Anime business
So yeah I decided to try to write something about how the anime business model works.
Several years ago, the Japanese Ministry of Economy, Trade and Industry had released an analysis (pdf) on the current situation in the anime industry and the issues that they are facing.
Quick translated version of the anime production chart
(The chart mainly applies only to late night anime. Prime time anime go by a different business model)
Edit: I realised the chart can work for prime time anime too depending on how you interpret it
Basically, when the sponsors provide the funding for an anime, most of the money goes to paying the broadcasting stations in order to buy themselves a timeslot for the anime, while the amount of funding that gets to the anime production company is less what they actually need in order to make each episode.
What this means is that each episode of anime is usually made at a loss of money for the production company and they try to cover the losses through other means such as DVD sales and figure sales.
The cost of broadcasting anime is also one of the reasons why there has been moves made in the industry to adopt methods such as airing anime via online video streaming or by selling anime DVDs with manga like Negima. By not having to broadcast through the TV stations, companies will be able to sell anime DVDs at much lower prices.
Misc notes:
- Key broadcasting stations refer to stations such as FujiTV and TBS that have a broadcast area that covers most of Japan
- OVAs save the cost of broadcasting, but their sales tend to be lower so the prices of the DVDs aren’t too different
- Magister Negi Magi author Akamatsu Ken had written on his blog that the success or failure of the Ala Alba OAD would change how the anime industry works
- It costed approximately 10,000,000 yen (US$92,000) per episode to make Bamboo Blade (info from leaked internal documents)
- It reportedly cost only 2,000,000 yen (US$18,400) to make Makoto Shinkai’s Hoshi no Koe, since it was basically a one man job. Accumulated 800,000,000 yen (US$7,350,000) in sales.
- Escaflowne had a budget of 30,000,000 yen (US$276,000) per ep
- Penguin Musume was aired on Nico Nico Douga, so the DVDs could have theoretically been sold cheaper, but the producers expected OVA-level of sales so it was priced relatively high
- 10,000 DVDs sold is a big success in the anime industry
- The majority of anime is not mainstream
- Cartoons in the US have a much higher budget on average as compared to Japanese anime productions
Update: sazae has the following to add about the chart
“In prime time anime, sponsors pay as advertisements to advertising company and TV station for broadcasting their CF. They are general companies such as toys, supermarket, car, foods, insurance, tour, electronics, building, and so on. They have no relations for dvd sales.
In late night anime, 製作委員会 pays as a timeslot’s cost to TV station for broadcasting their anime. It’s composed of only anime-releted companies such as dvd distributor, manga publisher, anime-music label, game developer, and anime production. no general companies like Toyota, Sony. They need to recover their all costs, by dvd/manga/cd/game/rights sales. In sense of Japanese, they are more enterprises than sponsors for anime.
Prime time animes have only to recover a shortage of anime-producing cost despite exploitation of TV station. Late night animes have to recover their all costs, anime-producing, advertising, broadcasting.
The chart is similar to the report about a certain prime time show’s affair. the intermediary exploitation by TV station like your article was disclosed during the affair. And prime timeslot is priced roughly 10-100 million yen while late nightslot is priced 0.3-5 million. TV stations are taking 40 million in the chart. as far as I can recollect, these are why I said the chart is not for a prime time anime.”
August 30th, 2008 at 11:53 pm
“Magister Negi Magi author Akamatsu Ken had written on his blog that the success or failure of the Ala Alba OAD would change how the anime industry works.”
Did he elaborate on this? That’s kinda vague in my personal opinion.
August 31st, 2008 at 12:05 am
I’ve heard that Gonzo had gotten a lot of flak from other anime companies and broadcasting stations for streaming their anime series online. I guess this somewhat validates their actions - streaming online = no need to pay obscene costs for national broadcast (which is going to be seen by a niche market anyway) -> lower production costs for DVD -> higher demand for DVD?
I’m thinking about what Akamatsu Ken said. Is he implying that anime series in the future would be made based on online demand and producing series direct-to-DVD? Or maybe only animating favorite scenes or popular arcs?
August 31st, 2008 at 12:07 am
He didn’t really elaborate, but basically, if the OAD format sells relatively well, anime productions can save on the cost of broadcasting and sell DVDs at a cheaper price by bundling it with the original manga and still make a bigger profit.
August 31st, 2008 at 12:39 am
Animation Runner Kuromi!
DVDs seem crazily priced compared to North America, what with a two episode disc selling for 6000 yen or so….
