Netflix embarks on full-scale drive in anime business

© Go Nagai-Devilman Crybaby Project

A scene from “Devilman Crybaby”

By Makoto Hoshino / Yomiuri Shimbun Staff WriterThis year the U.S.-based streaming service Netflix has been ramping up its strategy of focusing on anime by delivering Netflix originals one after another — including “Devilman Crybaby,” directed by Masaaki Yuasa — rather than simply adding more anime already in existence to its lineup.

People are watching this strategy to see whether Netflix will be the savior of the anime industry, or a competitor akin to the “Black Ships,” the U.S. fleet that came to Japan toward the end of the Edo period (1603-1867) and opened the nation up to the world.

“The range of age groups among anime fans has narrowed, with larger audiences in the older age groups,” said Taito Okiura, Netflix Japan’s director of anime. “There are some blockbusters such as “Kimi no Na wa” (your name.), but they’re exceptions. The domestic anime market has been shrinking.”

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  • The Yomiuri Shimbun

    Taito Okiura

“As we turn our attention to the world, however, many people are watching anime. [If we do business on a global level] I thought I could implement a project that I had previously had to give up. This idea was behind my motivation to jump into [Netflix],” Okiura said. He joined Netflix Japan in October after quitting as president of anime production firm David Production Inc.

As a filmmaker and manager, Okiura was worried about Japan’s rapidly aging population due to the chronically low birthrate. Then Netflix unveiled a new strategy of strengthening its anime lineup — which was just what Okiura wanted to do.

With Netflix now providing its service in 190 countries worldwide, its Japanese arm plays a central role, raising expectations for anime.

In late January, Netflix announced a comprehensive business alliance with Production I.G Inc. and another anime production studio called Bones Inc. The move surprised people in the industry, as the alliance with the two firms meant Netflix was going to launch a full-scale anime streaming service. In the past, anime has been mostly watched on TV or at movie theaters.

Production I.G is known for its TV series “Kokaku Kidotai” (Ghost in the Shell), and Bones is known for “Kokyoshihen Eureka Seven” (Psalms of Planets Eureka Seven). Both anime studios are among the strongest in the nation, and with Netflix they plan to jointly produce several anime for global distribution.

When Netflix first entered the Japanese market in September 2015, Greg Peters, then president of the Japanese arm, said the firm was ready to set up a surprising collaboration with Japanese production companies. His words have now become a reality.

“Excellent creators are very scarce and very much in demand. It’s important that we were able to make a deal with these companies to steadily produce work,” Okiura said.

An animated film usually takes several years to create, from planning to completion. Netflix is expected to start offering anime jointly developed through these alliances after 2020.

“Devilman Crybaby” started streaming globally in January. Energetic director Yuasa’s adaptation of Go Nagai’s original manga “Devilman,” the anime has been attracting attention and is earning a reputation overseas for its unrestrained depictions and elaborate framework, among other features. Expectations are now high for future collaborations.

The 2017 white paper on digital content, compiled by the Digital Content Association of Japan, said animation production budgets have not expanded as much as the market has, while production costs have risen.

With the entry of a prominent company like Netflix, there have been some signs of improvement in the production environment, which has been troubled with chronic understaffing and a lack of funds.

“People may think otherwise, but the fact is that the costs of producing Netflix originals are not so high,” Okiura said.

The budgets for Netflix originals depend on the number of targeted views, just as for TV programs and movies.

“But the number of Netflix subscribers is 117 million. Various kinds of projects have a chance to be viewed worldwide, which will certainly have a positive impact on the Japanese anime industry,” Okiura said.Speech

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