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Anime Producers Explain The Ups and Downs of Overseas Collaboration

Anime producers Nao Hirasawa (Arch Inc. CEO, Graphinica representative director) and Akira Takayama (Fanworks CEO) spoke about the upsides and challenges of overseas collaboration at the "Next Generation Anime Producer's Plan for Overseas Collaboration in Production" seminar at TIFFCOM.

The seminar first opened with a brief explanation of the context around international involvement in anime. In the late 2000s, when anime revenue was at a low point, attention began to shift overseas. Although the worldwide popularity of anime was keenly evident, the issue was in figuring out how to effectively monetize it through business deals.

Both producers highlighted the importance in building trust when it came to international business deals. When Fanworks was negotiating a deal with the Chinese company Quan, Takayama said that he would have regular meetings with the clients in order to understand them, not just their business culture, but as individual people.

"It's a matter of finding the right chemistry," he said. "Once you understand someone as a person, it's easier to talk business."

For his part, Hirasawa stressed the importance of long-term commitment from international business partners, saying that he prefers dealing with companies that are willing to establish a branch office in Japan.

"To make anime, you need to work together for 2-3 years. To make this kind of long-term arrangement work, you need a committed partner," he said. He noted that it is the tendency of IT companies to work with a short-term scale in mind, which was why he appreciated a firm show of commitment. "Otherwise, there's a possibility that they won't return calls after a year or so."

Cultural differences and clashing expectations can sometimes lead to conflict. Hirasawa said that in these cases, a "broker" is necessary as a neutral third party who will act by the letter of the law.

Takayama said that being extremely up-front and honest is his way of nipping potential problems in the bud: "If the other side does not have a culture of reading between the lines, then it's better to be straightforward." He said that whenever he has expressed a blunt opinion that would be dicey in a Japanese business context, the deal has always still managed to go through.

He also talked about the need to make decisions that are practical and reasonable for the creative side. If the overseas partner asks for something unrealistic from the creators, then it is his duty to step in and say no because protecting the creative side is necessary for business relations to succeed. Hirasawa said it was the same for him, and in cases where he has to make a refusal, he tries to offer alternatives as well. Even still, there are many projects that will never see the light of day.

Despite the difficulties and failed deals, Hirasawa said he is satisfied with his dealings because they establish precedents for overseas collaborations. As examples of successful partnerships, he highlighted Arch's investment in Yostar Pictures, an animation studio founded by the Chinese game company Yostar. When a Yostar producer said he wanted to make anime-style PVs to promote the games, Hirasawa advised him that because most Japanese studios are based around a film or TV show production pipeline, he would need to establish a studio from the ground up that specializes in PV work. From there, he introduced the producer to various other creators and producers. The idea behind Yostar was to establish it from the start as a studio with a digital production workflow.

Another positive example he highlighted is The Journey, a Japanese-Saudi Arabia co-production. This deal came about because Toei Animation has always had a strong relationship with the Saudi Arabia-based company Manga Productions. The “Saudi-Japan Vision 2030” agreement between Japan and Saudi Arabia gave Toei the opportunity to pursue business relations in earnest, but because the studio was too busy to immediately work on the project, they turned to Arch to help establish a new studio based in Japan. The idea was to get Saudi Arabian talent to learn Japanese techniques and create their own titles. It was also a good opportunity for the Japanese side to learn more about the world of Islam and Saudi Arabian culture.

For their part, Fanworks started getting involved in overseas collaborations in 2015 with the Aggretsuko series. Takayama said that the appeal of anime is ubiquitous, so a big reason for collaborating is to be able to share the anime with as many people overseas as possible. On the other hand, he pointed out how different cultures react differently to certain content, and said this created a constant push-and-pull between the Japanese creators and overseas audiences. This would lead the creative side to ask themselves whether the traditional ways in Japan were in need of updating, or whether they were fine as is. However, Takayama also said that being exposed to these different viewpoints also made avenues to create something entirely new.

As for a more down-to-earth challenge, Hirasawa pointed specifically to taxation. "When overseas investments that are individually taxed in their own countries, there can be gaps in terms of what the other side pledges and how much money actually ends up in the pool," he said. "Also, when it comes to sharing revenue, the tax rates in different countries have to be taken into account as well."

Another problem is determining just how much each side should invest after taking into account the size of the projected audience. In the case of overseas investment, it is not as if the entire country is the audience but rather a certain segment of that country, and it is important to have a firm grasp of the distinctions. Hirasawa claimed that this is something that Japanese businesses are far more conscious about these days compared to 10 years ago. When it comes to revenue share, a mismatch of expectations and miscommunication will cause the other side to give back disproportionately more or less than their investment, which will lead to suspicion around the partnership. Thankfully, these problems dwindle the longer and more closely the partners work together.

The subject then turned to the effects of COVID-19. Hirasawa said that financers were also impacted by the delays in production, because there are cases where you cannot receive payment until the product has been delivered. This caused cashflow problems for financers who have their fingers in multiple different pots. On the production side at Graphinica, there were also problems when it came to instructing new recruits, and he highlighted preproduction as an area that was particularly affected because it requires meetings with large numbers of people. When converting this kind of dynamic to an online environment, it was necessary to give people clear roles like "emcee" and "commentator" in order to keep conversations flowing smoothly.

On the other hand, Takayama said that Fanworks wasn't too impacted because it specializes in short animation. In fact, the company reported record high revenue during the pandemic. The company uses a joint server that can connect the various production sites to a single hub, which meant that it did not have to create a new scaffold because of the pandemic.

Looking towards the future, both Hirasawa and Takayama expressed optimism that the experiences accrued from working remotely can be easily applied to future interactions with business partners overseas. People are no longer hesitant expressing themselves in an online call, and they have become used to the technology as well. Although problems would still remain with fully remote work, the accelerated trend towards online communication will have a positive impact on future business.

"We're all trying to overcome COVID, countries are collaborating more because of it, and there are systems that have been nurtured throughout the pandemic," Takayama concluded. "I think the world is closer now because of COVID."

Source: TIFFCOM Online Seminar