800 million and growing: Why everyone wants a piece of the anime action

In the function centre of a large hotel in southern Tokyo, some of the biggest names in pop culture have come together for an awards night. Filmmaker Joaquim Dos Santos – director of the Oscar-nominated Spider-Man: Across the Spider-Verse – is here. So is Iman Vellani, the young Canadian actor who became the first Muslim-background lead in the Marvel universe as the star of TV series Ms Marvel and a co-star of feature film The Marvels.

Oscar-winners Phil Lord and Chris Miller (Spider-Man: Into the Spider-Verse, The Lego Movie) and Bong Joon Ho (Parasite) are among the presenters, as are American footballer De Marcus Lawrence and English rapper Che Lingo. And the main award of the night is presented by Megan Thee Stallion, one of the biggest musical acts in the world right now.

The event is the Crunchyroll Anime Awards, and all these people (along with about 500 more, mostly creators) are here because of their love for the artform – and for the big cheques the streaming service has written to entice them.

While the focus in the streaming wars has been on the household names – Netflix, HBO Max (in the US and soon in Australia), Amazon Prime Video, Apple TV+ and (in this country, at least) Stan (whose parent company, Nine, also owns this masthead) – Crunchyroll has been building critical mass, largely unnoticed by the wider public. But that could soon change.

The Sony-owned streaming service does nothing but anime – which chief executive Rahul Purini offers a simple but precise definition of.

“We believe our fans get attracted to anime because of its connection to Japan and Japanese pop culture,” he says. “So for us, for it to be considered anime, it needs to be conceived or created in Japan, and be influenced by Japanese culture and storytelling.”

So far so niche, you might think, and until recently that was the case. But the anime market is growing – at a rate of knots.

“Our research shows there are about 750 to 800 million people watching anime outside of Japan and China,” says Purini, “and that number is projected to grow to a billion in the next three years.”

Crunchyroll is the biggest player in that space. At the time the company and rival player Funimation merged in 2021, they had a combined 7.5 million paying subscribers worldwide. In January, the streamer announced it had just passed 13 million .

According to a recent report by analyst Grandview Research, the global market for anime was worth more than $US31 billion (including merchandise, events, music, theatrical and broadcast revenues) in 2023, and was expected to grow at almost 10 per cent a year from now to 2030.

Little wonder many of the other streamers are taking notice, and trying to stamp their own mark on the sector.

“Since 2017, we’ve been listening closely to fans to build our anime line-up,” says Kaata Sakamoto, Netflix vice-president of content, Japan.

In its homeland, anime is a mainstream proposition. Netflix claims it is “one of the highest viewing categories” and in 2021 “nearly 90 per cent of our members in Japan watched anime”.

Whatever else it may have done for the screen business, Netflix has proven beyond all doubt that good content can find audiences all over the world, regardless of the genre or original language in which it is made. And in that same year, the streamer claims, half of its 209 million members worldwide watched anime.

Netflix is following a two-pronged strategy in trying to build its anime catalogue: acquiring fan-favourite content via licensing deals; and generating its own IP, in some cases by remaking those fan favourites in live-action formats (it has had success with its 2021 reimagining of Cowboy Bepop, a hugely influential jazz-soundtracked space-noir that ran for two seasons from 1998-99; One Piece, the animated version of which is still running after 20 years and more than 1000 episodes; and Avatar: The Last Airbender, which is technically not an anime, since the original was made in the US, though it is stylistically and thematically very much in the anime wheelhouse).

Netflix is far from alone in looking to get its hands on a slice of anime’s inventory and audience. Stan has a selection of titles aimed mostly at younger audiences (Bey Blade, Transformers, a reboot of Astro Boy).

Amazon Prime Video’s small selection leans a little older, with romantic drama Scum’s Wish, historical dramas Dororo and Vinland Saga, and crime thriller Babylon among the standouts. Disney+ in Australia has only a small offering of titles – unlike in the US, where almost one-in-eight titles on its Hulu service is anime – but they include the highly rated Tokyo Revengers. Oddly, given Disney’s focus on animation for children, the vast majority of anime on the platform is rated M or MA15.

This surge in interest was inconceivable when local distributor Madman launched its streaming platform Anime Lab in 2014.

“We had laughably low targets,” says Tim Anderson, who co-founded Madman as a VHS mail-order business with Paul Wiegard in 1996 when the pair were university students.

