In Japan, Animation studios have been known as slave drivers, with animators working long and stressful hours for little pay. And while the anime industry itself is flourishing, the current Japanese business model isn’t very profitable. Many production houses are typically left in the red after the initial domestic television run, with majority of profits often coming from Blu-ray and DVD sales, as well as merchandise. But now, with the arrival of global streaming brands like Netflix, Amazon Prime, and Crunchyroll, things seem to be changing.

According to the Hollywood Reporter, “Overseas sales have been an additional revenue stream, but Netflix’s original content strategy is becoming a game changer.” The global streaming platform wants 50% of its library to be original content, and they have even set aside a whopping US$8 billion for making that possible. And Netflix has confirmed that a huge chunk of that US$8 billion will be going to anime. In fact, they are already planning on 30 new anime titles just for next year alone.

The Hollywood Reporter also stated that “Budgets for individual projects haven’t been disclosed, but it is an open secret in the Japanese industry that they are significantly larger than for those ordered by domestic TV networks.” They also reported:

The work in anime studios is notoriously tough, and many studios have been labeled “black companies” by the Japanese media for the low wages paid, particularly to junior animators. A major cause of that are the tight budgets dictated by the TV networks.

Joseph Chou, a producer for Toei Animation’s 12-episode Knights of the Zodiac: Saint Seiya series for Netflix said that:

“Lately the media has been bashing the anime industry over working conditions; the TV stations have been reporting on it, but they’re a big culprit, Netflix is restoring it to a sane business model. You’re looking at maybe a 15 percent margin rather than a 5 percent loss.

Chou, who is also president of Sola Digital Arts studio in Japan, also talked about the other online streaming services scrambling for anime.

 “There’s Netflix, Amazon, Crunchyroll and Apple Studios all talking to people, as well as rumors there’s another major player about to get involved. They’re all scrambling to meet with everybody, but Netflix is the most aggressive.”

Kotaro Yoshikawa, vp distribution and licensing at TMS Entertainment also weighed in.

“Netflix is producing dubbed versions in several languages and subtitles in more than 20 languages, with a release to around 200 countries in one go, which we couldn’t do.”

This means that is the fact that Netflix is ordering directly from the anime studios also eliminates the need for production committees, a fact of life in the Japanese entertainment industry for movies and TV series. Involving anywhere from five to 15 companies, the committees help share costs and risk, as well as giving advertising agencies, TV stations and newspapers a stake in the production’s success and an incentive to promote it. The downsides are a slowing down of decision making and some stifling of creative risk-taking because approval is usually required from all parties. Yoshikawa also stated:

“There’s no TV station involved to say what needs to be done to make something okay for broadcast, hough we may still have to make adjustments, like reducing the amount of blood onscreen, for versions that will be broadcast on television.”

And of course, not everyone is aboard the global streaming train. Keiichi Hara, director of Miss Hokusai and subject of the Animation Focus at this year’s Tokyo International Film Festival, says he would consider an offer from Netflix, but has unexpected concerns.

I work on commercial productions, so inevitably I get directions from companies, like TV networks, about the story etc. When I was young I used to get really mad about it. But working out ways to keep those people happy has been the source of some really great ideas. That kind of pressure actually helps creativity in some ways.

Because of Netflix, things are really changing in Japan. And one of the industry’s big producers, Chou, has said that it may not yet be a bubble or a bonanza, but “nearly all the studios are full booked until 2020.” Does this mean that we should expect more changes in the anime industry? Looks like we may find out soon enough.

Among these 30 new anime titles are the new Baki and Saint Seiya anime, as well as Kyoto Animation’s Violet Evergarden, BONES’ A.I.C.O. -Incarnation-, DLE Inc.’s Sword Gai: The Animation, Production I.G’s B: The Beginning, LIDEN FILMS’ Lost Song, and many more.

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Source: The Hollywood Reporter



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