Anime Industry Report 2022 (Part 1): The Japanese Anime Industry Is Now Worth Nearly 3 Trillion Yen, Its Largest Ever Recorded Since 2002

The Market in a Broad Sense

When talking about “the market in a broad sense”, AJA describes it as all receipts (estimated) from animation or animation-related markets.

The Japanese animation market in the broad sense has recorded a 13.03% year-on-year (y-o-y) increase to 2,742.2 billion yen (≈20.63 billion USD) after a temporary decline it encountered in 2021 amid the pandemic. Despite a potential prolonged impact supposedly to spill over into the year 2021, it took the market only one year to recover from the pandemic with all indicators on the green (see the breakdown in terms of segment right here).

In a broad sense, the biggest rise belongs to the Live Entertainment market which recorded a 96.90% jump to 57.1 billion yen (≈429.62 million USD), which is not its largest having peaked at 84.4 billion yen (≈634.83 million USD) before in 2019. The huge jump — almost double of last year’s market— is attributable to the opening of the market post-pandemic that previously saw Japan mired in a state of emergency in the year 2020 making it difficult to host live events at the time (please see The Japan Times; The Guardian). The market is expected to gradually improve or stay consistent in the subsequent years as Japan and the rest of the world return to normalcy.

The next biggest improvement was recorded for the Internet Distribution segment that had risen 65.91% y-o-y to 154.3 billion yen (≈1.16 billion USD), which is the highest it has ever achieved since the year 2002 — where it was only worth 0.2 billion yen (≈1.50 million USD) at the time. The report attributed the growth to how the medium of consumption has changed to become more and heavily concentrated on the Internet of Things (IoT), making platforms that serve video on demand (VOD) to be very popular amongst consumers. However, the report cautioned as to the future of this market after seeing a massive decline in the number of subscribers particularly it noted with Netflix which earnings had been negatively affected. In July 2022, various news agencies reported of Netflix’s fall in number of subscribers by nearly 1 million in the second quarter of 2022 (see NPR; BBC), its first drop ever in the past ten years of operation. That said, the 2.4 million subscribers the platform gained in the third quarter (see The New York Times; The Wall Street Journal) is a huge relief and may signal all things positive to come for Internet Distribution, in the case for Anime in general. But the report does not seem to quite see just that stating that the market may very well be on its way to hit its limit no thanks to the lack of major hits on specific platforms. Then again, the opposite can be true as well as the year 2021 did see the releases of titles such as Kimetsu no Yaiba: Yuukaku-hen and Spy x Family amongst others on Netflix that were proven to be really popular with fans and non-fans alike. The trepidation felt is not unwarranted, in fact, a chart released by Netflix demonstrated how popular titles can help drive subscribers’ count. In 2016 for instance, the number of subscribers went up by around 25 million after The Crown Season 1 was aired. The platform noted a similar outcome with Stranger Things Season 3 that pushed the number further up until Squid Game arrived to bolster the number. Yet, the release of Stranger Things Season 4 did not quite help the platform to attract subscribers in the second quarter of 2022. Therefore, it remains to be seen how this segment would perform from 2022 onward.

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A figure released by Netflix describing the quarterly number of subscribers trend from 2015 to 2022 via the BBC

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Then, we have the Video market witnessing a 42.06% increase in size to 66.2 billion yen (≈497.93 million USD), its first ever improvement since 2013. And this is largely thanks to the stellar performances of Kimetsu no Yaiba Movie: Mugen Ressha-hen and Uma Musume: Pretty Derby Season 2, which I will discuss further in its very own article right here.

As for Panchinko and the likes, Music and Merchandising markets, they have grown by a decent amount. Panchinko and the likes went up 16.20% to 305.6 billion yen (≈2.30 billion USD) thanks to the popularity of machines that make use of the Anime themes. This latest performance also marks its second-best to date after hitting a peak of 319.9 billion yen (≈2.41 billion USD) in 2019, which makes it the third largest market with a share of 11.1% (0.3% more than the year before). Music, on the other hand, moved up by 14.86% to 31.7 billion yen (≈238.50 million USD), of which I will discuss more in its own article here. Expanding by 13.95% y-o-y to 663.1 billion yen (≈4.99 billion USD), not only that it is the second biggest market overall (24.2% of the total, up by 0.2% from the prior year), this is also the Merchandising market‘s best performance to date, sustained by the growth of Anime characters in the market, allowing for more products to be purchased by consumers.

