Demand for anime content is reaching new levels thanks to VOD services and new opportunities in the licensing sphere. Animatsu Entertainment's chief operations officer, Jerome Mazandarani and marketing manager Andrew Hewson talk us through the global growth of Japanese animation.

Animatsu Entertainment on the global growth of animé

How has the popularity of animé grow across the globe in recent years? How big a market is the UK for anime content?

Jerome Mazandarani: The market for anime products in the UK is rock solid. We have not seen our DVD and Blu-ray sales dip at all since the recession. It is a flat curve and my estimate is the UK market is worth over £9 million GBP annually, just for finished packaged goods.

The other areas of growth are in subscription OTT service like Crunchyroll and merchandising, transactional video on demand and merchandising. Particularly apparel, collectables, posters and accessories.

On a global level, mobile gaming is massive, especially with China and Korea as well as Japan.

How have you seen consumption of anime content evolve over recent years, how important are digital streaming platforms for anime content today?

JM: [Online anime streaming service] has changed the game entirely. It has become a major disrupter to the traditional model of distribution for animé in foreign markets.

TV’s loss has been digital’s gain and even in more sophisticated markets like the US and Australia where animé has enjoyed market penetration and traditional television broadcast since the 70s, legal subscription streaming platforms like Crunchyroll have allowed fans access to shows as they air in Japan like never before.

These high quality streams with subtitles are delivered on demand to the viewer within 48 hours of the show’s broadcast in Japan. This has driven the audience’s awareness for new franchises, brands and genres within animé. It’s basically fuelled foreign fans’ appetite for animé more than ever before.

Andrew Hewson: One of the strange knock-on effects of home video is that it has increased the demand for high-end, collector editions Blu-ray box sets, which is interesting. We think this is part of the Superfan curve that many in the music business have predicted.

We see a glut of fans at the low end of the curve happy to consume the content for free via AD-VOD or illegal streaming sites. There’s a decent concentration of fans paying a monthly sub in the middle and then at the top of the curve we have 10-15% of fans who want premium edition goods across all formats.

Streaming will ultimately have a negative impact on packaged media sales as more and more new and younger fans migrate to streaming sites for this content. This has put pressure on reputable publishers, distributors and studios to establish their own platforms.

Manga/Animatsu is currently developing its business strategy in regards to the growth of the streaming market and you can expect to hear more about that soon.

Can you tell us a bit of history about Manga Entertainment, Animatsu and the Dragon Ball Z brand and what are your plans for the business in the UK?

JM: Manga Entertainment Ltd is 25 years old next year. It’s the longest running anime distributor in the UK and Ireland and at the start of this year was bought out from STARZ, the American cable subscription company by the UK management.

MangaUK is now a wholly independently owned business for the UK and Ireland.

Andrew and I started Animatsu Entertainment when we left Manga in October last year. Following the MBO of Manga, we brought Animatsu back to the new management as we required a domestic distributor and Manga needed a licensing and acquisitions team.

We’ve merged our operations and moving forward, we are redefining what Animatsu is, which I hope will be a unique, special projects division encompassing digital platform building, original content development and production and global rights sales.

We have a few projects in development already as well as a global license acquisition I hope to announce before the end of the year.

AH: Dragon Ball Z, meanwhile, is a perennial manga and anime brand that has been on screens around the world for over 30 years and is produced by the legendary animation studio, Toei.

The show first debuted on UK screens in early 2000 on Toonami. It was broadcast on the channel until 2002. An abridged version of the original show is now on air at KIX and its called Dragon Ball Z Kai.

We released the latest animated DBZ movie, Resurrection of F on over 80 screens nationwide on September 30th. The film grossed over £96,000 in one night and had the second highest screen average after Ridley Scott’s blockbuster The Martian.

We also debuted in the UK Box Office Top Ten during its opening week. We are now positioning the movie for DVD and Blu-ray release across all retail platforms on 25th January.

JM: What’s great for Manga from a home video standpoint is the relative older age of the Dragon Ball Z fan-base. Over 60% of the audience on Facebook and the official site is aged 15-25, which means we have a title that is more comparable to recent home video hits like The Flash TV box set and DTV hits like our own, HALO Nightfall.

