Kunihiko Sakurai is nervously slurping the last of his iced coffee. The 37-year-old animation producer needs a java jolt before heading into Tokyo’s Madhouse Studio to crack the whip. It’s almost 8 p.m., but the animators doing the Cardcaptors animation film are frantically working around the clock to meet their production deadline.

Cardcaptors, a popular series of animation films and TV episodes, is adapted from a manga comic produced by a group of female artists known as Clamp. Not only is the show airing on NHK in Japan, but Nelvana recently purchased world distribution rights for the show and sold it to Fox Kids in the U.S. Cardcaptors is part of the post-Pokémon phenomenon; anime shows that are capturing eyeballs in North America and Europe.

Anime’s popularity outside of Japan has come not a moment too soon. After 40 years of unwavering popularity, anime in Japan has flat-lined. Japanese kids are tuning into bizarre cooking shows starring teenage rock stars. The principal buyers of anime are no longer heavyweight broadcasters NHK, Fuji Television and Asahi TV. They’ve cut back their commissions: Asahi now airs five anime programs per year rather than six. ‘The audience ratings for animation have been falling in Japan due mainly to two factors: The decreasing number of children and their diversifying TV tastes,’ says Junichi Kimura, director of the movie department for Asahi National Broadcasting.

To counteract waning interest, broadcasters are programming more high-octane, violent shows like the popular Cowboy Bebop, a series following the exploits of intergalactic bounty hunters, produced by Bandai Entertainment production arm Sunrise Entertainment.

Fuji TV, a private station that once aired a number of Nippon Animation’s classical animation shows such as Tom Sawyer, axed them all three years ago. The only show to survive was its ever-popular Chibi Maruko Chan. Studio producer Junzo Nakajima has caved to broadcaster demands and produced shows such as Cooking Master Boy, but he’s not happy. ‘What I like isn’t popular,’ says Nakajima.

‘In Japan, there are few programs for really young kids,’ he adds. ‘It’s all targeting teenagers and high school kids who can buy merchandise.’ His strategy has been to co-produce Marcelino pan y vino with European broadcasters.

Today, the biggest buyer of animation shows in Japan is Television Tokyo Channel 12. According to TV Tokyo producer Keisuke Iwata, half of all animation on the Japanese airwaves today is running on his station, including Cowboy Bebop. While the number of TV anime titles airing in Japan hovers around 50 to 60 titles, TV Tokyo is currently airing 25 titles a year. This represents a 20% to 30% increase over the last five years. Twelve of those titles are aimed at kids ages six to 12.

The growth of animation on the station came in the wake of the popular anime program Evangelion, which aired four years ago in the so-called family entertainment slot at 6:30 p.m.-despite the fact that the show featured a controversial rape scene. Its success underscored that lucrative crossover effect for TV Tokyo. When kids shows attract teens and adults, it can result in a merchandising landslide. Evangelion dolls for adult men are still available in large department stores in Japan, four years after the show first aired.

TV Tokyo’s success aside, most animation distributors are hoping for an anime resurgence when the BS digital broadcasting satellite is launched in December and new channels abound. Until then, animation production and distribution houses such as Bandai and Toei are now focusing more attention outside of Japan. ‘TV Tokyo has so far considered profits from overseas as a bonus, but that will likely change,’ says Iwata. International revenues from anime shows used to make up only 3% of overall sales for popular shows. Toei’s Sailor Moon and Dragon Ball Z only brought in US$1 million in overseas revenues during the mid-nineties. But the new crop of shows, including Digimon Digital Monsters, Gundam Wing and Cardcaptors, may change all this. If the video sell-through market in the U.S. is any indication, Bandai may have another megahit on its hands with Gundam Wing.

In its first two weeks of sales earlier this year, the company sold 20,000 units. By contrast, Pokémon sold 12,000 units during its first two weeks of sales, says Satoru Matsumoto, executive managing director of Sunrise. Matsumoto is also banking on his new show Dinozaurs for Fox Kids, the first TV show Bandai has ever produced solely for the American market. It’s an industry watershed.

There is one catch to Bandai’s international sales strategy. ‘Pokémon is for kids, but the subject of Gundam is war,’ says Matsumoto. ‘There are so many violent scenes that it can’t be broadcast [in its entirety] on a network.’ The Cartoon Network’s compromise has been to cut scenes in the daily shows, but retain them for the late night screenings. ‘Behind the popularity of Japanese animation overseas is the fact that it contains more violent and destructive elements than Western animation,’ says Japanese manga columnist Fusanosuke Natsume.

But it’s not only the violence that’s strangely appealing, it’s the unique look of the characters. Tired of the anthropomorphic cute creatures favored by Disney, young audiences like the edginess of the Japanese animated characters with their big gleaming eyes and spiky hair. And Japanese artists, in turn, are working American graphics into their designs. ‘Backdrops are becoming more three-dimensional, and camera perspectives more interesting,’ says Sakurai of Madhouse Studio. He believes the convergence of styles has been instrumental in the Japanese invasion.

Cowboy Bebop is a case in point. Its graphic designer, Toshihiro Kawamoto, describes his show as a melting pot. One of his main characters is even modeled on the Hollywood star Brad Pitt. ‘I chose a mixture of various ethnic groups for this animation,’ he says.