Trading houses seek profits in anime exports
Plus: Ani-One streaming service enters India; Bandai Namco remains optimistic in slowing China market; Visa Japan confirms adult media restrictions; and more
This is the weekly newsletter of Animenomics, covering the business of anime and manga. Today is Wednesday, December 4, 2024.
In case you missed it: A few weeks ago, I wrote about Ikebukuro’s newfound status as an anime and manga mecca to rival Akihabara. Web magazine Scrmbl took a deep look at how this happened.
Trading houses seek new investments in anime exports
Japan’s wholesale trading conglomerates are making a new push into anime and the entertainment business as they seek new profit sources and diversify away from trade and investments in raw materials and natural resources.
Why it matters: In addition to supplying manufacturers, wholesale trading companies have distribution relationships with many retailers, an important avenue for the anime industry to grow merchandising revenues.
Wholesale and retail trade is Japan’s second largest industry after manufacturing, contributing 14.4 percent of the country’s gross domestic product in 2022.
What’s happening: Trading conglomerate Itochu made headlines in March when it announced a return to the anime business in an 80:20 joint venture with satellite broadcaster Sky Perfect JSAT.
That joint venture is the lead investor in the currently airing anime series Orb: On the Movements of the Earth and plans to invest in a total of 10 anime titles by 2029, targeting a return of ¥50 billion (US$330 million), Toyo Keizai Online reports.
In October, Itochu’s Hong Kong-based Rights & Brand Asia character licensing unit also landed exclusive rights to sell merchandise in China for the illustrated character Opanchu Usagi, whose popularity in on par with Chiikawa.
Zoom in: The financial scale at which wholesale trading conglomerates operate gives them the opportunity to be able to handle rising anime production costs, says Kenji Hata, an associate professor at Globis University Graduate School of Management.
Hata also argues that trading houses are well-positioned to benefit from anime’s shift into an export industry, given their experience with international business development.
Earlier this year, Shogakukan and paper conglomerate Marubeni formed a joint venture to build an overseas distribution network for manga and anime content.
Yes, but: Trading conglomerates have a mixed track record with investments in anime.
Itochu itself last exited the anime business in 2007 after its shares in anime film studio CoMix Wave Films were sold as part of a management buyout.
In 2015, Mitsubishi divested from the industry after selling its stake in Beyblade rightsholder d-rights to co-owner Asatsu-DK (now ADK Marketing Solutions).
Medialink expands Ani-One streaming service to India
Hong Kong-based anime licensing specialist Medialink Group is launching its Ani-One anime streaming brand in India as the company charts a growth strategy for the next five years.
Why it matters: Ani-One doesn’t have a dedicated platform and instead operates on YouTube, which still led in India last year with an 88 percent share of video streaming minutes, according to a Media Partners Asia report.
Whereas YouTube remains dominant in the country, TikTok has carved away a large share of streaming minutes in Southeast Asia, Ani-One’s launch market.
By the numbers: Ani-One crossed 6.4 million subscription video on demand (SVOD) and advertising-based video on demand (AVOD) subscribers in September, Medialink said last week in its midyear financial results.
The service added a new channel in 2022 dedicated to Chinese-subtitled anime for viewers in Hong Kong, Taiwan, Macau, Malaysia, and Singapore.
“Now our target is 10 million [subscribers],” chief executive officer Lovinia Chiu told Anime News Network in May as Medialink aims to deepen its presence in China and India.
Zoom out: Medialink joins Crunchyroll, Taiwan-based Muse Communications, and Avex subsidiary Anime Times in what has become one of the world’s most competitive markets for anime streaming.
Yes, but: As reported by Animenomics last week, widespread piracy in India remains a concern for licensors, and licensees are developing their own strategies for overcoming hesitancy in adopting premium video-on-demand platforms.