The UK is a key market for anime because it is virtually untapped and has huge potential. There is a hardcore audience that we can rely on to take us over the line in terms of profitability, but also we have a huge cross over market of male gamers, collectors and hobbyists.

In recent years, Animatsu has been involved in the local campaigns for Halo: Nightfall and Dead Rising: Watchtower via our partnership with Content Media. These projects are direct-to-digital movies that spin off from the games.

AH: We see Manga and Animatsu as a marketing force that understands the Comic Con/Fanboy/Fangirl audience much better than our competitors and even the major studios and game publishers.

We have put a lot of effort into our grassroots marketing and community building and have found inspiration from brands like Nintendo, Roosterteeth and Anime News Network.

We intend to grow the company into a digital entertainment brand for the 21st century.

JM: We will continue exploiting traditional packaged media as the demand is still there among our keen, hobbyist and collectors audience while building a solid VOD presence too. We will also be expanding our product offering after successful testing.

We will have licensed apparel and other low-cost branded items available to consumers in the new year. We would like to try to drive our expansion into Europe in the new year. It will take time and we have a very careful approach, but I’ve learnt after 12 years in animé publishing that patience is a virtue.

What are the key areas of growth for anime content, is it in video games, TV or licensed products?

AH: We have been lucky to handle nearly all of the major anime brands. In recent years, we have distributed Death Note, Bleach, Naruto, Yu Gi Oh, One Piece, DBZ, Ghost In The Shell, Akira and many more. The biggest show in animé right now is Attack On Titan – that’s absolutely massive.

As far as I can tell, the key areas of growth for anime IP over the next several years will still be TV shows and movies that are based on a manga (Japanese comic book), light novels, followed by RPG and action game properties.

JM: Crunchyroll’s continued success means that we are now more comfortable trying out genres that have not worked for us before such as sport, dating/romantic and “idoru” Pop Idol animé shows. And with growth of VOD I also expect to see the first original animé series co-produced with the likes of Crunchyroll, Netflix and Amazon.

These will redefine what animé is and will show Japan new ways to crossover into a wider audience. In order for animé to remain viable, we need to see it continue to grow into a meaningful business overseas.

Less than 20 per cent of all license revenues are derived from international licensing. It will be interesting to see how Disney XD and Nintendo do with Yo-Kai Watch next year.

A live-action Ghost In The Shell film has been announced by Avi Arad Productions and Dreamworks with Scarlet Johansson set to star, and an Akira trilogy is in the works at Warner Bros. A Robotech trilogy is also in development at Sony Pictures so the future is looking very bright for animé fans all over the world.

What have been some of the most successful brand extensions for Dragon Ball Z and what would you like to see the property move into?

JM: By far the most successful brand extension for DBZ in recent years has been the long-running game franchise published by Namco Bandai.

Outside of the worldwide manga book sales, the game has been the second best performing category followed by home video. They have sold nearly a million units in the UK over the past 17 years on multiple platforms from Playstation, DS, Xbox to VITA and the Wii U.

I would like to see the property move into higher end CG animated films in the same vein as Big Hero 6.

What do you guys look for in a licensing partner?

JM: Someone who wants to get things done, but who is patient. All Japanese IPs have to go through a rigorous approval process. Ideally, we want to find partners who are specialists and market leaders in their field and who are respected by their clients as having a good nose for IP and being ahead of the curve.

It also helps if you have a good understanding of the global fanbase and online community and an appetite for grass roots marketing and sales at comic conventions such as the MCM London Comic Con that happens twice a year at ExCel. Do not be afraid of the fans.

With recent deals to bring Japanese hit Yo-Kai Watch to the US and the UK, and continued efforts to drive the likes of Dragon Ball Z among others, is anime content more popular than it ever has been in the West?

JM: It ebbs and flows to be honest. It’s only as good as the content. Kids and their parents aren’t suckers. The only way to pull in an audience is to engage them with great characters, great stories and that something extra and mysterious that captures the zeitgeist.

There has never actually been “The new Pokemon” for example. There’s no point copying or trying to emulate other successful brands. Just believe in your story and think about what makes it different and what makes it resonate with your audience.

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