Anime is Changing Faster Than You Think

Below are my opening remarks from the recently concluded Project Anime conference. There seemed to be some interest in social media about what I was saying, so I'm reproducing them here.

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Anime today is going through a period of radical change. Let me qualify that statement a little bit first - I’ve been watching and reading anime and manga for 40 years, and I’ve been working in this industry for 20. During that time, I’ve watched anime go from a few obscure shows on American TV to mass acceptance, not just here, but around the world. I’ve watched VHS give way to DVD, and seen DVD pass the torch to streaming. I’ve seen bookstores that carried almost no graphic novels that moved to stocking hundreds if not thousands of volumes of manga. In other words, I’ve been around the block a few times, and I’ve seen this business and art form evolve and change many times over the years. So when I tell you we’re entering another phase of radical change, I don’t say that lightly.

When I started in this business it quickly became clear to me that Japanese rights holders - the studios, production committees, and manga publishers - just weren’t that interested in markets outside of Japan. The truth was that they saw the vast majority of their revenue come from their own domestic market, and international markets comprised maybe ten to fifteen percent of their revenue. This meant that here in the U.S. in the early days, we didn’t see a lot of the content that was being created, at least not through legal means. And I’m not talking about internet piracy here, I’m talking about the passionate fans who traded fansubbed VHS tapes at small anime cons around the country. To be an anime fan was something you had to work at, for sure. And to translate and sell anime and manga here, you had to work pretty damn hard as well.

See, the Japanese companies viewed our market as an afterthought, the change under the cushions to be looked for after they had finished the important stuff. The editorial departments at the big manga companies could consist of literally dozens of editorial staff and perhaps three licensing people who covered the entire world. Their focus was on their own market, and when they did everything they needed to in order to succeed in that market, only then did they make any serious effort in foreign markets. When I made the transition from manga to anime by joining Crunchyroll in 2015, I learned this the hard way. I came from American book publishing, where it’s necessary to know what you’re publishing one to two years in advance. On my first day at Crunchyroll I asked one of the brand managers how much lead time they had before launching a new anime - how much time did they have to prepare before they announced and began to market the title? There would be a lot involved in this, I knew. The script would have to be translated, the metadata all lined up correctly, and most if not all of this would need to have been submitted back to the licensor for approval. The brand manager smiled and said “Oh, it’s been getting much better in recent months. Sometimes we get a full week!”

I was pretty shocked to learn that companies like Crunchyroll and Funimation were being given only days to translate and subtitle anime, and sometimes only hours. They didn’t even know for sure which titles they were going to get in a given season until as little as 24 hours before their debut! That’s insane, right? How do you plan a business around that? Why would the original rights holder leave so little time for the licensee to prepare and market their titles? The answer was: “sofa change.” It represented so little money to them that it was literally the last thing they did before airing the anime.

It’s not like that now. I don’t mean that this never happens; things haven’t changed THAT much.  I’m sure you’ve noticed how many series Funimation and Crunchyroll have announced in the last two weeks as the summer season begins. But drawing again on my time at Crunchyroll over the four years I worked there, I began to see those lead times increase to a month, and then two months, and then sometimes - rarely - as high as six. That kind of time gave American companies the opportunity to do a lot more promotion to try to set up interest in a given anime before it actually launched.

It’s worth looking at why the bigger titles have gained a lot more lead time. There are two factors. First, anime has become significantly more popular throughout the world. No one has, to my knowledge, done an analysis about how much Japanese anime there is in the U.S. versus homegrown animation, and maybe it would be difficult to draw any strong conclusions even if that analysis existed. But for manga, we do have some numbers. In America, we know that manga represents 25% of the market for graphic novels. That number is closer to 50% if we take children’s graphic novels out of the equation. In France, the market most similar to Japan for manga publishing, comics are about 25% of all publishing, and manga represents 50% of comic publishing there. 

Meanwhile, Crunchyroll has surpassed two million subscribers and 50 million registered users, with the majority of their growth coming in the last two years. Or to put it another way, it took them ten years to get to one million subs, and then two more years to more than double that.