August 31st, 2008 at 2:11 am
Funny how this comes up right after I bought the Negima Ala Alba set. I actually thought it was a pretty good deal since I’ve been collecting the original tankoubans anyways, and the anime was actually good for a start, so despite paying a high premium for it, I feel satisfied.
I’m glad Akamatsu’s finally using his considerable influence to try and bring about a change to the industry. His OAD model really makes a lot of sense for the fans of a series by packaging the anime with the original material of the series.
Last I heard, Ala Alba’s #1 sales have actually reached 100k, including 82k preorders, so I guess it’s a good sign for things to come.
August 31st, 2008 at 6:26 am
I’ve heard from other industry people about the price of Japanese DVD being the way it is also due to simple supply/demand calculations. Basically they said if things were cheaper, it’s not going to sell more units.
A lot of it depends on which title you are talking about as well. Negima is already a well-known franchise so it’s a good series to experiment on OAD, if we want to see results.
Damn, Shinkai is a rich man :o
August 31st, 2008 at 7:22 am
With Zetsubou on the same track, I have the feeling the anime industry has already began to change…
And weren’t the results of the Negima! preorder announced some time ago, and they were much higher than expected ?
August 31st, 2008 at 7:52 am
>Iggy
Yeah, the Negima preorders really exceeded expectations, and they were already announcing new OADs, so they’re probably already moving in that direction.
August 31st, 2008 at 8:23 am
>Fat Cat Lim
>I’ve heard that Gonzo had gotten a lot of flak from other anime companies and broadcasting stations for streaming their anime series online. I guess this somewhat validates their actions - streaming online = no need to pay obscene costs for national broadcast (which is going to be seen by a niche market anyway) -> lower production costs for DVD -> higher demand for DVD?
The times; they are a’changin’. And the losers will be the ones who refuse to evolve.
Now all Gonzo needs to do, to show up those circus clowns who run the animu industry, is to make something for that hundred-million-dollor-giving “summer movie” type of anime audience.
Strike Witches had done well. So let’s just hope that Iron Linebarrels doesn’t revisit Evangelion’s “Shinji losership” and $unrise’s “Shinn depowerment.”
August 31st, 2008 at 10:16 am
Thanks for the write up Zepy. I was trying to argue points like this with a friend of mine not to long ago. I’ll be sending a link along to him because you do a much better job explaining this here. Stuff like this is why I’m glad I follow this blog. Keep it up.
August 31st, 2008 at 5:26 pm
The real question is, why does the television airtime cost so much? 3 in the morning?!
August 31st, 2008 at 5:45 pm
>Now all Gonzo needs to do,
All I want is Strike Witches Season Two (And three, and four, and…)
August 31st, 2008 at 9:35 pm
“- Cartoons in the US have a much higher budget on average as compared to Japanese anime productions ”
What sort of cartoons are these? cartoon network and nickelodeon style cartoons? many of those look like really low budget jobs compared to japanese anime.
August 31st, 2008 at 11:38 pm
>>What sort of cartoons are these? cartoon network and nickelodeon style cartoons? many of those look like really low budget jobs compared to japanese anime.<<
Western voice actors and producers cost more than Japanese, so even if everything were subcontracted to South Korea (which is the case whether American or Japanese animation), an episode of the Simpsons will still cost you $1 million to produce. I am not kidding.
September 1st, 2008 at 2:39 am
There have been articles that put the average price of American cartoons at around US$300,000 per episode, and this NYtimes article reports that it costs US$500,000 on average per episode for an American made cartoon. Though I’m sure there are others who have a more in-depth knowledge of the American animation industry that can give a more detailed explaination.
The Simpsons is a special case though, the top voice actors on that show get paid almost US$400,000 each, per episode. The total cost of making one episode of The Simpsons is probably enough to fully fund a TV series.
September 1st, 2008 at 7:50 am
Here’s the problem though… I **don’t** want to **buy** anime! I only want to rent it. There will be the few that I do want for keeps, but that is very, very few.
Take a look at Netflix in the US. For $24/month, less than the price of a single DVD, I could view probably 1 DVD/day, maybe more. That’s 30 DVDs! And I can usually view them within a week of release, though there are instances when a popular one is queued for longer.
Why should I buy when I can view them for 3-4% of the cost?
September 1st, 2008 at 8:07 am
That chart applies only to prime time anime?
Late night anime’s bussiness model is a 製作委員会方式. That chart’s is a general TV program’s model.
http://business.nikkeibp.co.jp/article/manage/20070129/117878/ and http://ja.wikipedia.org/wiki/%E6%B7%B1%E5%A4%9C%E3%82%A2%E3%83%8B%E3%83%A1 are good references.
