Answerman

Is The Anime Glut And The American TV Glut The Same Thing?

Chris asks:

Over the Summer, there was a lot of talk about “Peak TV”, the idea that there is more good scripted TV being produced than there are viewers with time to watch it. The argument was succinctly made by FX's John Landgraf at the Television Critics Association press tour, who showed that there are more than 1,700 series currently on US television, nearly 400 of which are scripted. This sounds a lot like comments I've heard from you, Zac, and others about the enormous amount of anime being produced, and whether this represents a new anime “bubble”. Is it valid to compare the booms in US TV and anime production? Are the underlying economics similar or different, and can either continue on its current trajectory?

Every year, the Television Critics Association Press Tour (TCA's, as they're known) is a semi-annual conference (in Beverly Hills in the summer, and Pasadena in the winter), wherein television critics are wined and dined by the various TV networks and streaming services. They get to meet the stars, screen pilots and previews, and sit through panels and Q&As with network executives. The networks try to get the critics excited for the new shows coming up, while the critics sit there and tried to decipher what shows were good, and what shows were going to be hot garbage.

It was at this July's TCA's that people started realizing en masse that the "golden age of television" of the past few years had turned into an unwieldy nightmare. The 1,700 series on the air (371 scripted) was JUST PRIME-TIME programming -- that didn't count talk shows, soaps, syndicated game shows or other daytime programming. Channels across the Basic Cable spectrum that nobody watched and streaming websites nobody visited were suddenly producing their own comedies and dramas. Nobody could even keep track of what networks were in the game, let alone what shows they were running. And the TCA's stretched on for longer and longer.

Finally, FX Networks president John Landgraf, who is incredibly well-respected in the business, gave a speech that freaked everybody out. We have achieved "peak television," he said, and this is too much content. Critics can't review them, viewers can't find them, and not that many of them are actually good. There are so many shows that it's nearly impossible to cut through the clutter and market a new one in a way that will get people to tune in. It's not sustainable, it's out of control, and it's a bubble that's about to burst, was the gist of his speech.

Boy, that sure sounds like the same problem we're dealing with in anime, doesn't it? The anime industry is much smaller than Hollywood, and yet, counting short-form and sequel series, we get well over 200 new anime series a year. Nobody can keep up with a pile that huge.

But honestly, these are two separate market bubbles, and they exist for different reasons. In my opinion, the television business is in the early stages of massive, massive upheaval that I've been predicting for a few years now. The business has, for years, been propped up by a bizarre, consumer-abusive business model that is now starting to fall apart. With ratings down substantially across the board, advertising is nowhere near as lucrative as it once was. With most people skipping commercials on a DVR, it's questionable that commercial ad time is worth anything at all. Hundreds of cable networks that nobody watches are being kept alive by fees paid by cable companies, which they were forced to pay for because the crap networks are owned by the same people as big, important networks, and they have to buy them together in a bundle. Consumers are forced to pay an enormous amount of money for networks they don't watch. ESPN amounts to over $6 of everybody's cable bill every month, whether you watch it or not.

With cable bills getting more and more expensive, consumers are starting to revolt by "cutting the cord" and relying on streaming services instead. Millennials often never bother subscribing to cable at all. The industry is trying to cut through its red tape by offering slimmed down packages of basic channels for a lower price, which is something Apple and Sony are both attempting to do as well. People will pay extra money for networks who provide top-tier programming like AMC or HBO, but is anyone really going to pay extra money for VH1? The Weather Channel? TV Land? All nine "Discovery" channels? With more and more eyeballs going to internet-based on-demand services like Netflix, there is no reason for most of these networks to exist. Without cable company fees to keep them alive, a huge number of these networks are going to die.

And that's why everybody is suddenly getting into scripted content. It's expensive to make all of these shows, but every network, big and small, knows the day of reckoning is coming, and they're trying desperately to make an impression with viewers. "Hey, we're an important network! When you can pick and choose, you'll want to pay extra money to subscribe to us!" It's an uphill battle to prove that case, but it's their only chance. Fail to stick out, and in five years they'll probably be gone.

Anime is not in such a desperate state. The current flood of programming is, in my opinion, the result of what economists call "irrational exuberance," the sort of excitement about an area of business that results in dumb spending, like most bubble markets. In this case, international streaming is opening up a world of possibilities and new territories. No longer limited by having to sell DVDs to young people that can't often afford them in countries with good DVD distribution networks, anime can now freely be a worldwide thing. Where a fan ten years ago could usually only get their hands on a few hours of new anime a month, now fans can consume nearly any new series being made, and thousands of back catalog shows. It's a whole new market, and it's breathing an insane amount of money back into the anime business.

Making matters even better for Japan right now is the low value of the yen (meaning every sale gets them substantially more money), and fierce competition between overseas publishers and streaming companies for new shows. China is also buying content and pumping an obscene amount of money into the business. And increasinly, anime streaming is being made available worldwide, so countries that were previously neglected can legally watch (some) anime and contribute revenue. And all of these markets are potentially hungry for related merchandise.

It's still very difficult for Japanese producers to predict what will work overseas and what won't, and many are still turning to their (still very important) home grown otaku base and assuming fans around the world have more or less the same taste. But anime is cheap to make, the Japanese population isn't getting any bigger, and the government is helping to subsidize efforts to offer Japanese content outside of the country. With all of those factors, production has quite simply snowballed.

The American TV bubble is going to pop. It's going to pop when advertisers finally give up and admit that nobody is watching their ads, and when consumers defecting to streaming services hit a critical mass. The fallout will be ugly and a lot of people are going to lose their jobs. There are rumblings going on at the major media companies that suggest that it's already starting.

The anime bubble has so many positive factors going for it that it's hard to tell if or when it will pop. I don't think it will do so spectacularly unless producers really overextend themselves and suffer huge financial losses, which I have no evidence that they're doing. But certainly some of those positive factors are going to ebb, and they'll have to cut back. And when that happens, that will probably be a good thing. Because 200 new shows a year is just too freaking much.

Justin Sevakis is the founder of Anime News Network, and owner of the video production company MediaOCD. You can follow him on Twitter at @worldofcrap.