How Japan Can Win Back the Anime Market It Created

Japan made anime a global phenomenon. So why are others reaping the rewards? As streaming giants and overseas producers claim the profits, Japan’s anime industry must rethink how it funds, owns, and distributes its biggest export.

Once niche, now mainstream—anime now commands a vast international audience and a multibillion-dollar market. In 2023 alone, One Piece logged 479 million viewing hours on Netflix, while its live-action adaptation became the platform’s most-watched show in the second half of the year. 

Jujutsu Kaisen was named the most in-demand anime globally, especially among Gen Z audiences. Demon Slayer’s latest arc drew nearly 23 million viewers for its finale in Japan and held a top spot on Netflix’s Global Top 10 for six weeks. And Pokémon, a franchise that once dominated American Saturday mornings, continues to air in over 190 countries.

But behind the global fanfare is an industry under strain. Japan’s anime workforce is aging, entry into creative careers is slowing, and many studios still rely on long hours and low pay to meet growing demand. Burnout is widespread. Meanwhile, competition from China and the rapid adoption of generative AI are redrawing the economics of production. Japan’s traditional model — driven by output volume — is showing its limits.

To remain globally competitive, Japanese studios will need to build new advantages—through better talent models, smarter integration of technology, and greater ownership over distribution and IP.

As global demand accelerates, Japan faces a strategic question: how to stay at the center of an industry it created, but no longer controls?

When platforms set the terms

Global appetite for anime shows no sign of slowing. In 2021, Netflix reported that more than half of its 222 million users watched anime. By 2023, global anime revenue reached $28.35 billion and is projected to surpass $50 billion by 2033.

Yet much of that revenue is flowing abroad. More than half of anime-related income now comes from international markets, with streaming platforms and overseas studios capturing the upside. Netflix alone earned an estimated $2.07 billion from anime in 2023—nearly 38% of global anime streaming revenue. And that’s only one slice of the pie; games, merchandise, and live events generate even more.

Streaming platforms now determine how anime reaches most of the world. Through upfront funding, exclusive licensing, and detailed viewer analytics, platforms like Netflix, Crunchyroll, Disney+, and Bilibili now guide what gets made, how it’s made, and who sees it.

For Japanese studios, the benefits are limited. Most receive a fixed “flat” production fee, with no royalties, merchandise rights, or access to performance data. Even when a series becomes a global hit, the long-term value stays with the platform. What began as a pipeline for exposure has turned into a structural imbalance.

This arrangement leaves Japan with diminishing influence over how its content is monetized abroad. While short-term cash flow keeps projects moving, the long-term value increasingly shifts to foreign companies that control distribution and audience engagement.

Sony’s ownership of Crunchyroll provides a foundation, but realizing its full potential will require broader coordination—between studios, investors, and policymakers—to build a platform that reflects both Japanese creative leadership and the commercial ambition needed to match global competitors.

The China question

Chinese studios and platforms are now deeply embedded in the anime economy. Platforms like Bilibili, Tencent, and iQIYI release hundreds of animated series each year. Many draw from Japanese styles or involve Japanese creators, but are funded, produced, and monetized within China’s digital ecosystem.

Chinese studios also offer more attractive pay. Animator salaries can be up to 2.5 times higher than in Japan, making cross-border work increasingly common. Combined with state investment and integrated infrastructure, China has developed speed and scale advantages that Japan’s fragmented system struggles to match.

This shift reflects both market size and strategic investment. Chinese platforms integrate production, distribution, and audience engagement under a single digital infrastructure. That integration allows them to move faster, iterate more efficiently, and keep a larger share of the resulting value.

Rather than viewing this as purely competitive, Japanese studios may find opportunities in carefully structured co-productions—ones that protect IP ownership and allow for brand equity to remain intact while accessing new capital and distribution reach.

As one anime CEO bluntly noted in a presentation, “Even if we want to triple our sales, we can’t triple the number of productions we currently make… we need to create higher quality works and raise the price of each work.”

Cultural equity under pressure

Earlier this year, Studio Ghibli’s art style became the subject of a viral AI trend. Generative tools were used to produce near-perfect imitations of Ghibli’s hand-drawn aesthetic. While many saw the results as impressive, others—fans, artists, and the studio itself—expressed concern about the loss of authorship, the blurring of provenance, and the erosion of a hard-won creative identity.

The images weren’t technically illegal—style isn’t protected under copyright—but the emotional impact was real. What had taken decades of craft could now be simulated in seconds, without credit, context, or consent.

Yet the backlash revealed something valuable: authenticity still holds power. Audiences recognized the difference between a Ghibli film and a machine-generated imitation. That trust—in artistry, intention, and emotional depth—is one of Japan’s most durable assets in the global content economy.

Studios that invest in craftsmanship, originality, and emotional depth continue to build trust with global audiences. Studios that protect and project that identity will likely find that in a crowded market, cultural clarity matters more than ever.

What Japan can do

Japan’s anime industry has the creative talent, legacy brands, and international visibility. What it needs is a business model that matches its cultural influence with structural leverage. Five priorities stand out:

• Develop a global distribution ecosystem. A unified platform—or closer coordination among existing ones—can help Japanese studios retain more control over how their content is delivered, monetized, and promoted internationally.
• Reform employment practices. Studios like Sanzigen have begun shifting to salaried roles with benefits, in contrast to the usual model of paying freelancers per frame of animation. This allows for talent retention, skill development, and more consistent output. As labor reforms take effect across Japan, more studios may find it both viable and necessary to follow suit.
• Retain IP and participate in downstream value. Instead of relinquishing rights for short-term financing, studios and investors can explore models that keep licensing, merchandising, and adaptations closer to the creators.
• Use AI strategically. Tools that improve workflow or reduce repetitive tasks can be beneficial. But the core storytelling and artistic vision must remain human-led. Guardrails will be needed to ensure that AI augments rather than replaces cultural intent.
• Think in franchises, not just episodes. Japan has a history of long-running series with rich worlds. Framing anime not only as serialized entertainment but as multi-platform intellectual property can unlock value across games, merchandise, exhibitions, and theme park experiences.