Despite the impact of the pandemic, Japan’s animation industry appears to be in poor health, according to figures from the Anime Industry Report 2022, an annual survey conducted every year since 2009.
At a TIFFCOM seminar on Tuesday, Anime Industry Report editor-in-chief Masuda Hiromichi and programming consultant for TIFF’s Japanese animation division Fujitsu Ryota, discussed not just the numbers, but the trends behind them.
Last year, the industry reached its all-time high with $18.4 billion in revenue, with “industry” defined not only as animated content for television, movies, live broadcasts, and video, but also merchandise, amusement parks, music, outdoor sales, and live entertainment. This is a 9% increase over the previous peak year, 2019. As Masuda noted, industry growth came to a standstill in the pandemic year of 2020, but “rebounded strongly” in 2021.
At first we thought there might be a bigger impact [from the pandemic]But this decline only lasted for one year.”
One reason: Anime studios have been quick to switch to remote work and keep production levels high. Another reason is the backlog of titles in various stages of production, which, after a pause in 2020, began flowing smoothly into pipelines in 2021. Buoyed by strong merchandising sales and growing demand from streaming services, revenue surged last year. Even video sales, which have long been faltering, enjoyed a growth spurt.
But by far the biggest contributor was foreign rights sales, which accounted for nearly 48% of total revenue in 2021. Also, last year, the overseas anime market became larger than the domestic Japanese market for the first time, reaching 9.6 billion dollars, for $8.8. billion dollars for the host team.
However, anime studios have been feeling the pain of profiting from rising costs due to anti-epidemic measures and increased personnel expenses, including training staff to handle the digitization of animation production. “A lot of studios have told me that they are going 100% digital,” Masouda said. “It happens very quickly.”
Another industry concern is the biggest streaming company, Netflix, which has been aggressively buying the animation but stingy with information about its plans. “They can radically change,” Fujitsu said. “People in the industry want to know what they’re going to do.”
Another industry concern is China, which has been a huge market for Japanese anime, but is not always a reliable market. “Who knows how the political winds will blow there,” Fujitsu said. The result can be that a request for an entire string is canceled for reasons that are difficult to analyze.
Finally, Matsuda noted that the currently burgeoning live streaming market could go the way of the video market, which has thrived for nearly 20 years, and then plunged into a meltdown. “Broadcasting started in the early 2000s and is peaking now,” he said. “What will be the next media? Nobody knows.”