Sony (NYSE: SONY) is moving to capitalize on global hunger for Japan’s burgeoning anime scene

Sony Corp. (NYSE: SONY), a Tokyo-based media conglomerate, is positioning itself to benefit from exploding interest in Japan’s latest export boom: anime. While the animation genre—known for its distinct visual style, inner monologues and over-the-top fight scenes with energy bolts and glowing auras—has long been popular as a niche interest, it’s been finding new success with some of the biggest, and most mainstream global platforms like Amazon Prime (NASDAQ: AMZN) and Netflix (NASDAQ: NFLX).

“In order to capitalize on the rapid expansion of the anime market, we have signed a global distribution agreement with Amazon Prime Channels, and, after launching in the US and the UK in October last year, we began distribution via Amazon in Brazil, France, India and other countries since April this year,” a Sony executive said during its latest earnings call, referring to the company’s Crunchyroll streaming service that primarily focuses on the distribution of Japanese animation. 

The platform, which exceeded 15 million paid subscribers in July, was cited as a rare bright spot for the Sony Pictures segment in its latest quarter amid declining revenues that resulted from fewer television productions and theatrical releases. The company said it’s planning to further engage anime fans by expanding its Crunchyroll ecommerce site to 34 European countries; it’s also developing new partnerships with the Alamo Drafthouse Cinema chain it acquired earlier this year that operates 41 theaters across the US where customers can dine while enjoying a movie.

“Crunchyroll intends to focus on global expansion in Europe, Latin America, India, and Southeast Asia,” the executive added, pointing to success seen with recent titles including “Demon Slayer – Hashira Training Arc,” “Kaiju No.8” and “My Hero Academia.” “Crunchyroll is also working on discovering high-quality IP overseas and co-producing works with Japanese animation creators.”

The Association of Japanese Animations, in its latest report, said that revenue tied to the sector more than doubled from 2012 to 2022 to 2.9 trillion yen ($19 billion), with most of the growth coming from overseas. The US and Canada were among the biggest markets outside of Japan for anime content, the trade group said. Indeed, Grand View Research pointed to a “remarkable increase in mainstream acceptance of anime beyond its traditional fan base” and said it expects the American market for Japanese animation to grow 15% a year through 2030 from the $2.2 billion it reached in 2023. 

“Streaming platforms such as Netflix, Crunchyroll, and Funimation are instrumental in this trend, offering a vast array of anime content to a wider audience,” the consultancy said, pointing to additional growth connected to conventions, merchandise and collaborations with mainstream brands. “This trend is influencing content creation, with platforms investing in a mix of established classics and fresh, innovative series to cater to evolving viewer tastes.”

Netflix’s latest Top 10 list confirms all the action, with three anime series ranking among the most popular non-English language shows in the last week of October. “One Piece,” a live-action adaptation of a famous Japanese manga, was the most watched series on the platform in the second half of 2023 with 71.6 million views and 541.9 million hours watched, according to an engagement report. And while “Avatar: The Last Airbender” is not considered to be an actual anime series, but rather anime-inspired, it was among the top 5 most watched series on Netflix in the first half of 2024, with 71.1 million views and 515.3 million hours watched. 

Sony shares have surged 14% over the past year, and companies that derive a greater share of overall revenue from Japanese animation are also seeing shares rise. Toei Animation (TYO: 4816), a Japanese animation studio that owns the One Piece franchise, has risen 12% over the past year, while Sanrio (OTC: SNROF)—which owns popular characters like Hello Kitty—is up 124%. It’s of course harder to move shares of a diversified company like Sony, which has interests that range from Hollywood movies to its PlayStation gaming franchise. But it’s exactly all those different business units that may help make some anime magic—that won’t get Lost in Translation—if Sony can use Crunchyroll to compete with the more dominant Netflix as a one-stop-shop for the hottest titles and then leverage that success across its portfolio.