API’s “10 Years” of
Challenging Conventional Norms and
Pursuing New Possibilities

The year 2024 marks the 10th anniversary of Avex Pictures Inc. (API). This decade has been a truly turbulent era for the Anime/Video industries, characterized by the expansion of online streaming services, significant advancements in the viewing environment for users, and the growth of overseas markets. What challenges has API faced over the past 10 years? To reflect on API’s journey, we spoke with the President, Hideo Katsumata; Nobuhito Maeno, President of Avex Film Labels Inc.; and Ryo Ohyama, President of Avex Animation Labels Inc.

Challenges Made Possible Only as
the “Newcomer” to the Industry

To begin, we looked back at the foundation of API and asked what thoughts went into taking on this challenge at the time.

Katsumata "The core of Avex has always had a company culture of “breaking the mold” and “thinking outside the box.” When we were establishing API, we followed that path, making sure to overthrow the established norms and cause a paradigm shift in the Anime/Video industry."

Ohyama "In 2014, the anime industry was still primarily driven by the sales of packages like DVDs and Blu-rays, but it was also in a transitional period. So, when we launched API, we had the foundation to create an organization capable of developing a holistic business model. This model included not only packages but also MDs, live events, and both domestic and international video distribution. Even on the production side, there was a demand for an organizational structure that could handle everything from production to advertising to sales, an end-to-end solution."

The year following API’s launch, 2015, is often referred to as the “year one of streaming,” coinciding with the period when video streaming services like Netflix and Amazon Prime Video began to gain popularity in Japan. The first challenge API faced was how to create a “de-packaging” paradigm shift, moving away from traditional packaging. In other words, the challenge was how to take the lead.

In the short span of about one year since the company's establishment, and alongside 14 other companies in the industry, API launched the video streaming service “Anime Times,” allowing users to enjoy a wide range of anime, from the most popular titles to classic favorites.

Katsumata "The emergence of overseas services like Netflix, Amazon Prime Video, and later Disney+ in 2015 was seen as “The Perry Expedition” from a domestic perspective. It was a common sentiment among all the participating companies of Anime Times that there was a need to create a platform that could compete with them. For API, this eventually led to the starting point for the full-scale development of its streaming business."

In 2016, in the announcement of the “avex group growth strategy 2020,” anime production was mentioned as one of Avex’s major operations. As if being carried forward by the waves of the times, the environment surrounding API changed, and with it, expectations naturally soared.

Katsumata "At this time, we were still just ‘newcomers’ in the anime industry. We put emphasis on creating hits while avoiding the industry's conventional ideas, like a dark horse, so to speak."

Ohyama "Companies that had been leading the industry already had existing blockbusters, which they could use as a foundation for running holistic businesses. But we did not have that."

API’s immediate goal became to focus on producing titles that could become its strengths. While not having representative title was a disadvantage for API, Ohyama reflects that, at the same time, it allowed them to boldly take on new challenges.

That challenge led to the birth of API’s long-awaited hit, “Osomatsusan,” in 2015.

Ohyama "During times of major transformation, whether due to changes within the company or changes of the times, people tend to take on challenges more actively, and I have a strong sense that these actions lead to creating big hits. In the midst of this, one year after API’s launch, we began airing “Osomatsusan”."

360 Degrees Business Expansion Established
by the Success of “Osomatsusan”

From the company's launch, one of the primary goals was to establish a 360 degrees business model, and it was the success of “Osomatsusan” that propelled this forward.

Maeno "We cannot fully utilize the holistic business model without having suitable content. When “Osomatsusan” became a hit in 2016, I felt for the first time that we were able to extend our business in various directions. I have the impression that API suddenly gained a lot of skills by absorbing all the cases and experiences through “Osomatsusan”."

Ohyama "On one hand, we reached a record high in package sales for API at the time. Since the characters were immensely popular too, it drove merchandise sales explosively, and we were also able to expand into areas such as stage performances and events."

Katsumata "In terms of advertising, I think it was symbolic that an anime was featured on the front cover of the women’s fashion and lifestyle magazine "anan" for the first time. We were able to take various approaches to reach fans across different groups."

Through the successful case of 360 degrees business with “Osomatsusan,” API established its own sense of strength. They were able to take on each new project with total confidence, which also led to more hits.

Maeno "Speaking of new challenges, I think it was a turning point to have the anime film “KING OF PRISM by PrettyRhythm (hereinafter referred to as KING OF PRISM)” in 2016. It was one challenge to plan and produce an anime, as well as a live-action business, but figuring out how to tackle movie distribution for theaters, and how to approach an industry that is already fairly stable, was another challenge I believe we faced from the launch of API. "KING OF PRISM" was made at our studio, and we started as a small-scale distribution within the company services. However, there we introduced a new way of enjoying movies in theaters, called “ou’en jou’ei,” which became a huge success in terms of revenue."

“Ou’en jou’ei,” a popular, norm-breaking theater entertainment style, allows audiences to enjoy movies by cheering loudly at the screen or showing their love for the anime by cosplaying, in the theatre, a place where we would normally sit quietly to enjoy films. This screening approach has been growing in popularity in recent years, but it was a method pioneered by API’s challenge.

Katsumata "I think “ou’en jou’ei” is an example of a paradigm shift unique to Avex, something that major distribution companies are not able to do as easily. I believe it is important to focus on advancing with this paradigm shift in mind when faced with doubt, and this approach still applies to our current stance. As times change, new things are demanded, which means it is necessary to break free from the conventional ideas of that period. I believe it is our mission to continue seeking change while consistently creating new hits."

Do Everything We Can.
The Passion That Is “Mad” and “Pure” in
Exploring New Possibilities

In 2018, Flagship Line Inc., an animation and planning production studio, was established as an affiliated company.

