Japanese popular culture and the foreign markets

4.2 Japanese popular culture and the foreign markets

In addition to its attractiveness from an artistic point of view, it is important to keep in mind that Japan’s popular culture represents also a big export industry (Otmazgin, 2013: 51). Based on a broad definition of popular culture, Sugiura tried to estimate the export value of Japanese media, copyrights, publishing, fashion, other entertainment, and fine art. According to his own calculation, cultural exports surged from ¥497 billion in 1992 to almost ¥1.5 trillion in 2002, representing a cumulated value of ¥10.5 trillion between 1992 and 2002. This increase is particularly impressive when compared to the only 20 per cent of growth of manufacturing sector’s exports during the same time frame (Sugiura, 2003).

After the end of the Second World War, the Japanese cultural industries focused their activities on the domestic market. Their growth was due to local demand. But, in the 1980s, Japan progressively became an important exporter of popular culture with anime, manga and video games. Since then, the volume and the range of products (dramas, music, spin-off items etc.) have significantly increased. In addition to the consumption of Japanese pop cultural products overseas, its formats and genres, such as trendy drama and idols, have been emulated in East Asia, for instance in South Korea. In general, the success of one product engenders a process of spill-over into the success of other products. Thus, the success of anime has stimulated the sales of character toys, video games and manga. Nowadays, Japanese entertainment products, in particular manga, video games and anime, are praised for their well-developed narratives (Otmazgin, 2013: 72).

4.2.1 The exports of anime

Manga and anime were the two first products to be exported. In a report, the JETRO claims that around 60 per cent of animation broadcast around the world comes from Japan (JETRO, 2005: 7). In the past two decades, feature anime movies such as Ghost in the Shell (1995) and Spirited Away (2001), and anime series such as Dragon Ball, Knight of the Zodiac and Sailor Moon captured the public’s attention abroad and sparked off a massive interest in Japanese animation, especially among young people.

According to the AJA, the sales of anime abroad were at the peak in 2005 with ¥31.3 billion. Yet, in 2012, the sales represented only ¥14.4 billion, a sharp decrease of 54 per cent of the sales compared to the peak of 2005. In particular, it is between 2008 and 2009 that the drop was the most pronounced, from ¥24.8 billion to ¥15.3 billion. If we take into consideration the market based on the purchases of anime and anime-related products by fans, the peak of anime sales was again in 2005, totalling ¥521.5 billion. Nevertheless, in 2012, the sales amounted only to ¥240.8 billion, a collapse of approximately 54 per cent. It is especially between 2008 and 2009 that the decrease was the most pronounced, from ¥413.7 billion to ¥254.4 billion (AJA, 2013: 67). This pronounced decrease was certainly linked to the beginning of the American economy crisis.


Figure 4. The anime market overseas (anime studios’ sales)
Source: AJA, 2013: 67.
Figure 4. The anime market overseas (fans’ purchases)
Source: AJA, 2013: 67.

In 2013, 989 contracts with fifty-three countries⁵⁷ were signed for the overseas distribution of Japanese animation, for a total of 388 works. The first client was South Korea, for a number of ninety contracts. Taiwan was ranked second with eighty-one and the US the third, totalling seventy-three contracts. Ranked from the fourth until the tenth were respectively Canada (sixty-two), Thailand (fifty-four), China (fifty), Hong Kong (forty-four), Italia (thirty-five), Australia (thirty-one) and, equally ranked, New Zealand and France (nineteen) (AJA, 2014: 5). In 2013, Asia⁵⁸ represented 56.4 per cent of the contracts, North America (Canada and the US) 18.9 per cent, Europe⁵⁹ 12.9 per cent, Oceania (Australia and New Zealand) 7 per cent, Latin America⁶⁰ 3.1 per cent, Eastern Europe (Czech Republic, Poland and Russia) 1.7 per cent, Africa (South Africa) 0.1 per cent and Middle East 0 per cent (AJA, 2014: 5). South Korea, Taiwan and the US have been the first ranked nations in terms of contracts signed for the commercialization of Japanese anime in the previous years, while France and Hong Kong lost several places compared to 2012. The top ten countries represented 75.4 per cent of the contracts signed in 2013. This significantly differs with the previous where they accounted for 48.5 per cent (AJA, 2014: 5).

