Ask John: How Much Anime is Made for the International Market?

Question:
In your opinion, how much anime is being produced with American financial support? How much anime is being produced for worldwide distribution? If American support for anime ceased, how would the Japanese domestic market fare?

Answer:
I’m not aware of any statistical reports on the financial constitution of Japan’s animation industry, so I can only estimate and refer to limited statistics that I am aware of. I think that most anime fans who closely observe the anime industry are aware of titles produced with American financial support. American co-productions have occurred at least since the mid 1990s and including the original Ghost in the Shell movie, the Macross Plus OAV series, and the AD Police TV series. More recently, shows like Tenjoh Tenge and Samurai Gun, and current productions like Erementar Gerad, Eureka Seven, and Pandalian have all been produced with the assistance of American investors. In fact, AD Vision recently claimed to co-finance nearly one out of every three anime shows currently produced in Japan, but it’s not clear if that means literally contributing money to specific productions or simply paying licensing fees and royalties to companies which may use that money to produce other programs.

Besides anime produced with money partially provided by American investors, there are also anime productions made with American and international release in mind. Anime including the Rurouni Kenshin Seishouhen OAV series and The Big O II premiered in Japan, but were created largely in response to the American success of their respective franchises. There have also been anime productions such as D.I.C.E., a new season of Ultimate Muscle, and the 2004 Yu-Gi-Oh movie that were created specifically for American release and were released in America long before their Japanese release. Looking toward the future, the American Cartoon Network is co-creating new Japanese animated Powerpuff Girls and IGPX animation. And Warner Bros. and Disney will co-finance Gonzo Studio’s Brave Story anime movie.

But considering that there are roughly a hundred anime TV series airing new episodes on Japanese television during any given week these days, and there are still numerous OAVs and theatrical movies being created for Japanese exclusive release, I’d say that the handful of titles that I can name which are specifically created for international release or as international co-productions are a small percentage of the anime industry’s total output. I think that the majority of anime is still made primarily for Japanese consumption because the Japanese market still accounts for the vast majority of anime sales. Allow me to illustrate. Gonzo Studios is one of the most well represented Japanese production companies in America. Very nearly every title Gonzo has ever produced has been officially released in America. However, for the 2004 financial year that ended in March 2005, international sales including America, Europe, and Asia, accounted for only 10.6% of Gonzo’s annual income. That means that in 2004 nearly 90% of Gonzo Studios’ income came from the Japanese market alone. If a production company like Gonzo, which is extensively represented in America, still earns 90% of its income from Japanese sales, I’d imagine that studios with fewer titles released internationally would have even less of their revenue come from international sales. Since the majority of studio profits seem to come from Japanese consumers, it makes sense to assume that the majority of current anime is targeted at those consumers.

There should be no doubt that American and international sales contribute a lot of revenue to Japanese studios and distributors. Japanese companies like Broccoli, A.P.P.P., Shogakukan and Shueisha, and Toei wouldn’t be directly distributing their titles in America if there wasn’t profit to be earned from doing so. But the number of entirely Japanese funded current anime productions still far outnumbers Japanese and foreign co-productions. I have little doubt that a sudden drop in foreign demand for anime and a sudden decline in foreign investment in anime production would have an impact Japan’s anime industry. I’m sure that without foreign demand and investment there wouldn’t be quite as many anime series produced in Japan as there are now, but I seriously doubt that the Japanese industry would crash or severely constrict. I believe that Japan still sees the international market for anime as an opportune but not absolutely necessary partner.