September 1st, 2008 at 8:09 am
Makes me wonder when an anime is set for re-broadcast… would the cost of broadcasting be any different? Or it’ll have the same treatment as any other animes/shows whose cost of broadcasting will depend on the airing time?
(and gawd, those Simpsons voice actors must be filthy rich now. how much of the budget is alloted for anime seiyuus’ voice acting fee, I wonder.)
September 1st, 2008 at 10:14 am
>Here’s the problem though… I **don’t** want to **buy** anime! I only want to rent it.
Hey, you’re still supporting the industry.
>Why should I buy when I can view them for 3-4% of the cost?
You could just as easily download the shows off iTunes, X-Box Live, or PlayStation Network. Only around $2 an episode, shouldn’t kill ya. Then put them on your iPod or whatever. Better than downloading fansubs, which are of course the cancer that is killing the anime industry.
September 1st, 2008 at 10:42 am
>sazae
The chart applies only to late night anime, 製作委員会方式 just refers to the method whereby the sponsors come together to share the sponsorship so there’s risk distribution.
The main difference between prime time anime and late night anime is that for prime time anime, the TV station is usually buying the anime for the timeslot, whereas for late night anime, the sponsors are the ones that are buying the timeslot for the anime.
>usagijen
Because of the business model, re-broadcast of late night anime happens very seldomly. Their aim is to sell the DVDs so paying for a re-broadcast doesn’t really give any benefits, and if it happens it’s usually the TV station or pay channel that’s buying the show for broadcast.
September 1st, 2008 at 11:42 am
> Hey, you’re still supporting the industry.
That’s kinda my question. How much of what I pay Netflix gets to the creator of a DVD (any DVD, not just anime, for that matter). Do they get a cut of the rentals, or do they just get whatever profit they normally get due to Netflix buying X DVDs? If the anime industry is thinking that they can fund themselves through DVD sales, I think that is fundamentally wrong.
Let’s say I watch 24 DVDs per month. That’s $1 per DVD through Netflix (if I had more time, it could be about 35-40 per month, perhaps with a 4-at-a-time plan, or about $0.60/per DVD). With most DVDs having 4 episodes, that’s $0.15-$0.25 per episode.
That’s still 1/8 or less the cost of an iTunes, and I get the extras (if any). Plus the fact that iTunes probably doesn’t give you subtitled episodes, which means I won’t do it anyways. And I don’t own an iPod, nor do I expect to ever own one :)
> Better than downloading fansubs, which are of course the cancer that is killing the anime industry.
But is it? Say you move all of the illegal downloaders to Netflix (I doubt you’ll get them to buy DVDs). How much more money would it generate for the creators? I’m guessing fairly little. They’d probably have to buy a few more DVDs per title, but not a lot.
September 1st, 2008 at 5:24 pm
Netflix? Aren’t we just being a bit too cheap there?
The phrase I use: “Anime is an expensive hobby for broke people.”
I don’t like having to pay $50~$80 for a two-episode animu DVD that has no English dub dialogue. But I’m not that desperate to pay around $2 for downloadable animu either. I’m still willing to pay $20~$30 for a physical product, $60~$80 for a dual-languaged full series.
It’s in everybody’s best interest to continue financially supporting the industry. Lest you wish for another blatant viral marketing gimmick ala KyotoAnimu’s Lucky*Star.
September 1st, 2008 at 7:32 pm
@Tyrenol: I prefer the phrase “Anime is an moderately-priced hobby for greedy and self-entitled people.”
September 1st, 2008 at 8:18 pm
Netflix is like fansubbing. Pretty sure if you saved your $17 and buy a DVD a month instead of watching a bunch of stuff on Netflix, you’re giving way, way more money to the American licensees than just from what Netflix hands out a month from your own contribution. Of course, you ought to use something like Netflix anyways just because you can watch all the anime on Netflix you don’t want to buy, so it’s not like you got to choose between Netflix and fansubs. But make no mistake you aren’t really helping the industry beyond just facial recognition and maybe helping yourself sleep better at night.
The #1 incurring cost for Netflix’s operation is postage, by the way; not a media publisher.