In 2002, the American anime market amounted to $US4.36 billion (¥547.1 billion) (JETRO, 2011a: 39). It accounted for 3.5 per cent of the total exports from Japan to the US. It was 3.2 times more than the exports of Japanese steel products to the US in the same year (Otmazgin, 2013: 72). The following year, the anime market in this country reached its peak with $US4.84 billion (¥560.5 billion). The sales of character goods, spin-offs of anime, constituted 92 per cent of the total sales, demonstrating the importance of products derived from anime. However, in 2009, the American anime market was only worth $US2.74 billion (¥256.5 billion). Even if it increased between 2008 and 2009, its amount was still far from the peak of 2003. It is in particular the collapse of character goods from $US4.45 billion (¥515.4 billion) in 2003 to $US2.42 billion (¥226.5 billion) in 2009 that caused the dramatic decrease of 43 per cent of the anime market in the US in the same period (JETRO, 2011a: 39).
Figure 4. Anime market in the US⁶¹

Source: JETRO, 2011a: 39.

In contrast to Japanese manga publishers that moved from the sales of translation rights to the setting-up of subsidiaries in the West, Japanese anime studios have not established their own subsidiaries abroad. Nowadays, the anime industry is in a paradoxical situation: despite the global success of anime around the world, this sector is struggling. As detailed in Chapter 3, Section 3.3.1, the production committee system implies that anime companies are deprived of the revenues if they are not part of the production committee. If they are one member, they have to share the revenues with the other investors in proportion to each participant’s respective investment. Therefore, anime companies do not have enough money to fund their own subsidiaries overseas, Tōei and Production I.G being exceptions.

Moreover, the Japanese anime industry suffers from a big shortage of staff with expertise in intellectual property rights. This has caused small profits for this industry abroad. Anime studios need staff members who know to negotiate with American distributors on equal terms, and also to analyze the performance of their product sales so that they can secure equitable and profitable contracts overseas. Until now, few Japanese studios have been able to negotiate with American studios on equal terms (JETRO, 2005: 7-8). The loss of royalties in the foreign markets of Bandai Visual is calculated at tens of millions of yen every year (JETRO, 2005: 8). Roland Kelts uses the expression “Japan’s IP⁶² problem” to call the difficulty of the anime companies to export their contents on their own (2006: 103-21). In general, Japanese companies are very high-skilled at marrying their intellectual property to physical products, but they do not have long experience as an exporter of IP in the digital age (Kelts, 2006: 106-8).

4.2.2 The exports of manga

The exports of manga have been on the rise as well. The ten major Japanese manga publishers sell translated versions of manga. Their licensing income is estimated at approximately ¥12 billion, whilst the total-right associated income of the domestic market is believed to be about ¥50 billion (¥26 billion for manga books, ¥24 billion for manga magazines). Therefore, the overseas licensing income represents 24 per cent of the domestic right-associated income (JETRO, 2008: 9).

Since the 1990s, manga have been massively disseminated abroad. They are particularly popular in East Asia. In 2009, in South Korea, approximately 80 per cent of comic books were manga translated from Japanese (Yamanaka, 2010: 50). In Taiwan, even if manga sales have decreased sharply by 40 per cent since 1996, they still represent approximately 80 per cent of the comics market (Lent, 2010: 307). Japan’s bestselling weekly manga magazine, Weekly Shōnen Jump, after its launch in the US in November 2002, sold more than 500,000 copies per issue monthly (Sugiura, 2008: 133). In 2002, the American manga market was worth $US50 million (¥6.3 billion). It increased steadily until its peak in 2007, totalling $US210 million (¥24.7 billion). But, two years later, in 2009, it decreased to $US140 million (¥13.1 billion) JETRO, 2011a: 55).

Italy used to be the most important market for manga in Europe despite the absence of official sales’ statistics. However, in 2005, manga and manhwa (Korean manga) accounted for 58 per cent of the approximately 2,800 comic titles published (Zaccagnino and Contrari, 2007: 2). Dragon Ball deluxe edition represents the all-time bestselling manga, each issue totalling around 150,000 copies sold at the end of the 1990s. Later best-sellers, for example InuYasha and One Piece, were less popular, with no more than 75,000 copies per volume (Bouissou et al., 2010: 254).

