Will AnimeLog Disrupt the Western Industry?

A project called AnimeLog recently made the news. A joint venture between several major anime studios and production companies, AnimeLog is a YouTube channel for full episodes of anime. Companies like Toei Animation, Tezuka Productions, and Kodansha are on-board.

Already at over 195,000 subscribers and with a wealth of classic anime on the channel, AnimeLog has caught the eye of many, both east and west. Further, AnalyzeLog, the digital agency that manages AnimeLog, is in part funded by venture firm Next 10 Ventures.

AnimeLog in Japan (Image courtesy @Shinden9)

Venture firms getting involved with the anime space is nothing new, but AnimeLog is somewhat of a different paradigm. We have a Western company investing in a Japanese venture that will (eventually) serve anime to the US. AnimeLog’s real content isn’t available to US viewers yet, but part of the plan is to serve anime to English-speakers.

Presumably because Toei Animation is involved, people are treating AnimeLog like a potential upset. Because Toei produces Dragon Ball, and because Dragon Ball is a major title for Funimation, speculation abounds.

But it isn’t that simple.

As we know, the anime industry is a complex web of money and companies. Anime’s business model is, in part, designed to allow specialized decision-making. Music companies handle the music; merchandise companies handle the merchandise, and so on. The same is true for international licensing.

The incentives to handle international licensing and distribution through international companies are extremely strong.

Think about it. If you’re a Japanese company that holds the rights to an anime, here are your choices:

  • You can release the anime yourself, which means translating it, subtitling it, potentially dubbing it, repackaging it, marketing it, and distributing it in a country you don’t fully understand. All of which costs money that you’re on the hook for if the show doesn’t do well internationally.
  • You can push all that responsibility onto a Western publisher, who will not only pay you to take on that burden, but is probably better at it than you will be.

Depending on the anime, your hypothetical anime company can make several tens of thousands or hundreds of thousands of dollars just selling the rights. And if the show fails internationally, the Western company is on the hook for it and you’ve still got your money.

Not a tough decision, from a business perspective. Not only that, but cautionary tales exist. Aniplex of America seems to be doing alright, but Pony Canyon couldn’t find that same success with a similar business model.

If AnimeLog manages to see wild success, it could be the beginning of a paradigm shift, but the deck is stacked against it. I especially wouldn’t bet on it threatening Funimation or Crunchyroll. The incentives for doing business with them are too strong, and they both sit on some production committees themselves.

It’s difficult to tell where AnimeLog will go. They have big plans (3000 titles, 1 million subscribers, 300 million views per month by 2022), but it’s too early to say how far it’ll go. People looking to AnimeLog as their savior from the likes of Crunchyroll and Funimation, however, may be barking up the wrong tree.