Blackstone Sees Billions In Japan’s Manga. You Should Too
Japan’s soft power is leading to hard cash, as a recent deal to buy a digital comic book platform illustrates. There’s more to come.
(Bloomberg Opinion) -- He’s the fastest man in America — and soon, perhaps the world. Yet US sprinter Noah Lyles made waves this week for dropping something positively Japanese.
Lyles delighted millions of fans — and may have baffled older athletics viewers — when he flashed a trading card to the cameras ahead of his heats at the US Olympic track-and-field finals this week, doing it again in his next race. The moment, which quickly went viral on social media, was part of an anime-influenced bet with a fellow US athlete, who promised to reference a trope from during her own trial.
If you don’t know your’s from your ’s, that’s OK. (The former began as a manga in 1996 before expanding into anime and a wildly successful trading card game(1); the latter is one of the many manga series Netflix Inc. is bringing to life.) The important takeaway from this moment is to recognize how deeply Japanese soft power penetrates modern culture — and what opportunities that presents.
At least one alternative investment firm has just shown that it’s ahead of the curve. Blackstone Inc. last week launched a $1.7 billion deal to buy the operator of Mecha Comics, a Japanese online platform for reading manga. Reportedly seeing off competitors, including KKR & Co., Blackstone’s bid might be the most significant overseas investment in Japan’s growing soft power empire to date, and it highlights the burgeoning valuations to be had in a booming sector. The worth of Japan’s soft-power content — games, anime, manga and, perhaps in time, more movies and J-pop — is only set to increase.
Look around: From the singer Usher, the halftime show performer at this year’s Super Bowl, cosplaying as character Satoru Gojo in response to fans’ requests, to McDonald’s Corp., the largest restaurant chain in the world, temporarily rebranding itself as its fictional comic book equivalent, manga’s influence is everywhere.
Nonetheless, it still flies under the radar of many investors, analysts and commentators just how big this market has become. It is hardly transparent, though; rights to properties are often divided up among companies, making them difficult to value, while Japan’s largest publishers are unlisted, leaving it hard to value their collections of intellectual property.
Consider that at ¥4.7 trillion ($29.5 billion), the value of Japan’s content exports — mainly its games, manga, anime and movies — is nearly as big as the country’s semiconductor-related exports, or the estimated value of all spending this year by tourists to the country — many of whom are inspired to visit by those same cultural exports. That figure has risen more than three times in just a decade, with the government this month setting an ambitious target of that amount again to ¥20 trillion by 2033.
Having exploded during the Covid-19 pandemic, over the past three years manga has made up around half or more of all graphic novel sales in the US. It’s the darling of an often-struggling publishing industry, occupying increasing space in US bookstores. At home in Japan, as Blackstone’s deal shows, readers are increasingly moving to smartphones and digital platforms that are to manga what Spotify is to music.
To those unfamiliar with the genre, there’s a temptation to think of manga as merely the Japanese equivalent of the US comic book industry, with its focus on spandex-wearing superheroes and audience of young men. But manga is far more diverse in appeal. Walt Disney Co. might be taking a ham-fisted approach to appeal to broader audiences with its properties (often alienating long-standing fans), but manga’s breadth means there’s something for everyone — from romance to from representation in protagonists to LGBTQ+ themes — helping to appeal to Gen Z fans. Along with the traditional hero-versus-villain comic series that appeal to all ages, recent hits include themes based on cooking in the world of medieval fantasy or set in the hyper-competitive world of Japan’s popstar industry. There’s a manga for almost any hobby or sport; an animated movie based on volleyball just opened at the top of China’s box office(2), where Japanese cultural exports are booming despite the two countries’ often rocky political relationship.
In an interesting divergence from the world of business, where US companies tend to be younger and Japanese ones much older, the world of manga is home to impressive creative destruction. While the best-selling franchises such as Spider-Man or Batman have been running for decades amid endless reboots, even the biggest series in manga end. The result is that four of the top five best-selling manga in the US last year started publication in 2016 or later, and there’s always something new to catch.
Yet Japan is still struggling to turn this soft-power success into hard cash. Both anime and manga are notorious for the low pay offered to creators, while the industry also struggles with piracy. (Crunchyroll, the US anime streaming giant now owned by Sony Group Corp., began life as a site that hosted unlicensed content.) AI-powered translations will make that even easier for pirates.
From ski resorts to semiconductors, one defining characteristic of Japanese business in recent decades is a reluctance to invest — even in growing industries. South Korea, though, is making inroads with webtoons, a more natively digital form of comic, with Naver Corp.-backed Webtoon Entertainment Inc. seeking a valuation of more than $2.6 billion in its forthcoming Nasdaq listing. China, meanwhile, is publicly seeking to expand its soft power reach.
Despite the organic success of its content, the Tokyo government’s own “Cool Japan” top-down efforts have largely been considered flops. It’s incredible to think, for example, that the world’s first theme park won’t be in Tokyo or Osaka (or even the US or France), but instead in Saudi Arabia — which is smartly betting on a number of soft-power and “sportswashing” initiatives, including buying up stakes in multiple Japanese video-game firms.
This is where the likes of Blackstone might be able to help. And that means opportunities abound in a sector not typically known for its riches. A rare card can fetch tens of thousands of dollars. But the properties themselves, and their creators, are worth far, far more.
More From Bloomberg Opinion:
- From Shohei to Zelda, Japan’s Big Soft-Power Year: Gearoid Reidy
- ‘3-Body Problem’ of Changing Cross-Border Content: Gearoid Reidy
- How a Fading Japan Regained Its Superpowers: Gearoid Reidy
(1) The creator tragically drowned two years ago trying to save other swimmers.
(2) To return to the Olympics theme, the manga might also be responsible for boosting the once-struggling Japan’s men’s volleyball team into medal contention in the Paris Olympics, having inspired a generation to take up the sport.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Gearoid Reidy is a Bloomberg Opinion columnist covering Japan and the Koreas. He previously led the breaking news team in North Asia, and was the Tokyo deputy bureau chief.
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