From auteur-based domestic beginnings in the early 20th century, to a global breakout driven by brands like Astro Boy, Sailor Moon, Dragon Ball Z and Ghost in the Shell, anime has long since outgrown its niche genre status.
And today’s proliferation of streaming services such as Netflix, Disney+, Amazon and Sony-owned American anime SVOD Crunchyroll is fueling demand for both Japanese-made anime—often classified demographically for children (kodomo), girls (shōjo), boys (shōnen) and adults—and anime-influenced content produced elsewhere.
The anime market worldwide is expected to increase in value by 7.5% to US$52 billion by 2032, according to Future Market Insights, with sales of content to online platforms driving much of this growth. And while Japan is likely to maintain the largest share of this business (it cornered 43% last year), other regions are starting to emerge as players—particularly the Middle East and Africa, where the anime market is predicted to expand by nearly 10% in the next 10 years. Silas Hickey is a former Cartoon Network APAC executive who recently co-founded an animation studio called Custom Nuts (Amy & the Afterlife) in Tokyo. He says that while the global anime market hasn’t reached a saturation point yet, domestic factors in Japan like an over-supply in certain anime genres, the cyclical nature of content trends and the country’s declining youth population are making change necessary. “Massive shōnen action-comedy shows like One Piece, Demon Slayer and Jojo’s Bizarre Adventure have a huge export market driven by growing fandom and exposure on streaming platforms. But slice-of-life shows aimed at the bridge audience, such as Doraemon or Crayon Shin-chan, don’t work outside of Japan because they’re very parochial and quite different culturally from Western shows,” Hickey explains. “I’ve been researching how to hybridize a new type of bridge anime that will work overseas and in Japan. Japanese studios need to start addressing generic diversification so that when the market does cycle down, there will be other genres with massive potential to tap into, especially in terms of consumer products.”
Developing Original Anime
What will this new hybrid content look like? In Hickey’s view, exportable anime shows could blend slapstick mechanics à la Tom & Jerry (still one of the top American shows on terrestrial TV in Japan) with slice-of-life sitcom elements and heartfelt moments. Custom Nuts currently has a few original hybrid series in development, including Jock & Sunshine, a 2D-animated shĥnen slapstick sitcom about a couple of crash-landed animal astronauts who are forced to work dangerous part-time jobs in order to survive life in a version of 1980s Tokyo.
“Jock & Sunshine mixes Japanese and Western storytelling with Japanese and Western animation techniques,” says Hickey. “It’s a great example of how we are proposing an important cultural exchange.” Yoshiya Ayugai, a creative producer at Singapore’s August Media (Tish Tash) and a former Disney Japan and Cartoon Network Japan exec, agrees with Hickey’s views on the potential for new types of hybrid anime shows for kids. “For the development of an international co-production, slapstick and tears work well together, as they do in shows with heart like BBC’s animated preschool series Bluey,” says Ayugai.
“Japanese audiences love to cry, so an emotional rollercoaster type of story with a protagonist who is more humble than cocky could work well. Characters like SpongeBob SquarePants and Peter Parker from Spider-Man would resonate well with Japanese kids.”
And Hickey believes US audiences, in particular, could benefit from hybrid anime shows with heart. “It’s quite uncommon in the US to have narrative pauses for moments of introspection or emotional resonance. But in Japanese anime shows, it’s very common to have close-up shots of facial features with tears, for example, and hold on these moments a lot longer than in a Western cartoon,” he says. “There are a lot of Japanese series that have as much heart as shows like Bluey, but no one’s made exportable versions of them yet.”
International co-production growth
Custom Nuts isn’t the only production company looking to develop new original anime series for kids through authentic collaborations. France’s Cyber Group Studios (Gigantosaurus) recently struck a long-term partnership with veteran Japanese prodco Nippon Animation to co-produce new IPs and reimagine several of Nippon’s classic series. First up is Nanami and the Quest for Atlantis, a 2D/3D-animated feature film based on Nippon’s ’90s anime series Tico and Friends. And a new animated series that continues the film’s storyline is also in the works. “Given that the export market is so much more important to Japanese studios right now, I think they’ll be more receptive to co-pro opportunities than they would have been just a couple of years ago,” Hickey says. “Now is a really good time to have these conversations at industry events.”
TMS Entertainment, which launched in 1946 and produces hit teen series Detective Conan, is another Japanese studio that’s not averse to making Western-friendly content for younger kids, adds Ayugai. Though it’s not a co-pro, TMS’s popular two-season preschool anime series Bananya—about an adorable cat who lives in a banana—is currently streaming on Crunchyroll, which has given the show a global audience and wider L&M presence. Its consumer products program currently includes deals with partners including Gucci and Bioworld for products such as T-shirts, ties, footwear and desk collectibles. “TMS is looking into making more kids content that will travel because its parent company is Sega Sammy,” says Ayugai. “So anything in the kids space that works for an international audience and could eventually sell games and merchandising is encouraged.”
Meanwhile, Crunchyroll has grown in a big way since Sony’s Funimation acquired it from AT&T and WarnerMedia in 2021 for US$1.2 billion. Now available in more than 200 countries and territories, the platform has become the world’s largest anime streaming service, offering more than 16,000 hours of content. The company also does business in theatrical distribution, video games, home entertainment, live events and manga. As a measure of its success in the feature film market, Toei Animation’s Dragon Ball Super: Super Hero (pictured)—the first Dragon Ball movie to be distributed by Crunchyroll—shattered expectations with a US$20.1-million opening weekend in North America at the beginning of August. And its global take had increased to more than US$47 million by the end of the month, according to tracking site Box Office Mojo.
