April 2, 2024

Itochu will Embark on Animation Business

With the spread of Netflix and other video streaming services, animation is now proliferating overseas. Expanding the animation economic zone originating from Japan is beginning to be in full swing.

Itochu will invest approximately 20% in SKY Perfect Pictures Inc., which Sky Perfect JSAT will launch. Sky Perfect JSAT has been involved in the animation production business since 2016 and is currently working on four works. The new company will mainly support the production of works based on manga. The program will be broadcast via video streaming beginning in fiscal year 2024 to produce at least ten films in five years.

Itochu will utilize their own sales networks to focus on overseas distribution of the animations they produce. Overseas distribution is done by selling distribution rights by country or region to Netflix, Amazon, and other operators for a commission. Translation and modification of expressions to suit the local culture may be required, and generally, higher fees can be expected than in Japan.

International video streaming has a large scale of membership. Netflix has 260.28 million members worldwide at the end of December 2023. Itochu will also develop sales of goods and other products in conjunction with overseas distribution to increase revenues.

Overseas, merchandise sales often arrive after delivery. Itochu is involved in licensing animation and other products in the Asian region, and the company intends to leverage its network to sell goods as soon as possible. Itochu aims to expand the number of anime fans in the country and abroad and increase the total annual distribution transactions of Japanese anime involved in its production to the 50 billion yen scale in five years.

The anime market is rapidly expanding as video streaming has created an environment where anime can be viewed simultaneously worldwide. According to the Japan Animation Association, the global animation market originating from Japan in 2022 was 2.9 trillion yen, 2.2 times the size of 10 years ago. In particular, overseas markets, excluding Japan, have expanded about sixfold.

Animation is highly competitive overseas as a leading content. "The First Slam Dunk," an animated film released in 2022, broke the box office record for a Japanese movie in South Korea and set a new record for first-day attendance for a Japanese animated film in China.