese subsidiary, a response to recent regulations that have made it difficult for new titles from Japan to enter the Chinese market. (Animation Business Journal)
Book☆Walker is seeing a growing demand for manga in the original Japanese on its international electronic bookstore platform, prompting Kadokawa to consider new ways to develop the manga market overseas. (The Bunka News)
Simon & Schuster will be sold to private equity firm KKR after a previous sale of the publisher to Penguin Random House was blocked by the United States Justice Department in 2021 over antitrust concerns. (Axios)
Simon & Schuster is the exclusive manga distribution partner of Viz Media in the United States, Canada, the United Kingdom, India, Australia, and New Zealand.
CoMix Wave Films handled approximately 56 terabytes of data in the production of Suzume, a 60 percent increase from director Makoto Shinkai’s previous film, Weathering with You. Digital files increased 80 percent to 1.69 million. (NetApp)
Fans slam Bandai Namco for ‘Gundam’ article omission
Bandai Namco Filmworks is under fire from viewers of Mobile Suit Gundam: The Witch from Mercury after the company removed the mention of same-sex marriage between the show’s female protagonists Suletta Mercury and Miorine Rembran from the September 2023 issue of Gundam Ace magazine.
Why it matters: Bandai Namco’s action risks alienating The Witch from Mercury fans who have given the Mobile Suit Gundam franchise one of its most successful fiscal year results in history.
Catch up quick: A Gundam fan translator discovered that the digital version of an interview with the protagonists’ voice actors omits the word “marriage”, which is present in the print edition, from a description of the protagonists’ relationship.
A statement released jointly by Bandai Namco Filmworks and Gundam Ace publisher Kadokawa says the word’s inclusion is the result of “speculation” by the magazine’s editors, and while a correction was made during proofreading, it was overlooked in the print edition of the magazine.
But, but, but: Viewers point out that official media related to The Witch from Mercury have made direct references to the characters’ marriage, including an illustration from the show that depicts Suletta Mercury with a ring on her left hand.
The Witch from Mercury producer Takuya Okamoto said in an interview last year that he hoped the series would be a Gundam for the next generation, a point not lost on Sugimoto given that a recent survey found young Japanese overwhelmingly support same-sex marriage.
One signal of Suletta and Miorine’s popularity is their representation among fan fiction works at this month’s Comic Market, or Comiket, in Tokyo. Booths selling fan art and manga of the two characters rank third among all character pairings, according to a preliminary survey of exhibitors.