Why The Anime Industry Is Still In Its “Startup” Phase, And How It Got Here

anime industry business

In the business world there are life cycles and trends, no different to how nature or life works in general.

First off you have:

  • The startup phase. Where businesses are unprofitable and expenses are high (lack of innovation).
  • The growth phase. The industry is experiencing massive growth and profits are high.
  • The maturity phase. Where the industry cruises along nicely, makes “decent” money and the barrier to entry is higher than ever.
  • The decline phase. Demand starts dropping, profits become thin, employees get laid off in the 100’s, etc.


So where does the anime industry fit into the picture?

As far as 2018 goes, the anime industry is sitting in the startup phase with a first-class seat.

But before I get into that, let’s look at the historical life cycle of the anime industry so far…


The historical life cycle of the anime industry:


1. The 1960’s when anime was born

Instant History Anime

The anime above was produced and released in 1961. It’s considered the first anime to have been created.

During this time in the industry, there wasn’t much of anything in terms of growth, decline, maturity and so on.

The only “phase” the anime industry was in from the 1960’s-1970’s was the startup phase. But it was so insignificant that I’m hesitant to even put it in any category at all during this time.


2. The 1980’s-1990’s: the “growth” era of the anime industry

This is the golden era of the anime industry.

If it wasn’t for the 1980’s and 90’s, most anime fans today wouldn’t even exist. 

At this point of the industry, anime had dived into the “growth” phase with its foot on the pedal, driving 100 miles per hour.

We can thank anime shows like:

  • Dragon Ball Z.
  • Pokemon.
  • One Piece.
  • Yu Yu Hakusho.
  • Slayers.
  • Akira.
  • Sailor Moon.
  • Cowboy Bebop.
  • Inuyasha.

And too many other shows for the massive growth of the anime industry in the 80’s/90’s, and even today.


3. The year 2000’s: where growth meets maturity

fullmetal alchemist edward elric and alphonse elric
Fullmetal Alchemist characters.

The year 2000’s is another era we can thank for massive growth in the anime industry.

After all it’s thanks to shows like:

  • Fullmetal Alchemist.
  • Death Note.
  • Full Metal Panic.
  • Eureka Seven.
  • Code Geass.

And so many more why I’m even able to have this conversation.

Unlike the 80’s and 90’s, the 2000’s is where the anime industry started “settling in” to the maturity phase. 

At this point the anime industry was more profitable than it ever was, and even more successful (it’s debatable).

That’s why it’s not surprising to see anime shows created in the 90’s and 2000’s that are still loved to this day.


4. 2010 onwards: the industry starts to “dip its head” into the depths of decline

sword art online kirito and asuna
Sword Art Online: season 1.

Don’t misunderstand my point. I’m aware of all the successful shows that came about since 2010.

SAO, Fairy Tail, Food Wars, Attack On Titan… No matter what your opinion is of these anime, they’ve driven the anime industry forward since day 1 of being released.

But since 2010:

  • The anime industry has experienced bankruptcies as if it’s some kind of seasonal event.
  • Animator shortage is at an all-time high.
  • Old business practices that no longer work in the 21st century are hurting the anime industry.
    • It’s only now that we’re starting to see the after-affects.
  • Many anime companies and studios have shutdown. Even in Japan itself.
  • Companies are still promoting cd’s as if we still give a shit about them. They’ve lost money for years.

The last 8 years of the anime industry has been a mix of decline and “startup” mode.

But in the past 2-3 years the life-cycle of the anime industry is in its startup phase again.


The definition of “startup” phase

Here’s what investopedia says about the startup phase:

“Participants tend to be unprofitable because expenses are incurred to develop and market the offering, but revenues are still low.”

This is EXACTLY what the anime industry looks like in 2018.

In the past few months there have been dozens of anime companies who’ve shutdown.

Just look at these headlines:

Animation Studio Files For Bankruptcy

Production IMS Consolidates Debt, Considers Filing for Bankruptcy

Amo Subcontracting Anime Studio Files for Bankruptcy

This is only a “small” portion. And it’s a typical example of startup territory.

it’s not even a surprise when I see these headlines pop up so often, because in general: you have to be insane to start an anime company. Since the industry itself is one of the ugliest in the entertainment business.

That’s true whether you’re a business owner or an “employee” of the industry.

Anime News Network covers this point really well: Working In The Anime Industry.


So what’s next? Where does the anime industry go from here?

shirobako anime office
Shirobako: an anime based on the industry.

When an industry is in its “startup” phase it’s unprofitable and risky for one reason: uncertainty.

To overcome uncertainty, you need innovation on a massive scale. And not just any innovation, but the type of innovation that people want to have. 

The kind that drives demand and makes everyone happy. Fans and businesses alike.


So THAT is where the anime industry needs to go from here

I predict within the next 10+ years, more anime companies and businesses will have more opportunities than we’ve ever seen in the past.

More companies will become more profitable and successful. And certain issues like Piracy, animator shortage (and more) will die down and improve.

As long as there are investors, enough funding, and innovation becomes more of a priority, the future of the anime industry will be brighter than we ever thought possible.

But there’s still a long way for us to go from here. So don’t celebrate yet.

We’ll get there eventually (on a global scale).


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