Though Crunchyroll’s audience tends to skew more 18 to 34, the majority of its content is appropriate for older tweens and teens, and the platform also provides a selection of family-friendly titles. “When fans come to Crunchyroll, they’re looking for a mix of new simulcast series [shows that can be watched the same day—usually within hours—as their broadcast in Japan] and nostalgic or classic anime titles,” says Crunchyroll COO Brady McCollum. “Within anime, we offer hit tentpole shōnen titles like Naruto and My Hero Academia, but also romance, sports and slice-of-life content.”
In addition to Bananya, the platform’s family-friendly acquisitions include Shōnen Ashibe GO! GO! Goma-chan, about a baby spotted seal and a first-grader; and Mitchiri Neko, which tracks a group of mysterious cat-like creatures.
On the originals front, Crunchyroll has produced more than 60 titles to date, including several co-pros with Japanese partners, says McCollum. “We recently premiered the fantasy series Kaina of the Great Snow Sea at this year’s Crunchyroll Expo. It’s a co-production with [linear network] Fuji TV for its +Ultra programming block.”
According to August Media’s Ayugai, securing a partnership with a Japanese terrestrial channel is key for the success of new international co-pros in Japan. “Linear TV—not streaming—is the number-one way to access entertainment in Japan,” he says. “Without some sort of terrestrial strategy, you are probably not going to be very successful there, especially on the kids side.” Custom Nuts’ Hickey concurs. “To get a slot in Japan is a really difficult thing, and an expensive proposition because they are still massively coveted,” he says.
Aside from getting Japanese linear nets on board, new original anime co-pros will face a number of additional challenges. The biggest, according to Ayugai, is the language issue. “Most Japanese artists don’t speak English, and when characters speak in Japanese, not only is the sentence structure very different from other languages, but so are the accent points,” he explains. “Because the spoken words are different, the emotion in the animation is, too.” Fortunately, studios are now making a concerted effort to find more English-speaking production staff to help with translation, according to Hickey.
Another hurdle is that Japanese development and production is radically different from how things are done in the West, says Ayugai. In particular, the scripting-to-storyboarding stage is very fluid in Japan until the final picture, whereas Western culture has a much more rigorous step-by-step approval process. “Japanese prodcos often tend to hold work until they think it’s ready—then when they show it, it might not be what you wanted,” he says.
Hickey agrees that the creative checkpoints usually written into contracts in the US don’t necessarily apply in Japan. “This could be a major roadblock, and quite frustrating for an international co-pro partner,” he says. Another major issue is that many Japanese artists still prefer hand-drawn techniques. “I love this, but it is really inefficient,” says Hickey. “It poses serious compatibility issues with the way you will be working with a US producer, for example, and it’s very hard if you have to make changes during development and production. If you are talking about high-volume series production, you want all of it to be digital.” Hickey also notes that a lot of Japanese anime series use kisho-tenketsu, a classic four-act narrative structure that’s very different from the three-act hero’s journey model developed by American writer Joseph Campbell and commonly used in the US and Europe. “I think there is enormous potential to figure out how to merge both storytelling structures, but these are the difficulties you are up against from a creative point of view,” he says.
Moving forward, Hickey wants to see Japanese studios get more adventurous with the development process because the majority of anime is adapted from manga or video games. “In Japan, only about 5% of purely original production is for anime TV series,” he says.
“And with the Japanese consortium model [a long-held system whereby multiple partners including TV networks, toycos, publishers and other media companies invest in entertainment projects as a collective], you often have too many cooks in the kitchen weighing in creatively, which is stifling and diminishes risk. There needs to be another development model for people who aren’t manga artists.”
For Ayugai, since Japan has manga for every demographic and most shows are manga-based, the domestic market is already at the saturation point. “I’m not exactly sure how many manga series are currently being made in Japan, but we estimate it is more than 200 per year,” he says. “A healthier number is probably around 120 so that everyone can make a little bit of money, and we do need that international revenue coming in.”
With so many manga series in production, Ayugai says Japanese studios are booked up for at least the next two years, which could be a problem for international co-pro growth. “They don’t have pipelines to do any other animation unless they can miraculously find some out-of-work animators who have left other studios in Japan,” he says. Ayugai predicts the industry won’t see a new crop of hybrid anime co-pros actually launch until 2025, but adds that achieving popularity in Japan will require a mindset change among Japanese audiences. “Unless there is a major cultural shift in the next two or three years to recognize true authentic co-pros, I don’t see Japan accepting international content as much as people might like,” he says.
McCollum has a rosier outlook for Crunchyroll’s global business. After lowering the price of the service in nearly 100 territories in July, Crunchyroll saw higher engagement and strong, steady growth in both subscribers and viewing in India, the UK, Latin America and the Middle East. “Our fans are hungry for localized anime, particularly as a result of a first wave of series we made available on our platform this year, fully dubbed and subtitled in Hindi, Italian, Arabic and Castilian Spanish,” says McCollum.
“The biggest challenge is keeping up with consumer demand. Our fans want new content at the speed of Japan, so we do our best to share anime localized in 10 languages, day-and-date with Japanese premieres.” McCollum also agrees that there’s space for new types of hybrid anime shows for kids. “Anime is such a dynamic medium that lends itself to a variety of stories and genres,” he says. “We’re also seeing continued advancements in computer-generated animation, so the sky’s the limit with the types of stories that can be told to resonate with audiences around the globe.”
Tune in tomorrow for part two of this series where we dive into how producers and buyers are exporting anime to countries around the world.
This story originally appeared in the October/November 2022 edition of Kidscreen magazine.