With anime taking hold at mass merchants, characters and stories that once were relegated to specialty and niche distribution is moving into the mainstream.

The shifting fortunes of anime are being driven by the increasing availability of content through streaming services, TV and mobile devices and the sheer volume that is being produced. For example, Ellation’s Crunchyroll streaming service has doubled its number of paid subscribers in a little over a year to two million and releases 250-300 new series annually. That’s in addition to Funimation, which formally parted last week with Crunchyroll on a content-sharing agreement to focus on its own FunimationNow streaming service. The change follows Funimation’s acquisition by Sony Pictures Television last year. Adult Swim also has an evening block of anime. 

That kind of expansion hasn’t gone unnoticed. While specialty retailers such as Hot Topic, FYE Entertainment and GameStop have grown to be a key channel for anime, mass merchants are taking tentative steps into the arena. For example, Market sources say Target is expected to feature anime products – collectibles, apparel, mugs and other items – in 1,600 stores during a 2-3 month run beginning in March in its dedicated “license shop” — a scalable display within its entertainment department. (A Target spokesman declined comment.) 

For its part, Walmart launched a dedicated collectibles section with Loot Crate, Culture Fly and Funko at 3,500 stores in October and is expected to add anime-related items in early 2019.

“Anime has always been in the niche space, but it is quickly becoming more mainstream and relevant and if you are Target or Walmart, you start to notice that,” says Viz Media’s Brad Woods, whose firm is best known for its “Naruto”, “My Hero Academia” and “Sailor Moon” properties.

As they’re working to extend retail exposure, owners and licensors of anime IP also are trying to broaden the base of licensees. That’s not without challenges.

Many anime productions in Japan are funded by 3-4 different companies, all of whom have approval rights for merchandise along with the anime artist, a step that can be jarring for licensees accustomed to working via a more streamlined process with property owners in other parts of the world. 

“It takes [properties with multiple ownership] longer sometimes to get through the system,” although the process is quicker for well-known properties like Naruto with an established track record, says Woods. “It can be a frustration for licensees; what we do with new groups is manage expectations and plan accordingly. If you come out and say ‘let’s do a shirt and hit the (retail) planogram in six weeks,’ you aren’t being very realistic. Sometimes it is better to say ‘let’s plan for next season’ to allow for enough time to make the process a little easier.”

Anime’s crossover to the mainstream has been evident this fall. Legendary Pictures announced plans for a live-action adaptation of “My Hero Academia.” That’s in addition to it currently being in production on the live-action film, Detective Pikachu. 

Separately, Fathom Events worked with Crunchyroll to bring its 12-episode “Yuri on Ice” series to 95 movie theaters on Oct. 13 for marathon screenings. And the Goku character from Dragon Ball Super: Broly, will be one of 15 big character floats (56 feet long) in the Macy’s Thanksgiving Day parade later this month.

“Geek chic is popular now and people wear it with pride and it is totally acceptable,” says Rooster Teeth’s Geoff Yetter, whose firm developed the popular RWBY series that is among the few anime series produced in the U.S. “We had these fandoms, but they were kept behind closed doors. But now these people are adults with money to spend and there is a sense of nostalgia” for properties such as Dragon Ball and Naruto, which were released more than 20 years ago.

Given that increasingly monied-fan base, the once in inexpensive t-shirts and collectibles are being joined by premium products. For example, RWBY licensee McFarlane Toys developed a 12-inch resin RWBY Alpha Beowolf Battle statue the sells for $550. And the Benny Gold streetwear brand and boutique is working on a co-branded Crunchyroll collection that due in 2019.

“The execution and target price points have matured,” says Woods. “Before you might have a $10 t-shirt, now you have a $50 version that has a collaborative artist interpretation of one of the characters. It becomes trendier and higher quality and that does a lot to raise a brand’s image.”

While Dragon Ball, Naruto and My Hero Academia are among the top-selling licensed brands, finding the up and coming properties such as Re: Zero, Black Clover, Yuri on Ice, Goblin Slayer and others are of equal importance if anime is going to continue to raise its profile. To that end, Bioworld Merchandising launched Anime Pls as a platform for testing sales of new properties and using that data to sell retailers on carrying the product, says Bioworld’s Beth Taylor. It also uses the site to put a twist on proven properties with designs that appeal to hardcore fans but might be lost on mass consumers. For example, it is featuring a design with a “Great Ape Goku” design that has appeared only a few times in the Dragon Ball series.  Ellation also formed a studio division earlier to release original content on Crunchyroll in 2019, starting with “High Guardian Spice,” which will have a licensing program attached to it, says Crunchyroll’s Michael Melby.

“The goal is to find the next big title and bring it to brick and mortar,” says Taylor. “Even within the more popular titles there will be more ‘insider’ art, which allows us to keep that pop culture fan happy and we can communicate to brick and mortar the results we are having.”

While the designs have traditionally found a home in apparel and accessories and collectibles, anime in finding its way into licensed food and beverages as well as home décor and bedding. Viz Media licensee CTC Food International  in the U.S. has launched Naruto-branded ramen noodle soup and soda featuring designs from the series that first ran in the early 2000s. The food is part of an effort to appeal to a younger audience than the typical teenager to young adult consumer attracted to the property, says Wood. In the case of Crunchyroll, it is targeting ramen noodles, ice cream and baked goods for 2019 and licensee Just Funky recently launched bedding sets using Black Clover, Yuri on Ice and Bananya, says Melby.

“It is about bringing a meaningful experience to the fans through content and merchandise. If you don’t have that and it’s just a money-grab, anime fans know that and won’t buy the product,” says Yetter.

Contacts:

Bioworld Merchandising, Beth Taylor, Licensing Dir., 888-831-2138 betht@bioworldmerch.com

Crunchyroll, Michael Melby, Consumer Products Dir., 415-770-9404, mmelby@crunchyroll.com

Rooster Teeth, Geoff Yetter, Licensing Mgr., 940-353-7144, Geoff.yetter@roosterteeth.com

Viz Media. Brad Woods, Chief Marketing Officer, 415-546-7073 x235, bradwoods@viz.com