The company soon evolved from dealing in imported VHS tapes to officially licensing anime titles for the Australian and New Zealand markets. They prided themselves on being early adopters, and quickly saw the potential of DVDs (which allowed for subtitled and dubbed versions of a film or series to co-exist), fan events (they staged a couple of anime conventions that attracted thousands of people), and the internet (as a way of sharing trailers and, later, sample episodes).

They saw the boost that came from getting one of their shows, Neon Genesis Evangelion, onto SBS on Saturday evenings, where it found an audience among high school and university students preparing for a night of partying. They made an auspicious start in the theatrical distribution business, too, when Studio Ghibli’s Oscar-winning Spirited Away became their first cinema release in 2002.

But the move to streaming was a leap into the great unknown, given the negative impact it would surely have on sales of physical media.

“You might sell 1000 copies of a half-decent title on VHS or DVD, and for a blockbuster like Spirited Away maybe you’d move 10,000 to 20,000,” says Anderson, who now runs boutique anime distributor Sugoi. “We didn’t know what the potential of the online space might be. We thought $8 a month [subscription fee] was a big ask, something that would only be for the hardcore fans. If we were lucky, we might get to 20,000, but we quickly got to 10 times that.”

By the time they sold Anime Lab for $35 million in 2019 (to Aniplex, another Sony company; the operation was eventually folded into Crunchyroll), they had more than 300,000 paying subscribers, and a couple of million registered users, in Australia and New Zealand.

Japanese animation has been around since the 1910s, but anime as we know it now arguably blasted off in 1963, when the black-and-white sci-fi series Astro Boy, created by Osamu Tezuka and based on his 1952 manga, went to air. Though it landed in multiple foreign markets – including Australia, where it remained a TV staple well into the 1970s – not everyone who watched it with eyes as wide as its titular hero realised they were in thrall to a little slice of Japanese pop culture.

“It was a foundational element to the artist that I am today,” says Joaquim Dos Santos of that first wave of anime. “I grew up with it, but there were a lot of shows I watched as a kid that I didn’t even realise were anime because they were brought over to the States and re-dubbed.”

It was only later, he says, that shows such as Voltron and Macross stamped themselves on his brain as fundamentally different to material from elsewhere.

“The quality of the animation was better,” he says, trying to enumerate what makes anime different to other animated forms. “The storytelling was not playing towards kids necessarily, it was not pulling any punches; characters were falling in love, out of love; the distinguishing factors between what constitutes a good character versus an evil character became really blurry; characters died and stayed dead. It was very, very heavy stuff.”

One of the most common mistakes the uninitiated make is to think of anime as a genre. “It’s not; it’s an art form,” says Mitchel Berger, Crunchyroll’s head of global commerce (responsible for maximising revenues through all the ancillary stuff – merchandise, events, music – that radiates off the central hub of the animation itself). “And within that art form you can find a whole range of different genres.”

Think the playful kids’ shows like Pokemon and Yu-Gi Oh, the romantic drama Horimiya: The Missing Pieces, or the action-comedy Buddy Daddies, about a pair of assassins who accidentally become parents to the orphaned child of one of their targets. Or above all the whimsical, metaphysical, genre-bending work of Studio Ghibli’s master storyteller Hayao Miyazaki, whose film The Boy and the Heron this week won him his second Oscar, 21 years after Spirited Away won him his first.

For the fans, anime contains multitudes.

“Anime is part of me. It’s in everything I do,” says young Australian-Filipino singer and actor Ylona Garcia. “I love how simple anime can be, and how much depth it has.”

“I grew up in a place where a good number of the people I was around went down paths that weren’t necessarily beneficial for their life or their time on this earth,” says rapper Che Lingo, who grew up in South London. “A lot of them learnt their lessons that way, which is obviously one of the hardest ways, and sometimes the most finite way. I learned my lessons about how to respect people, how to make friends, how to maintain bonds, how to fight for what you love, how to love the fight as well, from anime.”

Typically in the West, if we’ve thought of anime at all it is as a format aimed at children. But wandering around Tokyo – where characters are integrated into so many aspects of the cityscape – and listening to these grown-up fans, it’s obvious there’s much more to anime than that.

Yes, it helps sell a truckload of merchandise, and yes it’s a big multi-faceted business. But just like the novel or the movie or the long-form live-action drama, anime is also capable of hitting people of all ages where they live.

And for the streamers, that’s all the reason they need to try to hit you and me in our homes.

The author travelled to Tokyo as a guest of Crunchyroll.

Contact the author at kquinn@theage.com.au, follow him on Facebook at karlquinnjournalist and on Twitter @karlkwin, and read more of his work here.

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