Ask John: Are Japanese Animation Studios Really Small Businesses?

Question:
All these years watching anime, I always thought the studios behind them were big and make a lot of money. But I heard it’s just the opposite. In fact, rumors say the reason why most stay in business is because foreign companies such as U.S. companies buy their shows. Is that true?

Answer:
Whether or not a typical Japanese animation production studio qualifies as a “small business” depends on what you classify as a small business. Studios like Madhouse, Gonzo, Tezuka Pro, Production I.G. and many others may employ a hundred people or more. By comparison, American anime distribution companies range in size from under 20 employees to over 60 employees. But beside their number of employees, it’s relatively well known that animators for major Japanese studios are not paid well, and do not enjoy many perks such as comfortable work hours and vacation time. The stories of animators that sleep on the floor of the studio for only 3 hours a night are based on reality.

Anime studios may earn a lot of money from their productions, but most of that money goes into operating expenses and the costs of producing new anime. The majority of the profit generated by successful anime series is absorbed by producers, home video distributors, and other middlemen- not by the actual animators or the original production studio. That’s partly why the Japanese anime industry is in the ailing condition it is now. Few Japanese natives want to work in the anime industry because there are easier, better paying jobs available. Animators that do work in the anime industry may feel unappreciated, overworked and underpaid.

For a cute, slightly exaggerated expose on the way small anime studios run, watch the two Animation Runner Kuromi-chan anime OAVs. The first one is available on American DVD.

It’s an exaggeration to say that anime studios now remain in business because of American investment, though. Anime studios have been prolific in Japan since the 1950s, and now there’s more anime being produced than ever before. The fact that there’s so much anime being produced in Japan clearly proves that Japanese demand alone is still strong enough to support hundreds of anime production studios. But increasingly interest from overseas markets, and American sponsorships are contributing to the continuance, growth, and evolution of anime studios in Japan.