At last, Japan gets it

by Roland Kelts

The Japanese entertainment industry is finally growing up, says Shin Unozawa, and he should know. Unozawa joined Bandai Entertainment back in 1981, and serves as chair of the Computer Entertainment Supplier’s Association (CESA), co-hosts of the Tokyo Game Show.

Now he is CEO of the recently formed Anime Consortium Japan (ACJ) — a multipartner corporation launched last November, with the goal of localizing and consolidating the digital streaming of official Japanese content.

The ACJ’s lineup is top shelf: Production and advertising giants Toei, Sunrise, TMS, Aniplex, Asatsu-DK, Nihon Ad Systems and Dentsu have teamed up with major shareholders Bandai Namco Holdings and the government-sponsored Cool Japan Fund. Their primary aim is to tackle piracy and develop the first Japan-centered streaming entertainment and e-commerce platform called Daisuki. It’s as impressive as it is long overdue.

Since the mid-2000s, when broadband became de rigueur, most global consumers have been getting their anime fix online. In the interim, Japanese producers have either ignored the Internet, relying instead upon their loyal, if slowly dwindling, otaku clans of domestic DVD collectors, or treated it with regret or derision — a cesspool of piracy run amuck, with no way to patrol its borders.

Meanwhile, non-Japanese players dived straight in. Major IT entertainment purveyors such as Hulu, Netflix and Amazon began sniffing at anime licenses, gnawing at the edges of a low-cost 21st-century medium with an expanding global youth market. Foreign DVD distributors shuttered as physical sales tanked; others, like Funimation and Viz Media, ramped up their streaming capacities and online catalogs.

Most noteworthy has been the explosive success of Crunchyroll, a once piracy-driven anime fansite that went legal in 2009, and has since been amassing licenses and subscribers at a rapid clip.

A 2013 investment from the deep-pocketed Chernin Group, founded by Hollywood mogul Peter Chernin, is paying off. Crunchyroll has doubled its San Francisco-based staff, moved into former Microsoft digs in the Westfield San Francisco Centre, expanded its Tokyo office, and developed two new stand-alone content channels, plus its own coproduced online manga series, Hypersonic Music Club. The site now boasts the fifth largest streaming subscription base in the United States.

So what took Japan’s industry so long? And why is it suddenly embracing the Internet streaming model now?

Unozawa cites the usual interrelated factors — a shrinking Japanese youth population with thinning wallets means the domestic DVD market has peaked, and the industry has finally accepted it. The toll of piracy has become not just an irritant, but the cause of unsustainable losses, denting profits from domestic and overseas sales via free smartphone and tablet downloads.

But Unozawa also sees specific changes over the past two years creating a watershed moment for anime producers.

“A generational torch is being passed,” he tells me in his 11th-floor office in Shinagawa Seaside, overlooking the Olympic construction cranes dotting Tokyo Bay. “A lot of the people in charge are counting their days to retirement. They want to leave a legacy behind, and they are saying to themselves, ‘What can I leave? What can I do to help things?’ “

That positive, proactive stance has opened doors to a number of opportunities and alliances that were previously spurned. Unozawa points to the reunification of participants from the Tokyo Anime Fair and the Anime Contents Expo in the now two-year-old AnimeJapan as one example. Another is the industry’s embrace of the “Manga-Anime Guardians Project,” a joint government-industry campaign to stamp out piracy, supported by such stalwarts as Shueisha, Shogakukan, Tezuka Productions and Studio Ghibli.

Only a few years ago, veteran producers scoffed when I suggested that the government might be a source of financial support and strength amid tough times. “They just want to control us,” one studio founder and president told me. “They don’t even know what we do.”

But after the Cool Japan Fund was rubber-stamped in the summer of 2013, its administrative arm, J-LOP, which distributes “Japan content localization and promotional support grants,” has proven a worthy and well-structured buttress to producers and artists who wish to reach fast-growing consumer populations beyond Japan’s borders.

“J-LOP really changed things,” Unozawa says. “Until now, there was a reluctance (in the industry) to take on government money. It was just seen as being more work for the understaffed studios. But people now see that it’s being handled professionally and fairly.”

Earlier this month, Daisuki, ACJ’s platform, began streaming its first six series’ simulcasts to a wide range of global markets with multilingual subtitles. Like Crunchyroll, which is also fast expanding its language offerings, the ACJ plans to have Daisuki one day coproduce titles with domestic studios and artists, to create works that have a cross-border appeal.

The industry’s decade-old hand-wringing over an excess of so-called moe anime content — the stylized illustrations of eroticized youthful characters targeting aging male otaku — has largely receded in the face of current international hit series such as “Attack on Titan” and “Kill la Kill,” both of which are streamed online. As their business gains a newfound stability and optimism, are anime producers actually maturing?

Unozawa shrugs. “They’re thinking like grownups now,” he says.

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.

  • When i get older,i will definitely get a crunchyroll subscription

  • jcbinok

    I’m not much of an anime fan, but the article mentions subtitling of Japanese movies for foreign audiences. This is something that should definitely be expanded here in Japan, too. I like renting Japanese movies from Geo, et al., but only about 2% have English subtitles. Also, if a movie is in a language other than Japanese or English, it would be nice to run two sets of subtitles on-screen simultaneously; an English speaker and a Japanese speaker could watch, say, a German movie together.

  • Jesus

    Ok great, now put Pokémon!

  • Michael Eamon Osborne

    Great news!!

  • kregano

    As an American anime fan, I find the assertion that Daisuki is a success to be really ridiculous. When it first debuted, its user interface was drastically inferior to Hulu and Crunchyroll, its video quality/service was inferior to both, and the one exclusive franchise it boasted, Gundam, was either also freely and legally available on YouTube and/or quickly removed within a year of Daisuki’s launch. Daisuki’s release of Gundam the Origin episode 1 was also inferior to Amazon and Google Play’s offerings in terms of price and functionality (there were widespread problems paying for and downloading the rental). In terms of the major legal anime streaming services, it’s a distant fourth, barely relevant to anyone outside of non-English speaking nations in Europe (who get some pretty great language support on Daisuki).

    If anything, Daisuki is another in a LONG string of Japanese controlled services/companies attempting to directly tap into the American/western market without actually employing or listening to western advisers/employees who actually know what the western market expects and demands. This sort of thinking has categorized at LEAST the past 15 years of the US anime/manga industry and brings us nonsense like manga publishers being denied digital publishing rights for titles they have licensed. It makes me think that “Cool Japan” would be far more effective if the Japanese IP holders were marginalized and the non-Japanese partners were given more freedom to handle things as they saw fit.

  • mlbscout6

    Really? This article is trying to paint Daisuki as a success? Daisuki has all but been abandoned. Sure, when it started out it had some promise. When they first launched they had a diverse catalogue of shows including old stuff like Lupin III. There seemed to be a genuine interest in promoting the site. Daisuki was running ads and holding contests to drive traffic, as well as hosting surveys to learn what shows the viewers most wanted to see on the site. They never followed through, and like most Japanese business endeavors that don’t IMMEDIATELY hit the unrealistic numbers they’re expecting, they quickly gave up and moved on. Now it’s just a dumping ground for the Aniplex shows that come out every season and the crappy merchandise that comes with them.

    It’s sad because it was easy to see all the work that went into the initial campaign.