Anime Industry Report 2020: 10 Years of Consecutive Growth, a Market Worth 2.51 Trillion Yen

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After a slow down in growth between 2017 to 2018, the Anime industry has once again noted another jump in overall market growth in 2019 to see a record 2,511 billion yen (~23 billion USD) in sales despite anticipation that the market would shrink amid a tighter restriction imposed by the Chinese government on overseas media products. The rise is said to be attributed to Movies which recorded the highest sales on record of 69.2 billion yen (~629 million USD), up 38.44% year-on-year. According to the Association of Japanese Animations (page 6 of the report), titles such as: Tenki no Ko, Detective Conan and One Piece were among the main contributors. Note that in 2019, Tenki no Ko reported a gross revenue of 14.06 billion yen (~128 million USD) in the domestic market while Detective Conan: The Fist of Blue Sapphire and One Piece: Stampede each had 9.37 billion yen (~85 million USD) and 5.55 billion yen (~50 million USD) in gross sales (Source: Motion Picture Producers Association of Japan). Overseas, Merchandise sales, and Pachinko were also cited to be the main cause for the strong growth. As such sales grew from 1,009 billion yen (~$9 billon USD) to 1,200 billion yen (~11 billion yen), marking an improvement of 15.96% year-on-year. Rilakkuma and Sumikkogurashi, two popular characters that were turned into animation series, and the increased number of pachinko slot machines in collaborations with animated works allowed the industry to register better growth year-on-year.

Based on questionnaires conducted by the Association Japanese Animation plus other publicly available statistics (report page 5). Alternative View: Here

Based on questionnaires conducted by the Association Japanese Animation plus other publicly available statistics. Alternative View: Here

Birth Decline is not Enough to Stop the Local Market from Growing

Despite the ongoing birth decline, Japan saw no stopping to the ongoing growth of its Japanese Market, hitting a total 302 billion yen (~3 billion USD) worth of sales as of 2019. Sales are still going strong for TV, and revenue from the Overseas market recorded unprecedented highs of 71.80 billion yen (~647 million USD). Though things are not looking so good for the Videogram market as it shrinks further again in 2019 from 2018’s 8.10 billion yen (~72 million USD) to 7.50 billion yen (~67 million USD). We shall discuss further in another section.

Based on questionnaires conducted by the Association Japanese Animation plus other publicly available statistics (report page 5). Alternative View: Here

Alternative View: Here

Both Movies and Internet Distribution are brimming with bright potential as the two press on with an uptrend in sales. While Movies’ growth were stymied from 2008 to 2011, it has steadily reported a climb in revenue until 2019 of which it generated 38.80 billion yen (~349 million USD). Internet Distribution impresses as sales have not slowed down since its inclusion in 2002. A record high of 21.60 billion yen (~194 million USD) in revenue was reported as of 2019.

Based on questionnaires conducted by the Association Japanese Animation plus other publicly available statistics (report page 5). Alternative View: Here

Comment: Why the concern with aging? It makes total sense that when a population decreases, the number of purchases made will reciprocate as the country will have less people buying things. Having fewer customers will be bad for any company or industry since their ability to produce sales will be considerably suppressed. If that is indeed the case, then why is the market still growing year on year? There is a good explanation for this. Apparently, researchers have found no evidence as of yet for any negative impact on an economy belonging to a nation that is experiencing a population decline, in particular Japan. Several researchers have documented the effect of population ageing on an economy through several papers such as the ones by Oliver in 2015, Jimeno in 2019 and Kajimura in 2020. The reason for market stability is highly attributable to the large number of those in the age of 25 and above in Japan, who are massive contributors to the economy. Since Japan is also the oldest nation on Earth, the older group of people tend to have more income at their disposal, hence more spending. Therefore, we will not see the market slowing down for some time, but one thing is for sure, it is not at all sustainable as eventually there will be fewer people in Japan. A shift in market growth will certainly occur, though it is extremely difficult to say when it will take place. Only time will tell.

Domestic and Overseas Market Playing Catch-up

Interestingly, after a slowdown in growth reported between 2017 and 2018 due to a change in Chinese media consumption law, it was initially anticipated that the market would falter in 2019. That apparently was not the case as the difference of change between the two has widened positively as sales from the Overseas market brought in a record breaking 1,201 billion yen (~11 billion USD). From the looks of it, if the Overseas market does not overtake the domestic market in 2020, it will most likely do so in 2021.