September 2nd, 2008 at 3:34 am
> Zepy
Late night anime(LNA) is often likened to OVA. Except for a big name like DeathNote and Noitamina slot, No sponsors for LNA actually. 製作委員会 themselves are LNA sponsors and all thier companies are usually anime-related ones included TV station, advertising agent. 製作委員会 is buying time slot directly. for example, pizzahut is not in 提供(sponsor) to Code Geass. Sponsors are only Bandai(for distribute Anime), Kadokawa(for manga publishing) and SonyMusic(for music) all from 製作委員会. It’s roughly the same with even R2 airing on evening.
And the chart only shows flow of funds, not about contracts. the analysis doesn’t mention about LNA. Well, LNA is not even on the government’s radar.
September 2nd, 2008 at 3:52 am
> sazae
Yes, as you mentioned, the companies in the 製作委員会 act as the sponsors for the show. I’m not sure where the dispute is…
Though I now noticed that the chart is ambiguous enough that it can apply for both business models.
September 2nd, 2008 at 7:32 am
I wanted to simply say, the chart is not for late night anime, it’s for prime time anime. That chart has no relation to the LNA’s DVD prices.
In the 製作委員会 model, TV station and advertising agent don’t steal money by the chart’s method. Because 製作委員会 directly pays to anime production. LNA uses a 製作委員会 model in almost all cases.
see also http://www.meti.go.jp/kohosys/press/0002941/4/020705contents-animation.pdf.
It’s difficult to explain for me with English, But the chart is actualy for the prime time anime. It is obvious to Japanese otaku.
Thanks for your replies.
September 2nd, 2008 at 8:29 am
> linger
There are a lot of us who make only tens of thousands in dollars yearly. So we can’t afford “greed” and “self-entitlement.”
> Mr. CAPSLOCK
You’re not hearing me right. Maybe it’s because I don’t have my CAPS set in the LOCK position. I said: “Anime is an expensive hobby for broke people.” “Illegal” online distribution (read: the anime companies aren’t getting their money through this); these people who are doing this aren’t, and probably will never be, millionaires.
(Except if you run webpages like ANN…)
So yeah; “making ends meet.” A long time ago, I said that 90% of anime is crap and garbage. This means that there’s this 10% that isn’t crap and garbage. So, monthly, that’s like 1-3 DVDs or a boxset.
And you obviously DO care; enough to reply in an effort to try to mentally defend yourself from reality. Plus having a car is known to be a large chunk of money being drained from your life. Bet’cha paying for gas through the nose right now. :P
September 2nd, 2008 at 2:48 pm
Om…
“90% is crap, 10% is good” is a self-delusion that covers up the reality of “99% is crap, 1% is good.”
From the 99% crap, 9% is stuff you think is good because of personal preference and bias. Everyone has a different 9%, but everyone believes that they are not biased and that their own 9% is the best. We all argue endlessly over our different 9%, but no one here can ever win because everyone’s 9% is really just crap in different personalized flavors.
No one argues over the truly good 1%, because everyone already knows that the 1% is truly good. There is no controversy in things that are as obvious as a clear blue sky. And you cannot get rid of the crap 99%, because the 99% provides all the different 9%s that inspire the creation of the 1%. The slim top cannot be supported without a wide bottom. You can never reach the highest point without having some lower ground to stand on.
Humans cannot live without lying to themselves, but we can at least understand and be at peace with our lies. Om…
September 2nd, 2008 at 6:36 pm
> Tokyo’s slacker buddha
“99%?” To say “ninety-nine percent” is a heartbeat away from saying that everyone in Japan needs to commit mass suicide. The culture of Japan may be “about face” the culture of the US; but I doubt they would knowingly spew garbage if it wasn’t making them any money.
“90%;” and we’d say that the anime industry has some life left. The “talent” is there. It’s just all over the place. “Great animation” there, “great writing” here, the voice-acting populace are not “loyal dogs” but “hungry dogs.”
> TV’s “None Of Your Business”
We were all such fools when we were young. We see the pretty roses and forget that the thorns are sharp enough to go through your fingers. How cool we thought the bands were before we find out that they’re people too… Mentally messed up and bitter people at that.
The sad thing about “anime” is that, if you’re not mentally careful, the scarring effects are permanent.
September 2nd, 2008 at 11:49 pm
Om…
> “99%?” To say “ninety-nine percent” is a heartbeat away from saying that everyone in Japan needs to commit mass suicide.
To say 99% is to say 99%. Suicide does not have to be an automatic necessity. For even the existence of crap has its place in this life, and in fact is a necessity for life to continue.
> “90%;” and we’d say that the anime industry has some life left. The “talent” is there. It’s just all over the place. “Great animation” there, “great writing” here, the voice-acting populace are not “loyal dogs” but “hungry dogs.”
