If any story has recently been shaking up the world of entertainment business in recent days, it’s been the recent Netflix stock tumble. The considerable loss of value for the company has led to some major discussions regarding the future of the platform’s offerings, as well as starting more than a few conversations about the nature of streaming content going forward in general.
While the inner workings of a company’s finances can feel very distant from the content its users know and love, the changes brought about by these developments have already begun to play a role in the platform’s strategic restructuring for both live-action and animated content. By looking at the latest developments, there are some broad strokes that can paint a picture of what things might look like going forward for anime on Netflix.
What the Netflix Stock Tumble Means for Audiences
Earlier this month, a first-quarter earnings report for Netflix showed that the company had lost around 200,000 subscribers since the end of 2021. While this is a relatively small number in comparison to the company’s hundreds of millions of subscriptions, it was the first time that a concrete shrinkage was reported after years of meteoric growth—likely felt from the effects of economic recession and the wider variety of streaming options available now (HBO Max, Disney+) compared to five years ago. The “bubble” of Netflix’s stock (NFLX) has essentially burst, and the current valuation at around $200 USD has plunged quite a bit from its 1-year high of almost $700 last November.
The effects of this development have been felt throughout Netflix’s different content divisions, as well as its business strategy for attracting and maintaining subscribers. In the wake of the news, there has been a confirmation of pre-existing speculation that the platform is planning on introducing a lower-cost, ad-supported alternative to its ad-free subscription packages as well as implementing tougher standards on password sharing. Of perhaps greater importance, though, is the news that the company is heavily cutting its animation output, with most of the news currently focused on its western animation. A report from The Wrap has revealed that there have been several shelved projects, including a highly-anticipated adaptation of the Bone graphic novel series. Likewise compounded with uncertainties over maximizing viewership numbers and the challenges of negotiating wages for animation staff, things are feeling uncertain going forward in more than a few ways.
Impacts the News Has Already Had on Netflix’s Anime Division
The developments coming out of Netflix’s non-anime animation division are stark, to say the least. It’s natural that a little of this ambiguity should spill over into considerations of its Japanese animation, though some more information should help to put things in perspective. According to a recent report published last month in Variety, over half of Netflix’s subscribers had watched anime at some point during 2021. This, above anything else, shows strong interest in that aspect of the company’s brand, and a desire to continue fostering it and bolstering its reputation. (At least in terms of actual anime written and animated in Japan. Western cartoons billed as “anime,” and especially live-action adaptations are two different conversations.)
The stock tumble has yet to show any clear signs of slashing in-development projects at Netflix, and recent news has shown the company striking development deals with Studio Colorido and maintaining strong ties with its various other studios that have previously produced titles with the platform, including Studio Trigger (Brand New Animal) and Science Saru (Japan Sinks 2020).
Netflix’s Possible Approaches to Anime Going Forward
Anime’s market is considerably different than the market for Western animation. The traditional market of general-kids’ animation has in recent years shifted towards younger audiences as older kids tend to focus on anime, video games, and social gaming platforms like Twitch as seemingly more mature alternatives. In needing to adjust to these trends, there are a few plausible approaches that the company might take going forward: shifting the focus towards IPs, shifting the focus towards autonomous studio creations, and licensing the rights to autonomous productions.
Netflix has already made strong use of licensing and adapting new properties, such as its CG-animated adaptations of Ghost in the Shell and Ultraman. Likewise, the original projects greenlit by the company may be strongly linked to studios’ brand identity. While Netflix has often bet heavily on individual creators for its western animation, the anime industry has a stronger relationship to studios’ identity that will impact the direction of what they want to make (the intense action-comedy of Trigger’s brand, or the mindfully gorgeous style of Studio Ghibli.) The importance of studio brand has been recognized by other streaming services as well; Disney has sought strong relationships with various studios through its Star Wars anthology Star Wars: Visions in which each short film was animated by a different studio as a selling point.
Thirdly and finally, it’s common for die-hard anime fans to want a strong degree of autonomy in their work, and excessive input from Netflix is seen to produce mixed results, as seen in the less-than-stellar reception of the company’s heavily-marketed 2021 live-action Cowboy Bebop adaptation. Likewise, licensing premade content (which the company still usually brands as a “Netflix Original” all the same) is a stronger way of earning the good will of that die-hard fanbase.
Ultimately, with a company as large as Netflix it can be hard to pinpoint hard rules onto the variety and styles of content it produces. There are still likely going to be plenty of projects going forward that highlight the depth and breadth of Japanese animation, although the specifics of that content will likely shift in the threefold directions of established IP, established studios, and licensing deals over premade content. The company has continued to foster an unprecedented interest in growing its anime offerings, and it has certainly introduced the medium to tens of millions of fans around the world. The specific long-term effects of its recent business developments remain to be seen, but there are good signs to see that fans will continue to get more of the content they love.