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Recently, popular Japanese magazine Weekly Toyo Keizai – a business and finance magazine published in Tokyo, Japan – interviewed several producers of anime in Japan about Netflix and the future of anime. One of the anonymous producer’s gave the publication a startling quote:

In 2022, the [Netflix] plans for original anime have completely failed.

Considering how much money Netflix has been pouring into the industry with co-productions and original anime over the past several years, the quote may come as a bit of a shock. Wasn’t Netflix a key member in funding new anime these days? Haven’t they become one of the biggest producers of anime? Isn’t it mentioned all the time how big anime is on streaming, and that Netflix’s involvement in the field is one of the key reasons Sony decided to buckle down and purchase Crunchyroll and Funimation? What gives? Take a closer look at what’s going on though, and many anime producers’ concerns may have more weight than you’d think.

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Netflix is Pouring Less Money into Anime

Yoh Asakura from Shaman King

While this is more of a general problem Netflix has, it should be noted that the company has confirmed that they would be cutting expenses after they first reported subscriber losses earlier this year. This has resulted in various changes at the company to increase revenue (this is why password sharing being cracked down on, theatrical releases being tested, and creating a new ad-supported tier have become top priorities for the company this year). Aside from creating new forms of revenue, Netflix CEO Ted Sarandos also announced a corporate restructuring to cut costs.

Notably, animation took a huge hit, and several high-profile projects (including the highly anticipated film adaptation of Jeff Smith’s Bone) were canceled. It stands to reason that some of the money that was being spent on anime productions has also taken a hit. While anime is a relatively small portion of Netflix’s annual $1.1 billion dollar a year spending budget, reports that every division in the company is receiving cutbacks means that even the anime budget is being cut back a bit.

It may be a small part of Netflix’s budget, but for an anime production whose whole existence relies on that budget…well, let’s just say there are at least a few shows that likely got delayed or canceled outright as a result of this restructuring, and that’s got to make some producers nervous about the future of Netflix co-productions.

Netflix Has Not Produced a Hit Like TV Has

Sailor Moon Eternal Netflix

While Netflix was able to turn the Korean drama Squid Game into a surprise international hit, they have not done so with anime. Sure, established properties like Shaman King and Cyberpunk 2077 have thrived on the service, there is no anime (as of this writing) that premiered exclusively on Netflix that you can say is a huge hit. Some of their biggest animes that have popped up on the platform include Death Note, Pokemon, and Cowboy Bebop (which produced high enough numbers to convince Netflix to invest in the live-action series).

The thing is that these series either weren’t Netflix productions or (in the case of Pokemon and Sailor Moon) were huge hits before Netflix made deals to continue producing them. This is leading Japanese producers to revise their strategy and offer Netflix small, experimental shows while saving their ‘franchise potential’ series for regular TV, where they have good reason to feel would be a better fit.

Japanese Viewers Still Prefer TV

Life with Louie in the Pool with a TV

The issue here is two-fold. On one hand, while Netflix may be gaining serious ground overseas, most Japanese viewers still watch their anime on TV (heck, there are Japanese viewers who are recording the new Urusei Yatsura reboot on VHS and watching them on outdated TVs). What may be of more concern is that while Netflix’s binging model may be great for longer series with established histories, it’s not necessarily the ideal way to introduce viewers to a new series. When Netflix drops a series all at once it risks getting buried under all the other content rather quickly.

This is not only a concern of anime producers but showrunners in general, who feel weekly releases on Disney+ and HBO Max do more in helping shows get discovered and talked about by the public. There may even be some anecdotal evidence of this, as one of the few anime that became a sleeper hit on Netflix recently was Komi Can’t Communicate. Sure, the manga had caught the reader's attention beforehand, but this is one of the few series they’ve released on a weekly basis, giving the series time to build word-of-mouth.

This also isn’t normal for the Netflix model, and until weekly releases do become the norm, anime producers are more likely to send a 13-episode one-off to Netflix while series that are intended to be long and continuous are shopped around to TV stations first.

The Future

Netflix Account Sharing

Readers should not be too nervous about the future of anime on Netflix because rest assured: it’s not going anywhere. Anime is not only good business for Netflix it’s good business for streaming in general. Considering Netflix can potentially get 50 full shows for what HBO spends on one season of Game of Thrones: House of Dragons, anime is an economic way for the company to get content for a huge discount. What’s more, shows like One Piece, Pokemon, and Sailor Moon have become such huge hits for the platform, it has inspired Netflix to put more money into those productions (and even start a live-action series based on the pirated-themed show).

Anime WILL continue to have a presence on Netflix! What appears to be changing is anime producers’ attitudes towards Netflix, as they will be shifting franchise potential shows to TV while giving Netflix the specialty anime that were unlikely to be huge hits in the first place. There’s nothing saying that Netflix can’t pick up those series later down the road, only that some companies might not offer it to them first. By the way, this could also change if Netflix decides to embrace weekly episode releases in the future (which they are experimenting with right now).

If Netflix embraces weekly releases more in the future, maybe some of these anime companies wouldn’t mind selling a franchise potential anime to Netflix, and maybe that release strategy could give Netflix the worldwide anime hit it deserves to be. Who knows? For the time being though anime is doing well for Netflix and the company is going to continue to pour money into it. The problem comes with the fact that anime production companies want more from Netflix, and that could be a big problem if the streamer wants the next One Piece. For now, enjoy the anime that is available (Home is pretty good according to most fans).

Source: CartoonBrew

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