Clippings: CyberAgent wins ‘Kagurabachi’ anime project
CyberAgent and Shochiku won a joint bid to lead an anime production committee for the Shonen Jump manga Kagurabachi, an apparent attempt by publisher Shueisha to diversify from contracts with first-tier producers and studios. (Toyo Keizai Online)
Japan’s Agency for Cultural Affairs is planning to build a system to detect websites hosting pirated anime and manga content by using artificial intelligence to identify common patterns in website layouts and advertisements. (NHK News)
Used bookstore chain Book Off plans to grow its footprint in the United States from the current 16 stores to 100 stores by 2033, importing anime and other entertainment merchandise from Japan to attract customers. (Nikkei Asia)
Amazon Prime Video made anime a pillar of its streaming platform growth in Japan, Prime Video executives Gourav Gandhi and Yosuke Ishibashi told attendees of the APOS media industry conference in Bali in September. (Nikkei xTREND)
Catch up quick: Amazon last month released globally on Prime Video one of the year’s biggest anime films, Look Back, after subsidiary Amazon MGM Studios invested in the film’s production committee.
Educational publishing giant Benesse has acquired the operator of Japan’s privately-run Digital Hollywood University, a popular destination among international students seeking to learn digital production in anime and video games. (The Nikkei)
Bandai Namco optimistic amid China market slowdown
“We want to become a company that is more deeply rooted in the Chinese region, so we want to strengthen our local production business using Chinese IP for local consumption. Up until now, we have expanded to Shanghai, Beijing, and Guangzhou, but we would like to open stores inland as well.”
— Daiki Miyatani, Bandai Namco Entertainment Shanghai chief executive officer and chief operating officer
Context: Miyatani, speaking to TV Tokyo Business, remains optimistic about Bandai Namco Entertainment’s prospects in the Chinese market despite a slowdown in the country’s economy.
Miyatani wrote in Bandai Namco Group’s integrated report earlier this year that the company is seeking to increase brand recognition in China.
Last month, his company organized Bandai Namco Carnival in Shanghai’s busiest shopping district, exhibiting Gundam robot figures and selling anime products.
The bigger picture: Survey results released last month by the Japanese Chamber Commerce and Industry in China found that two out of three locally-run Japanese companies believe that business conditions have worsened since last year.
Visa Japan affirms payment restrictions on adult media
Visa has confirmed to local media that the global payment card network provider has been pressuring payment processors to stop accepting Visa credit cards on platforms that may contain adult content like pornographic manga and anime.
Why it matters: Visa accounts for half of Japan’s credit card payments market, and its credit cards are also used by many overseas customers who buy Japanese content.
Driving the story: Visa Worldwide Japan president Cietan Kitney was asked about the issue last week at a press event intended to promote touch-based payments ahead of next year’s World Expo in Osaka, Impress Watch reported.
While Visa has a policy of allowing use of lawful payments as much as possible, “sometimes we need to make payments unavailable to protect our brand,” Kitney responded.
Catch up quick: Kadokawa-owned video sharing service Niconico and self-published manga and video game marketplace DLsite are among the platforms that no longer accept Visa credit card payments, Animenomics previously reported.
Manga Library Z, the service formerly known as J-Comi that distributed DRM-free out-of-print manga, also shut down last month after the site’s payment processor terminated all payment services including credit cards.
What’s next: Uguisu Ribbon, a non-profit organization that promotes freedom of speech, briefed lawmakers on the issue yesterday in a session that included an overview of payment processors’ past actions on adult content in the United States.
Taro Yamada, a legislator in the National Diet’s upper house, told followers on X that he is considering how lawmakers can restrict such moves by payment services companies in Japan to protect consumers.
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This was very interesting! It is absolutely awful that payment processors can dictate how we spend our money. And we cant buy things globally without credit cards as crypto is not everyone's idea of a good time. I wonder if there are any alternatives because this is absolutely a violation of our ability to spend our money wherr we want. Why should Visa care if we buy porn?!
The abundance of piracy in India is interesting. I imagine they dont really have any laws against it (or they have no way to meaningfully enforce them) so it is very prolific.