Now, that’s reason enough for Japanese companies to start taking foreign markets more seriously, but there was a second factor, and that was the decline of sales of both manga and anime in Japan. There, however, the problem isn’t lack of interest, it’s lack of people. Fertility rates in Japan have been in decline for years. The population of the country currently stands at 124 million people. At the current rate of decline, it will go down to 88 million in forty years. Compounding that problem is that the population is aging, and though anime and manga remain popular among adults, people do still age out of it there. So with a shrinking market at home, Japan’s path forward is clear: If anime is going to grow, it’s going to have to grow outside of Japan, and that’s bringing increased attention on foreign markets from the companies that make it.

We’re seeing the effects. Anime companies hold worldwide premieres here at Anime Expo. Marketing plans help titles succeed outside of Japan, which can only happen when foreign markets are not treated as the last priority. Manga publishers likewise have looked to the U.S. to bolster their profits, and now that Square Enix has announced the formation of a U.S. publishing house, the top five Japanese manga publishers now have subsidiaries here in the U.S.

I started by saying that this is a period of radical change for anime and manga. I could stop here and I would have made my point. But of course, I’m not going to stop here. When a market grows, bigger companies get interested. Star Wars showed the public was hungry for sci-fi blockbusters, and Hollywood answered the call. Iron Man proved there was a market for superhero movies, and the market responded. And in the last year or two, guess what’s happened to anime. I wrote an article about this that goes into more detail, so I won’t belabor this point, but the players in anime are radically different from what they were just three or four years ago. We’ve spent most of the past decade viewing U.S. anime as a rivalry between, primarily, Funimation and Crunchyroll. On the surface, it still is, but underneath that, it’s now Sony versus WarnerMedia, with Netflix raising the stakes for good measure.

Hollywood is, of course, getting involved as well. We’ve seen many adaptations recently, from Netflix doing Death Note and Cowboy Bebop, to the Ghost in the Shell and Alita Battle Angel movies. This is really just the beginning. Roland Kelts just wrote an article titled “Why Hollywood doesn't yet get anime”, stating that “so far, Hollywood’s versions of Japanese content have received mixed reviews at best, with some earning respectable but not remarkable box-office numbers. Most fans return to the original stories and wonder: Why can’t they get it right?”

He’s not wrong to think that. “Hate watch” is the phrase I read most associated with the American Death Note, and perhaps the less said about Scarlet Johannsen’s Ghost in the Shell, the better. But there are a lot more adaptations coming down the pike: JJ Abrams’ version of Your Name, WarnerMedia’s Attack on Titan, Taika Waititi’s Akira, Jeff Gomez’s Ultraman. Legendary just did Godzilla and Detective Pikachu, and are currently working on Gundam and My Hero Academia. And these are just the projects that we know about. 

I should note that there’s hope for good adaptations in the future. Alita was better than many expected (OK, I loved it, but I’m an old school Alita fan so I’m biased). Sunrise is deeply involved in developing the Gundam movie. And note that Roland wrote Why Hollywood doesn't yet get anime. It’s going to be done right eventually, and it will succeed, and success breeds imitation.

So - radical change. The anime and manga that we know and love has been noticed by some big companies with deep pockets. That worked out pretty well for Marvel and Star Wars and (eventually) DC. I won’t be a pollyanna about it, I know there are risks there. But optimism is a choice, and I choose to believe that in the long run we’re going to see great movies and greater interest in anime, and better quality as a result. It’s an exciting time to be in this business. 

That’s why this year we set up two tracks for Project Anime. We believe that by coming together, we can support each other. We can learn from each other. And we can make each other better. That’s where the events track comes in. Things are also changing at a rapid pace, and for me personally, my career has always been based on learning everything I can wherever I work, because seeing the big picture will always help me make better decisions. It’s with that philosophy in mind that we’re trying something new here this year. I can’t wait to hear what you think of it. Welcome to Project Anime.