Overseas Streaming Money Now Decides Which Anime Gets Made, Veteran Producer Reveals

Veteran anime producer Yusuke Onuki (president of Bushiroad Move Co. Ltd.) has revealed that the fate of an anime adaptation today depends on how much overseas streaming platforms are willing to pay for it.

According to Onuki, who served as a producer for anime like 100 Girlfriends and Grisaia: Phantom Trigger, overseas streaming platforms hold a powerful position in the anime industry now. This is true not just for major platforms like Netflix and Disney+, but also for anime-focused streaming services like Crunchyroll.

“‘How much will they buy this anime for?’ and ‘How high of an MG will they offer?’ serve as the absolute lifeline determining whether a project can be greenlit,” Onuki noted.

Whether an anime adaptation lives or dies depends on the Minimum Guarantee (MG), which is basically an upfront payment that these streaming platforms are willing to pay the rights holders.

Without the MG, it is hard for a proposed anime adaptation to find investors and be greenlit.

On the other hand, if a Minimum Guarantee has been agreed upon, even a work that is not popular in Japan can still secure an anime adaptation.

Understanding the Role of Streaming Services in Anime Production:

To understand why overseas streaming companies play such an important role, we first need to understand how they fit into the larger production picture.

A standard 12- to 13-episode late-night anime requires an investment of approximately 350 million yen, according to Onuki.

The majority of this funding must be secured before the series airs to cover operational expenses, including animator salaries, studio rentals, voice recording, post-production, and marketing campaigns.

In order to manage these upfront costs, production committees rely on Minimum Guarantee contracts from streaming services.

This secures them an initial advance payment calculated against a fixed number of views.

If the anime’s actual viewership surpasses this established metric, the rights holders begin earning supplementary income through a revenue-sharing model.

However, this is not merely a one-way transaction.

As anime’s footprint increases in the West, streaming companies and distributors are realizing that Japan’s export is no longer a niche interest and that it has turned into cost-effective content consumed by a massive audience.

This has led streaming giants to offer significant Minimum Guarantees in order to secure exclusive titles on their platforms and expand their reach.

The exclusivity of a title to a particular platform and its distribution window directly affect this Minimum Guarantee.

“In cases of ‘exclusive streaming,’ the platform gains significant advantages, often leading to offers of high-value MGs. Conversely, for works simulcast across numerous platforms from the start, the exclusivity value drops, causing terms to fluctuate depending on the title’s name recognition and expectation levels,” Onuki said.

Domestic Broadcasting of Anime is Merely a Promotional Activity:

As the anime industry moved away from the DVD and Blu-ray disc model, overseas audiences and the streaming revenue generated from these regions have become a vital cog in the financial ecosystem.

Onuki stated that domestic broadcasting in Japan is now viewed under a completely different lens.

“While overseas distribution used to be merely a bonus income, a ‘lucky if it sells’ kind of thing, now overseas distribution and its related revenues are the main source of income. Domestic broadcasting in Japan has even come to be seen as merely a promotional activity to define it as Japanese anime or to contribute to the core business of the investing companies,” the producer said.

It is no secret that the overseas anime market has outperformed the domestic one, a trend highlighted in recent ABJ anime industry reports. However, Onuki revealed that these numbers do not reveal the complete picture.

According to the producer, a significant amount of data is omitted in such calculations, including revenue that is generateed from overseas sale of rights.

“This is part of the complex revenue structure of anime, making it difficult for counting authorities to keep up. Currently, the revenue generated from rights alone is arguably enormous,” the producer added, emphasizing that the domestic market’s share of overall anime revenue is substantially smaller than commonly perceived.

Additionally, overseas sales and revenue also played an important role in decident whether an anime got a sequel or not.

“The way overseas sales are counted differs depending on the data, and it changes considerably depending on what is included in the denominator. No matter how many times a property goes viral on social media in Japan, if it does not translate directly into sales, it is not a viable business. From the perspective of an investing company, they might conclude that a project was culturally relevant, but without strong sales data, there is no financial reason to greenlight a sequel.“

Naturally, this is leading anime studios and production committees to prioritize markets for which they produce the work.

In the end, Onuki asked fans to try researching where their favorite anime are streaming, and whether they are exclusive to a platform or not, to understand how the anime generates revenue and which market it is prioritizing.

Source: Gendai Media