Ask John: How Much Does Licensing Anime Cost?

Question:
I was just reading the “Is America’s Anime Industry Out of Touch with Fans?” artice and started to wonder how much does an expensive anime cost compared to an inexpensive one. Could 3 million get me a good anime?

Answer:
Even among professionals working in America’s anime industry, specifics about licensing are closely guarded secrets. Employees of America’s anime distribution companies may be polite, and even friendly with each other, but America’s anime industry is relatively small (compared to the traditional American movie & home video industry), so even small advantages can make a huge impact on an anime distributor’s success. I know what AN Entertainment has spent on its licenses, and I’ve heard reliable second-hand estimates of the licensing cost of some of the anime titles available in America, so I’ll extrapolate from that limited knowledge. Please understand that this is largely speculation based on fact, so my answer is only an estimate that may not accurately reflect every example.

In 2005 it seemed to be common for American translation and distribution rights to high profile anime series to cost a five-figure sum under $50,000 per episode. By contrast, in the early part of this decade, high profile shows could be acquired at a 4 digit sum per episode. In early 2003 AN Entertainment was offered the opportunity to license North American distribution rights to a certain high profile anime motion picture for one million dollars. So 3 million would certainly be enough to acquire distribution rights to virtually any anime title. In fact, based on average estimated production costs from 2003, three million American dollars is enough to cover all of the production cost of an average 26 episode anime TV series or an average theatrical film. (However, big budget anime may have production budgets as large as nearly $20 million.)

However, the licensing fees for anime are not the only financial consideration to be aware of. In fact, dubbing an anime into English may cost as much or even more than the initial licensing fees. Licensing fees may not include additional charges for supplemental material like TV spots and clips, promotional artwork, music rights, and the rights to use footage and music for promotional purposes such as trailers. Licensing fees may also need to be supplemented by royalties paid to the Japanese copyright owner based on number of DVDs sold in America. And domestic distributors also have to pay for translation, DVD production and replication, and advertising.

With all of these costs, it’s not surprising that American anime companies are so secretive with industrial secrets. These days a best selling American anime DVD may sell fewer than 20,000 copies. By extrapolation, obscure, poor selling American anime DVDs with minimal distribution may literally sell only a few hundred copies. When an American company spends over a million dollars to distribute an anime in America then has that release sell only a few hundred copies, it’s easy to see why certain anime series have never been fully released on American DVD. Three million dollars is definitely enough investment capital to bring a good anime series to America. In fact, a three million dollar investment may be enough to commission the production of an original anime series. But sadly there’s no guarantee that bringing an anime series to America will bring a profitable return on your investment.