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Current State and Challenges of the Anime Industry

Market Size and Growth Forecast​

The anime industry has experienced continuous growth over the past 50 years. Japanese animation, which began in the 1960s, has become a cultural phenomenon with significant domestic and international influence. From the 1980s to the 1990s, the popularity of anime further increased, giving birth to globally renowned works.

In recent years, the proliferation of streaming platforms has dramatically changed the viewing environment for anime. With the emergence of global streaming services like Netflix, anime has become accessible to viewers worldwide. This widespread availability has led to rapid expansion of the anime market, with reports indicating that the market size of the anime industry exceeded $24 billion in 2019.

Furthermore, projections for the anime market size up to 2030 suggest an annual growth rate exceeding 8%, with the potential for the market size to reach $65 billion(*1). Anime is no longer limited to a specific age group but has evolved into content all age demographics enjoy. This growth demonstrates anime's ability to appeal to a broad audience by addressing diverse genres and themes.

Labor Shortages in Production and the Urgent Need for Efficiency​

While digitalization is progressing in anime production, a severe labor shortage remains a significant challenge. There is a need for more personnel across all areas, including animators, background artists, and production coordinators, leading to production companies needing more support with orders. Currently, if one requests production from a famous studio, there is a waiting period of 3 to 4 years, making it challenging to supply work flexibly.

In an environment that demands rapid response to market needs, the labor shortage in production is causing missed opportunities. Specifically, delays in producing sequels to popular works or series risk diminishing viewer interest due to the inability to release timely content. Additionally, while games incorporating animation could experience significant success if released immediately after an anime hit, their development time prevents sales maximization.

The increasing need for efficiency in anime production necessitates the adoption of digital tools and AI technologies. By automating routine tasks and processes, these tools can free creators to focus on more creative work and tasks that significantly impact the final product's quality. The integration of AI technology is expected to enhance animation production speed and maintain consistent quality.

Challenges in Global Expansion​

The global popularity of anime is soaring, increasing demand for localization and region-specific versions. However, personnel shortages and delays in understanding local market needs present significant challenges. Beyond translation, subtitling, and dubbing, content may need modification to align with different cultures, languages, and religions. While localization ideally involves local contributors, there's often a lack of specialized knowledge and skills related to anime production.

Moreover, adjustments to comply with local laws and regulations are necessary, potentially hindering global expansion. For instance, strict copyright management is required in Western markets, and resources to address this may be lacking.

To avoid missing opportunities in the global market, streamlining the localization process and swiftly grasping market needs are crucial. This enables timely release of anime works, meeting viewer expectations and maximizing potential success.

Development of Generative AI and Its Impact on the Anime Industry

Rapid Progress of Generative AI Technology​

Generative AI technology has progressed rapidly in recent years. Notably, the development of large language models (such as OpenAI's GPT-4 or its successors) and image/video generation AI technologies are significantly impacting anime production. These technologies learn from vast datasets and can generate high-quality images and videos.

For example, generative AI can automatically propose character designs or create scene backgrounds, greatly enhancing efficiency in the initial stages of production. Additionally, by having creators refine AI-generated prototypes, the overall production process can be expedited while maintaining quality.

Potential Applications of Generative AI in Anime Production​

Generative AI can be applied to various aspects of anime production. For instance, utilizing AI in character design, background art, and video production can help alleviate labor shortages, reduce costs, and shorten production timelines.

In character design, AI can automatically generate diverse designs as starting points, supporting creators' brainstorming process. For background art, AI can create visuals of realistic landscapes or fantasy worlds, significantly improving production efficiency. In video production, AI can perform in-between frame generation (tweening), line correction, and coloring, thereby enhancing the quality and consistency of animations.

With AI support, creators can dedicate on more creative processes and high-value tasks that enhance the overall quality of their work. As AI technology continues to evolve, its applications in anime production are expected to expand further. Notably, AI's ability to learn individual characteristics and styles suggests that it will be utilized in increasingly sophisticated ways, ultimately broadening the scope of creative expression within the industry.

Challenges Brought by Generative AI

While the rapid advancement of generative AI technology brings many benefits to anime production, it also presents several challenges.

Current generative AI systems learn from vast amounts of data collected from the internet, much of which may be copyrighted or licensed. Using unauthorized data without permission from copyright holders poses legal risks of copyright infringement. Moreover, most mainstream generative AI systems (as of July 2024) do not compensate the creators and artists who provided the training data, failing to protect their rightful entitlements.

Usability for Creators and Lack of Quality:​

Current generative AI is often not readily adaptable to anime production environments. The inability to fine-tune outputs to match a work's specific style and direction, as well as the lack of models specialized for particular genres or styles, hinder the production of desired results. Furthermore, developing, adjusting, and modifying AI models, as well as operating AI tools to customize outputs, require specialized knowledge, making them difficult for creators to utilize effectively. This creates barriers to maximizing creators' creativity and necessitates improvements to both AI models and user literacy.

Challenges in Sustainable Development of AI Models:​

The continuous evolution of generative AI requires learning from high-quality data and continuously incorporating new data. Providing appropriate compensation to data providers and building an ecosystem around AI models are ongoing challenges. Additionally, training advanced generative AI models requires substantial computational resources, such as GPUs, which presents a barrier to continuous model development and widespread accessibility.

To address these challenges, it is crucial to ensure transparency in data collection, model training, synthesis, and usage history. Additionally, building a system that respects the rights of creators and intellectual property (IP), along with the infrastructure to provide accessible GPUs, is essential for sustainable development. Improving the quality and consistency of generative AI outputs and providing user-friendly tools and interfaces are also vital. Animechain.ai aims to offer innovative solutions to address these challenges.