Screen explores what is driving the phenomenon and what’s coming next
Japanese animation is no longer just dominating the box office in its home country. Franchises such as Demon Slayer, Dragon Ball and Jujutsu Kaisen are now regularly earning millions of dollars from their international theatrical releases and exhibitors are taking notice.
The Japanese animation industry, including films, television series, merchandise and events, was worth $20bn (¥2.9tn) in 2022, according to the Association of Japanese Animations, a 6.8% increase on 2021 and the highest number on record. The overall value of the industry has more than doubled over the past decade, and nearly half of all revenue – close to $10bn (¥1.46tn) in 2022 – now comes from outside Japan.
Animated features dominated the Japanese box office in 2023, led by The First Slam Dunk, which took $108.1m (¥15.87bn); US title The Super Mario Bros. Movie, based on characters from the iconic Japanese videogame, which grossed $95m (¥14bn); and Detective Conan: Black Iron Submarine, the latest in the anime franchise, with $94.2m (¥13.88bn). Studio Ghibli’s The Boy And The Heron marked what will likely be the last feature from animation maestro Hayao Miyazaki and ranked fourth with $60m (¥8.84bn), despite Studio Ghibli’s unusual choice not to promote the film before release.
But anime is also on a roll outside Japan and has benefitted in western markets from exhibitors’ desire for “counter programming”, says Chance Huskey, director of distribution at GKids, a boutique distributor of animated content in North America.
“There’s been a broadening of demand for different sorts of content, both on the consumer and exhibitor sides,” Huskey says. “There’s a perception that tentpoles are not enough to drive a healthy business.” He also points out that streamers have invested heavily in mid-budget romantic comedies and adult dramas, which has “opened up opportunities [in cinemas] for genre films and anime”.
“Twenty years ago, exhibitors wouldn’t even open the door for meetings to you,” says Andrew Partridge, CEO of UK-based Anime Limited, which distributes in the UK and Europe and was acquired by Germany’s Plaion Pictures in 2022. “Nowadays, there is an acceptance that anime is here to stay.”
Japanese animation also now has generations of fans outside Japan, from the “18 to 34 crowd… to Gen Xers who bought their anime on VHS and DVD back in the day”, says Huskey, adding, “In many cases, small-screen popularity via home entertainment and streaming feeds into success on the big screen. Many of the highest-grossing films are part of franchises such as Dragon Ball and Demon Slayer, which have built up fans over years or decades on TV. Even the success of The Boy And The Heron was primed by the appearance in recent years of Studio Ghibli films on streaming platforms such as Max in the US and Netflix elsewhere in the world.”
The small-screen effect
Streaming has been key in building the anime audience, agrees Yoshi Ikezawa, a veteran in-house producer at Japan’s Toei Animation, boosted by captivated viewers during the pandemic. “Casual viewers became much more deeply invested in even more shows and characters, and some who had never seen anime before watched it for the first time and discovered a whole new world,” he says.
The success of films based on established franchises (often from popular manga) can also be attributed to tighter integration between big- and small-screen storylines in recent years. “Traditionally, anime franchise films were non-canonical,” says Partridge. “But you now have to go to the cinema if you want to know what happens between seasons. That’s a seismic shift.”
While theatrical exhibitors outside Japan have become more aware of anime’s ability to attract a diverse audience, one challenge for distributors is “educating exhibitors and helping them understand that it’s not a monolithic medium”, notes Huskey. “Anime has certain signifiers that speak to certain audiences, but just because they go see Dragon Ball doesn’t mean they’ll go see something like [Makoto Shinkai’s] Suzume.”
“The most important thing for exhibitors is to decide whether it makes more sense to do a broad release or go for an arthouse chain,” says Partridge. “If you go wide and it’s a disaster, you’re just hurting your own chances in the future and everyone else’s.”
One film that did go wide in 2023 was The Boy And The Heron. The film earned nearly $46m in the US, $5.6m (£4.4m) in the UK and $168m worldwide. Studio Ghibli has partnered with Shanghai-based Alibaba Pictures to release it in mainland China, although a date has yet to be set.
But while the Oscar-winning feature has been a critical and financial hit, its success will not be easy to duplicate. “It’s a significant milestone, but probably one that won’t happen all that often,” notes Huskey.
In 2024, the slate of titles set to be released in western markets include films that have already debuted in Japan, such as Spy X Family Code: White, Haikyuu!! The Movie: The Battle At The Garbage Dump and Mobile Suit Gundam SEED Freedom, all based on popular manga and anime franchises, as well as upcoming Japanese releases Detective Conan: The Million-Dollar Pentagram, the 27th film in the long-running franchise; Dead Dead Demon’s Dededede Destruction, a two-part adaptation of the manga by cult favourite Inio Asano; and Your Color, the latest original film from acclaimed director Naoko Yamada (A Silent Voice).
Cultural values
While the North American and European markets are significant, so are those in Asia. According to the Association of Japanese Animations’ figures for 2022, the latest available, the four largest contract holders are Taiwan (with 651 titles licensed for release), China (587), South Korea (552) and the US (529). In Asian territories, cultural and physical proximity to Japan can be a boon for licensors and licensees.
“My view is that audiences enjoy entertainment based on their own cultural values,” says Ikezawa. “The more specific a show’s cultural values, the farther it can reach for those with those same values.”
One example of a film that performed differently in Asian and western markets was Toei’s basketball anime The First Slam Dunk, Japan’s highest-grossing film of 2023. The picture earned more than $38m in South Korea – where nostalgia for the original 1990s Slam Dunk manga is also strong – versus $1.3m in the US.
“The US is still a major market, but at a base level, audiences in East Asia and maybe Asia more broadly are more open to the possibilities and the different genres that are included in the anime,” says Huskey.
One growing challenge for small distributors is industry consolidation. Sony’s purchase of anime streamer Crunchyroll (and its merger with Sony-owned streamer Funimation) has transformed it into a theatrical distributor in addition to a streaming service.
“It changes the dynamics, because it suddenly makes the anime calendar more dependent on the studio release calendar,” says Huskey. “Crunchyroll films now have to play nice with Sony Pictures releases.”
Distribution through a major player like Crunchyroll has advantages such as co-ordinated international rollouts and consistent branding, but small distributors can offer “local knowledge that’s hard to replicate” when it comes to promotion, says Partridge.
Such on-the-ground insight has been a boon for Toei, says Ikezawa. “Having partners in other countries, like CJ ENM in South Korea, Studio La Cachette in France and Manga Productions in Saudi Arabia, helps us figure out which kind of story is best for which market, because we’re able to work with people who speak the language of that market fluently.”
In terms of challenges on the production side, Ikezawa highlights that anime films still have smaller budgets than US features and are “made with more limited resources and smaller teams”. He says that the long production time required for animated films can make it difficult to respond to current trends. “We have to really believe in the projects we’re making and trust they will find an audience,” he adds.
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