if the anime industry is pulling in 24 billion dollars per year
how is it possible the artists are getting paid as low as 2 dollars
an hour let's find out today we're going to dive deep into the inner workings of
the anime economy and figure out just how such disturbing
figures are even possible to understand the economics of the anime
industry first we need to look at just how and why anime are made in the
first place other than some obvious exceptions just
about all anime start in the exact same way
with a middle-aged salaryman daydreaming about money
typically one that already works for some sort of publishing company
they look for pre-existing toy video game or most commonly manga properties
that have potential to reach a wider audience
with dollar signs in their eyes and the secret formula in their briefcase
they set to work forming a production committee which is essentially just a
group of companies that all stand to profit from the anime's success
this could include game studios record labels or even a town's tourism
department a typical season of anime can run
anywhere from one to three million dollars which might
sound expensive to you but it's actually fairly comparable to a
season of american television although the breakdown of this budget can vary
from anime to anime we can assume the percentages are somewhere in this range
for an episode of anime costing 172 thousand dollars to produce
the script would be 3200 directing 8000 production 31500
animation 45000 finishing background art and sound
19000 dollars each photography 11000
materials 6000 editing 3000 and printing 8000
but with numbers this high it would be far too risky for a single
company to front the entire cost in case they end up making another x arm
but with the risk spread between several different companies
they are all able to survive the occasional flop so you've got your idea
you've got your funding time to hand it over to the artists right
not even close now comes the exciting part where a bunch of businessmen
sit around a table and discuss the best way to tell the story
design the art and cast the characters in order to make the maximum amount of
profit since each committee member has their
own different often competing agendas this phase of production can stretch on
for ages deciding on the most minute of details like how long to make
the girls skirts technically the original creator usually
the manga artist has final say in how things turn out but
who in the right mind would want to sit in on these meetings when they could be
at home drawing so the majority of the time
a surrogate is chosen from the publishing company to represent the
interests of the author but once every possible revenue stream
has been explored from figures to body pillows the important
businessmen hand things over to the anime studio to do what they do best
and here's where the root of the two dollar an hour problem lies
the commissioned anime studio is paid a flat fee
and it is up to them to deliver a polished final product on time
turn a profit for their own business and pay their hundreds of employees a fair
wage and unfortunately most of the time they
have no choice but to completely ignore that last requirement
as with most creative industries from vfx to game design
there is virtually an infinite lineup of anime artists just waiting for their
opportunity to break into their dream field this oversaturation
of potential employees strips the artists of all their bargaining power
and is the reason for the incredibly long hours and low wages
with entry level animators making around 1.75 per frame they often have to work
over 11 hours a day just to scrape by and
even then often require assistance from family to
live in the third most expensive city on the planet
despite every individual artist overflowing with talent and creativity
they are seen as replaceable over the past few years this dichotomy has been
brought center stage by the news but so far very little has been done to
rectify anything but even if all the underpaid and overworked anime artists
joined together and demanded higher pay all that would accomplish is bankrupting
the studios who themselves are just barely scraping
by the whole system is one long race to the bottom competing
for lower and lower costs in order to build a more sustainable and
fair anime economy the entire system would have to be
rebuilt from the ground up which i think is exactly what we're going to see
happen in the coming years but before we can make predictions about
the future first we need to look at how the anime industry
is currently generating that 24 billion dollars per year
inverse to hollywood box office the anime industry still makes most of its
profits domestically i guess the world just
isn't ready for as i touched on before
anime aren't particularly designed to turn a profit in and of themselves
the meme online is that anime are just long ads made to sell manga
and that's why it's oh so common for incredible shows to never be completed
kubikiri cycles konosuba but i never fully understood
just how true that was when watching tv in the west
if anyone actually still does that there are these things called commercial
breaks which annoyingly get in the way of you
finding out whether or not they're gonna love or list it
this is because the channel that you're watching has paid great
sums of money for the rights to broadcast a show and need to recoup
their investment through advertising well if any of you 90s kids have ever
stayed up way past your bedtime flipping channels just looking for
any alternative to going to sleep then chances are you've stumbled on the paid
programming channel which ingeniously thought to themselves
why don't we just skip the content and only run
ads and thus the shamwow was born well with some
obvious exceptions this is exactly how anime
works rather than the td channel paying for
the rights to air say horimiya horimiya pays the tv channel
to air their show let me repeat that the anime producers
pay the network to run their show and it's not cheap anime being ads for
manga isn't just an expression it's a literal
fact and if you're wondering why the system
only works in one direction it's because compared to anime
manga is incredibly easy and inexpensive to produce
it only takes a handful of people to create a volume of manga which
can then retail for five dollars and potentially sell
tens of millions of copies so whenever you see an advertisement for an upcoming
anime you're literally watching an ad for an
ad adception but the financial success of an anime
doesn't live or die here it is not uncommon for an anime to take
up to several years to break even let alone turn a
profit the goal of the production committee is
to turn on as many slow dripping faucets as possible to
slowly fill up their bucket with a diverse stream of revenues
