TLDR;
The anime industry is showing cracks due to over-reliance on overseas distribution, particularly Crunchyroll. With Crunchyroll's dominance, studios are realizing they can't depend on it to license every anime. Kadokawa's chief anime officer highlights the uncertainty in overseas revenue, pushing for a shift in strategy. The industry needs to diversify revenue streams, focusing on Asian markets, merchandise, and other platforms like Netflix and Amazon, to avoid potential censorship and ensure sustainability.
- Over-reliance on Crunchyroll is unsustainable.
- Kadokawa acknowledges the uncertainty in overseas revenue.
- Diversification of revenue streams is crucial.
- Focus on Asian markets and merchandise is necessary.
- Netflix and Amazon could step up, but aren't fully committed yet.
The Cracks in the Anime Industry [0:00]
The anime industry is starting to show cracks because it's too dependent on overseas licensing, especially with Crunchyroll becoming so dominant. The current model of producing tons of anime in the hope that someone will license it is not sustainable. With the merger of Funimation and Crunchyroll, and other platforms like Netflix and Disney only licensing a few shows, Crunchyroll now calls the shots, affecting how much anime studios get paid.
Kadokawa's Perspective on Streaming Services [1:44]
Kadokawa's chief anime officer, Dook Kudo, shared in an interview that the revenue boom from US streamers buying anime isn't what it seems anymore. Overseas anime sales are growing, but the US streaming landscape has led to uncertainty. The merger of Funimation and Crunchyroll removed the bid war that used to drive up prices for anime titles. Now, with Crunchyroll as the main player and High Dive weakening, studios are spending more time negotiating purchase prices.
The Impact of Crunchyroll's Dominance [4:36]
The change in power dynamics with American streamers has made it harder to sell distribution rights and receive revenue. Some anime works are appearing where overseas distribution revenue can't be predicted if Crunchyroll doesn't buy the rights. Studios are now presetting up their exit strategies from the start of planning, as they can no longer rely on overseas distribution as a guaranteed source of income.
MAPA's Forward-Thinking Approach [6:53]
It's interesting that Kadokawa is finally being vocal about these issues. MAPA's CEO, Manibu Otsuka, had pointed out the risks of relying on overseas distribution a year or two ago. MAPA wanted to avoid relying on Crunchyroll for revenue from "Chainsaw Man." They understood the danger of depending on any single source of demand and the importance of adapting to each era.
The Boys Love Anime Example [8:50]
Kadokawa believes that some genres, like Boys Love anime, are difficult to sell to American streamers like Crunchyroll. When adapting a Boys Love work, companies need to consider an exit strategy and focus on markets in Asia and Japan, as well as merchandise sales. Crunchyroll might not license these titles or pay much for them. While Crunchyroll has promoted Boys Love titles like "Given," the ratings weren't as high as expected, indicating that it's not as popular as other genres.
The Fear of Censorship and the Need for Diversification [11:55]
There's a fear that Crunchyroll's dominance could lead to censorship, where they dictate what gets adapted. Companies need to focus on Asia distribution, merchandise, and other sources of revenue besides Crunchyroll. The industry needs a course correction, and companies are waking up to the fact that they can't just keep turning out stuff for Crunchyroll to buy.
Exploring Alternative Platforms [13:26]
Netflix wants to step up its distribution of anime, but they're not fully committing yet. They realize that only a small number of titles are successful for their users. Amazon Japan is huge with anime, but globally they're very selective. However, they've started having one or two titles a season again, possibly because Crunchyroll isn't buying up all the titles.
Conclusion: A Scare and a Sign [14:57]
This situation is a bit of a scare and a sign that the current model can't sustain itself. It's a course correction, and companies are realizing they can't just keep turning out stuff for Crunchyroll. They need to shift their mindset and not focus too much on the United States. Many people are echoing the same thing: stop trying to be big in America and focus on other countries.