Sanrio shifts from Hello Kitty as she turns 50
Plus: AI anime project creates mascot character; Chinese 2D fandom grows despite sluggish economy; Webtoon Entertainment sets sights on markets abroad; and more
This is your weekly Animenomics briefing, covering the business of anime and manga. Today is Wednesday, August 14, 2024.
In case you missed it: WIT STUDIO has been gathering animators primarily in their 20s and 30s to create The One Piece, a brand new adaptation of the One Piece manga, according to a production diary released by the studio.
Sanrio diversifies from Hello Kitty in fiscal turnaround
Hello Kitty celebrates the 50th anniversary of her creation this year, but while the character remains a cultural force worldwide, Sanrio licensing data show that the rightsholder has become less dependent on her contributions to the bottom line.
Why it matters: Sanrio’s turnaround since 2021 after more than 20 years of falling sales has primarily been led by diversification into properties like Aggretsuko and Gudetama.
Sanrio revised its sales forecast upward last week for the fiscal year ending March 2025 to ¥119.3 billion (US$795 million), more than 8 percent higher than what was originally forecast in May.
By the numbers: Sanrio’s character license deals that don’t involve Hello Kitty now make up more than half of the company’s gross profit, the most recent full-year earnings data reveals.
Over the last decade, Hello Kitty’s contribution to Sanrio’s bottom line has more than halved, from 75 percent of the company’s gross profit in 2014 to only 30 percent in 2024.
Licenses involving multiple characters have grown the most and now make up one-fifth of Sanrio’s gross profit.
What’s happening: Tomokuni Tsuji, the 35-year-old grandson of Sanrio’s founder, has pivoted the company toward digital entertainment since taking over as chief executive in 2020.
Gudetama: An Eggscellent Adventure, a hybrid CG anime and live-action series produced by OLM and distributed on Netflix, received an International Emmy Award nomination last year.
Next month, Sanrio will host a music festival featuring virtual YouTubers in a virtual reality extension of the Sanrio Puroland theme park.
What we’re watching: Licensing deals abroad will be key in helping bring Sanrio toward a full-year operating profit target of ¥50 billion (US$333 million).
In the April–June quarter alone, license sales are up 145 percent in North America and 61 percent in Asia compared to the same period last year.
Anime mascot seeks to make AI tech more palatable
Japan has a history of successfully popularizing new technologies with the help of anthropomorphic characters, and a team of creators thinks an anime-style mascot character can help artificial intelligence (AI) technology gain public traction.
Why it matters: Mascots like Hatsune Miku, the most recognizable character by voice synthesizer software Vocaloid, and Kizuna Ai, a CG vlogging avatar that paved the way for ranks of virtual YouTubers, are instantly recognizable today.
Songs using Hatsune Miku’s voice continue to draw the attention of music critics, and Kizuna Ai got an anime treatment in the last couple of years.
Driving the story: Nagoya-based anime studio K&K Design and Tokyo-based AI creative studio Taziku are planning a series of short anime episodes featuring the new character, Aino Saki.
“If we just create a character, it won’t be accepted without context, so we decided to start by creating animation,” Taziku founder Yoshihiro Tanaka told the ASCII technology magazine in an interview.
The team wants to create a series of short anime episodes with self-contained stories using funding from small corporate sponsors.
Episodes will feature a fictional anime studio experimenting with AI to create commercial shorts for the sponsors.
Between the lines: Anime journalist Atsushi Matsumoto believes a commercial anime that is produced with AI assistance is a smart move because it wouldn’t draw as much attention and criticism from general audiences.
“As the number of AI videos increases, viewers’ eyes will become accustomed to it, and through short videos the sense of discomfort may disappear,” Matsumoto says.
Taziku and K&K Design are also avoiding a production committee process on purpose because they want to retain intellectual property rights to the project.
Reality check: Tanaka admits anime studios are very far from being able to incorporate AI into their workflows regularly.
“Anime studios in Tokyo are booked for the next two to up five years, so they can’t free up new production lines. They’re so busy with work that they can’t even do research and development,” said K&K Design animation head Hiroshi Kawakami.
Clippings: Chinese 2D fandom market grows to US$12b
Bilibili World 2024 in Shanghai last month drew 250,000 Chinese fans of anime, manga, and video games. The event, organized by one of China’s largest importers of anime, drew about 50 exhibitors from Japan. (Japan External Trade Organization)
Shanghai-based China Insights Consultancy estimates that the Chinese market for 2D content in animation, comics, and games will grow to CN¥87.8 billion (US$12.2 billion) this year despite sluggish consumer spending.
Manga’s rise in the United States, along with other young adult graphic novels, is helping motivate comic book publishers to release titles in more compact formats to bring in new, younger audiences. (SKTCHD)
Security breach at dubbing studio Iyuno, a post-production partner for Netflix and Crunchyroll, has resulted in the unauthorized release of multiple anime titles being produced or distributed by the streaming services. (Variety)
Vietnamese payment app MoMo’s partnership with Detective Conan: The Million-Dollar Pentagram is helping increase the rate of cashless payments at stores in the country. (Nikkei Asia)
As previously reported by Animenomics, the 27th film in the Detective Conan series is the highest-grossing film in Japan so far this year.
Webtoon Ent. pursues global market for digital manga
“Our company is very interested in the global expansion of Japanese creators, even more than in developing the market in Japan. So far, Japanese creators have exported a lot of digital content. We would like to see them expand their access to the world and explore more genres beyond the traditional Japanese genres. This will be possible with this IPO.”
— Masamine Takahashi, LINE Digital Frontier chief executive officer
Context: Takahashi and Webtoon Entertainment chief operating officer and chief financial officer David Lee, in an interview with Real Sound, discuss the future of the company’s LINE Manga and Webtoon platforms in the Japanese and United States markets, respectively, following a Nasdaq stock exchange listing in June.
What we’re watching: Takahashi and Lee hint at a future emphasis on the U.S. market, where 94 percent of Webtoon platform users are 35 years old or younger, compared to less than half of LINE Manga users in Japan.
Zoom in: Takahashi is pushing for the growth of LINE Manga Indies, LINE Manga’s “creator-first marketplace”, where Senpai Is an Otokonoko, currently adapted as an anime series, was first published.
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Your latest newsletter offers insightful coverage of the evolving anime and manga industry. I particularly enjoyed the exploration of Sanrio's diversification, AI anime projects, and the growth of the Chinese 2D fandom market. Your writing style keeps you hooked.