Japanese Anime

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1. Introduction
Think about exaggerated physical features such as large eyes, big hair and varied facial expressions and almost immediately, Japanese anime pops into our minds. A very distinct industry different from its American cartoon counterpart, anime has been a very economically lucrative industry within Japan and of recent times, has gained tremendous popularity and commercial viability worldwide in countries such as the United States, Europe and Latin America , further expanding its market.

Anime can be categorized into three main streams, namely, feature films such as “Spirited Away” and “Howl’s Moving Castle”; animated TV series like “Naruto” and “Coifboy Bebop”; and original video animations (OVAs) also known as OAVs, which are essentially stand alone titles like “Samurai X” or “Read or Die” that are released directly to the home video market.

Feature films are mostly used for engaging a wider range of audience and exhibit excellence in animation techniques and are more expensive to make. TV series are cheaper to produce and focus on different target viewers. Original video animations target specific audience and niche markets, with themes different from the mainstream and often with mature content.

This industry, which has audience ranging from young children to adults, is estimated to be worth US$ 7 billion worldwide in 2005 . Over 60% of the world’s animated cartoon broadcasts are made in Japan and just the US market alone for Japanese anime industry is worth around US$4.35 billion. However, lately, not all has been rosy for Japanese anime in terms of profitability despite its rapid growth in popularity. Many issues have been contributing to the falling of Japanese anime market shares.

This report aims to investigate and analyze whether piracy and copyright issues are the key forces in the falling market share of the Japanese anime industry or if there are other more crucial factors – factors that may be playing a major role by covering the current trend and issues pertaining to the anime industry in Japan and worldwide. Then, we will look into the factors that are affecting the market share of the industry. Based on findings and conclusions, we will make suitable recommendations to reduce the negative impact on the industry.

The research methods we have mostly adopted include theoretical background as well as the main secondary source, the Internet, through which we have utilized articles and fact sheets on anime industry data as well as relevant case studies to further support our facts, figures and conclusions.

2. Current trend and issues in the anime industry.
This section of the report will focus on the current trends and issues existing in the anime industry which have led to the factors leading to the fall in the market share.
2.1 Increase in interest in Japan’s animation.
Anime has been gaining popularity worldwide for its “original, Japan-based culture and content”, as seen from the success of movies such as academy award winning “Spirited Away” (2001, ¥30.4 billion) and “Howl’s Moving Castle” (2003, ¥22 billion) . Japan managed to establish itself as an internationally competitive industry with strong qualities by exhibiting of its world-class animation skills in the international arena.

There has been an increase in the number of channels in US showing anime series, from 5 channels showing 18 series in 2002 to 11 channels showing 38 series in 2007. This further points in the direction of anime’s growing popularity. With the rising interest worldwide for anime, the question lies, why is there a falling market sales for the industry, worldwide. 2.2 Comparison of Japanese anime’s standing with other countries. 2.21 Market Shares

Figure 1: Anime Market Size of Japan
60% of world anime are produced by Japan, with China, India and South Korea as the other leading anime production countries in Asia. Japanese anime industry’s total sales have been valued at USD$1.9...
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