For a few years now, anime content has been making some massive accomplishments in the entertainment industry. Unlike during the 20th century, when this culture was only appreciated in Japan, anime has become mainstream worldwide. Besides, the industry’s market value is growing at an encouraging pace.
Presently, new anime movies and series are making their way to the market almost every day. And thanks to the era of mobile phones and the internet, delivery to consumers is smooth and quick. Streaming platforms accommodate anime content, and now, after a very long time, more anime content is being considered for theatre release.
Finally, it seems the anime business is now in its season. Is it right to say the anime business is profitable with all factors in favor of this industry? Before you rush to settle for a Yes, remember that recently CW shocked the world with a statement that “the company has never been profitable since its formation in 2006.”
The report revealed that the company has only been able to survive on revenue generated through contracts with international broadcasters and streaming companies like Netflix. Who could have thought of this? Anyone would have thought they were doing great with the successes accomplished through shows like Supernatural, Riverdale, and the Arrowverse.
Besides, there has been news of companies in the entertainment industry and movies with the same story as CW. This means that it would be wrong to assume that the anime business is profitable because of the global spread of its content. For this reason, it’s essential to perform due diligence before investing in the industry.
In this article, we will look at the question “is the anime business profitable” and provide you with enough facts that would guide you on whether to invest or not invest in the industry.
The structure of the Anime industry
Aside from the people in the industry, many other people think that anime production begins and ends with anime studios. But on the contrary, there are other parties involved in the business. The anime studios only handle most of the production activities.
When an anime idea is pitched, a committee of entertainment companies, marketers, content distributors, and merchandising brands come together to form a committee. Each member of this committee will contribute financially to the production cost of the anime.
They do not need to share the cost equally. The percentage each contributes is proportional to the share of profits. Contrary to what many think, most profit goes to the committee and not the anime studio. This is one of the reasons why there is news that anime studios employees receive low wages.
Meanwhile, it’s good to know that the committee members don’t make their profit from the same revenue streams. Some take their share from merchandising and others from theatre revenue.
Anime studios consist of the brains behind character designs, graphics, artworks, and voice-over integration that make up the content. Studio professionals include directors, supervisors, special effect artists, and animators. And it may take more than ten (10) animation studios to make a series or movie.
Even with many people involved in the production, only a small percentage or half of the production budget goes to the studios. The other part, which amounts to the most significant portion of the production budget, goes to broadcasters and voice actors.
Cost of Production for anime movies
The cost of making an anime franchise is small compared to live-action series or movies. However, it could still be considered expensive considering that most of the work is indoor. The average cost for a 60-second 2D animation is around $6000, while an episode of an anime ranges between $100,000 t0 $300,000.
Attack on Titans, one of the most popular anime in the industry, is produced for $300,000 per episode. The creator of the anime franchise spent $3.6 – $4.2 million to make the 12 episodes of part 2 of the fourth season. This amount includes the wages of the animators, directors, supervisors, and the voice acting cast.
Making an anime movie could even be more expensive than the amount used for making a whole season. For instance, $15.75 million was invested in producing the 119 minutes anime Demon Slayer: Mugen Train.
Revenue generated from anime franchise
The same Demon Slayer: Mugen Train released about two years ago has generated a Box office profit of over $500 million. Attack on Titans has also been one of the most profitable anime series right from its first season.
The sources of anime franchise profit include streaming platform contracts, theater release revenue, sales of merchandise, and profit from sales of local disk and contents. However, it’s not all bed of roses because many anime series never became popular in Japan and never made it to the mainstream.
Therefore, investor committees always tend to recover their loss from only the few that made a profit. Hence, leaving the crumbs for anime studio workers.
Like every other business, the anime market has its gain and loss. Any investor that wants to go into the industry must be prepared for both. However, it is worth the risk because the anime industry is making more revenue than it used to be.