Kadogawa Eyes Diversification, Taiwan Expansion

Japanese entertainment giant Kadogawa is looking to double its international revenue through diversification and localization. Taiwan is expected to be a key group in outreach, executives from the Taiwan Creative Content Fest (TCCF) asked on Tuesday.

“Currently 20% of Kadogawa’s revenue comes from outside Japan. I want to increase this number to 40%,” said Natsuno Takeshi, CEO of Kadogawa Corp.

Kadogawa has its roots in publishing comics and other fiction and has deeply established roots in film production and distribution. In 2014, change within the group took a leap forward when an equal party merged with Tuango, the owner of Kadogawa IP and Niconico Online. Natsuno, sometimes referred to as the father of mobile internet in Japan, was formerly the founder of i-mode and Duango’s MD.

„We’ve done well by diversifying into video, gaming and online education,” Natsuno said. But he is clearly ambitious to do more, and says the opportunity for Japanese content industries is huge.

„The content industry has changed. At one time, manga was only for otaku (nerds), but now everyone is interested in Japanese animation, increasingly in Japan and abroad. You can find its shelves at Barnes & Noble in New York or FNAC in France,” said Natsuno.

But globalization requires negotiating many obstacles. Natsuno gave the example of e-books, which now account for 50% of the book market in Japan and about 30% in Korea and Japan. He suggested that the company’s e-book insights from Japan could be transferred to less developed markets such as the US, where people still prefer paper-based books. „Let’s sell [books] to people how they want,” he addressed his speech’s theme of „media mixing.” But then Natsuno described the logistical problems of paper distribution and the problems of piracy that come with digital formats.

Similarly, other segments have uneven impact on different geographic markets. Its comic book publishing business generates little profit in some regions, but supports anime and content licensing sales. Some products are considered niche markets, but are „very, very sticky,” allowing Kadokawa to sell merchandise and other ancillary products.

Another obstacle to the group’s expansion, Natsuno said, is a lack of animation production skills within Japan. „In Japan, animation production lines have been full for years. We have a capacity problem. Maybe we can produce in Taiwan as well,” he suggested.

Taiwan, one of Kadogawa’s first non-Japanese outposts, is of great interest to the group. Earlier this month Kadokawa and the Taiwan Creative Contents Agency (TAICCA) signed a memorandum of understanding that will lead to a mixed media approach to turning Japanese novels and comics into Taiwanese films, series and animation productions.

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 Taiwanese creators. [In contrast] Japan was not very supportive. Mostly non-profit enterprises. Just boring stuff. Not anime. Not the manga. And some money for the film”