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The Anime Economy - Part 1: Let's Make An Anime!


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HitokiriShadow



Joined: 09 May 2005
Posts: 6251
PostPosted: Mon Mar 05, 2012 2:03 pm Reply with quote
It's interesting to hear that 70% of shows break even 'eventually'. Because international licensing was one of the factors that could bring a show to profitability, I'm curious when that number came from. If it was from several years ago, I wonder if the number has changed since then.

configspace wrote:

For example:
animenewsnetwork.com/interest/2011-10-01/animator-shunji-suzuki-confirms-nichijo-r-15-itsuten-low-sales
talks about how Nichijou and R-15 bombed. Nichijou's first week sales in June 2011 was 3,544 / vol. Since that was only for its first week, we can round it up to at least 4,000 by end of July, a month later, which might be a bit conservative. Still he mentioned:
Quote:
"did not come close to meeting the break-even line"


Nichijou was clearly on the high end of the budget scale though. Whatever it needed to break even, I would think something like Kill Me Baby, Amagami SS+ or High School D x D would need significantly less. It's hard to imagine that the majority of shows (even removing shows like Naruto, Pretty Cure, etc. for which the home video sales clearly do not matter much) could require over 4k in sales to break even. I would think the JP industry would have collapsed years ago if that was the case.
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Saffire



Joined: 25 Nov 2007
Posts: 1255
Location: Iowa, USA
PostPosted: Mon Mar 05, 2012 2:10 pm Reply with quote
Great article, looking forward to the next piece!
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Chagen46



Joined: 27 Jun 2010
Posts: 4377
PostPosted: Mon Mar 05, 2012 2:12 pm Reply with quote
Quote:
Every anime fan, at one time or another, daydreams about making an anime. It's not an uncommon sight to see younger fans toiling over their own original manga, fantasizing that one day it might get an animated TV show.


Ha ha, I am SO that person. I've been harboring a dream of making my own animation company ( It pretty much IS my one true dream besides "become a linguist"). I've come up with over 10 shows, ranging from such diverse genres as Super Robot, SOL, Shonen, and the like. I know it will never happen, but a boy can dream, can't he?

Nonetheless, this column will be VERY interesting for me.
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Shiroi Hane
Encyclopedia Editor


Joined: 25 Oct 2003
Posts: 7580
Location: Wales
PostPosted: Mon Mar 05, 2012 2:12 pm Reply with quote
configspace wrote:
That manabi line of 2,000 copies/vol (at the standard singles pricing in Japan) turns out to be false. It might have started as a joke on 2chan or maybe a false assumption, perhaps not taking into account other costs, but we know that for the most part, it's got to be at least twice that much.

[...]

Nichijou's first week sales in June 2011 was 3,544 / vol. Since that was only for its first week, we can round it up to at least 4,000 by end of July, a month later, which might be a bit conservative. Still he mentioned:
Quote:
"did not come close to meeting the break-even line"

The line will vary per title though. Nice as Manabi was, I doubt the animation cost as much to do (it was in SD for a start and Nichijou had some insanely detailed and fluid stuff with large numbers of key frames).
While it is not a direct source, assuming license costs are somewhat congruent with production costs... I was surprised that Manga was disappointed with "only" 14,000 copies sold of the Sub-only Vexille in the UK, whereas a lot of stuff struggles to sell more than a couple of thousand units, but apparently the license was particularly expensive (for reference, the CGI Appleseed sold three times as many and Ex-Machina did 25K).
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momonae



Joined: 05 Mar 2012
Posts: 5
PostPosted: Mon Mar 05, 2012 2:19 pm Reply with quote
Thanks for interesting reading.
But "gensaku" means "orginal work" and "orginal creator" is "gensakusha"....
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The King of Harts



Joined: 05 May 2009
Posts: 6712
Location: Mount Crawford, Virginia
PostPosted: Mon Mar 05, 2012 2:25 pm Reply with quote
Justin, I hope you're aware of the fact that for years to come, when fans are arguing about the state/health of the industry, they will be quoting and mis-quoting the words you put into these three pieces. These will now be the "go to" pieces for people to prove their points and disprove another's.

