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Are Streaming Revenues Improving The Lives Of Animators?

by Justin Sevakis,

Custom Gundam asked:

With ANN recently reporting that Crunchyroll royalties to the Japanese industry exceed US $100 million and also the huge amount recieved from global companies like Netflix and Amazon and also the various other companies around the world that release anime in their respective territories...why is it that still in 2018 that Japanese animators are paid so little ie not even a living wage of say US $30,000 a year? I appreciate that anime is expensive to make and that production commitee system is complex with everyone involved needing their slice of the pie, but are a lot of these profits simply not filtering down to the animation studios so that they can improve working conditions for their staff.

Crunchyroll's recent announcement of having paid out over US$100 Million in royalties and license fees to anime producers was big news, and certainly something to crow about. It was a big number that proved the site is making a meaningful contribution to anime production. And, with other sites in both the US and China also throwing significant money at the anime business, that means that revenues are good, despite a downturn in Japan's domestic anime market.

That sounds like good news for the anime business, and it is. However, it's slightly less exciting when you realize that those revenues aren't going to everybody equally, and the anime business is not one big company, but rather a pile of companies that all work together a lot. If you look at Crunchyroll's list of popular shows, you'll see a lot of the same shows that have always populated that list. Naruto Shippūden and Boruto. One Piece. Dragon Ball Super. My Hero Academia. Some recent shows have cracked the top of the list lately, such as Black Clover and Overlord, but the overwhelming majority of that money really just went to a handful of giant blockbuster shows.

Overseas licensing in the US and China have been a boon for the anime industry as a whole. However, coming up with new hits is still a difficult and fickle thing, as it is for every entertainment industry, and the overall success/failure rate hasn't really changed that much over the years. To hedge its bets, the main anime producers ("planners" / kikaku) have spread themselves out, and used that extra revenue largely to create more shows. And more shows. And more shows.

So ultimately, that creates an interesting situation: all of the anime studios are fully booked for the next several years. Whereas ten years ago a studio would really have to scrimp and suffer, cutting their rates to land new projects, that doesn't really happen anymore. New productions have settled at a specific price (around US$320,000 per episode), and anime studios haven't really had to go lower than that.

Revenues from international licensing, and pretty much every other way an anime can make money, don't filter down to the people paid by the animation studio. It DOES directly pay a few prominent members of the staff, such as the original creator, the director, and the head writer, who all enjoy royalty payments. But if the show is a hit, the company tasked with making the show doesn't see an additional dime. They were tasked with doing a job for a specific price, as if they were being paid to cut the lawn. Anime, especially TV anime, has always been a penny-pinching business. Decades of the studios barely scraping by, and often losing money on productions, has meant they simply haven't been ABLE to pay animators more.

So while things aren't as dire as they used to be, that doesn't mean the anime studios are rolling in it. Production committees, and the TV networks that sit on them, exercise a huge amount of control over the budgets and keep the costs low across the board. Really, that price just allows a production to squeak by without losing the studio a ton of money, and without much animation having to be sacrificed. Production costs were so constrained that the additional funds aren't getting anyone in production a raise, it just means the studios aren't bleeding to death.

What IS potentially moving the needle? Well, maybe it will be Netflix, though it's far too early to say. Production costs of US$320,000 per episode is ridiculously low by American standards, and Netflix has the money to pay all of it and then some. Which means, for its original shows, there's no need for a production committee. Ultimately we don't know how much Netflix is spending, but at least for some of their productions, it looks like it'll be significantly more than that. "Netflix is restoring it to a sane business model. You're looking at maybe a 15 percent margin rather than a 5 percent loss," Joseph Chou, a producer for Toei Animation and president of Sola Digital Arts told The Hollywood Reporter last December. But the jury is absolutely still out on Netflix's involvement in the anime industry - as of this writing they have yet to actually personally produce an anime or sit on a single production committee, so we don't know what impact they'll have yet (or if they're even really interested in overhauling that system). Kevin Cirugeda over at Sakugablog posted this pretty tough opinion piece about Netflix's involvement, including some anecdotes from animator Katsunori Shibata on how things really haven't changed. Come to your own conclusions, but I think it's an informed perspective worth considering.

Will any of this stuff finally allow the junior animators to get paid more? We aren't getting much information yet, but with the industry perpetually short-staffed, I expect that competition will eventually drive up wages when the studios can afford it.

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Anime News Network founder Justin Sevakis wrote Answerman between July 2013 and August 2019, and had over 20 years of experience in the anime business at the time. These days, he's the owner of the video production company MediaOCD, where he produces many anime Blu-rays. You can follow him on Twitter at @worldofcrap.

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