The Journal The Authority on Global Business in Japan

Anime studio DLE Inc., the company behind well-known series such as Haiyoru! Nyaruani and Eagle Talon, announced on November 2 a partnership with Chinese movie producer Shanghai Griffin Film Corporation. The tie-up will include the launch of a joint venture named Griffin DLE and a ¥10 billion Chinese–Japanese Anime Fund for up-and-coming anime artists and designers.

The deal is just the latest indication of the growing ties between the two nations’ creative industries, anime insiders and analysts say, and probably heralds some significant changes in a sector in which Japan has been the acknowledged world leader for seven decades.

The new venture will be based in Tokyo’s Chiyoda Ward and intends to work on a range of creative projects in the animation industries in Japan and China. It will provide access to the Chinese market for Japanese creative products, with executives using the announcement of the deal to confirm that multiple productions are already in the planning phase. They say that markets in East Asia are the initial target, but global distribution is the aim.

Japan’s anime industry is experiencing a surge in interest and investment at present, said Roland Kelts, author of Japanamerica: How Japanese Pop Culture Has Invaded the US. But the growing collaborations with China, in particular, could have come significantly earlier.

“There were a series of co-productions that were underway just before the row over the Senkaku Islands broke out around 2013, and everything just fell apart,” Kelts told The Journal. “It was, in some ways, quite tragic because a lot of Japanese companies had spent years building up their links and working with Chinese firms—and then geopolitical relations deteriorated to the point where it was impossible to go ahead very rapidly.”

Today, with the territorial issue once again seemingly on the backburner, the “explosion of streaming media has reopened that door,” said Kelts, who is presently in residence at Harvard University on a Nieman Fellowship while he writes a book.

Along with Netflix and Amazon Prime in the United States, the emergence in China of providers such as Alibaba and Tencent, the country’s largest Internet service portal, has reignited the possibilities.

An industry insider told The Journal that “players with deep pockets” are today willing to pay as much as $500,000 per episode for a co-produced anime series, and that something of a bubble is emerging in the sector.

And while Chinese companies are looking to collaborate with Japanese enterprises over the short term, Kelts says those same companies have set themselves the target of overtaking Japan—both in terms of quantity and quality—within a decade.

“At the moment, the Chinese are lacking in quality, largely because they simply don’t have the intellectual property, such as Naruto, One Piece, or Hello Kitty,” he said. “But they are busy inking deals with Japanese industry, which has the problem at home of a shrinking population.

“That has finally forced the industry [in Japan] to look further afield for new markets because the old way of doing business has gone, which is something they realized in the US more than a decade ago.”

Henry Thurlow

Henry Thurlow

For generations happy to turn out products for a loyal otaku fanbase, and a mass market that was large enough that they earned sufficient money to ignore outside pressure on the direction of their work, Japanese companies are grappling to come to terms with a whole new picture.

“The Japanese industry is in a transitional phase, as they have to take into account the demands of a global audience,” Kelts said.

Henry Thurlow, one of the very few non-Japanese to have made a name for themselves as an artist in Japan’s anime world, agrees that the industry here “has been very, very averse to change.”

“They only moved from cell art to digital in the early 2000s, and even now they still do a lot of paper-and-pencil work—which no one else in the world does,” said Thurlow, who is originally from New York but came to Japan in 2009 and has worked as an animator on a number of projects, including Naruto and Tokyo Ghoul.

Thurlow believes that the rapid global growth of social networking services has helped fuel the boom in the genre and has broken down borders. This has encouraged Japanese studios to accept the concept of international joint productions—even though they are far from completely happy with the idea.

“But the future, without a doubt, is in international productions, and that is the direction that the industry here has to head in,” Thurlow said. Given its proximity and the massive numbers of young consumers in the market, China is arguably the obvious partner for Japanese companies.

Aouchache Noureddine Widad

Aouchache Noureddine Widad

“Japanese anime is huge in China, and studios here are recognized as having a good system that produces a lot of very high-quality stuff,” he said.

One excellent example of a joint venture that is making cross-border strides is Haoliners Animation, which was set up in Shanghai in late 2013 by Li Haolin. The company opened its Japan branch, Emon Animation Co., in October 2015, making Emon the first Japanese anime studio with a non-Japanese parent company.

“The idea came from the Chinese side, as they were thinking of a way to make Chinese content more international and knew that the experience and talent of the Japanese in animation would be necessary to do exactly that,” said Aouchache Noureddine Widad, a French national who heads Emon’s international section in Tokyo and oversees global licensing.

Emon is presently working on its first project in Tokyo, The Silver Guardian, which is due to be released next year and is a rendering of a Chinese web manga that has been read no fewer than 400 million times. But the cross-border collaboration has already delivered four anime series.

“In the last few years, anime has become more recognized internationally, so it’s not so unusual to find international companies being involved in the production of anime in Japan,” Widad said. “And as the Japanese animation market wasn’t doing so great back then, that international investment has helped the Japanese animation market a lot.”

And that, inevitably, helps to create more opportunities.

“Demand in China is increasing greatly,” Widad said. “People are becoming more and more connected through their mobile phones, and Chinese consumers now don’t only watch anime on TV or their computer; they tend to watch a lot on their phones. That is why we get to see a lot of 10-minute episodes; it’s the most useful for people watching anime in the train or during breakfast.”

Statistics show that the typical Chinese consumer is a lot like consumers in other countries. They are between the ages of 15 and 35 and are mostly male—although the gender divide is narrower than most people would suspect.

For Chinese companies looking to partner with a Japanese studio, the reasons are threefold, explains Widad.

“It really is a question of experience, quality, and creativity, I believe,” he said, pointing out that Chinese companies have long accepted that the cost of producing in Japan is going to be far higher than at home. But that is a price they are willing to pay.

“Japanese companies have already managed to make names for themselves, and everybody recognizes Japan as the ‘country of anime’,” he said. “Japanese animators have decades of experience in this field, so it’s kind of natural to come here if you want to create great content. China has a lot of very interesting content and Japan has numerous talented animators, so bringing the two together is our ambition.

“International anime consumers want to watch anime made by Japanese,” he added with a shrug. “So if, as a company, you want to aim for a global audience, you need to take these steps if you want your production to be internationally recognized. That is the situation at present, at least; maybe people will be able to accept more and more overseas anime production with time.”

There is also a sense that, while elections and referendums in other parts of the world have returned governments that are less outward-looking and less tolerant of differences, cross-border collaboration on projects such as anime might just go some way to building trust and mutual development.

“If there is anything that is going to bring China and Japan closer together, it is events such as Brexit or the US presidential elections that are going to show the people of Asia that they can’t count on the West anymore,” said Kelts. “Japanese and Chinese anime artists are already working together, and that is only going to increase in the future.”

Thurlow agrees: “A world without borders would be a wonderful thing; and it’s up to industries such as ours to start breaking down those barriers and to blow up the old way of doing things.”

Julian Ryall is Tokyo correspondent for The Daily Telegraph
Cross-border collaboration on projects such as anime might just go some way to building trust and mutual development