Anime industry report 2016

            “Hey you’re the anime science guy, what are you doing discussing economics?”

It might come as a surprise for some of you, but I did minor in business in college and it was rather interesting, so I thought I would give you guys the highlights. The report summary that I managed to get my hands on was created by the Association of Japanese Animators, with input from a variety of researchers, journalists, and industry insiders.  By the numbers, things are looking good in the anime industry in a broad sense as the market’s revenue grew by almost 200 billion yen ($1.76 billion) for the third year in a row. Currently, the industry generates 1,826 billion yen or 15.9 billion USD.  This is all well and good but there are some interesting trends in the numbers with most areas staying about the same such as TV, movies, videos, music, and pachinko machines staying about the

This is all well and good, but there are some interesting trends in the numbers with most areas staying about the same such as TV, movies, videos, music, and pachinko machines while merchandising revenue decreased by around 75 billion yen ($661.46 million).  This decrease was more than offset by a massive increase in the international distribution, which increased by around 260 billion yen ($2.29 billion).  Small increases were also made by internet streaming and live entertainment, but the bulk of the increase was from international distribution.

International Market

I would like to focus on the increase in revenue from international distribution, as more than half of the 260 billion yen jump in international sales is coming from China. This is great news for the industry, but it is also something of a double-edged sword given how controlling the Chinese government can be. It could clamp down on the import of anime, cutting the entire industry out of a significant source of income.  In the past, China has tried to reduce the popularity of Japan including trying to downplay Akihabara, the anime mecca.

Some other notable moves by the Chinese government includes banning the airing of anime during primetime TV.

A much more recent move by the Chinese government was to blacklist a number of popular anime including Attack on Titan and Death Note.

While there really isn’t anything the industry can do about Chinese censorship, I hope that the industry will continue to move into more overseas markets beyond China. Interestingly enough, the report included a map with a breakdown of how many licensed works existed in different countries around the world. It came as no surprise to see that Mongolia only has about 10-29 licensed works, more shockingly though is North Korea also has the same number of licensed titles. Who would have thought that any anime would be in North Korea?  China and North America have over 150 licensed titles, while Europe averages about 100 or so. The top three countries are the United States (298), China (286), and Canada (181).

Despite the large number of licensed titles, North America only accounts for 12.3% of the total overseas market, while Europe makes up 25.8% of the market, with Asia still dominant at 38.9%. This is not a big surprise, given China and the booming markets in South East Asia.

Live programming has also done well, doubling in size over the past three years, but nothing compared to the overseas markets. The largest increase came from stage events (194.9% increase), but I was happy to see that anime museums and exhibitions increased by 177.1% as this gives us some really interesting places to visit if and when you decide to visit Japan.  My personal favorite was the International Manga Museum in Kyoto, but I have yet to make it to the Ghibli Museum.

4^th Anime Boom

This, of course, leads to us discussing the possibility of a 4^th anime boom, which is being driven by overseas markets and internet distribution per the report. As part of the boom, late night anime surpassed day time anime for the first time by about 6,000 minutes of total airtime. The report seems to think that this is indicative of a new direction for the industry where adult anime could be a major market instead of a side show.

While I agree with the thinking of the adult market, I worry about some of the late-night anime, which can be pandering to otaku and may not play well internationally. I’m hesitant to name a show due to varying tastes, but I think we all have anime that we watched that made us think, “what the hell Japan.”  At the same time, let’s not discount daytime anime as some of them can still be interesting to certain demographics.

While we are on the topic of an anime boom, we have to borrow a term from the oil industry and talk about peak anime. Have the production companies hit their limit in terms of production, which decreased slightly from the previous year by about 4,000 minutes? In terms of raw numbers, only one more new anime was produced this year as compared to the previous year, with the rest of the bump coming from a larger hold over of older shows. The reason for the slowed growth is due to a lack of capacity in producing and finding spots to air the shows.

While TV anime growth has slowed, movies and other types of anime production have continued to grow.  While a movie can be a risky production, it is still a viable source of income for the industry. Internet distribution has continued to rise, but at a slower pace compared to a few years ago. However, I think it is an area that could grow rapidly in the future due to both Netflix and Amazon considering streaming more anime.

Post Miyazaki

A big question on many people’s minds, have we entered a post-Studio Ghibli era, with the record success of Your Name by Makoto Shinkai? (FYI- I still need to see it, but it is not getting a Mongolian release). It is the first non-Miyazaki movie to break the 10 billion yen mark, and it did so in only 9 weeks. By comparison, it took Princess Mononoke 4 months to pass the 10 billion yen mark.

This all leads to the question of who is going to be the next superstar anime director in Japan, and what will the defining works of the 4^th anime boom be?