Anime is dying (feat. graphs)

[blkmage]

So you might have seen me go over the state of the anime industry with respect to Japan in response to things like why things are the way they are and peoples' misconceptions about how things work. Basically, I usually go over how anything that happens in the American market is moot because it's almost irrelevant to the success of the industry in Japan. Now, I have graphs and a Japanese PDF.

Port IG, the parent company of Production IG and XEBEC has a report outlining the state of the industry in Japan. In it, there are two interesting graphs that basically summarize what I've been mentioning. Here they are, translated by some admin at MAL:



The above graph, taken from slide 25, basically gets at what I've been saying: overseas fans are essentially the cherry on top in terms of revenue. In particular, overseas sales are about as much as goods, which includes toys, figures, soundtracks, singles, and other merchandise. If, for whatever reason, a studio needed to focus on something to the exclusion of all else, they will not be targeting the foreign audience.



And this chart, from slide 26, shows that not only do foreigners not matter, but pretty much anyone who's not a hardcore otaku doesn't matter either. And this is why shows that typically air on, say, noitaminA are considered financial failures. Since such a huge proportion of the income is DVD sales and DVDs are insanely expensive in Japan, most people won't buy DVDs. This is why you get more shows that don't have broad, general appeal.

In summary, you don't matter if you're not living in Japan and spend ridiculous sums of money on DVDs (better crack open that wallet and spend $60 for a two-episode volume), and I hope you like the moeru.

[ShiroiHikari]

I've been saying this for a long time: the Japanese anime industry's business model is broken and needs to be fixed.

[Ingemar]

So..... take interest in cheaper hobbies?

I have no doubt that Canada has excellent media.

[CrimsonRyu17]

Y'know, I realize anime is sorta expensive to make yet the workers are underpaid and all but why on earth are the DVD's so expensive there anyway? I've never found out nor been informed but if there's no good reason then maybe that's contributing to the "dying"? owO;

I've always lol'd at people who think they're making a big difference in Japan by buying US anime dvds but whatever.

[blkmage]

I've been saying this for a long time: the Japanese anime industry's business model is broken and needs to be fixed.

The thing is that there doesn't seem to be any obvious fix, at least for TV productions. Pricing and the way TV airing work in Japan have sort of cornered them into this thing. And like I mentioned, widening appeal to people who aren't otaku hasn't worked out very well yet. I'd also imagine margins on foreign sales are too low to make that audience worth expanding.

So..... take interest in cheaper hobbies?

I have no doubt that Canada has excellent media.

I'm not sure how you extrapolated that from my post, but okay. ┐]Y'know, I realize anime is sorta expensive to make yet the workers are underpaid and all but why on earth are the DVD's so expensive there anyway? I've never found out nor been informed but if there's no good reason then maybe that's contributing to the "dying"? owO;

I've always lol'd at people who think they're making a big difference in Japan by buying US anime dvds but whatever.[/QUOTE]
I'm not sure how they got to be so expensive, but at the moment, it's probably because the prices are in some sort of equilibrium where studios make enough money off of them and if they lowered the prices without somehow making up for it in quantity of sales, they'd be screwed. Considering they've had about zero success in converting a broader audience to more sales, I doubt that many studios are up for taking a risk like broadening the audience and experimenting with dropping the price on DVDs. I mean, they could just make easy money by making another terrible harem comedy or something.

[Yamamaya]

Guess we'll be seeing another decade of moe then.

The high prices of the DVDs are really limiting their source of revenue. I frankly don't see why they can't make a series that will appeal to a larger audience then charge less for the DVDs. They would still make a profit of it if it did well(plus otakus would buy it as well)

[TheSubtleDoctor]

The thing is that there doesn't seem to be any obvious fix, at least for TV productions. Pricing and the way TV airing work in Japan have sort of cornered them into this thing. And like I mentioned, widening appeal to people who aren't otaku hasn't worked out very well yet. I'd also imagine margins on foreign sales are too low to make that audience worth expanding.

Could this be a recipe for the rebirth of the OVA? Si. I think the Japanese companies will have to change something about the formula, and the OVA provides a way around the TV-time problem. Now, they just have to tweak a few other things in order to make mass-appeal OVAs a profitable venture, cause I need a string of moe OVAs like I need a root canal.

[blkmage]

Guess we'll be seeing another decade of moe then.

The high prices of the DVDs are really limiting their source of revenue. I frankly don't see why they can't make a series that will appeal to a larger audience then charge less for the DVDs. They would still make a profit of it if it did well(plus otakus would buy it as well)

I'd imagine there's huge risk involved with that and companies, especially ones that are publicly traded, are averse to that sort of huge gamble.

