“Animator Supporters Project Posts Toshio Okada’s Criticisms of Production Committee System With English Subtitles”, 2023-03-02 (; backlinks):
[elaboration of 2017] On Monday, the Animator Supporters non-profit organization began streaming an English-subtitled clip from former Gainax president Toshio Okada’s YouTube channel. The clip details Okada’s criticisms of the anime production committee system.
Okada claimed that animators are so poor even though the industry attracts more money than ever because the production committee caps the budgets on individual anime titles. This is apparently because of a culture of corporate collusion, where the lead investing company determines beforehand the highest amount every other company in the committee can spend proportionally.
Okada elaborated that because control over the copyright is proportional to the amount of investment, companies will bid to become the highest investor (this is usually 40%). Once they attain this status, they have the power to determine the budget. For example, if the lead investor spends $4 million, the budget would be capped at $10 million.
After the budget has been determined proportionally, production committees will not accept larger investments from outsider (usually foreign) companies. A large investment would be split into separate projects to keep those companies lower down in the production committee.
It makes more sense for the show’s producer to lock the budget at $1m so that they can do what they want with the production. What this means is this anime, no matter how successful, will be made with a capped budget—a monetary ceiling, no matter how successful.
…Similar ceilings are placed on animation for the same reason [to avoid everyone trying to outbid each other for the top place in the production committee]. And what do we call that? Collusion. So far, anime producers, including broadcast stations, TV producers, and major toy companies, have a fixed limit to the amount of money they can spend on a single production.
…a particular rule was put in place: one company per industry. Doing so limits the number of potential investors on a committee. It ensures that its members will always be the same. Hence, everyone on the board knows how much each company can afford to spend, thus capping the budget for each anime.
For example, Okada said that if a Chinese company offered to pay for an entire $10 million budget, the production committee would turn their investment into $50,000 chunks across 20 different projects. In other words, to maintain control and profits, the Japanese companies on anime production committees are incentivized to use the surplus from foreign investment to fund other projects instead of increasing an individual title’s budget.
[This explains something I had always been puzzled by. Why is it possible for clearly wildly successful anime, which have gripped the entire nation of Japan and are already minting a fortune, to run out of money during production? While NGE TV’s second-half woes seem to have been due more to lack of time, planning, and staff (particularly Anno’s difficulty with writing endings given that he couldn’t simply crib that from Nadia: The Secret of Blue Water because the Nadia ending was inapplicable), they were still short on money, even though from quite early on, NGE was obviously a bonkers success that was a money spigot. Why was it not possible to get more investment or dilute the ownership a little? Japan is a very large, modern economy, there is investment capital and the banks can transfer any sum in days, there is no apparent logistical or economic barrier.
In Hollywood or with TV in America, you don’t seem to see this sort of effect, but in anime, it seems quite routine that for whatever reason, it is an ironclad rule that you start with a certain fixed budget, and you keep with it until the end. What is going on there?
The answer seems to be that the ‘production committee system’ doesn’t operate the way you would naively assume it does from Hollywood and venture capital stuff. It is instead structured dangerously, where any additional outside investment destroys it, and it is enforced by stereotypical Japanese collusion and backscratching to eliminate competition.
So the ‘committee’ of investors simply cannot allow any outside investment: they have already invested what money they can afford, and if they put in more, they are breaking the unspoken cartel rules about how big an investment is allowed. If they do so, they will be blackballed and punished.
In NGE TV, for example, King Records famously instigated Anno into making it; King Records in return got exclusive soundtrack rights (rather than a more straightforward equity return). So if NGE TV had required additional investment, King Records would have potentially lost exclusivity. So King Records would want to veto any additional investment. And this applies to Sega, which got video games, and so on and so forth. And so if Anno wanted more money for NGE TV, no matter how much of a proven success it was—too bad. He just has to make do, and order the animators to work 16-hour days if he blew it all early on (like Michael House says).]