For those unfamiliar with the medium, the most agreed upon definition of "anime" describes all animated works that originate from Japan. Anime is widely equated to American cartoons among people who haven't consumed such content, but this is not the case. Unlike American cartoons that largely fall under the three segments of children's TV, superheroes, and adult sitcom, the entirety of anime can be bucketed into the low-high tens of genres and subgenres that cater to a wide spectrum of audiences and ages. My favorite shows tend to showcase complex world-building, exceptional sakuga, and/or inspirational characters working super hard to achieve their goals.
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Great products need great distribution in order to be successful. In the case of non vertically-integrated anime companies, distributors will pen deals with producers requesting a set of rights to distribute and merchandise the created work for a certain set of time in a particular territory, along with an accompanying payment model. The big anime streaming services like Crunchyroll, Funimation, and Netflix are now distributors in their own right, as many production companies now make deals with them directly, instead of adding complexity by using an intermediary company to negotiate with the respective streaming services.
Japanese TV networks are a critical component of the anime value chain. Not only do they serve as highly-lucrative distribution channels, but many also participate in production committees with the anime production companies themselves, helping garner sponsors and advertisers to fund a lot of the production. In Japan, the domestic TV market segment is around twice as big as the domestic streaming market. With streaming playing such a prevalent part in our lives and culture, this was surprising to me. Overall trends are shifting towards streaming in general, so I can see that happening in Japan as well eventually.
There wouldn't be any of the amazing anime present today without the work that anime studios put in. Studios are ultimately responsible for staffing all of the people needed to create the content. These roles include, but are not limited to:
It's debatable as to when anime became mainstream in the US, but I believe it was through the introduction of the Toonami block on Cartoon Network in the late 90s. That's when I first became familiar with the medium. Shoutout to Toonami creator Jason DeMarco for creating that initial spark! Now the US has highest demand for anime in the world when it comes to streaming, merchandising, and otherwise, with the exception of Japan. We can see that with Crunchyroll and Funimation persisting in the Top 200 Free Apps chart in the US App Store.
I predict that a franchise with Pokmon-level brand recognition will emerge in 5-10 years. With the simultaneous rise of esports and manga, I predict that the anime will be adapted either from a popular video game or Shōnen Jump manga.
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I love to throw myself into the deep end when it comes to learning about the context behind the hobbies I enjoy, especially those that I've been enamored by for the past 10+ years. The recent acquisition of Crunchyroll by Funimation spurred me to finally write this piece, in an effort to learn a little about who\u2019s involved on the business side of anime production, anime\u2019s effect on Internet culture, and where opportunities lie. Let's get started.
For those unfamiliar with the medium, the most agreed upon definition of \\\"anime\\\" describes all animated works that originate from Japan. Anime is widely equated to American cartoons among people who haven't consumed such content, but this is not the case. Unlike American cartoons that largely fall under the three segments of children's TV, superheroes, and adult sitcom, the entirety of anime can be bucketed into the low-high tens of genres and subgenres that cater to a wide spectrum of audiences and ages. My favorite shows tend to showcase complex world-building, exceptional sakuga, and/or inspirational characters working super hard to achieve their goals.
The intricacy of the content created is a reflection of how capital intensive the process is, as it takes around $100-300K to make a single episode. As a result, the vast majority of anime series are adapted from source material that's popular at the time. Adapting anime from popular IP mitigates a lot of risk when it comes to predicting how well the content will be received. It makes complete sense from a business perspective. After doing a little research, I found that manga seems to be the most adapted type of source material, followed by mediums such as light novels, video games, and visual novels. Since the practice of adapting anime from popular, market-tested IP has become commonplace, end-to-end anime creation has been streamlined by including all of the relevant players in the process: anime production companies, publishers of the source material, distributors, TV networks, animation studios, and more. Here\u2019s a little bit of a breakdown on each of these parties.
Production companies are essentially the glue that holds everything together, interfacing between many of the relevant parties in order to keep everyone aligned and episodes released. They\u2019re the ones who pay upfront costs for studios to make it, TV networks to broadcast it, and distributors to get it to market. Companies like Aniplex have started to vertically integrate by creating their own animation studios and distributor subsidiaries.
As previously mentioned, the usage of source material like a popular manga is a key predictor of a show\u2019s success. It\u2019s natural that manga publishers are a part of the process when manga is used as source material. The role of a manga publisher in Japan is similar to that of a comic book publisher in the US. However, as opposed to the US comic market where publishers own at least some of the rights, the author or mangaka in Japan commonly keep their copyright for business model, legal, and cultural reasons, all of which are specific to Japan.
This surge in demand has enabled anime to become a permanent fixture of Internet culture. The butterfly and \\\"it's over 9000\\\" memes are just a couple of examples. Whenever I want to post a GIF on Twitter, anime-related GIFs always come up first on search. In the fashion world, Gucci recently released a Doraemon capsule collection to celebrate Chinese New Year. Shounen anime has been a staple of the hip-hop community for the longest time, and now Megan Thee Stallion is unabashedly leading the charge as the biggest rapper otaku with a Naruto drop in \u201CGirls in the Hood,\u201D fire Boku no Hero cosplay, and big love on IG Lives. TikTok and Insta are always flooded with so anime content that it\u2019ll make your head spin. The impact that anime has on culture today is undeniable.
The anime market is growing at an astonishing pace, as its influence continues to spill over into Internet culture. This spillover effect raises more awareness of the medium and enables the market to expand, causing this virtuous cycle to repeat over and over again with greater momentum on each successive spin. This market expansion allows for more opportunities in new products, offerings, and experiences that can be brought to market than ever before. Here\u2019s what I\u2019m currently thinking about.
Let\u2019s face it \u2014 the only anime series that your grandma likely knows about is Pok\u00E9mon. Pok\u00E9mon roughly grosses $4 billion a year in merchandising, and has been able to maintain steady cultural relevance for the past 25 years. Recently, the franchise has an experienced a larger-than-life resurgence through the advent of Niantic\u2019s popular AR mobile game Pok\u00E9mon GO.
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