Demand for anime content soars

Driving the news: Last week, AMC Networks bought anime distributor and streaming company Sentai Holdings. Sentai owns HIDIVE, an anime-focused subscription streaming service, and other anime-based video services.

AMC Networks' acquisition comes as Hollywood studios are starting to pour more resources into anime content amid increased global streaming competition.

• Sony Pictures Entertainment acquired Crunchyroll, one of the largest U.S.-based anime streaming services, for $1.2 billion from AT&T last year. It plans to merge Crunchyroll with Funimation, another anime streaming service it already owns, to create one giant platform.
• Netflix is developing a new anime series based on "Scott Pilgrim," a hit graphic novel series, The Hollywood Reporter reported Friday. It previously touted its investments in anime, reporting that more than 100 million households globally watched at least one anime title on its platform between October 2019 and September 2020, a 50% increase from the year prior.
• Disney+ released its own anime series, "Star Wars: Visions," last fall and has announced plans for more titles in the future.

By the numbers: Overall, the share of global demand that anime took across all content genres was 7.1% in December, up from 4.2% in Jan 2020, per Parrot.

• Japanese-language content was the most in-demand, non-English language content with American audiences last year, even outperforming Spanish language series.
• For reference, Parrot Analytics measures demand for content by combining consumption data with social media, social video and research activity to determine the value of a particular TV show, film, talent or genre.

Be smart: For streaming companies facing increased competition and saturation in the U.S., anime offers a new way to lure new viewers, and reengage existing ones.

• "As global demand for anime continues to grow, so does the need for better accessibility, curation, and selection," said Julia Alexander, senior strategy analyst at Parrot Analytics.
• "Streaming platforms take on the role of acting as a discovery tool for subscribers, and ensuring their library is in line with customers’ growing demand is crucial to continued success, both in finding new customers and keeping current ones satisfied," she said.

The big picture: In addition to the U.S., more audiences outside of Japan are looking for anime content.

• "In other English-speaking countries, there's a lot [of people] that want to kind of continue to branch out and watch more and more new types of anime, so it's a really helpful user acquisition tool," said Michael Dempsey, general partner at Compound, a seed-stage venture fund and an animation expert.
• "It's definitely more mainstream," he added. "It's not as contained towards niches as it used to be. I think that's probably because there's just a broader, continual hunger for animated content."

What to watch: As the appeal for anime content broadens, so has its fanbase.

• “There's a lot of really amazing content in the category that appeals to people, even people that might not define themselves as anime fans," said Tal Shachar, CEO and co-founder of Infinite Canvas, who previously worked at The Chernin Group when it owned a majority stake in Crunchyroll.
• "In previous eras, they might never been exposed to the content or not enough of it," Shachar said.