Ask John: Are Anime Companies Distributing Live Action a Growing Trend?

Question:
What is your take on Funimation and other anime companies’ recent forays into live-action Japanese TV and film? Does it seem to you like the industry as a whole is moving more toward an animation-and-live product mix rather than the traditional anime-only catalog? Is this trend widespread enough to be considered the next step in the anime business model?

Answer:
Roughly over the past five years since Crouching Tiger, Hidden Dragon almost single-handedly enlightened mainstream America about the existence of live action Asian cinema, the market for Japanese (as well as Chinese and Korean, and to a lesser degree Thai) live action film has steadily increased in America. During the same time that American interest in live action Japanese film is increasing, the market for anime seems to be shrinking, or at least steadying instead of growing. Anime distributor AnimEigo now licenses exclusively live action Japanese film. Urban Vision has created a new subsidiary to concentrate on licensing and distributing live action Japanese genre movies. Geneon recently announced its acquisition of distribution rights to Kagen no Tsuki ~ Last Quarter. Even more recently FUNimation has announced its acquisition of Shinobi ~Heart Under Blade~. AD Vision and Bandai have both experimented with distributing live action. And Media Blasters has been seemingly quite successful by diversifying its catalog with a variety of live action genres. Domestic distribution companies including Pathfinder and Discotek concentrate on Asian live action with some anime, or maintain a balanced mix of Asian live action and anime titles.

On one hand, the increasing interest in live action among America’s anime distributors is a response to increasing consumer demand. Asian live action films seem to sell fairly well in America, so it’s no surprise to see Geneon distributing “The Locker” to capitalize on the American success of The Ring and The Grudge. But the move toward distributing live action Japanese movies may also be a necessity. If the profitability of distributing anime in America is falling or even remaining constant in the face of increasing competition from other titles and other media, domestic distributors may have to find new revenue streams.

Although I don’t know for certain, it does seem as though distributors like AnimEigo and Urban Vision that once distributed anime now license only live action either because they can’t afford anime anymore, or because distributing live action is now more profitable than distributing anime. I’m not prepared to say that America’s anime industry will shift its attention onto live action and forego anime in the future, but I do think it’s clear that we’re already seeing an increasing number of America’s anime distribution companies branch out into live action. Considering the signs present in the American anime community over the past two years, I believe that it’s becoming an unavoidable necessity for American anime distributors to supplement with live action and other revenue streams. Anime may still generate significant sales in America, but anime seemingly doesn’t generate a lot of profit in America. Furthermore, the anime industry in America is now over 15 years old, so the cost of doing business in the industry has matured. Importing live action contemporary Japanese film is still in its relative infancy, so Japanese live action films may be less expensive to license than anime, and may generate more profit than anime in America since live action has, and always will have a bigger audience in America than animation.