Based on questionnaires conducted by the Association Japanese Animation plus other publicly available statistics (report page 3). Alternative View: Here

Comment: This is actually not surprising. The Anime industry has been nothing short but a major global phenomenon, and the year 2020 will most likely see the Overseas market strengthen as a result of titles such as Kimetsu no Yaiba: Mugen Ressha-hen and Jujutsu Kaisen. Remember, that in 2020 alone, the Kimetsu no Yaiba: Mugen Ressha-hen film witnessed a massive 36.55 billion yen (~333 million USD) at the box office. Although its worldwide release dates were slow, heading into 2021, it will certainly trigger sales of other related products along the way. Sales of Merchandise, Music etc may be impacted positively.

Feel Like There Were Less Anime to Watch in 2019? If Yes, Then You Are Right

There were unfortunately a sharp decline in Production Minutes of TV Animation, hitting its lowest since 2012’s 105,070 minutes. A major contributor according to authors of the report is likely due to the deceleration of sales in the Chinese market, and as such producers and distributors may have decided to delay new works. There were indications that this could be a result of a shift to theatrical animation which achieved a new high in Production Minutes in 2019, or that works are moving onto streaming platforms. It is still unknown at this junction as to what was the actual cause of the overall drop. Was it the impact of COVID-19? Or it is indeed like the ones mentioned above? It is suggested that we wait for 2021 to pass.

Based on questionnaires conducted by the Association Japanese Animation plus other publicly available statistics (report page 3). Alternative View: Here

On the other hand, animation catered for adults are still as popular as ever in Japan. In the early 2000s, most Anime works were leaning more towards Kids and Family audiences, but a major shift to Anime for adults started to occur from 2015 onward.

Based on questionnaires conducted by the Association Japanese Animation plus other publicly available statistics (report page 6). Alternative View: Here

It is not only the Production Minutes that are down, TV Animation programs have also slumped from 350 works produced in 2018 to only 314 in 2019 (report page 6). It is noted that this could be a temporary effect, and that a decrease in demand for TV animation works were cited to be one of the causes amid diversification of media as producers and distributors move on to other platforms, in particular streaming. It makes total sense based on the growth reported for Internet Distribution, and that it possesses immense potential to offset TVs one day. Yet, a continuous drop would be alarming, though understandable.

On a side note, while it is true that revenue has been on an upward trajectory, the cost of production has been increasing in recent years where the demand for higher quality animation has catapulted, and the lack of skilled creators who could satisfy such demand would require a higher form of compensation. Perhaps scaling down on the number of works to be produced may take pressure off of studios and allow them to focus on trimming down the cost, hence quality would not be sacrificed as a result.

More Theatrical Animations Than Ever Before

2019 saw the highest number of Theatrical Animation works, and the most Production Minutes ever recorded, up 15.68% from 2018’s 6,186 minutes. And if you check out the major box office hits for the year, you will understand why. This is pale in comparison to the year 2000 where only 1,900 Production Minutes were recorded, and in a span of two decades, that number has grown nearly three times. More Theatrical Animation titles may sound good, however it can be extremely strenuous for studios, the report cautioned.

Based on questionnaires conducted by the Association Japanese Animation plus other publicly available statistics (report page 6). Alternative View: Here

2019 also saw the highest revenue ever generated for the segment worth 69.20 billion yen (~624 million USD), a 38.44% increase over the previous year. Part of the massive success is due to the release of Makoto Shinkai’s Tenki no Ko (Weathering with You) animated film which alone generated 14.06 billion yen (~127 million USD). While it is true that the work was a huge success, the report noted that the box office profit only accounts to 20% from the total revenue, lower than the 37% made from Kimi no Na wa in 2016. Nevertheless, that is still worth 2.81 billion yen (~25 million USD) in profit. 

