Two words to understand the anime industry
Plus: 'Suzume' ends box office run in Japan; Kodansha responds to K MANGA criticism; Why webtoons are produced by studios rather than individuals; and more
This is the weekly newsletter of Animenomics, covering the business of anime and manga. Today is Wednesday, May 31, 2023.
In case you missed it: The epic Japanese dubbed trailer of Spider-Man: Across the Spider-Verse, accompanied by a theme song from LiSA, has us wanting to see the movie in Japanese theaters instead.
Two words are key to understanding the anime business
The first stumbling block in understanding the anime industry is understanding the difference between 製作 and 制作 in Japanese. Such is the thesis of editors of Weekly Toyo Keizai, a business and finance magazine which published a special issue last week on recent developments in the anime business.
Why it matters: While the two words are read as seisaku (production) and have identical meanings in a dictionary, each has a distinct implication in the anime industry.
Anime planning and funding happen in the 製作 side, while the actual work of making anime happens in the 制作 side, and the magazine’s editors argue that profits from the former are not flowing to the latter side of the business.
Prior to the advent of digital distribution, home video sales were the primary source of income for producers, and those profits flowed to production teams.
Distribution contracts today, however, are often finalized long before the anime is aired, so creative teams don’t get a share of profits beyond the initial production fee if a series like Demon Slayer or Jujutsu Kaisen becomes a big hit.
The consequence: An informal hierarchy of anime studios has evolved, with S-ranked studios such as CloverWorks and MAPPA charging twice as much for one anime episode compared to A-ranked studios such as Toei Animation.
Some context: Up until about 10 years ago, the cost of producing a single anime episode was about ¥15 million. That has risen to ¥20–30 million today because of higher labor costs and an increase in quality expectations.
Yes, but: Studio profit margins remain slim, at about 5 percent for an average series. At this level, small delays can easily make a project unprofitable.
Pressured to complete projects on time, studios hire new animators but can’t afford to spare animation directors to train them. Those animators may make mistakes for a longer period of time, requiring more animation directors to make corrections, further accelerating the animator labor shortage.
Clippings: ‘Suzume’ finalizes box office takings in Japan
Suzume is Japan’s 14th highest earning film ever with a final box office revenue of ¥14.79 billion (US$105 million). Overseas screenings have earned the film an additional ¥28 billion (US$200 million) so far. (Oricon News)
Magazine sales make up 1 percent of a Japanese convenience store’s revenue, and they may soon disappear as store owners seek to reallocate space toward higher revenue items, cutting off a distribution channel for manga magazines. (Minkabu)
Dengeki Bunko, the publishing imprint that popularized the light novel medium, turns 30 years old on June 10. Today, it publishes beloved titles such as Sword Art Online and Rascal Does Not Dream of Bunny Girl Senpai. (LN News Online)
Shueisha is banking on webtoons with the planned launch of its Jump Toon service in 2024. The publisher is working with Korean-run production studio Red Seven to hold a webtoon competition for a chance at serialization. (Comic Natalie)
Anime Expo in Los Angeles will host the North American premiere of The First Slam Dunk. Theatrical screenings are scheduled later this summer. (Press release)
Kodansha responds to global criticism of K MANGA app
“We came to the conclusion that, rather than having someone locally set up and operate a completely new service, the advantage of being able to carefully manage works and projects in a place closest to the site of manga creation is greater, similar to the operation of Magazine Pocket in Japan.”
— Yuta Hiraoka, deputy editor-in-chief of Kodansha’s Weekly Shonen Magazine
Context: Kodansha’s K MANGA app had a rocky start when it launched in the U.S. earlier this month. Viz Media stole its thunder with a competing app that has a simpler payment structure. Observers also questioned why Kodansha didn’t involve its U.S. subsidiary in the launch and limited service to one country. In an interview with the Gendai business news portal, Hiraoka offers the first official acknowledgments of the app’s unmet expectations.
Focusing on speed, webtoons turn to studio production
Japan is home to about 70 webtoon production studios, according to a new report by Nikkei Cross Trend. Unlike traditional manga production, where the publisher works with a single manga artist through an editor, webtoon studios direct their editors to work with multiple artists simultaneously to produce a single work.
Why it matters: A studio production system creates the efficiencies that allow a webtoon to be published as frequently as once or twice a week while maintaining consistent quality from issue to issue.
Some traditional manga, like those published by Shonen Jump, publish new chapters once a week, but most are published biweekly or monthly.
How it works: Webtoon studios hire employees for different specialties, such as scenario writing, character design, line art, background art, coloring, etc.
One model shared with the ManNavi web portal by Tokyo-based webtoon studio Sorajima has the company employing up to seven different people to produce a single webtoon title.
“Webtoons require a lot of work and can’t be mass-produced unless it’s done in the form of a studio,” says Hiroshi Torimitsu, a producer in Shogakukan’s webtoon business.
What to look out for: With publishers like Shueisha and Kadokawa and Internet companies like DMM and CyberAgent standing up their own webtoon studios, the next big hit might come from a production team instead of a single artist.
Yes, but: Webtoon publishers say there is still room for amateur artists and writers. Masamine Takahashi, the CEO of LINE Manga’s parent company, points out that the hit series Senpai is an Otokonoko, which is being adapted into anime this year, was drawn by an independent artist.
Thanks for reading this week’s Animenomics. We will continue summary coverage of the anime industry stories reported by Weekly Toyo Keizai in subsequent newsletter issues.