With the latest anime hit bringing in hundreds of millions of dollars in Japan, industry players say the next year is likely to bring more deals and more content for the U.S.
“I used to have the sense that the anime category was spreading widely around the world, but what we’re seeing these days is a big leap beyond that,” said Taiki Sakurai, Netflix’s chief anime producer. “The global anime fan base is expanding rapidly.”
Last month, Netflix said it had 16 projects in the works at its Tokyo-based anime production hub, including “Godzilla” and “Transformers” titles, with plans for global distribution that it said were pushed forward by the evidence of higher demand.
Netflix, which hired a creative team dedicated to anime production in Tokyo four years ago, said more than 100 million households around the world watched at least one anime title on the streaming site in the year to September 2020, growing by 50% from a year earlier. Anime titles have appeared in the top-10 list in nearly 100 countries this year, it said. Amazon Prime also features a wealth of anime titles.
The financial reports of Tokyo-based Toei Animation Co., the studio responsible for anime such as the “Dragon Ball” and “Sailor Moon” franchises, give a glimpse into how the industry is changing.
Four years ago, revenue received from outside Japan accounted for one-third of Toei Animation’s overall revenue. The overseas portion rose to half of the total in the year ended this past March, and overseas revenue more than doubled to the equivalent of $243 million, with “Dragon Ball” programs available on streaming services such as Hulu in the U.S. In the most recent six months, overseas sales rose to nearly three-fifths of the total.
Animated content “isn’t just about Disneyanymore,” said Kozo Morishita, who stepped down as Toei Animation’s chairman in June and remains an adviser to the company. “We aren’t about to miss out on the opportunity.”
Overseas sales by Japanese companies involved in animation content, including those licensing characters for toys and other goods, grew to about $10 billion in 2018 from some $2.3 billion six years earlier and accounted for nearly half of total industry revenue, according to the Association of Japanese Animations.
An image from ‘Resident Evil: Infinite Darkness.’
PHOTO: CAPCOM CO. Movies by Mr. Miyazaki such as “Spirited Away” and “Princess Mononoke” introduced many in the West to anime in the 1990s and early 2000s, but there is a lot more content where that came from. Often the titles have fantasy and adventure themes that appeal to young viewers, such as Toei’s “One Piece,” a tale of a boy’s pirate adventures and a magical fruit.
In Japan, new programs are made each year for more than 300 TV animation titles, many little known outside the country.
Bringing anime to the world isn’t easy, and not just because of the difficulty of translating some of the more obscure cultural and historical references for a global audience.
Anime programs in Japan are typically made by a group of investors who form an ad hoc production committee for each movie or project. It is often impossible to find out who the members of a committee are and what roles they play, said Tomohito Mure, chief executive of Paradigm Shift Co., which negotiates international anime deals. The creators behind popular content may work for small companies with few English speakers or sophisticated licensing arms.
“It’s a system peculiar to Japan,” Mr. Mure said.
An official at the Association of Japanese Animations, which represents animation producers, said creators are sometimes turned off by the indiscriminate approach of overseas executives who try to buy up rights without showing sufficient respect for Japanese artistry. “Those who truly want to stream anime somehow find a way to contact” the right person, the official said.
Bigger-budget projects, such as Mr. Miyazaki’s movies or the 2016 hit fantasy “Your Name,” typically do have major investors such as TV networks or publishing companies. Even then, investors may be satisfied with their profits from the domestic market, and getting them all to agree on bringing their content abroad can be a challenge, said Soichiro Fukuda, an analyst at consulting firm Frontier Management Inc.
A poster for ‘Demon Slayer—Kimetsu no Yaiba—The Movie: Mugen Train.’
PHOTO: KOYOHARU GOTOGE/SHUEISHA, ANIPLEX, UFOTABLE Studio Ghibli, Mr. Miyazaki’s production company, long kept its catalog filled with popular hits off U.S. streaming services. This year, HBO Max, a streaming service owned by AT&T Inc.’sWarnerMedia, started offering them. Studio Ghibli declined to comment.
Sony Corp. is in talks to get into the streaming business by buying Crunchyroll, a specialist anime service with a cult following that is currently owned by AT&T, according to people familiar with the matter. Sony declined to comment.
A Sony Music unit has the biggest anime hit at the moment, at least for people in Japan. A movie about a boy with a sword, “Demon Slayer—Kimetsu no Yaiba—The Movie: Mugen Train,” has grossed more than $200 million in Japan in less than a month, drawing full houses of mask-wearing theatergoers. It is coming to the U.S. early next year.