Japanese entertainment conglomerate Kadokawa is seeking to double its international revenues through a strategy of diversification and localization. Taiwan is expected to be a key plank in the outreach, executives at the Taiwan Creative Content Fest (TCCF) heard on Tuesday.
“Currently 20% of Kadokawa’s revenues come from outside Japan. I want to get this figure to 40%,” said Natsuno Takeshi, CEO Kadokawa Corp.
Kadokawa has its roots in publishing of comics and other fiction and also has deeply-established roots in film production and distribution. Change within the group took a leap forward in 2014, when Kadokawa struck and equal party merger with Dwango, an IP company and owner of the Niconico online company. Natsuno, sometimes credited as the father of the mobile internet in Japan, was previously the founder of i-mode and MD of Dwango.
“We’ve done quite well through diversification into video, gaming and online education,” said Natsuno. But he is clearly ambitious to do more and says that the opportunity for Japanese content industries is huge.
“The content industry has changed. Once, manga was only for otaku (geeks), but now everyone is interested in Japanese animation, in Japan and increasingly abroad. I can find shelves of it in Barnes & Noble in New York or FNAC in France,” said Natsuno.
But globalization will require negotiating multiple obstacles. Natsuno gave the example of e-books, which he said now represent 50% of the book market in Japan and around 30% in Korea and Japan. He suggested that the company’s e-book insight from Japan could be transferred to other less-developed markets, such as the U.S. where people still prefer paper-based books. “We’ll sell [books] to people however they want them,” he said, addressing the “Media Mix” theme of his talk. But then Natsuno reflected describing the logistical problems incumbent in distribution of paper and the piracy problems that come with digital formats.
Similarly, other segments of have uneven impact in different geographical markets. In some territories its comic book publishing business makes little profit, but supports sales of anime and content licensing. Some products are considered as niche markets, but are “very, very sticky,” allowing Kadokawa to sell merchandise and other ancillary products.
Natsuno said that another obstacle to group expansion is the shortage of animation production capacity within Japan. “In Japan, animation production lines are full for years ahead. We have a capacity problem. Maybe we could produce in Taiwan as well,” he suggested.
Taiwan, one of Kadokawa’s first non-Japanese outposts, clearly remains of high interest to the group. Earlier this month Kadokawa and the Taiwan Creative Contents Agency (TAICCA) signed a memorandum of understanding intended to lead to the media mix approach of remaking Japanese novels and comics into Taiwanese films, series and animation products.
Natsuno began his presentation by telling the audience how lucky they are to have a government that puts money into the creative industries. “I envy you Taiwan creators. [In contrast] Japan does not support much. Mostly the non-profit industries. only boring things. Not anime. Not manga. And a little money for film.”
