Ahead of a weekend in which Asian content will have a major impact at San Diego Comic-Con, two of Japan’s largest industrial and financial conglomerates have quietly begun investing in Japanese animation, the hottest part of the film and TV industry of the country.
Marubeni, which has its roots in grains, chemicals and paper but has diversified to become a trading giant and Japan’s 13th largest company, says it is targeting the booming manga (comics) and anime (animated films) markets and series) through a new venture with Shogakukan. , a leading publisher.
Mizuho Securities, another part of the Mizuho keiretsu (a form of business alliance common in Japan), announced this month that it will launch an animated film fund. The brokerage will raise funding from institutions and wealthy individuals in batches starting at JPY300 million ($200,000) each and aims to raise $15 million by the end of the year.
Japanese animation is certainly experiencing a period of unprecedented success. Titles like “Doraemon” from Shogakukan and Shin-Ei Animation, “Demon Slayer” from Shuiesha and Ufotable, and “Detective Conan” and “One Piece” have become powerful global franchises. Also recently, Japanese animated films, including Studio Ghibli’s ‘The Boy and the Heron’ and CoMix Wave-Toho’s ‘Suzume’, have proven they are capable of $100 million theatrical runs in a single territory.
Mizuho will collaborate with Questry, a blockchain startup, and Royalty Bank. They will then deploy tranches of cash each year, up to $5 million at a time, as investments in a handful of new Japanese animations.
Institutional funds became a larger part of the Japanese scene in the early 2000s, but have since given way to the dominant system of production committees. These committees are clusters of companies active in or closely linked to the entertainment sector, such as advertising giants Dentsu and Hakuhodo, which agree to share the risks.
The production committee system provides stability, but has been criticized for slow decision-making, deterring international co-productions and keeping budgets artificially low. The special vehicles that committees often set up shield financial risks, but can also discourage reinvestment.
However, in recent years, several factors have led to an erosion of risk-averse committees. These include the growing international success of Japanese anime, Sony’s acquisition and rejuvenation of specialty anime streamer Crunchyroll, and the arrival of Netflix as another major investor in the sector.
Prime Minister Kishida Fumio’s government is also keen to see Japanese entertainment placed on the same level as K-pop and Korean TV dramas. In his “New Capitalism” proposals last month, he said, “Anime, manga, music and other artistic content are assets we should be proud of.” He suggested that entertainment content could have an export profile similar to steel and semiconductors.
Furthermore, leading filmmakers like Kore-eda Hirokazu are calling for a modernization of Japan’s film industry – an industry that sees the creation of state-backed production funds and incentives modeled after those of France’s Center Nationale de la Cinematographie, and a system that breaks down paternalistic hierarchies.
In a report from Bloomberg, Shuichiro Tomihari, director of Mizuho’s global investment banking division, said he hopes to “create opportunities for third-party investment and accelerate the revitalization of the animation industry.”
New funding could alleviate two problems the industry currently faces: a shortage of animators (low salaries and long hours deter newcomers) and production budgets that pale in comparison to the largest American (and Chinese) counterparts. (Sony is also currently setting up a skills training academy.)
The backlog of work is reportedly two to three years long, leading studios to consider outsourcing more production to offshore centers such as the Philippines or Vietnam. That is something that many do not want to admit. Ditto to a further weakening of the tradition of predominantly hand-drawn animation. But change is coming, whether they like it or not.
The threats posed by foreign rivals and AI-enabled production – and the current opportunities for diversification of Japanese anime into new markets and online formats – are catalysts for industry transformation that will require funding.
Marubeni’s involvement is fairly conventional in that it involves MAG.NET Corp. has been set up as a joint venture between two established companies (actually three, including Marubeni’s paper products subsidiary, Forest LinX). But it remains significant that this is the 168-year-old industry giant’s first foray into entertainment.
The group’s background reasoning is also similar. “Overseas sales of Japanese content were estimated to be the equivalent of JPY4.7 trillion ($2.9 billion) in 2022. The popularity of Japanese manga and anime is growing rapidly against the backdrop of rising demand for stay-at-home stocks due to the COVID-19 pandemic and aggressive distribution by major overseas distributors, with the market expanding to include a variety of merchandise. , including games,” Marubeni said in a statement.
It also identifies weaknesses that need to be addressed. “Lack of direct distribution networks and stores means that compelling content cannot be delivered to fans around the world, resulting in missed opportunities. This situation has led to an increase in illegal products, highlighting the need for a system that guarantees the distribution of legitimate goods,” the statement continued.
While Shogakukan is tasked with ensuring product supply for MAG.NET, Marubeni and Forest LinX aim to expand the range of goods and services using manga and anime and expand overseas distribution, including the construction of retail stores.
And other steps in financial engineering may be on the way. Earlier this month, Singapore-based Phillip Securities said it raised more than $2 million from the sale of digital effects for the Japanese live-action film “Treasure Island,” adapted from a novel by Shindo Junjo and starring Tsumabuki Satoshi.
In mid-June, private equity giant Blackstone announced that it had made a $1.7 billion offer for Japan’s Infocom. The company is a leading provider of digital comics, with its subsidiary Mecha Comic described as “the market leader for Japanese women aged 30 and over.”