I also hope you're prepared to take that responsibility. Godspeed, Mr. Sevakis.
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superdry



Joined: 07 Jan 2012
Posts: 1309
PostPosted: Mon Mar 05, 2012 2:26 pm Reply with quote
configspace wrote:
superdry wrote:
There is the "Manabi Line" regarding sales of a late-night anime that would break even. Whether that's true now is a different story, but at least it gives a baseline to look at.

That manabi line of 2,000 copies/vol (at the standard singles pricing in Japan) turns out to be false.


Of course it might not hold true today and the break-even point for series vary. But, my statement was never stated in any absolutes. I also edited my statement by removing the word "mythical" before "Manabi Line" - maybe I should have kept that in my post.
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Lord Geo



Joined: 18 Sep 2005
Posts: 2545
Location: North Brunswick, New Jersey
PostPosted: Mon Mar 05, 2012 2:30 pm Reply with quote
Zac wrote:
Lord Geo wrote:


The funny thing is that the R1 anime industry doesn't want to seemingly wait.


How many businesses do you know of that are super comfortable taking a loss on a product for years after release?


Whoever said that business was ever going to be "comfortable" in the first place? And, anyway, it's not like I'm talking about licensing a completely different title... This is about a title that has already been licensed, produced for a North American release, previously released, and, likely, will remain licensed for a few years still.

To bring up Big Windup! again, FUNimation announced the license to the show in 2008 and released the original two 13-episode sets in mid-2009. Then about a year later the S.A.V.E. Complete Collection release came out, which means that FUNimation is done with that show for good. But unless FUNi is allowed to nullify that license and give it back to the original licensors (and if they have, then so be it), wouldn't the company still have Big Windup! for a few more years? It's been about 3.5 years since the licensed was announced, afterall. I mean, really, is there any big difference in cost between producing a S.A.V.E. collection release and a regular complete collection release? The main difference is in how much FUNi wants people to pay for it, but the actual production costs are probably very similar.

Again, I'm not saying that Big Windup! would likely have made back its money for FUNimation, but the same idea applies to any other title that FUNi has or will give S.A.V.E. releases to after the initial releases, i.e. no regular complete collection release.
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Botan24



Joined: 30 Apr 2011
Posts: 684
Location: Northern Michigan
PostPosted: Mon Mar 05, 2012 2:30 pm Reply with quote
A very nifty article. Kinda interested in what brought this on...is it something Justin's been meaning to do for awhile? Or did people request it?
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configspace



Joined: 16 Aug 2008
Posts: 3717
PostPosted: Mon Mar 05, 2012 2:34 pm Reply with quote
jsevakis wrote:
Glad everyone's into this article. Very rewarding. It took a very long time. Smile

Part 2, which will post Wednesday, will get VERY deep into the R2 DVD market, with numbers. And yes, I can tell you the Manabi line is ludicrously low.

I want to thank you too for this. I've only gotten glimpses and been able to gather a few rare reports (like the Bamboo Blade spreadsheet leak) here and there so I am very much looking forward to the next installment with more data.

HitokiriShadow wrote:
It's interesting to hear that 70% of shows break even 'eventually'. Because international licensing was one of the factors that could bring a show to profitability, I'm curious when that number came from. If it was from several years ago, I wonder if the number has changed since then.

configspace wrote:

For example:
animenewsnetwork.com/interest/2011-10-01/animator-shunji-suzuki-confirms-nichijo-r-15-itsuten-low-sales
talks about how Nichijou and R-15 bombed. Nichijou's first week sales in June 2011 was 3,544 / vol. Since that was only for its first week, we can round it up to at least 4,000 by end of July, a month later, which might be a bit conservative. Still he mentioned:
Quote:
"did not come close to meeting the break-even line"


Nichijou was clearly on the high end of the budget scale though. Whatever it needed to break even, I would think something like Kill Me Baby, Amagami SS+ or High School D x D would need significantly less. It's hard to imagine that the majority of shows (even removing shows like Naruto, Pretty Cure, etc. for which the home video sales clearly do not matter much) could require over 4k in sales to break even. I would think the JP industry would have collapsed years ago if that was the case.