Until 2000, France published five times less new manga titles than Italy annually. Nevertheless, between 2000 and 2008, new manga titles in France skyrocketed by 567 per cent, from 227 to 1288 (plus 98 new manhwa titles). In 2008, manga represented a share of 35.8 per cent of the new comic titles published in France. Their sales accounted for 37 per cent of the French comics market, amounting to 12.3 million copies sold for a value of more than 160 million euro (¥24.4 billion). The bestseller Naruto sold 220,000 copies for each of its six new volumes. At this moment, France is perhaps the most important manga market in Europe (Bouissou et al., 2010: 254).

Nowadays, Germany is the third largest European manga market (Dolle-Weinkauff, 2006). Manga represent the majority of comics sold, approximately 70 per cent. In contrast to other European markets where the readers are more equally gender-distributed, manga are mostly read in Germany by women. From 1997 to 2006, the German market skyrocketed from 3 to 70 million euro (¥364.1 million⁶³ to ¥10.2 billion). Titles such as Dragon Ball, Sailor Moon, InuYasha and Detective Conan are the bestsellers. The sales of the latter two amounted to one million copies each in 2005. Dragon Ball sold six million copies between 1997 and 2006, and its current sales still do well (Bouissou et al., 2010: 255).

4.2.3 The exports of video games

In contrast to manga publishers and anime studios, the Japanese video games industry, since its beginning, has put emphasis on the global market (CESA Official Interview, 31/03/2014). The Nintendo’s Family Computer, also known as Famicom, was commercialized in Japan in 1983, and then was launched in the US in 1985 and Europe in 1986. In western countries, this console was released as the Nintendo Entertainment System (NES). The Japanese video games industry can be divided in two groups: first, small companies that only focus on the domestic market; and secondly, big companies that need to export their video games and consoles (Sony and Nintendo) because the Japanese domestic market is not large enough to secure a return on their investments. These companies calculate that the exports of their products can yield twice more than relying only on Japan’s domestic market. This is why they think about the exports of their products at the same time as the domestic sales since the development of such products (CESA Official Interview, 31/03/2014).

In 2010, the total overseas hardware shipments of the Japanese consoles manufacturers accounted for ¥960.2 billion. Yet, they decreased to ¥633.4 billion in 2012, Sony’s consoles representing 61.6 per cent of the shipments whilst Nintendo’s consoles 38.4 per cent. The overseas software shipments also fell between 2010 (¥411.5 billion) and 2012 (¥204.2 billion). In 2012, Nintendo’s consoles captured 59 per cent of the overseas software shipments, Sony’s hardware and Xbox 360 respectively 26 per cent and 15 per cent (CESA, 2013: 112-5).
Figure 4. Overseas shipments of hardware and software
Source: CESA, 2013: 112-5.
In 2007, Nintendo represented 61.7 per cent of the worldwide video games hardware market, whilst the sales of Sony’s PlayStation and Microsoft’s Xbox accounted for respectively 34.5 per cent and 2.3 per cent (Dentsū Communication Institute, 2009: 103-5). In September 2009, PlayStation 2 had sold 140 million units around the world, a record in the sales of hardware. In the first half of 2007, the sales of Wii exceeded the combined sales of Xbox 360 and PlayStation 3 in the American video games market.

Since its launch in November 2013, the PlayStation 4 has been the most sold home consoles of the current generation, with over 25 million units worldwide. The Wii U sold over 10 million and the Xbox One an estimated 14.32 million by the end of June 2015. If the estimate of the Xbox One sales is correct, the PlayStation 4 currently holds more than 50 per cent of the current generation home consoles market (Brunner, 2015). In the UK, this console became the fastest to reach the two million sales in the history of Sony. As Nintendo’s Wii accumulated 1.1 million units sold in the first nine months in the UK, and within 24 months 3.6 million, these figures would indicate that the Wii, the best-selling console of Nintendo, still remains the fastest to reach two million units (Crossley, 2015).

The Japanese video games industry has produced bestseller games as well, such as Super Mario, Dragon Quest, Sonic and Final Fantasy, totalling more than 35 million copies of these series overseas (Otmazgin, 2013: 76).