Even at 100% crap, life exists. For even crap is not death, but rather it is the natural basic state of existence from which greater things spring forth. Great things are made from simple crap. You cannot create greatness by destroying crap. You must create greatness from crap.
> We were all such fools when we were young. We see the pretty roses and forget that the thorns are sharp enough to go through your fingers. How cool we thought the bands were before we find out that they’re people too… Mentally messed up and bitter people at that.
But it is through suffering that we become wise and great. A common rock can never become pure steel without the pains of the smelt, hammer and forge. The greatest of men are still merely men. That does not diminish their greatness, but rather makes it an even more wondrous thing, that such greatness can grow from common men.
> The sad thing about “anime” is that, if you’re not mentally careful, the scarring effects are permanent.
Not just anime. Life itself is permanently scarring, no matter how careful you are. Those permanent scars are called memories, and are to be valued, for it is memories that make what we call man.
Om…
September 3rd, 2008 at 3:56 am
> Zepy
addition:
My definition of ’sponsor’ was odd on my post.
In prime time anime, sponsors pay as advertisements to advertising company and TV station for broadcasting their CF. They are general companies such as toys, supermarket, car, foods, insurance, tour, electronics, building, and so on. They have no relations for dvd sales.
In late night anime, 製作委員会 pays as a timeslot’s cost to TV station for broadcasting their anime. It’s composed of only anime-releted companies such as dvd distributor, manga publisher, anime-music label, game developer, and anime production. no general companies like Toyota, Sony. They need to recover their all costs, by dvd/manga/cd/game/rights sales. In sense of Japanese, they are more enterprises than sponsors for anime.
Prime time animes have only to recover a shortage of anime-producing cost despite exploitation of TV station.
Late night animes have to recover their all costs, anime-producing, advertising, broadcasting.
The chart is similar to the report about a certain prime time show’s affair. the intermediary exploitation by TV station like your article was disclosed during the affair. And prime timeslot is priced roughly 10-100 million yen while late nightslot is priced 0.3-5 million. TV stations are taking 40 million in the chart.
as far as I can recollect, these are why I said the chart is not for a prime time anime.
thanks again.
September 3rd, 2008 at 7:39 am
>sazae
Thanks for the input and clarification, I’ve added your info to the article if that’s okay with you.
September 3rd, 2008 at 10:14 am
>ANYWAY, THERE SHOULD BE AN IRC CHANNEL WHERE WE CAN DISCUSS (READ: BICKER) ABOUT THIS SHIT. (PREFERABLY EFNET)
Oh dear god please do that. This bickering is getting ridiculous. If you don’t want to install an IRC program then just chat through http://webchat.xs4all.nl or some other webchat site. Use the #anime channel or start a #canneddogs channel or something. Just please stop filling this blog with bickering shit.
September 3rd, 2008 at 11:59 am
Really? It’d kind of be a shame. I’ve been reading this site on and off for a long time and if you go backwards, the community didn’t really pick up until NOYFB started calling people out.
Not that I’m against the channel or anything, but, you know. People need calling out, and some of it needs to be done here. Caps or no, he is more articulate than most of the readership. Knows more than most, too. Kind of ironic.
I find it delightful.
Discussion is grand.
Fun fact: I’m subscribed to the comments rss, but _not_ the posts rss. True story.
September 3rd, 2008 at 1:14 pm
> slacker buddha
Heheh. Better be careful around here, or you’ll get your dot poked in.
September 4th, 2008 at 1:44 am
>Though I’m sure there are others who have a more in-depth knowledge of the American animation industry that can give a more detailed explaination.
Big studios like Cartoon Network and Nick are unionized. So you also have to take into account of the union rates. This could be triple to four times more than what a Japanese artist is getting paid.
September 4th, 2008 at 5:04 am
Thanks and of course okay.
And I forgot the important part. In the nationwide broadcasting of late night anime, Advertising company join in 製作委員会 and also TV station mostly(I said in 2nd post). they provide part of funds. case in the local’s, local station seldom join in it, but key station isn’t involved in the business. In the prime time anime and also other shows, TV station orders the program to the film production using the sponsor’s funds, like the chart. though, even if tv station join in 製作委員会, timeslot fee is necessary.
Sorry my insistent post, heheh.
September 6th, 2008 at 11:52 am
Internet: SERIOUS BUSINESS
September 21st, 2008 at 9:00 am
what its realy? anime for busines?