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In a Struggling Anime Workplace, “Cool Japan” Feels Like a Joke


More than ever before, Japanese pop culture is “cool.” Anime has made its way to Hollywood, video games were shown off at the Olympics, and celebrities across the world have been loud and proud in their love of Japan’s pop culture. Even the Japanese government has acknowledged the potential of anime as a catalyst for tourism and economic growth.

Anime’s massive (and still growing) popularity is what makes the hardships faced by those who work in anime production a difficult reality to reconcile—because at the end of the day, anime isn’t made by investors in suits but by overtaxed and underpaid artists.

According to the Animator Dormitory Project, which aims to support new animators by providing them with affordable lodgings, about 90% of new animators quit their jobs within three years. This is because newcomers often start as in-between animators, who are paid significantly below-average income even among other young members of the anime industry, earning around 50,000 yen (US$450) per month.

With such a high turnover rate, studios are struggling to retain and train their young staff for the future. As foreign investment into anime climbs, more and more anime projects are being funded, but the industry lacks the manpower to create them. Teikoku Databank’s 2019 and 2020 reports on the anime industry noted that revenue reached an all-time high in 2019 after a decade of growth, but pointed to long-term obstacles for growth even beyond COVID-19. Profits are being eaten up by a reliance on outsourcing, and because of the chronic labor shortages, productions are likely to see tight schedules to keep up with demand, which may hurt productivity and result in decreased revenue in the long run.

In this context, government intervention would be a boon. Unfortunately, however, that intervention has yet to occur. In November 2013, the government set up the Cool Japan Fund, which defines itself as “a public-private fund with the aim of supporting and promoting the development of demand overseas for excellent Japanese products and services.” Yet because this fund is focused on business enterprises with an explicitly global-oriented angle, such as localization and tourism, anime production studios have been unable to capitalize on it.

“So far, the national and local governments don’t have any effective strategies (for dealing with the issue of underpaid animators),” says Jun Sugawara, who runs the Animator Dormitory Project. His opinion on the Cool Japan Fund is blunt and forthright: “Cool Japan is a meaningless and irrelevant policy.”

In many ways, the Cool Japan policy culminated with the Tokyo 2020 Summer Olympics. In the leadup to the event, government officials eagerly spoke of their plans to showcase anime on the world stage. Various government-funded projects, such as Kadokawa‘s museum and hotel facilities in Saitama, were explicitly created in anticipation of the Olympics. The idea was to use anime brands to encourage international tourists to venture outside Tokyo and to see more of what Japan’s culture has to offer.

Nobody at the time could have predicted the events of 2020, of course. But the purpose of the Cool Japan Fund wasn’t to place all of Japan’s eggs into the Olympic basket—it was to lay a strong foundation for Japan’s future growth. In that case, regardless of how the Olympics actually turned out, Cool Japan should have seen dividends. Yet in 2017, Nikkei reported that most of the investments that year underperformed.

In the wake of the Olympics, it’s worth looking back on some of the major anime-related initiatives of Cool Japan and their impact.

Anime Consortium Japan and Daisuki

We’re coming up to the fourth anniversary of Daisuki‘s demise, but let us never forget Daisuki, as it was Cool Japan‘s most public failure in the anime localization sphere.

Daisuki was a streaming service born from a collaboration between a handful of prominent media companies and anime production studios. In 2014, a year after the service launched, the Cool Japan-funded venture company Anime Consortium Japan took over operations.

As industry analyst Justin Sevakis explained back when Daisuki announced its closure in August 2017, the service was unable to compete with the established streaming companies like Crunchyroll and Funimation. Its UI was clumsy, and in a market that was already heavily focused on attaining exclusive streaming rights, Daisuki didn’t release anything that other services didn’t also have access to.

In the wake of its closure, Daisuki insiders spoke of how anime production committees were reluctant to offer them the rights to their high-profile properties because those companies knew they could get more through working with the large American media corporations. Just because Daisuki was Japanese-owned didn’t mean that it was exempt from the expensive bidding and complex web of business relationships at the heart of anime licensing.

Daisuki could have been a good opportunity for Japanese production companies to increase their stake in overseas streaming, but the poor timing and lack of market research turned the investment into an expensive waste. Despite that failure, however, Cool Japan wasn’t done with the American streaming market.

