The popularity of anime — or animation produced in Japan — has boomed in recent years, and several global entertainment companies are leading in, according to Jefferies. “Many companies are now positioning anime-related businesses as core to their growth strategies,” the investment bank’s analysts said in an Oct. 9 equity research note. The key driver, they said, is overseas expansion. “The size of the overseas market has expanded rapidly over the past 10 years at a CAGR (compound annual growth rate) of 20%, and since Covid-19, it has grown to the same size as the Japanese market,” the analysts explained. “Anime has become a mainstream culture in the U.S./Europe, with significant potential for expansion.” Looking ahead, the analysts expect the market to double from $31.2 billion in 2023 to $60.1 billion by 2030, based on estimates from Grand View Research. This will come with higher distribution of anime on streaming platforms and a growth in licensing revenues via merchandise and use in advertising, they wrote. “Japanese anime IP (intellectual property) has a huge impact even on a global scale,” they added. The top six franchises — which include Pokémon, Sanrio ‘s Hello Kitty and Bandai Namco ‘s Dragon Ball — have raked in a cumulative revenue of $311 billion, according to Jefferies, compared to the Marvel Cinematic Universe’s $30 billion. Given this potential, the investment bank identified three of its buy-rated global stocks that are “well-positioned in the anime market.” Netflix The streaming platform has “leaned into anime” by licensing and funding several series, Jefferies noted. Among its hit anime shows are Demon Slayer, Delicious in Dungeon, Jujutsu Kaisen, and My Hero Academia, all of which have been in the weekly global top 10 rankings for non-English content across various countries since 2021. Netflix has also invested in its own anime content and turned “classic” anime series into live action productions. “We expect Netflix’s anime strategy of licensing top performing Japanese anime series, as well as funding its own animated and live action anime series to continue into the foreseeable future,” the bank’s analysts wrote. Sony Group The investment bank describes Sony Group as a “lead[er] (in) anime production and streaming in the world.” The entertainment giant already operates anime planning and production company Aniplex in its music segment, and anime streaming platform Crunchyroll in its picture segment. Looking ahead, it wants to provide even more support to the anime industry, Jefferies’ analysts wrote. Bandai Namco Jefferies noted that Bandai Namco leverages anime IP for toys and trading cards, snacks featuring anime characters and digital games. The Shonen Jump and Dragon Ball series are among the popular games it has produced and is now “enjoying rising anime IP popularity through overseas sales expansion,” the investment bank’s analysts wrote. — CNBC’s Michael Bloom contributed to this report.
