Growth in the anime industry over the past 11 years

Financial research firm Teikoku Databank released a report on the anime industry for 2019 on Monday.

The report reports that the anime industry’s revenue (based on revenues from 273 companies) amounted to 242,749 billion yen (about US $ 2.30 billion) in 2019. Although the anime industry is still in growth momentum since 2011, but the 0.5% increase in 2019 revenue is the lowest year-on-year gain in 11 years.

The report notes that while 2019 is the fifth year in a row with more than 300 anime produced in a single year, it is also the second consecutive year of the decline in anime total since peaking at 356 in 2017. There are 340 in 2018 and 332 anime in 2019. The anime industry had a total of 322 in 2015.

The average revenue of a company is 899 million yen (about 8.53 million US dollars) in 2019. Average revenue of companies peaked in 2007 – before the “anime bubble” burst – up to 1 billion yen (about US $ 9.48 million).

Outsourcing and main contract work amounted to ¥ 174.2 million (about US $ 1.65 million) in total industry revenue in 2019, an increase of around 3.7% year-on-year. Among subcontract studios, the average revenue of companies was 337 million yen (about US $ 3.19 million), a 5.8% increase from 2018 and the fifth increase in a row over the same period last year.

The report also outlines production trends such as capital cooperation, acquisitions to facilitate anime production, especially investment from abroad. In particular, the report notes Netflix’s investments in anime production, as well as the works of Tencent’s subsidiaries Haoliners Animation League and Colored Pencil Animation.

In 2019, only two anime companies declared bankruptcy and one company dissolved, compared with 12 companies leaving the industry in 2018. The report notes that this decline is largely due to a lack of manpower and labor costs and subcontract costs start to slow down in 2019. The report also cited unpaid or deferred payments to animators as the main reason for bankruptcy.

The report’s forecasts of future sector difficulties include a manpower shortage and training that may not keep up with rising demand, despite foreign investment. In this state, manufacturing firms may experience dense production schedules and corresponding reductions in productivity, which can lead to revenue reductions in the long run. The outlook for 2020 and beyond is likely to include more adjustments to better working conditions for animators. This reflects growing perceptions of workplace conditions and a larger move towards mid-sized Japanese firms to reduce overwork, but all balance with real costs.

In the short term, the COVID-19 pandemic takes a new direction in home anime production. Some key animations and voice recordings were done at home, but production efficiency was reduced during the transition, which would inevitably lead to production delays and unexpected cost increases. The report forecasts that management effectiveness will ultimately be the biggest factor affecting anime companies’ revenue by 2020.