Netflix Crisis Could Potentially Hit The Anime Industry As Well

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The streaming service Netflix has to accept steadily declining subscription numbers, which will sooner or later lead to cutbacks. Does this have a negative effect on the anime industry?

Declining Subscription Numbers At Netflix

This topic was recently discussed in an article published by the platform Toyo Keizai Online. Because the fact is that Netflix has seen a significant decline in subscriber numbers in the first two quarters of 2022. At least it showed a turnaround to the third quarter, whose figures announced an increase of 2.41 million paying members on October 18, 2022.

Since April, that is, after the declining membership numbers first became known, Netflix has taken several drastic consequences, including cost cuts through layoffs. It will also introduce a new subscription model called “Basic with Advertising” starting in November 2022.

As the name suggests, this is a cheaper and ad-supported subscription plan. The monthly fee for the new plan is just 4.99 euros. However, there are a few drawbacks. For one thing, there is no download function and the video quality is limited to 720p. Secondly, you have to reckon with about five minutes of advertising per hour.

The number of subscribers is expected to increase again as a result, but the impact on earnings will not be apparent until the next quarter. The company predicts that the number of subscribers will increase by 4.5 million compared to the third quarter and that sales will increase by 68 million euros, which would still be 305 million euros less in the annual balance sheet.

Declining Anime Productions

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But what exactly does this mean for the anime industry now? The anime genre is unfortunately still a niche genre at Netflix, which is therefore possibly one of the first to be canceled. In this context, there have already been some critical voices against Netflix in the current year.

For example, several anime producers who have already worked on some Netflix anime projects in the past would not have received any orders for new Netflix original projects in 2022. In addition, in some cases, even projects that were about to be launched were suddenly canceled, which would have had serious repercussions.

Other animation production sources tell similar stories, and it is believed that Netflix will reduce the number of animation projects produced in Japan starting in 2022. The timing of the subscriber decline has also led to the widespread belief that the company is cutting animation production to reduce its costs.

Netflix’s international fan event “TUDUM Japan,” held in September 2022, opened with a furious unveiling of new anime demonstrating the company’s focus on anime, which is understandably confusing for anime production houses.

Focus On Anime For Broad Audiences

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Yuji Yamano oversees animation content acquisition at Netflix. He was asked about the issue, but would not reveal whether the number of original productions will increase or decrease in the future. However, he had the following to say about the impact of the subscriber decline on Japanese animation production:

“We will continue to offer works that our viewers like. We are currently focusing on achieving a balance of animated projects that can be enjoyed by a wider audience, in addition to what today’s animation fans are looking for. We will periodically review whether we can invest more in these works.”

So instead of reducing the number of anime projects, the strategy seems to be shifting towards more targeted investments in anime. However, there are likely more serious issues behind Netflix’s strategy shift than declining subscriber numbers. The problem could be that there is not much successful anime among the Netflix exclusive releases.

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