Anime 'bubble' bursts amid slumping sales

Vaunted as a cultural export capable of pulling the country out of its economic doldrums, the once-booming anime business now appears to have lost steam.

After peaking around 2006, the number of new cartoon programs introduced in the domestic market has dropped considerably, along with sales of videos and DVDs both in Japan and abroad.

Drawing parallels between the asset-inflated economy in the 1980s and the excessive expectations of businesses entering what was long considered a niche industry, some insiders have likened the situation to a bubble bursting.

According to the Association of Japanese Animations (AJA), an industry body formed mainly by animation production companies, the number of anime programs aired on television steadily climbed from 124 in 2000 to a peak of 306 in 2006.

However, the figure dropped to 288 last year. Meanwhile, the number of new anime programs that began broadcasts last month was expected to be in the 30s, about half the 60-odd programs unveiled in April 2006.

"The bubble that formed several years ago has burst," said Yasuo Yamaguchi, executive director of the association. "The entire market is on a downward path," with the declining number of children and impact of the recession.

He added that the industry, already facing a glut of workers, could enter a phase of massive restructuring.

Sci-fi hits, such as "Space Battleship Yamato," "Galaxy Express 999" and "Mobile Suit Gundam," are credited with stirring anime booms during economic slumps in the 1970s and 1980s.

The advent of late-night TV broadcasts of anime programs in the late 1990s created the bubble. Major networks, along with UHF channels and satellite broadcasters, jumped on the bandwagon, filling their midnight airtime with anime programs targeting adult audiences.

The programs promoted video software, including DVDs and other media, featuring the same works, which in turn generated revenue.

After blockbuster hits, such as the "Shinseiki Evangelion (Neon Genesis Evangelion)" series, emerged, animation production companies, video companies, publishers and others teamed up in a fierce race to churn out new works.

One producer explained how the bubble worked: Broadcasters were euphoric as they could sell off unclaimed late-night airtime. And the media fueled the frenzy by trumpeting works as gaining popularity overseas and riding the so-called "moe (love)" boom, using the term coined by otaku geeks to refer to the affection felt for anime characters.

"Eventually, financial firms and new information technology businesses seeking new markets to invest in entered the picture as the economy started to recover. A market that was a niche at best became inflated with expectations," the producer said.

But while hit cartoons continued to pop up, sales of software started to taper off. According to Japan Video Software Association statistics, domestic sales of Japanese anime software, which hovered around 97.1 billion yen in 2005 and 95 billion yen in 2006, slipped to about 89.4 billion yen in 2007 and 77.9 billion yen in 2008.

Another animation producer attributed sliding sales to growing dissatisfaction among anime fans toward an apparent lack of creativity.

"Fans realized that most of the new titles were more or less the same. They were mere repetitions of seemingly popular themes, such as nymph-like girls and robots," the producer said.

"With the widespread introduction of high-definition TV recorders and a dwindling amount of disposable income, young people are becoming more selective in choosing software," the producer said.

He added that the only way to reverse the trend was to "come up with a powerful work that can withstand such scrutiny."

With demand shriveling here, anime producers might be tempted to look overseas. But the picture there is not all that rosy.

According to Japan External Trade Organization estimates, the U.S. market for Japanese anime products, including character goods, peaked in 2003 at about $4.8 billion, before dropping to about $2.8 billion in 2007. DVD and video sales have also declined since peaking in 2002.

One serious problem behind the drop in DVD sales is illegal distribution of anime programs on the Internet.

Copies of programs, complete with subtitles, have circulated through video sharing websites or by using file sharing software, just hours after broadcasts in Japan.

Hoping to combat such illegal distribution, TV Tokyo Corp. launched in January a service that delivers popular anime programming to members through a U.S. website on the same day the shows are aired in Japan.

The service, the first of its kind, lets paid viewers in the United States access nine programs with subtitles within about 30 minutes of broadcast. Other viewers can peruse material with advertisements for free a week after broadcast.

Fuji Television Network Inc. started distributing its anime programs through the same website this spring.

TV Tokyo has managed to draw about 18,000 members to its service.

"We eventually plan to allow fans to purchase related merchandise through the site. We hope to create a new business model that will allow us to collect revenue from fans around the world," said Yukio Kawasaki, director of anime operations at TV Tokyo.

But those moves may be a stopgap measure at best. Yamaguchi of AJA says the days when the market continued to grow by broadening the target age group have ended.

"There is very little space that remains untouched," Yamaguchi said. He added that he believes China has outpaced Japan in terms of total minutes of animation produced each year.

"From here on, it will be important to place more emphasis on quality rather than quantity," Yamaguchi said.(IHT/Asahi: May 23,2009)