By Mark Seavy

Believe it! (“Naruto” reference for you anime newbies 😉) Anime is big and getting bigger. The growth and increased international penetration the genre has experienced in recent years has only been accelerated by the global pandemic, raising both its profile and licensing prospects.

This surge in interest among the homebound arrives amidst the increasing availability of anime content on mainstream services like Netflix and Amazon as well genre-specific streamer Crunchyroll, which surpassed 3 million subscribers earlier this year. Netflix also said that more than 100 million households globally watched at least one anime title between October 2019 and September, a 50% increase from the previous year.  Overall, the global anime market is projected to grow 8.1% annually through 2027 to $33.6 billion.

“TV and streaming accessibility have expanded quite a bit, and anime has become a lot more mainstream than it was,” says Viz Media Chief Marketing Officer Brad Woods. “You also have a growing and aging fanbase that is gaining some traction, and we just happen to have a year where all these fans are at home and they can dive into anime even more so because there are fewer distractions.”

Anime also has benefitted from the near universal delays of tentpole films, most of which are rescheduled for 2021, leaving a sizeable content gap to be filled.

“The streaming channels have been opened up and people are looking for more content that has been lacking during the lockdown,” says Ben Woodman, Commercial Manager at collectibles/poster licensee GB eye.  “With anime there is so much content and people have definitely discovered it. With the kind of sales figures we are seeing and the uplift, it more than covers the delays in film releases and because there are so many anime titles that it isn’t just one moment in time” as it is with film releases, “but rather a sustained period.”

The explosion of the anime market has also attracted the attention of outside investors.

• Sony has reportedly entered final negotiations to acquire Crunchyroll for somewhere in the ballpark of $957 million, which would content in addition to the 95% stake they own in Funimation.
• Tencent Holdings, which operates, among other things, the WeChat social messaging service, recently invested $65 million in Japanese anime studio Marvelous Entertainment, becoming the company’s largest shareholder with a 20% stake. The move to buy a stake in a content creator rather than acquiring it outright marks a new strategy for Tencent as it establishes a beachhead in one of Japan’s most popular exports and gets access to IP to use in its games in the coming years.

The Licensing Factor

With that broader availability of content has come a wider array of products, expanding from standard fare t-shirts, accessories and collectibles to tertiary categories like home appliances and fashion collaborations.

• Manga artist Junji Ito and punk band The Misfits introduced a CR Loves collection of hoodies, sweatshirts and t-shirts that started with pre-orders on Oct. 29.
• DJ Steve Aoki launched a line of apparel in September inspired by the “Naruto” anime series that was co-branded with his Dim Mak music label.
• Uncanny Brands released a line of “Dragon Ball Z” home appliances – waffle, coffee and popcorn makers along with slow cookers – that are available exclusively through GameStop and is readying a line of “My Hero Academia” appliances that will be an exclusive at another retailer in 2021, according to Uncanny Brands CEO Matthew Hoffman.

Have Fanbase, Will Travel

According to John Leonhardt, head of consumer products at Crunchyroll speaking at last month’s Festival of Licensing, one of the biggest advantages of anime is that by the time it arrives on screens outside Japan a fanbase has already been baked in, thereby hastening the leap to retail.

“Anime is one of the most vetted forms of entertainment in the world. It starts off in the mind of someone that wants to create a manga, a writer. He develops a series of comic books and then it has to be published by a manga publisher in Japan. Then it becomes something that’s considered to be funded for animation. These production committees – basically consisting of like an industrialist, a broadcaster, an advertising agency, a publisher – decide to fund the manga for anime and then for broadcast in Japan. At that point Crunchyroll licenses it from Japan. By the time it gets to the US or anywhere else outside of Japan, it’s got a fanbase. It’s a question of how big that fanbase is, but it’s got a passionate fanbase.”

Interestingly, in a bid to further tap into current momentum behind anime, both Viz and Crunchyroll are developing original series, some of which will skip that initial manga phase. In 2016, Crunchyroll launched “Yuri on Ice” with a licensing program and without the benefit of manga or comic books.

• Crunchyroll unveiled eight original series earlier this year, the first of which, the 13-episode “Tower of God,” launched in April.
• Another series, “Onyx Equinox,” – another original not supported by a book or comic book series – is set to debut on Nov. 21, a slight delay from its planned summer release.
• Viz developed “Seis Manos” with Powerhouse Animation Studios and Netflix, which was released last October. Netflix is expected to renew it for a second season.

“It’s definitely a challenge because having an existing fanbase is something everyone wants to leverage,” says Leonhardt. With original series “it will take a little bit more time to get a fanbase engaged” enough for a licensing program and “that will a function of how we are marketing it.”