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Amid rising profits in Japan’s animation market, anime production studios in Japan are grappling with low finances, overwork, and stagnant wages that threaten the future sustainability of the industry.
A recent Nikkei Business report highlighted that anime production companies operate under severe financial constraints, making it difficult to raise wages for animators without jeopardizing their own survival.
At the heart of the issue lies the complex production committee system.
Intellectual property (IP) rights for anime and merchandise are often controlled by the committee members, which typically include TV stations, advertising agencies, and other investors.
Many production studios, however, are excluded from these committees and do not receive royalties from the work they produce, leaving them dependent on one-off production fees.
This system, in effect, covers production costs but fails to provide sustainable profits for studios, further limiting their ability to improve working conditions or raise wages.
A January 2024 report by the Japan Research Institute (JRI) made similar observations, noting that anime production studios earn only 6% of the overseas sales revenue from their works and 16% of domestic sales.
The current system ensured studios barely break even, with subcontractors—who often receive even less—frequently operating at a deficit.
Studios are also rarely able to manage entire productions independently, relying on subcontractors to complete projects.
However, with limited financial returns trickling down the production chain, many subcontracting studios struggle to stay afloat, exacerbating the industry’s financial instability.
The report by Nikkei Business comes in the backdrop of a report published by the United Nations in May this year, which stated that while Japan’s animation market generated approximately 2.74 trillion yen ($20 billion), animator salaries remained shockingly low.
Entry-level animators earn an average of 1.5 million yen ($10,000) per year, forcing many to leave the industry.
This exodus of skilled workers has led to a shortage of technical expertise, hindering the production of high-quality animation. As a result, studios have increasingly outsourced work overseas to manage production demands.
Moreover, the UN report found that nearly 31% of the workforce in the animation sector operates as freelancers or independent contractors, who lack labor protections and are subject to excessive working hours and unfair subcontracting practices.
The UN urged businesses and production committees to take responsibility and improve working conditions to prevent a potential industry collapse.
Once again, the JRI report had noted similar patterns.
The study revealed alarmingly high turnover rates, with 25% of animators leaving within four years of joining the industry, and 68% departing within eight years.
The inability to sustain a livelihood due to low wages and long working hours is cited as a key reason for this attrition.
For young animators under 30, the financial challenges are particularly acute. Animators aged 20 to 24 earn 1.23 million yen less annually compared to peers in other industries, while those aged 25 to 29 earn an average of 1.04 million yen less.
Additionally, freelancers and self-employed animators are at high risk of poverty, especially if their health deteriorates or they encounter financial difficulties.
While Japan’s recent labor reforms have reduced working hours, the financial situation for studios has worsened. In 2017, 30% of animators worked over 260 hours per month, but by 2022, this number dropped to 10%.
Despite this improvement, reduced overtime has squeezed studio profits, making it harder to meet the growing demand for anime, particularly from international markets.
To address these challenges, the JRI report had recommended that the Japanese government intervene in the situation.
Source: Nikkei Business