Could this be a recipe for the rebirth of the OVA? Si. I think the Japanese companies will have to change something about the formula, and the OVA provides a way around the TV-time problem. Now, they just have to tweak a few other things in order to make mass-appeal OVAs a profitable venture, cause I need a string of moe OVAs like I need a root canal.

This has been speculated to be one of the reasons we're seeing a Gundam UC OVA instead of a TV series. And we can see that in 2010, there are a bunch of adaptations that are getting the movie treatment (Haruhi, Bungaku Shoujo, Break Blade) instead of a TV series.

Of course, I don't think there have been many examples of OVA series. The closest thing I can think of that got released last year are the Negima Another World OVAs, Denpa Teki na Kanojo, and Shana S. I believe Shana S did okay, and the preceding Negima OVAs (Ala Alba) did really well. A lot of this thinking is based on how well Kara no Kyoukai did, which ended up being seven theatrical movies instead of a TV series.

You might also want to see which 2009 shows did super well and compare them to whatever's topped the sales charts in 2009.

[Nate]

Pricing and the way TV airing work in Japan have sort of cornered them into this thing.

Yeah I remember hearing something about that, like in America TV shows don't air at a loss but they do in Japan. I can't remember if it has something to do with the commercials or not but I think it does? I dunno you probably know more than I do.

[Yamamaya]

I'd imagine there's huge risk involved with that and companies, especially ones that are publicly traded, are averse to that sort of huge gamble.


This has been speculated to be one of the reasons we're seeing a Gundam UC OVA instead of a TV series. And we can see that in 2010, there are a bunch of adaptations that are getting the movie treatment (Haruhi, Bungaku Shoujo, Break Blade) instead of a TV series.

Of course, I don't think there have been many examples of OVA series. The closest thing I can think of that got released last year are the Negima Another World OVAs, Denpa Teki na Kanojo, and Shana S. I believe Shana S did okay, and the preceding Negima OVAs (Ala Alba) did really well. A lot of this thinking is based on how well Kara no Kyoukai did, which ended up being seven theatrical movies instead of a TV series.

You might also want to see which 2009 shows did super well and compare them to whatever's topped the sales charts in 2009.

That is true. There was a risk involved in all of the "classic" animes though(take NGE for example).

OVAs and movies in general seem to do better than anime series. People are more willing to buy movies than invest in purchasing an entire series.

I would think that the reason anime series air at a loss in Japan is the high expense of making an animated series in the first place.

[blkmage]

Yeah I remember hearing something about that, like in America TV shows don't air at a loss but they do in Japan. I can't remember if it has something to do with the commercials or not but I think it does? I dunno you probably know more than I do.

I would think that the reason anime series air at a loss in Japan is the high expense of making an animated series in the first place.

I was compiling a megas-long post about all of this, but then I realized that I was just heavily paraphrasing a post from omo's blog, so I'll just link that because it's really quite enlightening in terms of the sort of machinery and inside baseball that goes on behind your favourite TV anime.

[Nate]

omo's blog

Oh okay now I get it. So how it breaks down is that in America, the networks pay the studios to air the show, thus the show makes a profit like that, whereas in Japan the studios pay the networks to air the show, thus they have to make it back up and so it airs at a loss. I know that the article says there's a bit more to it than that but this seems to be the basic bare-bones of it. That makes sense.

[Blitzkrieg1701]

A good way for the industry to get out of this mess would be if so much of said industry wasn't localized in Japan. If more production companies from other regions, operating under other business models, were getting in on the game (or at least helping shoulder the production costs), do you think that would help things any?

[ShiroiHikari]

Don't they already have things animated in Korea rather than domestically?

[Nate]

Most anime is done in Korea, yeah. I think there's only a couple of big name studios that do the animation work in Japan. So obviously the cost of animating isn't the biggest factor.

[blkmage]

Yeah, animation is already outsourced. In terms of funding, shows already tend to be funded by production committee, which is a bunch of different media companies hoping to leverage the show to sell their own show-related goods. This is why, if you've ever watched fansubs, they have sponsor screens with a bunch of seemingly random companies.

And in fact, this is one of the reasons why GONZO died. As much as everyone criticized them for bad shows (which many of them were), they were attempting to make shows that geared towards non-hardcore fans and (in particular) foreign fans. Because they wanted to do this, they funded their shows on their own without a production committee. When their shows tanked, they didn't have a production committee to split and absorb the costs. When they began putting their shows up on Crunchyroll, it wasn't because they were especially forward-thinking and gazing into the future, it was because they were pretty much screwed and it was sort of a desperate move.