Based on questionnaires conducted by the Association Japanese Animation plus other publicly available statistics (report page 6). Alternative View: Here

Japan Box Office Chart 2019, extracted from Picture Producers Association of Japan here. Alternative View: Here

Fate/stay night Movie: Heaven’s Feel box office performance, sourced from the Motion Picture Producers Association of Japan. Alternative View: Here

Comment: This will most likely not come as a surprise, but revenue for Theatrical Animations will certainly explode in the year 2020 as a result of Kimetsu no Yaiba film, Mugen Ressha-hen (Mugen Train) which made 36.55 billion yen (~330 million yen) in revenue, more than double of what Tenki no Ko made in 2019. That alone is for the domestic market. 2021 will surely see another uptrend with the film being released elsewhere outside of Japan, adding more into sales made in the Overseas market. However, we have to remember that 2020 was also a tumultuous year for cinemas, not just in Japan amid the coronavirus pandemic. Many of them had to close down, or limit sittings to curb infection. True that this did not stop people from watching Kimetsu no Yaiba, yet we are still unsure how this may affect other titles. So far, titles such as the Fate films have not been greatly affected, in fact the opposite happened. Fate/stay night Movie: Heaven’s Feel have noted continuous increase in sales up to the third film, despite the pandemic.

The Us Still Leads in Terms of Number of Contracts

The report noted that the number of contracts in 2019 rose from 2,594 in 2018 to 3,822, a 32.12% increase with the US being the largest contractor followed by South Korea, Taiwan, Canada and China. Japan saw no noticeable change in appetite for more Anime related products in China, however global contracts has significantly increased. As such, the Overseas market records a 20% growth to account 49.5%, nearly half of the Japanese animation market, and is expected to grow further in the following years.

Alternative View: Here

Comment: This is the reason why it is hard to predict what Anime gets made, or what Anime will get a second season. In my own opinion, I do not think that the Japanese market alone would determine what gets made and what does not as the Overseas market has somewhat become crucial to the Japanese animation industry as a whole. Therefore, it will be unlikely that producers or studios to not consider market outside of Japan in decision making (particularly how China is often mentioned in the report, and the fact that there was a possibility of producers trimming down on number of works due to slow demand from the country). Good news for us folks who are not from Japan, this would mean that our support will continue to have a major impact on the Japanese market, but if a global recession would to hit us, it would also spell bad for Japan if it becomes too reliant on the foreign market — as can be seen when the market took a nosedive after the 2008 global financial crisis.

Not Looking Good for Videograms, but There Is Hope for 2020 and 2021

The Videogram market experience another decline year-on-year to see its worst performance since 2000. Sales for the market narrowed down by 4.1% to 56.3 million yen (503 thousand USD) in 2019. The market hit an all time high in 2006, but has been on the downtrend from there onward. One of the cause is attributed to the increase in the number of streaming platforms which has become a rather satisfying alternative for audiences worldwide. While Anime has become more accessible, people have been shunning away from buying copies of Anime Blu-rays and DVDs. According to the report, the number of rentals have also dropped amid a reduction in the number of video stores, yet some titles remain as popular as ever such as: Love Live! and Idol Master, and part of the reason is due to them being seen as collectibles.

Alternative View: Here

Comment: Although things may look quite bad, 2020 may present a glimmer of hope for the Videogram market. Remember, this was the year where titles such as Tenki no Ko and several others such as: Granblue Fantasy The Animation Season 2, Princess Connect! Re:Dive and Kimetsu no Yaiba made their appearances. According to number of copies tracked by the website, Granblue Fantasy The Animation Season 2 sold more than 44,574 copies, Princess Connect! Re:Dive at above 112,280 copies, while Kimetsu no Yaiba noted above 47,301 copies sold.

2021 is even better, Uma Musume: Pretty Derby (TV) Season 2 makes a very formidable presence, and still is at the time of writing. Number of copies tracked by the site puts it an extremely comfortable place of 677,505 copies, where actual numbers should put it close to 700,000 copies sold. What makes 2021 even better would be Kimetsu no Yaiba. The Blu-ray sales for the Mugen Ressha-hen alone have passed 812,754 copies sold, and if DVD sales are added, that number would have easily surpassed 1.6 million copies.

To close, Videogram should see a recovery, perhaps slightly in 2019, but a much healthier recovery in 2021. However, it may still be affected by Internet Distribution. A correlation was found to be present when sales of Videogram were put to contest against Internet Distribution. The higher the penetration of streaming platforms in various markets (not just in Japan), plus easier accessibility of Anime related products will certainly chip away some of its potential sales. Producers will have to find a way to further entice people into purchasing these products. Videogram market will not go away for sure as demand still exists for such products (as can be seen via Odd Taxi‘s recent success in getting 6,000 copies sold despite producers initially not keen on selling the Blu-rays), and there are collectors out there who are willing to go the extra mile to get their hands on the packages.