TV and Overseas markets both reported small improvements by 7.99% and 5.97% each. As for the TV market, the respite is not at its best level as it saw a stronger market way back in 2002 which was worth 124.1 billion yen (≈933.50 million USD) at the time. The 90.6 billion yen (≈681.51 million USD) in 2021 is not too shabby either, being worth more than the results posted in 2010 and 2011, however, it still remains below the rest. The Overseas market is becoming more and more of a behemoth for the industry where in 2021 alone, it accounted for up to 47.9% of the total market (slightly down from the 51.1% in 2020). The 5.97% gain it made y-o-y nudged the total size of the market to 1,313.4 billion yen (≈9.88 billion USD), its strongest yet since 2002 attributable to a number of factors such as the rise of online shopping in China, the penetration of the US market via internet through various platforms, and the lockdown period experienced due to the pandemic had bolstered demand for Anime on the internet platforms as a staggering number of people had to stay at home. The report still cautioned that though the market may grow further, it will continue to decelerate in terms of growth. The outlook remains a little dim considering the situation at home where Japan has to deal with an ageing demographic, plus a decline in birth rate which may make it difficult to sustain the entire market all around. The Film market, on the other hand, went up by 8.66% y-o-y to 60.2 billion yen (≈452.86 million USD) which is its third highest in history since 2002. The report indicated that the market actually put up a good fight and expects 2022 to be just as strong, particularly in the fourth quarter with the release of popular titles such as: One Piece Film: Red, The First Slam Dunk and Suzume no Tojimari. More about the segment will be discussed further right here.

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From left to right, One Piece Film: Red, The First Slam Dunk and Suzume no Tojimari
are expected to solidify the film market in 2022

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The Market in a Limited Sense

When talking about “the market in a limited sense”, AJA describes it as ONLY receipts from all DOMESTIC commercial animation studios.

Here, like “the Market in a Broad Sense”, Live Entertainment also has the largest gains amongst the rest, growing by 93.33% y-o-y to 2.9 billion yen (≈21.82 million USD). Others — revenue from services or businesses outside of the other criteria — captured a 63.90% growth to 10.1 billion yen (≈75.99 million USD). Internet Distribution noted the third biggest increase, climbing 30.37% to 24.9 billion yen (≈187.34 million USD) while Music and Panchinko and the likes reported modest growth of 14.71% and 10.46% y-o-y to 3.9 billion yen (≈29.33 million USD) and 16.9 billion yen (≈127.12 million USD) each. The Overseas market, which is its largest (28.3% of the total) grew by 8.67% to 82.7 billion yen (≈622.04 million USD), and TV that occupied 24.2% of the market for the year moving up by 8.24% y-o-y to 70.9 billion yen (≈533.28 million USD).

Unfortunately, for the rest, they have all recorded a decline. The Video market had the biggest drop, shrinking 29.58% y-o-y to just 5 billion yen (≈37.61 million USD), making this its worst since 2002 where the market was estimated to be at 35.8 billion yen (≈269.33 million USD). The Movie market was hit the second hardest, down by 14.55% to 22.9 billion yen (≈172.28 million USD). The Merchandising market on the other hand, fell slightly by 1.69% to 82.7 billion yen (≈622.17 million USD).

You can also refer to the breakdown by segment here.

The Domestic Market Outpaced the Overseas Market

In 2020, for the first time since 2002, the size of the Overseas market managed to go past the Domestic market which was then worth 1,239.4 billion yen (≈9.32 billion USD) against the other at 1,180.5 billion yen (≈8.88 billion USD). This time around, the Domestic market not just had grown to surpass the Overseas market, but it has also recorded its best performance to date since 2002, being worth 1,428.8 billion yen (≈10.75 billion USD). To compare, it was only worth 724.3 billion yen (≈5.45 billion USD) in 2002. While the Overseas market had certainly taken a step back against the Domestic market, it was estimated to be at 1,313.4 billion yen (≈9.88 billion USD), which is its ninth consecutive growth since 2013, plus being also its strongest to date since 2002.

