JAPANESE ANIME STUDIOS ARE AT A "STANDSTILL"

Hat tip to reader "MaverickLSC"for pointing the article out to me.

A must read article about the quakes impact on the anime industry from DailyFinance.com

Japan's recent earthquake, tsunami and nuclear reactor crises are taking their toll on the nation's population and industrial sector -- and Japanese anime, an industry that brings in an estimated $2.5 billion annually, has suffered as well.

"The whole thing is having a pretty significant effect right now," says Christopher Macdonald, CEO and publisher of Anime News Network. "70% of Japan's animation studios are in the suburbs of Tokyo, and those are . . . the areas being affected by the rolling blackouts. That means it's very hard for people to do work. They don't know when their electricity is going to be turned off for three to six hours; the offices start shaking every 15 minutes [from aftershocks]. For the most part, most of those studios are at a standstill when it comes to their animation work."

[snip]

The disaster is just the latest setback for Japan's anime industry. While demand for anime is growing internationally, Japanese anime is being challenged by animation from other countries. A lot of the manually-intensive animation work by Japanese studios is also being outsourced to countries with cheaper labor costs like South Korea, China and Thailand.

"Production budgets have been slashed because of the economic slump, and young workers on the margins are bearing hard burdens," Hisako Sasaki, the head of anime studio Wish, recently told the national newspaper Asahi Shimbun. "Young workers have fewer chances to accumulate experience and improve their skills."

There's also an ongoing international slump in the sale of DVDs, anime and otherwise. Internet piracy of anime programs, meanwhile, is rampant -- with some of the more popular shows illegally available online with hours of their first broadcast in Japan.

The article ends with a interesting observation from Anime News Network Editor-in-Chief Christopher MacDonald:

And there are now concerns the earthquake and tsunami could create a worse-case scenario for Japanese anime. With work at home interrupted by the disaster, Macdonald says, "some of the studios might decide we need to get this work done, so we're going to hire some more Korean studios to fill in temporarily. Once a season is off-shored for a couple of weeks, it's not coming back. And if you lose a complete season or two seasons of salary in Japan, these people are going to find work in other industries, higher paying industries, like video gaming."

Part of the reason why I have focused so much on the economy of Japan post quake is that it directly affects the amine industry. If studios have blackouts for three to six hours every day their workers are idle (while those studios still have to pay overhead costs like their salaries, water bills, materials etc..) and they cant make anine and thus not make money. Hence they outsource and when they do...

Put that on top of other industries that are idle in Japan. We are already seeing the end result in Japan with major industries struggling to get back on their feet. Instability in the Yen/Dollar relationship Wondering whats going to happen next with the Nuclear Emergency that now appears to be getting worse again.

No one knows how this all will impact the anime industry long term.