Alternative View: Here

Is it still as significant as it used to be? Less, but it is for sure not the main indicator to what gets made and what does not like in the late 1980s to early 1990s when demand for Videograms were higher (Source: ANN). Ever since the early 2002, Videogram only makes up a very small portion of the Japanese animation market, and in 2019 it only takes up 2.2% of the entire market. Yet, if you do get a hit with sales of DVDs and Blu-rays, you can easily call the Anime a success.

What decides an Anime gets made? Or a sequel gets made? Long story short, that would be the role of the production committee which would comprise of members who primarily act as investors in an Anime (Source: ANN). It is still unclear to what sort of variables that play roles in determining what Anime gets made or if it ever gets a sequel, but if a production committee does not come forward to fund or decide if something gets made, it most likely will not get made. Note that, anything that sells below the range between 2,000 or 3,000 discs (depending on the price) will put the company at risk of being in the red (Source: ANN). Therefore, if a home video maker, that could be a part of a committee sees disc sales of a given title not performing as intended, they may shoot down the idea of a sequel. Then again, with Videogram making only 2.2% of the market in 2019, much is to be said of how extensive their influence is in deciding the future of an Anime. Thus, if you see an Anime not doing as well as you hope, know that the key determiner would not be sales of Videogram. We will have to consider other streams which may have more influence in deciding what gets made, for instance the Merchandising market.

Japanese Animators Are Paid Higher Than the Average Salary in Japan

What is more interesting would be that in general, Japanese animators are said to earn higher than the average annual salaries of employees working in the private sector. A report by Japan Animation Creators Association (JAniCA) on November 10, 2019 suggested that salary of Japanese animators are estimated to have reached 4,969,000 yen (~44,370 USD) a year, a significant improvement when compared to when the survey was first carried out in 2009. In 2009, Animators were noted to have received 1.794 million yen (~16,014 USD) lower than than the average private sector employees at the time, which should put it at around 2,474,947 yen (~22,093 USD). The 4,969,000 yen (~44,370 USD) a year earned by the average Japanese animators is roughly 10% more than the average annual wages earned by normal Japanese according to OECD in 2019. In 2020, the average salary earned has slipped by a small amount, though it is unsure whether Animators are affected by this.

Alternative View: Here

But of course, how much an Animator earns would change depending on the person’s position in an organisation. We have to consider age and seniority of an employee as the longer you work, the more likely you are to be paid higher. Nevertheless, the average age of animation creators is reported to be 7.15 years younger than that of private employees, meaning they are earning quite high on average. Additional earnings from royalties, licensing fees, tuition, executive salaries were not taken into account in JAniCA’s assessment.

Note that, while the average salary is reported, we still are not clear on several other indicators such as the median wage. There has been several reports where Animators are said to be highly overworked in Japan where current estimates puts them at 9.66 hours per day on average, plus the in-between animators are said to only earn an average of 1,250,000 yen (~11,165 USD), which is considerably low and is perhaps the group of employees who are paid the lowest (Source: ANN).

Animation creators include directors, executive animation directors, producers, character designers, animation directors, 3D CG animators, rendition staff, storyboard writers, licensors, background art designers, color coordinators, shooting staff, production assistants, key animators, animation checkers, layout/rough-drawing staff, finishing staff, the 2nd key animators, animators and others.


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Sources:
The Association of Japanese Animations (AJA)
Motion Picture Producers Association of Japan
OECD Stat
World Bank Data

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2 thoughts on “Anime Industry Report 2020: 10 Years of Consecutive Growth, a Market Worth 2.51 Trillion Yen

  1. Artículo muy interesante, gracias por tomarte el tiempo de escribirlo. Casi pensaba que el crecimiento solo se debía a Demon slayer 🤣. PD: en el año 2022 también vienen películas de anime, a ver qué tal es la taquilla por el tema de la pandemia.

    1. Most welcome! It took some time for me to complete it haha Certainly, we get to see some very interesting data about the industry. I hope I could find one for Manga, but I haven’t been able to locate one. 2022 will probably see Jujutsu Kaisen taking the spotlight 😎

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