In June 2006, Mitsubishi Corporation formed an alliance with Dentsu Inc., a Japanese advertising agency, to produce Japanese animation features and thereby accelerate the global expansion of this business. The two companies established a joint fund of up to ¥2 billion and an organization to handle everything from development and production to sales and rights management. The plan is to produce 15–20 works each year, starting with the animated feature “Seirei no Moribito,” which will go on air in the spring of 2007. This project will be handled by d-rights Inc., a wholly owned subsidiary of Mitsubishi Corporation. We asked a producer of that company to talk about methods and behind-the-scenes strategies, and about developing their business globally at a time when Japanese animation is becoming internationally popular.
Kouta Sugiyama
Producer, Development & Production Department, d-rights Inc.

What are the specific activities of your company?
Our income is primarily from domestic and overseas sales of animation-related merchandise, and the sale of popular animation DVDs and CDs. However, we do that by being involved in the origination of high-quality content from the development and production stage. Our role is to create systems that allow the investment in these products to be recovered through our business. For example, when a manufacturer wanted to sell a toy, we tied up with a publisher and produced a comic starring the toy. We then arranged for it to be serialized in magazines and broadcast on television. When the comic became popular, we earned a profit on the sales of the toy.
Our business begins with marketing mechanisms developed through negotiation and collaboration with manufacturers and creators. The toy that I referred to became a huge hit in 80 countries, including the U.S. and Europe.
What is the purpose of the alliance with Dentsu, and what are the features of the fund?
Previously, we sold our products overseas through specialist agencies. To develop our overseas business the way we would like, we needed to be in control. One of Dentsu's subsidiaries, Geneon Entertainment USA, in which d-rights currently holds a 34% share, is the biggest seller of Japanese animation DVDs in the U.S. Despite market leadership, it was struggling with a downturn in the North American animation market. The alliance is a harmony of interests between our company, which has marketing know-how, and Dentsu, which is Japan’s biggest advertising agency, with access to a huge range of product ideas. Our two companies invest in the fund as equal partners. We can combine our capabilities and strengths to plan and produce animation works that succeed internationally.
You are currently targeting the North American market.
What are your main criteria when selecting products for that market?
The growing international popularity of Japanese animation has led to a swelling of production budgets and production staff, but also to a shortage of source material. Given the difficulty of securing quality works, our ideal would be to create 100% original animated works ourselves to maximize our business opportunities. A major goal is to use our marketing data as the basis for the customization of titles for overseas markets in collaboration with production teams and creators.
There is growing interest in “Seirei no Moribito,” which is based on a work of children’s literature. It is the first title selected for investment.
What are the issues you currently face and
your future goals?
The growing international popularity of Japanese animation has led to a swelling of production budgets and production staff, but also to a shortage of source material. Given the difficulty of securing quality works, our ideal would be to create 100% original animated works ourselves to maximize our business opportunities. A major goal is to use our marketing data as the basis for the customization of titles for overseas markets in collaboration with production teams and creators.