Summary
While we are pleased to report that the anime market is healthier than it has ever been thanks to streaming, a robustslew of successful theatrical releases, and a BluRay market that has proven to be surprisingly resilient to the Digital Revolution, it is worth remembering that this has not always been the case. In fact, it was just a little over a decade ago when the anime industry (particularly in the West) took a major beating in the markets, to the point where there was a genuine crash in the marketplace.
This crash was so severe it took down major players in the anime space, made the medium less mainstream to major retailers, and lots and lots of people lost their jobs in this industry. What is more crazy is that there was not one thing that contributed to this: it was a series of major events that piled on top of everything like a Jenga puzzle, and the whole thing had no choice but to come crashing down, so it could be rebuilt. What happened to cause this crash, and what were the end results? Let’s discuss everything that went down during this time period.
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Anime Hits Over Saturation
Because the early 2000s saw a significantboom in anime’s popularityin the West, many distribution companies began licensing far more titles to release to a market that was growing at a healthy pace. The problem was that when anime was truly niche, companies would be very careful about what they licensed due to the limited funds they had. With more money quality control became less of a factor.
This led to the market being flooded with a mixture of high-quality and mediocre shows. What made this especially problematic is that anime DVDs were often priced higher thanThe Lord of the Ringsmovies(or even season sets of24). While it would have been nice if consumers could rent early volumes before committing to a series that could be pricey in the long run, there weren’t a lot of great options. That means not all titles performed well, and retailers, as well as distributors, found themselves with surplus inventory that wasn’t selling.
Anime Fans Sail the Seven Seas
With fewer options to sample anime series, a new digital revolution came with the advent of ‘Digisubs,’ which were essentially fansubs that were distributed over the internet. Unlike fansubs that needed to be copied and traded at conventions (and whose tape quality degraded with each copy and viewing), digisubs could be downloaded over the internet (shows likeNarutowere especially popular on these sites).
While it may have been seen as a way to ‘try out’ a series before committing to a purchase, once sites started putting entire series up on easy-to-use sites likeCrunchyroll(more on them later), it didn’t take long for tech-savvy teenagers to realize they could basically get all the anime they wanted for free, leading to even fewer sales of DVDs and manga (what’s worse is that the Japanese anime industry basically ignored this issue for years, letting the practice of stealing anime become something that was as widely accepted as password sharing is these days).
The World Experiences an Economic Downturn
While this site rarely covers major political and economic events, for the purpose of this article we need to discuss the global economic recession in 2008. The economic recession of 2008 (commonly referred to as the Global Financial Crisis [GFC] or the Great Recession), was the most severe financial crisis since the Great Depression of the 1930s. Multiple factors contributed to the onset of the crisis (far more than we can go over in this article), but the primary cause was the bankruptcy of Lehman Brothers and the housing bubble popping.
This resulted in a recession that affected countries worldwide, leading to massive layoffs, austerity measures, and significant economic contraction. Recovery from the recession was prolonged, and as a result the market in general was suffering. This meant that many retailers were affected by the recession, and companies like Media Play, Sam Goody, Suncoast Video, and Border Books. Those four companies were responsible for a reported35% of anime and manga purchaseseach year that went away.
Likewise, companies like Wal-Mart and Best Buy also shrunk their anime section space because sales of anime slowed down. The combination of the factors mentioned above led to the bankruptcy or downsizing of several anime distributors Geneon, Central Park Media, and ADV Films, all of whom were once major players in the U.S. anime industry, as well as the sale ofFunimation to the Navarre Corporation. It was a major shift and there were serious questions about whether or not anime would go back to being a truly niche product that could only support a handful of titles.
Anime Rebounds
As with all crashes, the sun will rise the next day, and the anime industry (like many other industries) picked up the pieces. Yes, some companies filed for bankruptcy, however, new companies like Sentai Filmworks and Eleven Arts were formed as well. Also, remember that piracy site named Crunchyroll we mentioned earlier? Well, after years of the Japanese anime industry ignoring online piracy, Crunchyroll made deals with them to become one of the first sites fans could legally stream anime. Today, they are thebiggest anime company in America.
So yes, the anime industry had a hard fall. All industries have them from time to time, and theirs was during a time when most people in the world were suffering. Thankfully it was able to pick itself back up, and now the industry is stronger than it’s ever been before, and there are more anime fans than in 2008. Ultimately (as Doctor Malcolm famously said) life finds a way!