Investment in Sentai Filmworks

In August 2019, the Cool Japan Fund invested US$30 million in Sentai Filmworks, followed by another US$3.6 million a year later.

Sentai was ideally situated for the grant money: It had ample experience with anime licensing and marketing, but it was also a small player compared to the large corporations in the industry. Nowadays, with Sony owning both Crunchyroll and Funimation, it’s even harder for smaller companies to carve out a space for themselves than it was during the Daisuki years. Sentai needed a large investment to sit at the table with the big boys.

Foreign investment in anime hasn’t trickled down to the lower rungs of anime production workers—that’s true. But at the same time, monopolies spell trouble for consumers and industry workers alike, which is why Cool Japan‘s investment in Sentai is a welcome move. And by investing in a company that already has its own platform instead of trying to create a new one out of nowhere, the problems of Daisuki are averted. The long-term efficacy of the investment remains to be seen, but the logic behind it is sound.

Town Revitalization and Local Tourism

On the other hand, national and local governments are struggling in their attempts to encourage tourism in rural areas. Despite the evident popularity of anime-related tourism, governments have encountered difficulty in converting fan passion into long-term economic activity.

In fact, the government hasn’t found much success in creating anime hubs even within Tokyo. Asagaya Anime Street, a shopping strip supported by Cool Japan and Japan Railway, closed in 2019, just five years after inception. It was conceived as an alternative to Akihabara in west Tokyo, but right from the start it failed to attract crowds. Insiders blamed restrictions on the store designs—they weren’t allowed to put erotic art out in the open like Akihabara stores do, making the whole venture decidedly “uncool.”

For fan communities that value authenticity, the intervention of government and corporate entities is an unwelcome trend. One of the biggest recipients of Cool Japan money is the media conglomerate Kadokawa. Through various grants, Kadokawa has launched multiple tourism-related ventures, including the Anime Tourism Association, a travel agency, and an ambitious museum and hotel facility in Saitama. All of these projects have drawn criticism for existing primarily to promote Kadokawa‘s brand.

One also has to question whether a company as large as Kadokawa truly needed government support to make those investments in the first place. It is notable that despite using the “Universal Cool Japan” branding for its limited-time attractions based on Japanese media properties, Universal Studios Japan has not claimed to receive a government grant.

Post-COVID: Keeping the Culture Industries Afloat

Judging from the above examples, one could reasonably conclude that the results of Cool Japan so far have been mixed. Although individual efforts may have been squandered, it’s undeniable that anime properties are more accessible overseas than ever, and anime-related tourism is on the rise. The extent to which government intervention played a part in that growth is debatable, but by Cool Japan‘s vaguely defined goals, anime’s continuing popularity justifies the efforts. However, even this doesn’t represent the full picture.

The goal of Cool Japan might be to encourage inbound tourism through promoting Japanese cultural products abroad, but without an industry, there would be nothing to promote. COVID brought this fact into stark relief.

Last year, Cool Japan launched an emergency fund to help keep businesses afloat. Understandably, the fund focuses on businesses involved with events and entertainment—in other words, the businesses that were most impacted by the virus. However, even outside of a crisis, it’s important to keep the awareness that an impoverished industry cannot foster long-term growth.

On paper, the Japanese anime industry may be seeing impressive growth in the short and medium term, but its continued success is far from certain, especially as the chronic labor problems remain unaddressed. Notably, the government has made scattered attempts to support young animators, such as funding the Anime Tamago training program. It also supports select works of media through an art subsidy (the recent The House of the Lost on the Cape anime film benefited from this). However, those initiatives are unconnected to the Cool Japan Fund or to the Cool Japan brand. Even the successes of Cool Japan are divorced from the realities of anime production, and the world of TV anime receives barely any government support at all.

For anime to remain “cool,” investments need to be made with an eye for long-term sustainability. Investments in training and subsidies for production studios might not be immediately obvious options towards promoting Japan’s reputation abroad, but their importance in this current moment cannot be overstated. Fostering the international demand for anime without addressing the labor shortage issues only exacerbates the problem, because without financial support for animators and studios, the industry is struggling to produce the volume of work required to meet the demand. I want everyone to understand this: consumers, corporate investors—and the government, too.


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