Katsumata "In order to create hits, it is crucial to have the ability to deliver works to as many people as possible. However, the ability to plan and produce, which sits at the top of the flow, is even more important. While one reason for establishing Flagship Line was to secure work production resources, of course, but it was also intended to strengthen our planning and production capabilities, particularly in terms of development and acquiring rights."

As API approached the midpoint of its 10-year history, its position in the Anime/Video industry gradually became more established. Furthermore, Katsumata reflects that this was also the period when they took on the most challenges.

Katsumata "During this time, the overall mindset throughout the company was to try everything we could, that could have anime as the core. It was the period when we fully utilized the 360 degrees of our business model. Looking back now, I even think we went too far. We ventured into stage performances, and merchandise, of course, but also into areas like gaming, and even overseas markets. Our approach was to try everything without imposing any boundaries, with the hope that something great would come out of it."

Meanwhile, the world was engulfed in the COVID-19 pandemic. This drastically altered users' viewing environments and even reshaped the role that anime, movies, and ultimately entertainment itself played in everyday life.

Amid this period of significant societal change, it became clear that new challenges were being demanded from those responsible for delivering entertainment.

In 2022, Avex announced its Medium-term Management Plan, “Avex Vision 2027,” introducing a new corporate philosophy: “Making impossible entertainment, possible. We believe in your abilities, uniqueness and creativity in building a future that is exciting and world changing.” With the tagline, “Really! Mad+Pure,” API continues to embrace new challenges.

Katsumata "The words “Mad” and “Pure” are, in a way, opposites. I wanted to energize this era's entertainment by fully committing in the field of Anime/Video, like becoming obsessed with something and chasing it with pure passion."

Ohyama "Developing IP with globalization in mind was the biggest focus highlighted in “Avex Vision 2027.” But one of anime’s greatest strengths is its inherent ability to attract fans on a global scale. Around this time, I reaffirmed the importance of putting more effort into creating worldwide hits in the anime field."

Maeno "Since the COVID-19 pandemic, user consumption behaviors have shifted, but the need for creators to continue producing works did not. While theaters may close, viewers can still enjoy content online. Even though the way we deliver them has evolved, the necessity of maintaining a strong ability to create exceptional works remains unchanged. By returning to our roots and focusing on creating outstanding content with a “Mad” and “Pure” approach, I have redefined our mission. Taking into account the broader societal context, I see this as the responsibility that has been imposed on us."

More Free and Diverse.
API’s Pride Lies in Its Attitude to
Embrace New Challenges

In 2023, following a group restructuring, Avex Pictures Inc. transitioned into an intermediate holding company. Two new companies are established: Avex Animation Labels Inc. (AAL), which focuses on the planning, production, and sales of anime, as well as the management of voice actors and artists; and Avex Film Labels Inc. (AFL), which focuses on the planning, production, sales, management of video content, and distribution. Ohyama and Maeno serve as the representative presidents of each company.

For API, AAL, and AFL, this restructuring also marked a shift that allowed for greater freedom in their creativity respectively.

Katsumata "The source of creative power, in the end, comes down to people. When individual producers connect with creators and partners inside and outside the company, it results in new works and new hits. The word “Labels” is included in the company name because it represents a collection of various labels. Each individual and small team brings out their own “color,” and as these strong colors assemble, they create a variety of hits. This diversity not only shapes the future of Avex but also drives the future of entertainment. That vision is at the core of the name. Now is the time to create works by involving all kinds of talent, without being confined by traditional organizational structures. The way creative units are formed is becoming increasingly diverse across the industry. We aim to focus more on creativity and rethink how we collaborate with external creators. By building on the diverse results achieved under the name of “Labels,” we aim to explore new possibilities in entertainment. This organizational restructuring was a step toward that goal."

While always adapting to the changing times, API has built a unique history, unconstrained by established norms or conventions. From their initial challenges as “newcomers” to accumulating diverse experiences, they have now reached their 10th anniversary. What uniqueness has API discovered in the Anime/Video industry, and what are they most proud of? We posed this question to the three leaders.

Katsumata "Our greatest strength is undoubtedly our success in producing hits with original works. Today, 80 to 90 percent of anime productions are adaptations of manga, but one of our defining traits is our dedication to creating original titles. Examples include “KING OF PRISM” which we talked about, “YURI!!! on ICE,” “Zombie Land Saga,” and “The Orbital Children”."

Ohyama "I think the fact that we are in an environment that allows us to take on such challenges of creating original works is one of our strengths. For example, in addition to our original works, “Look Back” is a 58-minute film but it was a challenge at a time when there had not been a hit of a medium-length film of about an hour. But as a result, we gained valuable insights, namely, that even an hour-long film can deliver a deeply satisfying experience for the audience when the content is compelling. Moreover, in turn, the length offers practical advantages, such as making it convenient for people to find time to go see it."

Maeno "I do not think there are many companies that can take on so many different challenges across such a wide array of directions. By venturing into various business areas, we have expanded our capabilities in remarkably diverse ways. I think this openness to exploration has, in turn, fostered a persistence that has become a core strength of our company. And I believe this quality makes us truly unique, even within the broader video industry."

And so, over the past 10 years, API has continuously sought new possibilities. This spirit of constant challenge has shaped the API of today.

Lastly Katsumata concluded:

"I believe our commitment to freely and diversely venture new possibilities is what we have cultivated as API over the past 10 years."

They also discussed the company's plans to take on the challenge of producing works with a focus on global expansion, as well as further strengthening its live-action film productions. As API continues to embrace new challenges and leverage its strengths, we look forward to seeing how their diverse colors will vibrantly shape the next decade.