Slight Recovery in Production Minutes and Number of Titles Post-pandemic

The number of production minutes in 2021 had risen by 6.40% to 109,610 minutes from the 103,021 minutes it reported in 2020, which is still quite far from the 130,347 minutes the industry recorded in 2018. The number of titles had also jumped to 310 against 308 the year before, though the most it has ever experienced was in 2016 where a total of 361 titles were produced or released. The number of new broadcasts outshined old broadcasts in 2021 like the years before. In 2021, the industry put out 214 new broadcasts whereas old broadcasts numbered at only 96. In terms of number of new broadcasts, 2016 is still the highest with 271 while 2017 saw the most for old broadcasts at 113. Titles targeted at late night audiences were still very popular in 2021 seeing much higher production minutes when compared to those that are targeted at daytime audiences. The number of theatrical works also marked a slight increase from 71 to 73 y-o-y, bringing the total production minutes to 6,057. Note that the biggest it has ever recorded was in 2019 where the segment had 7,242 in production minutes and a total of 91 titles.

The improvement in all aspects of the segments above is partly due to the postponement of shows such as Tensei shitara Slime Datta Ken 2nd Season, Skate-Leading☆Stars, Uramichi Oniisan amongst others to 2021 which as a result bumped up the numbers of titles or production minutes for late night shows or new titles. Decline in the number of daytime shows that can be seen as being persisting (its lowest since the year 2000) is also due to the change in consumption habits (kids or teenagers having cram schools etc.), plus a reaction from broadcasters such as TV Tokyo abolishing some of the daytime slots on the weekdays, except Fridays. Some shows that are targeted at kids and families have also moved to other platforms such as YouTube, further contributing to the decline.

According to the report, it is rather passive as to the outlook of the TV Anime industry, noting that the number of subscribers in Anime-specialised channels are dwindling which may affect revenue or size of the market. Nonetheless, the broadcasters are said to have already taken the necessary steps to broaden their scope of “non-broadcasting” Anime business that can already be seen happening on VOD platforms. That said, it remains to be seen as to how well can broadcasters fare seeing platforms such as Netflix and its advertisement plans which could pose a cause for concern. In November 2022, NHK told Netflix to remove all its titles (22 of them) due to the platform’s latest move (see ANN; The Japan Times). If other broadcasters would react the same way, this could affect TV animation in 2022, however, there are still other platforms such as Crunchyroll, HIDIVE etc. that could potentially help to soften the blow.

Copyright Sales Moved to Its Highest Ever on Record Since 2002

The Anime video Copyright market has risen to its largest ever recorded since 2002 from 93 billion yen (≈700.49 million USD) to 154.30 billion yen (≈1.16 billion USD), a 65.91% growth y-o-y. To compare, the market was only worth 200 million yen (≈1.50 million USD) and took nearly seven years before it breached the 1 billion yen (≈7.52 million USD) mark it achieved in 2008. The market then grew by 70% between 2011 and 2012 before the y-o-y growth slowed down from 2013 to 2019. Amid the pandemic, the market moved up positively by 35.77% in 2020, its largest since 2012 before climbing yet again in 2021. Note that ever since the market was considered in 2002, it has so far not even once recorded a shrink in its market value. 

The growth it recorded in 2021 is understandable as the pandemic had forced many people to stay at home, making them reliant on internet platforms for media consumption. That all happened in 2019 where the market jumped 15.13% y-o-y, at the time, its largest since 2015. 2020 cemented the copyright business as people continued to get used to internet based media platforms such as Amazon Prime Video, Netflix, Hulu etc. In 2021, the growth compounded as demand heightened for internet consumption — this is happening not just for Anime video-related content, but for Manga as well. Yet, the report cautioned that the resumption of normal market activities thanks to the reopening of Japan may very likely slow down in 2022, or perhaps even experience a contract.

According to the report, Amazon Prime Video is the most popular media platform for consumption in 2021, accounting for 72.4% of the total respondents (numbered at 1,322 people) whereas Netflix was the second most at 23.7% of respondents. Hulu was down to 8.9% from 10.3% the year before, but still maintained its 3rd position. Note that the number of respondents were lower in 2021, amounting to 1,274 people, though in 2020, the number of people surveyed was much larger at 10,855 people. Below are the Top 5 video distribution services subscribed by Japanese in 2021.

Platforms	2021	2020
Amazon Prime Video	72.40%	69.20%
Netflix	23.70%	21.40%
Hulu	8.90%	10.30%
DAZN	8.10%	9.30%
U-NEXT	7.10%	6.30%

Note. based on the total number of respondents of 1,322 people in 2022, 1,274 in 2021

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