rights are sold off to video game studios merchandise companies
streaming services and foreign distributors like funimation or
crunchyroll all of which have to share a percent of
their profits with the production committee and if the anime studios
themselves aren't on the production committee they
aren't seeing a dime of those profits it makes little difference to the
studio's bottom line whether their work has demon slayer
levels of success or x-arm the only creatives that see a
cut of the prophets are the director head writer original
creator and sometimes the op artist who all
receive varying amounts of royalties surprisingly one of the most lucrative
revenue streams are dvd sales and if you don't know what
that is ask your grandma these relics of a
bygone era are sold with two to four episodes per
disc and will easily set you back somewhere between 50 and 100
yes you heard me right to own the entire season of your favorite yuri show could
cost you over 500 now you might be asking yourself who
in their right mind would spend that much money
but this is anime fans we're talking about in fact the prohibitively high
price is the very reason why dvd sales are so
important in the past they've tested lowering prices but
it only led to a marginal increase in sales which makes perfect sense since
their target market are hardcore collectors the utility and price of the
thing isn't what drives them the dvd market
works much like gacha games it only takes a few dedicated fans known
as whales to fund the entire game so that the rest of the user base can enjoy it
for free two thousand people buying the entire
season would bring in one million dollars of revenue which to
me begins to paint a better picture of how the anime industry operates the way
it does but chances are if you're watching this video right now
you don't live in japan and might be wondering just how
you pressing play on crunchyroll factors into all of this does any of your
monthly subscription make its way back to japan or is it
going straight into papa sony's pockets before the rise of funimation high dive
netflix and of course crunchyroll foreign audiences
depended on fan subbing and sailing the seven seas
which isn't a result of cost it's a result of convenience
or lack thereof the best way to stop the captain jacks of the world is to make
legal streaming easier and more convenient than the
alternative and you could definitely make a convincing argument as to why
that's not currently the case but let's just ignore their faults for
now basically any foreign profit is better than no foreign profit so
anime producers sell the rights to streaming
merch and home video to companies like crunchyroll for anywhere from a couple
grand to tens of thousands of dollars per
episode this fee is called the minimum guarantee which
basically transfers the risk off the anime producers and on to
crunchyroll who pay the mg upfront before making a single penny
if crunchyroll manages to recoup the mg any further revenue they make
is split with the production committee so yes technically the money you're
spending on streaming and merch is supporting the japanese anime
industry but of crunchyroll 70 million users
only about 3 million of them are paid the rest are just streaming anime for
free while sacrificing a few minutes here and
there to watch an ad let's assume crunchyroll makes a high cpm
of 10 dollars meaning for every 1000 views an ad gets
crunchyroll makes ten dollars with four ads per episode of anime
a smaller anime getting 20 000 views would only make crunchyroll 800 dollars
which wouldn't even cover the mg let alone the subtitling
hosting and marketing and don't even consider the idea of making a dubbed
version so if this ad supported model is so
unprofitable why does it even exist because
crunchyroll are smart enough to know that
removing it wouldn't force people to pay monthly it would just send them off to
one of the countless and easily accessible not so
legal streaming sites ad supported anime is only feasible for a company like anilog
who have a huge back catalog just sitting
around collecting dust that they could easily throw on youtube at
little to no cost if you'd like to learn more about anilog i have a whole video
on them linked in the description below the bottom line is one month of a paid
subscription would equal watching like 200 episodes
of anime with ads so we've basically got another small set
of whales carrying the entire industry on their shoulders
just to be clear i'm not making a judgment call or recommending you pay
monthly i'm just laying out the numbers at the rate the
global anime market is growing it should overtake domestic revenue before we know
it and with such drastic shifts taking place both
technologically and socially it is clear that major
change is coming with society becoming more and more digital
the barrier to entry for creating anime is getting lower and lower
as long as you have a computer and enough time a single person could create
an entire anime themselves and release it
online at next to no cost say the way makoto shinkai did with
voices of a distant star and if he could make that himself
imagine what an entire studio could create
without any of the restrictions of a production committee with several
studios binding together to create any log and
studio trigger coming out with a patreon it's clear that moves are being made
by the studios themselves to gain greater independence
major studios like ghibli and kyoto animation
already have the luxury of forming their own production committees and being
far more picky with the projects they choose to work on whether it's netflix
crunchyroll or a future kyoani streaming service
the future of media is obviously trending towards blending
production and distribution together into a little ball and
calling it an insert studio here original and i don't see why anime would
be any different this system also has a ton of concerns
and drawbacks but overall i think it would provide a much
more stable economy where productions aren't just closing
their eyes crossing their fingers and hoping enough people buy their dvds now
i don't know about you but anime has affected my life in such a
meaningful way and i want to do everything in my power
to preserve this incredibly unique and artistic medium and support the
artists actually responsible for creating the anime that have brought me
so much joy it feels to me like the industry is
heading towards a fork in the road and all we can do is hope that it goes
down the right path but no matter what happens it is
undeniable that anime artists deserve better
all i ask is that you continue to support the anime industry
in any way possible so that they can continue to make the breathtaking
heartwarming and magical stories that we all know and love
thanks for watching