Japanese animation: A new era of investment and global influence

As the weekend approaches, San Diego Comic-Con is set to spotlight Asian content, underscoring a significant shift in the entertainment landscape. Quietly but decisively, two of Japan’s largest industrial and financial conglomerates have begun investing in the country’s booming animation sector, a move that could reshape the global film and TV industry.

Marubeni and Shogakukan: A strategic partnership

Marubeni, a diversified trading giant with roots in cereals, chemicals, and paper, has ventured into the thriving manga and anime markets through a new collaboration with Shogakukan, a leading publisher. This partnership aims to capitalize on the growing demand for Japanese animated content, which has seen unprecedented success in recent years.

Mizuho Securities: Launching an animation film fund

Mizuho Securities, part of the Mizuho keiretsu, has announced the launch of an animation film fund. The brokerage plans to raise finance from institutions and wealthy individuals, with investments starting at JPY300 million ($200,000) each. The goal is to amass $15 million by the year’s end, which will be used to fund new Japanese animations annually.

The global success of Japanese animation

Japanese animation has reached new heights, with titles like Doraemon, Demon Slayer, Detective Conan, and One Piece becoming global franchises. Recent films such as Studio Ghibli’s The Boy and the Heron and CoMix Wave-Toho’s Suzume have demonstrated the potential for $100 million single-territory box office feats.

Institutional funds and the production committee system

In the early 2000s, institutional funds played a significant role in the Japanese animation scene. However, the production committee system, which involves clusters of companies sharing risks, has since become dominant. While this system provides stability, it has been criticized for slow decision-making and low budgets, deterring international co-productions.

Evolving dynamics in the animation industry

Several factors are challenging the risk-averse production committees. The international success of Japanese anime, Sony’s acquisition of Crunchyroll, and Netflix’s investment in the sector are driving change. Additionally, the Japanese government, under Prime Minister Kishida Fumio, is keen to elevate Japanese entertainment to the level of K-pop and Korean TV dramas. In his “New Capitalism” proposals, Kishida emphasized the importance of anime, manga, and music as national assets.

Calls for modernization

Prominent filmmakers like Kore-eda Hirokazu are advocating for a modernization of the Japanese film industry. They propose state-backed production funds and incentives similar to those in France, aiming to dismantle paternalist hierarchies and foster a more dynamic industry.

Addressing industry challenges

New funds could alleviate two major issues: a shortage of animators and insufficient production budgets. Low salaries and long hours deter new talent, while budgets lag behind those of American and Chinese counterparts. Sony’s establishment of a skills training academy is a step towards addressing these challenges.

Outsourcing and technological advancements

Work backlogs extending two to three years are prompting studios to consider outsourcing production to countries like the Philippines and Vietnam. However, many are reluctant to compromise on the tradition of hand-drawn animation. The rise of AI-assisted production and the diversification of anime into new markets and online formats are also driving transformation.

Marubeni’s first foray into entertainment

Marubeni’s involvement in the animation sector is significant, marking the 168-year-old industrial giant’s first venture into entertainment. The company recognizes the growing popularity of Japanese manga and anime, driven by increased demand during the COVID-19 pandemic and aggressive distribution by major overseas distributors.

Addressing distribution challenges

Marubeni identifies the lack of direct distribution networks and retail outlets as a key issue, leading to lost opportunities and an increase in pirated products. The company aims to expand the range of goods and services using manga and anime, and to build retail outlets for better global distribution.

Financial engineering and future prospects

Other financial moves are also underway. For instance, Phillip Securities is raising over $2 million through the sale of digital securities for the Japanese live-action film “Treasure Island.” Additionally, private equity giant Blackstone recently made a $1.7 billion tender offer for Japan’s Infocom, a leading provider of digital comics.

the Japanese animation industry is at a pivotal moment, with new investments and strategic partnerships poised to drive its global influence. As the sector evolves, it will be fascinating to see how these changes shape the future of Japanese entertainment.