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Online streaming keeps anime afloat

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Last week in California, I caught up with some of the chief purveyors of Japanese popular culture in the United States and elsewhere in the world. It became rapidly clear that 2016 won’t be at all like 2015 — or any other year before it.

The rollout of streaming media is fast approaching an avalanche. Mainstream portals Hulu and Netflix are snapping up anime licenses in an effort to target an expanding niche of young and dedicated global fans. Crunchyroll, the pioneer and leader in the market, is exploring content coproduction deals with anime studios, as Japan’s notoriously byzantine anime production committees slowly disintegrate in the face of plunging domestic DVD sales.

Anaheim, California-based Society for the Promotion of Japanese Animation (SPJA), the nonprofit organization behind Anime Expo, North America’s largest anime convention, is expanding, refocusing and rebranding. It plans to move beyond otaku/fan culture and embrace the broader challenge of integrating successful conventions in film, gaming, tech, music and other forms of entertainment media. SPJA will open an office in Tokyo later this year and will soon reveal a new brand name and logo.

Anime Expo celebrates its 25th anniversary in July. The con has signed as its first featured guest Japanese artist and character designer Yoshitaka Amano, whose works include decades-spanning iconic titles — from “Speed Racer” and “Gatchaman” to “Vampire Hunter D” and “Final Fantasy.”

Azusa Matsuda, the SPJA’s director of industry relations, tells me that the anniversary will be a chance to take stock of anime history. “It would be great if we could stage some events looking back on 25 years of Anime Expo, and at those same years in terms of anime and manga. How did we get here? More than half of our attendees are 18-25 years old. They love anime, but they want to know more, they want context.”

Originally from Arima Onsen, Kobe, Matsuda has lived in California for 28 years, nine of which she spent localizing Japanese entertainment content. Before joining SPJA, she was a translator for a gaming import company and a localization developer for Burbank, California-based post-production, audio and creative studio, Bang Zoom! Entertainment.

The biggest changes she sees in 2016 are interrelated: The transition from physical products, or “package businesses,” to on-demand, streaming media has resulted in a radical transformation in the intellectual-property licensing process.

“There was ‘before Netflix,’ and an ‘after Netflix,’ ” she says. “And it happened in only the past three or four years. Before, you sold your content to (U.S.-based distributors) like Viz Media or Funimation, Aniplex and Media Blasters. But with Netflix, you can sell it to them directly and go straight to your audience. You don’t have to have this industry connection and talk to these U.S.-based licensing companies. You can just go to Netflix and sell it and that’s it.”

The success of the new model relies on the diehard and insatiable devotion of niche fanatics, what Crunchyroll CEO Kun Gao recently called “passion audiences.” Anime fans were binge viewers long before U.S. TV serials like “Breaking Bad” and “The Walking Dead” were scripted, and the now seven-year-old Crunchyroll targeted, cultivated and respected them — to the tune of 20 million users, 750,000 paid subscribers and the backing of Hollywood and telecommunications company AT&T.

For most Japanese producers, Matsuda says, the watershed moment occurred in 2013, when the Tokyo-based 3-D computer graphics studio Polygon Pictures clinched a deal with Netflix for the distribution of its series “Knights of Sidonia.”

“Everyone (in the anime industry) was like, ‘Oh, crap: Can you do that directly with streaming? And then, ‘Oh, wow, you really can!’ ”

Shuzo Shiota, Polygon’s president, tells me that his studio’s specialization in digital media is an asset when competing in Japan’s relatively conservative and parochial anime industry.

“Digital animation studios like us have had difficulty gaining a footing in the Japanese market,” he says. “So, we’ve worked with North American clients, including Disney and Hasbro, for the past decade, building trust and reputation. Not being tied down to legacy industry norms in Japan allowed us to react swiftly to the massive changes happening in media and content distribution.”

In 2016, Japanese IP producers are scrambling to sell their content directly to fans, while conjuring new ways to pay for it. On a recent flight from New York to Manila via Tokyo, I watched an entire season of “Knights of Sidonia,” offered on the same sub-menu that included mainstream U.S. films and series such as “The Martian” and “Game of Thrones.”

