The International Anime Market Has Overtaken Japan’s – But What Does It Mean?

The story of the anime and manga industries in America has been one of immense growth. While at first they were a hard-to-find novelty with little coverage in the mainstream, both mediums have massively expanded to the point that they're a massive force in the American entertainment industry. And for the first time, the anime market in America has overtaken the one in Japan.

This information comes from the Association of Japanese Animations (AJA), which releases an industry report every year. As reported by Anime News Network, the figures this year feature a couple of big surprises. The biggest is that the anime industry (including live entertainment and merchandise) experienced a slight contraction in 2020, with the total market value falling by 3.5%. Anime sales in Japan also saw a reduction, falling by 9.7%, to 1.1867 trillion yen. Overseas anime sales, however, rose by 3.2% and are worth 1.2394 trillion yen, making this the first time the overseas market is larger than the Japanese market. What does this all mean for the anime industry's future?

Tanjiro with the messenger birds in Demon Slayer.

Obviously, some of this can be written up to the COVID-19 pandemic slowing production and reducing sales, both through lack of release opportunities and people simply buying less due to financial worries. The pandemic has caused a lot of friction in many industries as people were forced to quickly change how their work was done, leading to a good amount of chaos and confusion as new procedures had to be introduced and refined to account for shifting local guidance. The report notes that 2020 saw the fewest minutes of anime produced since 2011, and that the number of theatrically released anime had fallen to 66, down from 90 in 2019.

This increase in the overseas market is clearly visible in America, as more shows than ever are being brought to the USA thanks to streaming platforms. In the late 1990s and early 2000s, anime fans only had access to a handful of shows adapted for network television or had to rely on sparse and expensive DVD releases. Even if a show was released in America, there was still a good chance it was cut to ribbons and turned into a completely different series than the one Japanese audiences saw. Today, however, the explosion of streaming has led to more shows being brought to America. Crunchyroll and Funimation offer massive troves of anime to American fans, most of which are simulcast, so American fans can watch an episode just after it airs in Japan.

But even non-specialist platforms like Netflix and Hulu are acquiring and heavily promoting the anime series they purchase. Anime films are also getting big theatrical releases in mainstream cinemas, something previously unheard of for franchises not called Pokémon. In fact, Demon Slayer: Kimetsu no Yaiba – The Movie: Mugen Train's opening was the biggest opening for any foreign-language film released in North America, something that would sound like pure fantasy to an anime fan even ten years ago.

Korra enters Avatar State

But what does this growth mean for anime in America? At the most basic level, it guarantees that even more shows will be brought to the West; it's been proven that by not localizing, distributors and creators are leaving profit on the table. However, it could also lead to more studios making series directly focused on the international market. In recent years we've seen western shows like Avatar: The Last Airbender, Onyx Equinox, and Blood of Zeus use the anime visual style and format to create popular new shows. So a Japanese studio could conceivably create shows primarily aimed at the American market.

It should also be noted that the AJA report draws attention to the massive increase in anime production costs in the past few years, with episodes requiring more and more money to make. Because of this, it seems that tapping into the American market will be necessary for many studios as the Japanese market alone can't generate enough money to cover these ballooning costs. This is similar to how Hollywood is increasingly relying on international box office revenue to fund summer blockbusters.

The AJA figures make for fascinating reading. While a lot of the flux can be attributed to the COVID-19 pandemic, it can't be denied that America and the overseas market are becoming a powerful force in the anime industry. As anime continues to get more mainstream, we will doubtlessly see many studios adapt to cater to and profit from this blooming, profitable market.

Cowboy Bebop anime group shot
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