U.S. anime market matures in 2019

The third annual Animation Is Film festival kicked off on Oct. 18 in Los Angeles with the United States premiere of Makoto Shinkai’s latest Japan box-office hit, “Weathering With You,” followed by an onstage Q&A with Shinkai, who flew in from Tokyo for the event. Demand for tickets was so fierce that organizers added a second overflow screening at the city’s historic TCL Chinese Theater on Hollywood Boulevard.

According to festival founder Eric Beckman, CEO of U.S. distributor GKIDS, tickets to the second screening sold out in “less than three minutes.”

Six years after the global anime industry was jolted by the retirement of its most loved and bankable artist, Studio Ghibli director Hayao Miyazaki, developments in the North American market are transforming 2019 into a banner year. Through consolidation, the flowering of streaming media platforms and unexpected cash infusions, the anime business on the other side of the Pacific is rising to new levels of maturation and scale.

The day before the festival, WarnerMedia announced that all Studio Ghibli films, which the studio had previously refused to release digitally, would be made available to stream on its HBO Max site, set for launch next spring. (And, of course, Miyazaki himself is now out of retirement and working on his next film.)

Dedicated distributors and streaming platforms Funimation and Crunchyroll, both absorbed over the past two years by bigger players, are now being repositioned for growth by their respective parent companies. This September, Sony merged Funimation, which it acquired in 2017, with its Tokyo-headquartered anime arm, Aniplex, expanding its reach to 49 countries in 10 languages. Crunchyroll, under the umbrella of AT&T, is currently being folded into WarnerMedia but will likely retain its stand-alone status as a home for anime among a wider range of entertainment options.

This summer, the Japanese government finally put some serious skin into the international anime game through its Cool Japan Fund, long-pilloried for being badly named and poorly managed. In August, the fund made a $30 million investment in Sentai Filmworks, an independent Texas-based North American licensing firm, best known for presenting hit titles such as K-On! and Ninja Scroll. The cash infusion will go toward supporting Sentai’s own freshly minted streaming platform, HIDIVE, an alternative to the Sony and Time Warner heavyweights.

The government’s Cool Japan investment may also be a concession. “I feel like they basically acknowledged that they don’t know how to execute outside of Japan,” says anime executive Dallas Middaugh, a 20-year veteran of the U.S. manga and anime markets. “They tried with (discontinued streaming site) Daisuki a few years ago. Now they’ve realized that their best bet is to find an existing player in America. And Sony and Time Warner don’t need that money.”

In a speech he gave earlier this year at Project Anime, a bi-annual industry conference held in Los Angeles and Tokyo, Middaugh summarized the perfect storm of factors transforming the 2019 global business: Japan’s declining population and a fast-expanding fan base overseas has drawn the attention and commitment of the world’s major media companies.

“We’ve spent most of the past decade viewing U.S. anime as a rivalry between, primarily, Funimation and Crunchyroll,” he said. “On the surface, it still is, but underneath that, it’s now Sony versus WarnerMedia, with Netflix raising the stakes for good measure.”

International co-productions with Japanese studios, like Netflix’s recent “Cannon Busters” series, have now become almost commonplace. Producer and writer Eric Calderon, studio head of Octopie, an animation company founded by the Russo brothers of “Avengers” fame, was a pioneer of such transnational collaborations when he pulled together teams from three countries — Japan, the U.S. and U.K. — for 2007’s “Afro Samurai,” which was nominated for two Emmy Awards.

Calderon believes that spikes in communication, travel and the number of foreign artists and producers living and working in Japan over the past seven years have helped the industry evolve from a creative backwater, however rich in intellectual properties, into a global reservoir.

“There are still a lot of failures and letdowns, but the successes are starting to rise and grow,” he says. “Today you see American video games that suddenly have Japanese-made openings. It’s no longer a new idea now to collaborate with Japan.”

Calderon had direct experience with the Japanese industry’s growing pains. While “Afro Samurai” found both critical and commercial success, with A-list stars like Samuel L. Jackson, Lucy Liu and Wu Tang Clan’s RZA contributing their vocal talents, other projects, like Calderon’s original anime series from the same year, “The Five Killers,” barely left the starting gate.

The Japanese director disagreed with nearly all of Calderon’s ideas and, as a non-Japanese in a tightly hierarchical business, he had little status and received scant respect.

The difference today, he says, is not just the amount of money being devoted to anime projects, but where it’s coming from. Financing from one or two international investors instead of a domestic consortium means that the financiers have opinions and demands, and aren’t afraid to air them.

But foreign money can be fickle, and industry professionals on both sides of the Pacific well recall the bubbles and bursts of the past. Sony’s Funimation general manager, Colin Decker, says his company is taking the long view of 2019’s tectonic shifts, focusing more on sustaining a healthy anime ecosystem than churning out hits. “Surges of money coming and going is not good for any of us.”

Roland Kelts is the author of “Japanamerica: How Japanese Pop Culture has Invaded the U.S.” and is a visiting lecturer at Waseda University.