Matsuda is sanguine about the shakeup of the domestic Japanese industry. “I hope this pushes anime creators to make more content that doesn’t have to follow the norm in Japan,” she says. “With options like Kickstarter and digital streaming, there are now a lot more ways to get your IP out there, wherever you are.”

Roland Kelts is the author of “Japanamerica: How Japanese Pop Culture has Invaded the U.S.” He is a visiting scholar at Keio University in Tokyo.

  • kiros

    I think it’s great that big streaming companies are seriously considering buying up anime licenses. Maybe with a wider pool if viewers around the globe there will (as the article says) be more of a drive for anime studies to really start to open up new genres in anime. There seems to be a lot of repetition in the types of shows that get serialized in Japan these days. More often than not one show just seems derivative of the next. Makes sense if it is a direct catering to the fans who happen to like a particular type of show. Unfortunately a lot of the fringe anime with smaller fan bases seem to get squat. Been a Crunchyroll subscriber for 6 months now and love it, however, there are still in want of a lot of shows (no Knights of Sidonia :( ).

  • angelx03

    Geez, is “otaku culture” not sustainable nowadays? Does it really need to broaden to another “generic nerd culture convention”?

  • WaterBreath

    This is all a good thing. For the past few years, the anime industry was focusing way too much on making anime that catered to its domestic audience. That’s all well and good but it was struggling to attract an international audience. Now that online simulcasting has become a successful outlet of providing content, anime has been reaching Western audiences in a level I’ve never anticipated. The anime industry needs to capitalize on this opportunity while still remembering to make its domestic audience happy of course.

    Also, Correction: It’s Yoshitaka Amano. NOT Anno.

    • Anonymous

      Actually, the reason it captivated international audience was because they made content that catered to their domestic audience. It’s England and Formosa all over again. Make it more accesible and it’ll start losing it’s “charm”.

      • WaterBreath

        I agree. But that’s why it’s important to strike a balance between both sides in order to capture the largest possible audience. I’m not saying the anime industry should throw its domestic audience under the bus to cater exclusively to an international audience. Instead they should continue to make its domestic audience happy while also taking risks to try to garner more fans outside Japan. Do that, and you make everyone happy.

      • Clickonthewhatnow

        Absolutely they should cater to their domestic audience. The domestic audience will pay more for… everything. DVDs, merch, everything.

      • WaterBreath

        I agree. But that’s why it’s important to strike a balance between both sides in order to capture the largest possible audience. I’m not saying the anime industry should throw its domestic audience under the bus to cater exclusively to an international audience. Instead they should continue to make its domestic audience happy while also taking risks to try to garner more fans outside Japan. Do that, and you make everyone happy.

      • Clayton Forrester

        You just described the way I see Akiba (Akihabara).

      • Clayton Forrester

        You just described the way I see Akiba (Akihabara).

    • Anonymous

      Actually, the reason it captivated international audience was because they made content that catered to their domestic audience. It’s England and Formosa all over again. Make it more accesible and it’ll start losing it’s “charm”.

  • solletaire

    If all this means 50% of shows in the upcoming anime seasons will NOT be light novel adaptations, I’m all for it : )…

    I also hope that when more anime enters Western culture, folks will finally see that animation goes way beyond being a kids’ thing. That perception has pretty much stifled the development of the western animation industry and has reduced the industry to a single genre: the kid-friendly adventure family movie…

  • solletaire

    If all this means 50% of shows in the upcoming anime seasons will NOT be light novel adaptations, I’m all for it : )…

    I also hope that when more anime enters Western culture, folks will finally see that animation goes way beyond being a kids’ thing. That perception has pretty much stifled the development of the western animation industry and has reduced the industry to a single genre: the kid-friendly adventure family movie…

  • Michael Jensen

    Per it’s Wiki article, CR actually started in June ’06.

  • Michael Jensen

    Per it’s Wiki article, CR actually started in June ’06.

  • Michael Jensen

    Per it’s Wiki article, CR actually started in June ’06.