Netflix generated a monthly app revenue of about 465.8 thousand U.S. dollars in Japan in December 2024. The total app revenue during that year reached more than 6.9 million dollars. The subscription video-on-demand (SVOD) service entered the Japanese market in September 2015.

According to a report published by GEM Partners in February 2024, Netflix was the leading subscription video-on-demand (SVOD) service in Japan in 2023. The service held a market share of 21.7 percent during that year. The estimated value of the domestic SVOD market amounted to 505.4 billion Japanese yen in 2023, up from 450.8 billion yen in 2022. According to the estimate, which was based on user fees paid to service operators and excluded advertising revenues, Netflix's market share slightly decreased compared to the previous year.

Netflix in Japan

Netflix entered the Japanese streaming market in September 2015, making it the first Asian market the company ventured into. According to news reports, Netflix expected Japan to be one of the slowest markets to penetrate due to the brand sensitivity of Japanese audiences. At the same time, this brand sensitivity was seen as a key to long-term payoffs once the service was embraced by Japanese consumers. In order to achieve this, the company secured long-term partnership deals with Japanese content creators throughout the years. Notably among them were several high-profile anime studios, whose products were also seen as a way to counter Disney. Other shows featuring domestic content include "The Naked Director," "Terrace House," and "Tidying Up with Marie Kondo." A lack of local content is considered to be one of the factors that hampered Hulu's initial uptake when it started its operations in Japan back in 2011.

The Japanese video streaming market

Video streaming has become an increasingly contested business in Japan as the market has shown strong growth figures in recent years. One major reason for this development can be found in the entry of several foreign services into the Japanese market, with Netflix and Amazon Prime Video both launching in 2015, DAZN following in 2016, and Disney joining the competition in early 2019. One source estimated that the combined market of SVOD, transaction video-on-demand (TVOD), and electronic sell-through (EST) more than tripled in size between 2015 and 2022. A strong growth can also be seen in the share of people who use SVOD services. As a result, the average time people spend on watching video-on-demand (VOD) per weekday has increased significantly compared to the mid-2010s.

According to an online survey conducted in April 2021, more than 55 percent of paid video streaming service users in Japan often watched Western or international movies. Foreign movies were followed in popularity by Japanese movies, anime, and Japanese dramas.

The paid video streaming market in Japan

Paid video streaming services have seen an increase in popularity in Japan in the recent years. A major indicator for this is the estimated size of the paid video streaming market, which showed a clear growth trajectory throughout the 2010s. One important impetus during that time period was the entry of Amazon Prime Video and Netflix into the Japanese market in September 2015. While there had been a number of services prior to this date, such as GYAO! and Hulu, the competition intensified with the entry of these two major players. In October of that year, TVer INC. introduced the online television portal TVer, a joint project of several of Japan’s largest television stations and advertising companies. AbemaTV, which is part of the media business of CyberAgent, Inc., followed in 2016. Disney Deluxe was launched in early 2019 and later rebranded as Disney+. A ranking of the most commonly used paid video streaming services shows that Amazon Prime Video enjoys a particularly high popularity in Japan.

High demand for animated content

While the survey at hand suggests that Japanese viewers prefer international and domestic movies, a different survey on the most popular content among subscription video-on-demand (SVoD) users indicates that many of the leading shows in Japan are either anime themselves or titles based on anime properties. Japan is a major producer of animation worldwide, and the increasing popularity of streaming services has exerted positive effects on the country’s anime industry. Content providers such as Netflix have sought more and more cooperations with Japanese producers, which in turn enjoy an improved bargaining power when it comes to compensations. The sales revenue of the anime streaming market in Japan overtook the sales revenue of the television anime broadcasting market for the first time in 2020. Considering that television has been one of the pillars of the anime industry for decades, this development can be interpreted as a further indicator for the increased importance of streaming services among Japanese consumers and producers of content.

According to Cognitive Market Research, The Global Anime market will be worth USD 28.8 billion in 2023 and expand at a compound annual growth rate (CAGR) of 10.20% from 2023 to 2030.

The demand for anime is rising due to the emerging adoption and sales of Japanese anime content globally.
Demand for Merchandising remains higher in the anime market.
The online sales category held the highest anime market revenue share in 2023.
North American anime will continue to lead, whereas the European anime market will experience the most substantial growth until 2030.

Increase in Popularity of Anime to Provide Viable Market Output

One of the major causes driving anime consumption internationally is the expanding ownership of smart connected devices, owing to the increased affordability and accessibility of cell phones and internet services. Modern globalization has brought Japanese Anime to the international market, contributing to its appeal. The globalization of Japanese animation is also driven by partnerships between digital streaming services like Netflix and Amazon Prime and Japanese animation studios, pushing the worldwide anime business. The unique and distinguishing characteristics of Anime that endear it to the audience differ from those of Western animation or cartoons, making it extremely popular in the Western world. Growing animation studios with technology breakthroughs to produce more content to fulfill increased market demand has also boosted Anime's popularity. Creating personalized material for a particular geographical audience has aided the growth of the anime sector. Given the unique visuals and storytelling across genres, millennials' growing infatuation with anime has drawn significant attention to the global anime sector. Furthermore, the increased production of anime content in multiple countries to capitalize on the profitable anime business has led to the market's rise in the twenty-first century.

Growing New Technologies to Propel Market Growth

Artificial intelligence, augmented reality, big data, the Internet of Things, and machine learning are defining the arrival of Industry 4.0 in every sector of the economy. In the foreseeable era, integrating artificial intelligence and other technologies to create better animation faster would support exponential market expansion. By saving a lot of time and effort, animation companies' usage of new technology might provide lucrative opportunities. Artificial intelligence can also improve anime shows' graphics, animation, and angles, thereby expanding the worldwide anime business.