I think they most certainly would have collapsed if were every studio for itself. The usage of a production committee allows the industry to absorb very high losses initially, and remain unprofitable for some number of years, all the while relying on big hits to subsidize them in the mean time.

Like already mentioned, the break even manabi line of 2,000 copies is a myth, and despite the fact that Nichijou is higher cost in terms of more tweened frames (though certainly not more detailed or more complex), the fact that at ~4k copies "doesn't come close to breaking even" is still not a good sign. If we then speculate that ok, Nichijou = twice the cost, therefore, 4k is the minimum break even line (going by his statement of "not even close"), that still leaves most other anime doing poorly in the first year at least if you look at sales figures, like R-15's and all others like it.

For example for Gundam 00
http://bakudon.net/news/2008/02/27/financials-heaven-hell-reality-three-looks-at-the-business-of-animation-production-part-2-gundam-00-dvd-sales
Quote:
So a loss of at least -46,940 to be made up in toys and merch for season one.


But I'm sure we'll get hard numbers in Justin's next report


Last edited by configspace on Mon Mar 05, 2012 2:39 pm; edited 2 times in total
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Yorozuya



Joined: 11 Mar 2009
Posts: 332
PostPosted: Mon Mar 05, 2012 2:35 pm Reply with quote
Interesting :]
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jsevakis
Former ANN Editor in Chief


Joined: 28 Jul 2003
Posts: 1684
Location: Los Angeles, CA
PostPosted: Mon Mar 05, 2012 2:39 pm Reply with quote
momonae wrote:
Thanks for interesting reading.
But "gensaku" means "orginal work" and "orginal creator" is "gensakusha"....

Oops! Quite right. I got mixed up with the kanji 者 and 社. Fixed. Thanks!
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Veers



Joined: 31 Oct 2008
Posts: 1197
Location: Texas
PostPosted: Mon Mar 05, 2012 2:50 pm Reply with quote
I've been looking forward to this undertaking since it was mentioned on ANNCast, Justin.

More accurately, I was looking forward to what you haven't published yet (namely, just how much/little impact the NA market has these days and other nerdy sales figures in general), since I was already pretty familiar with this piece's content (sans some of the specific statistics). Despite never really doing any serious research on the process, spend a few years following anime news and you just kinda absorb that knowledge without going out of your way to find it.

Nevertheless, an interesting read, and a good a succinct presentation of the process. I look forward to the rest of your write-ups!
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Banden



Joined: 24 Sep 2010
Posts: 140
PostPosted: Mon Mar 05, 2012 3:10 pm Reply with quote
sburstall wrote:
This is true for movies also. Making a movie is a crap shoot and one hopes their movie makes money.


Questioning the unquestioned assumption: Was filmmaking always this way? Is the imbalance due to heavy market saturation, or is this an intrinsic hazard of the creative process?
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Chagen46



Joined: 27 Jun 2010
Posts: 4377
PostPosted: Mon Mar 05, 2012 3:14 pm Reply with quote
Banden wrote:
sburstall wrote:
This is true for movies also. Making a movie is a crap shoot and one hopes their movie makes money.


Questioning the unquestioned assumption: Was filmmaking always this way? Is the imbalance due to heavy market saturation, or is this an intrinsic hazard of the creative process?


I'm no expert but I'd wager that is was always like this. After all, making a movie takes a ton of money. Most don't have the money to make their own movie straight out of their pocket, so they sign on with a comlany willing to front the bills. Of course, their publisher would want some sort of profit, so....
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