Market Dynamics of the Anime

Lack of Anime Artists to Restrict Market Growth

Despite technical advances, anime production involves several steps, from writing and storyboarding to animation and sound design. The multiple steps take a long time. The lengthy hours worked by anime artists, designers, programmers, and creators are not justified by their pay. Budding anime artists are deterred from pursuing this job due to the hard hours and low pay. With an ever-increasing animation market and a scarcity of anime artists and professional animators, the business will likely grow slowly.

Impact of COVID–19 on the Anime Market

The global anime market growth was hampered by the COVID-19 pandemic, which resulted in the closure of production houses, declining goods sales, and delays in producing anime content. Profits and sales in the anime business suffered as a result. During the pandemic, however, the growth of streaming platforms has had a favorable impact on market growth. Post-pandemic production orders have continued to rise, as have the number of anime titles and production companies producing them, with the expanding streaming industry adding to this demand increase. The development of the COVID-19 pandemic had a huge impact on the market, with several animated television series, including some already in production, being canceled or postponed. Due to the complete lockdowns imposed in major cities, theatre releases and live performances were also hampered. Introduction of the Anime Market

Anime is a term used to describe animation that originated in Japan. The cultural distinction in how characters look and act matches Japanese society and culture and becomes the distinguishing aspect of anime. Anime is the animation of everything and anything that has the necessary featur...

The revenue of the animation video streaming market in Japan amounted to 250.1 billion Japanese yen in 2023. It grew by a whopping 51.4 percent compared to the previous year. Relevance of streaming for the anime market Due to its consistent growth, anime streaming has become an increasingly important segment of the anime industry in its domestic market in recent years. The competition between major streaming services has spurred on the Japanese video streaming market and created additional demand for animated content. As a result of its increasing popularity, anime streaming surpassed the animation videogram market in 2018 and the television animation broadcasting market in 2020. Broadcasting being overtaken by streaming is particularly noteworthy, as broadcasting has been a central segment of the anime industry for many decades. The Japanese video streaming market Video streaming services have enjoyed an increasing popularity among Japanese consumers in recent years. This is exemplified by the share of people who use subscription video-on-demand (SVOD) services, which showed a significant growth since the mid-2010s. One major factor for this development was the entry of Netflix and Amazon Prime Video into the Japanese market in September 2015, which increased the competition for domestic media companies. Next to Netflix and Amazon Prime Video, leading video-on-demand (VOD) platforms in the Japanese market include TVer, Abema, U-Next, DAZN, Disney+, and Hulu, whose Japanese version is operated by a subsidiary of Nippon TV. In 2020 and 2021, the Japanese on-demand video streaming market also profited from the heightened demand for home entertainment amid the COVID-19 pandemic.

The animation industry in Japan generated a revenue of about 1.72 trillion Japanese yen via overseas sales in 2023. Since the overseas business combines the revenue of various segments, it was the largest category in terms of revenue for the Japanese anime industry. Merchandising, pachinko, and streaming constituted the largest domestic segments. The anime market The anime industry is a booming enterprise in Japan. One major contributing factor is the growing demand in other countries, which has led to a strong increase in overseas sales particularly since the mid-2010s. Among the domestic segments, one notable area of growth for the industry is the streaming business, which overtook television broadcasting for the first time in 2020. Due to the competition between major streaming services, such as Netflix, Amazon Prime Video, and Disney+, this segment has received a lot of media attention in recent years. Live entertainment, which includes businesses such as live performances, exhibitions, and cafés, also constitutes a segment that enjoys increasing popularity. The segment was particularly adversely affected by the COVID-19 pandemic, but managed to recover by 2022. Anime production companies In Japan, animation works are usually produced by so-called production committees, which represent cooperative endeavors between companies that belong to various related industries. The production of content often goes hand in hand with further products, such as merchandise in the form of toys or other character goods. While this cooperation reduces the risk each company has to carry and allows for the utilization of a highly specialized know-how with regard to the various market segments, the actual animation production companies only earn a small proportion of the revenue generated in the anime market.

The U.S. is the largest market for Netflix and Amazon Prime Video, based on viewer numbers forecast for 2024. The country is estimated to have over 173 million Netflix and around 164 million Prime viewers. While Netflix is more popular than Amazon in the U.S., the UK, France, Canada, and Australia, Prime Video is more common in India, Germany, and Japan.

As of June 2024, the anime-focused video-on-demand platform Crunchyroll surpassed 15 million paying subscribers. Subscription numbers have grown rapidly in recent years, with the company managing to triple its number of paying subscribers between mid-2021 and the beginning of 2024. What is Crunchyroll? Similar to services like Netflix and Hulu, Crunchyroll provides subscribers with on-demand access to shows and video media through monthly subscriptions. The service also offers cheaper, ad-supported programming. Unlike its competitors, Crunchyroll focuses entirely upon one genre, anime. Its narrow focus ensures that it has an extremely extensive collection of titles that specifically cater to the interests of its customers. This unique product offering has made Crunchyroll of the leading entertainment apps in the United States. Anime and manga Anime is a type of cartoon animation series that originated in Japan, which often spawns from Japanese comic books called manga. Extremely popular within Japan, anime has also garnered large followings from around the world, and the industry earns millions of dollars in overseas sales each year. With many manga series selling hundreds of millions of copies, the audience for these types of entertainment is huge, highlighting the importance and appeal of services such as Crunchyroll.