This week on the Boxoffice Podcast, co-hosts Daniel Loria and Rebecca Pahle break down Netflix’s Army of the Dead coming exclusively to theaters for a week-long engagement, plus insights from the latest round of exhibitor investor relations call. In the main feature, Pahle speaks with Funimation’s Mitchel Berger on the theatrical potential of anime, with Demon Slayer and beyond.
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It was a rare box office bright spot in 2020: Demon Slayer broke Spirited Away’s 19-year-old record to become the highest-grossing film in Japan, despite a pandemic that caused headlines about the exhibition industry to be near-uniformly dour.
Based on a popular manga series that was subsequently adapted into a television anime, of which the film is a sequel, Demon Slayer (full title: Demon Slayer -Kimetsu no Yaiba- The Movie: Mugen Train) came into its April 23 domestic release with a few advantages under its belt: The loyalty of anime fans, the name recognition engendered by its record-breaking run in Japan, and a relative lack of competition from major studio titles. Still, in the negative column, one big hurdle: The pandemic.
And yet, Demon Slayer pulled into theaters with a higher-than-expected $21.1 million debut opening—not quite enough to take the number one spot from fellow new release Mortal Kombat ($23.3 million), but considering Demon Slayer played on nearly 1,500 fewer screens, you can chalk it up as a victory for anime distributor Funimation. Owned by Sony Group Corporation, the company is most recognizable as a streaming platform for anime—but, as explained by Senior Vice President, Global Commerce Mitchel Berger, theaters are not far from the company’s mind.
“We’ve absolutely had growth over the last year,” says Berger of Funimation’s streaming platform—no surprise to anyone who’s spent the past year-plus binging a higher-than-normal amount of TV content given the lack of much else to do. “The beautiful thing about anime is it is a rich and growing community. It’s bigger now than it’s ever been. It’s more mainstream now than it’s ever been… People are always coming into anime. Their friends are getting them into it. They are discovering things.” Throughout 2020, more people were discovering the Demon Slayer series—and if they didn’t have the time or the inclination to watch all of it, they could catch up with condensed recaps put up by Funimation in the lead-up to the film’s theatrical release. “As the movie’s opening, as it continues to play, we’re going to continue to talk to new people and try to bring new people in,” says Berger. “Because, at its core, anime is about community and about belonging. Sharing your passion for the film with someone and bringing them in and getting them to come experience something new is part of what makes anime so special. We’re leaning into that in a big way.”
“Streaming, in many ways, is people’s first exposure to a franchise,” says Berger—rejecting the notion that streaming and theatrical modes of release are inherently at odds with one another. For nearly seven years, Funimation has been releasing anime films to theaters, starting with 2015’s Dragonball Z: Resurrection ‘F’ and leading up to 2020 releases My Hero Academia: Heroes Rising (which had its theatrical run cut short by the pandemic) and Akira, a mid-pandemic re-release of the Katsuhiro Ôtomo classic. In between, a highlight was Dragon Ball Super: Broly, which in 2019 debuted to a higher-than-expected $11.9 million before eventually topping out domestically at $30.7 million. All three films got exclusive theatrical runs, with home video and digital releases coming months later. (Dates for a North American physical/VOD release for Demon Slayer have not yet been announced.)
“We believe in the theatrical experience and the theatrical window,” says Berger. “We absolute think it is a vital part of our fans’ lifestyle, because anime is all about community.” Whether at screenings or conventions, anime fans “like to congregate in person and see each other and cosplay. If you’ve never been to an anime film showing, there’s an energy there that you don’t get sometimes. When you can go to a Tuesday afternoon showing of an anime film and it’ll be electric. That’s amazing. And we really feed into that.”
“We’re really proud of the fact that we were able to give Demon Slayer a clean theatrical window,” continues Berger. “We think that that theatrical experience has a place. And then there’s a place for streaming, and then there’s a place for digital ownership, and then a place for home video. It’s all part of a lifecycle for a title and a lifestyle for our fans, and we love to support that.”
If Funimation supports its fans, the fans support Funimation—or, in this case, the theatrical release of Demon Slayer—right back. “What’s great about anime fans is that they’re also evangelists,” willing to spread the word about their favored titles and drive word-of-mouth. Social media, then, was a substantial component to Demon Slayer’s marketing strategy, as was marketing targeted at existing fans. But, given the unusual circumstances of Demon Slayer’s release—it being Funimation’s biggest release ever, both in terms of box office and screen count—the marketing strategy “start[ed] to look very traditional. We’ve done traditional television buys, we’ve done outdoor advertising, we’ve done paid media, we’ve worked with influencers… This is going to be a broad film, and we’re going to expand the audience.”
Once anime titles get to theaters, assuming a non-event-cinema release strategy, they often prove front-loaded, with box office dropping precipitously after opening weekend. Such was the case with Demon Slayer, which—in a case of glass half full, glass half empty—dropped 72 percent in its second frame while still overtaking Mortal Kombat to gain the number one spot. (With 1,905 screens to Mortal Kombat’s 3,114). It is now the third highest-grossing anime release in U.S. history, having surpassed Dragon Ball Super: Broly last weekend. A 300-strong increase in screens between Demon Slayer’s first and second week speaks to a “flexibility” that Funimation prioritizes when working with exhibitors. “Our entire strategy has always been about flexibility and making sure that we allow theaters to meet the demand that’s out there,” says Berger. Starting with Dragon Ball Super: Broly and carrying on through My Hero Academia and Demon Slayer is a tactic of “booking [the films] with exhibitors but then upfront working with them on flexibility. To say, ‘Look, if you see massive demand, if the fans are coming out, if you’re having sellouts, we’re going to work with you to either add showings on the days that you want to show, or we’re going to work with you to quickly flip things over to more traditional runs.’ Because the last thing that we want is for there to be demand in someone’s market and them be unable to meet it, because we agreed up front on some sort of distribution strategy and we’re not being responsive.”
What sort of legs Demon Slayer will have over the coming weeks—as with just about everything during the pandemic era of exhibition—remains uncertain. Its R rating seems to preclude it from the incredibly modest week-on-week drops seen with kid’s titles like The Croods: A New Age and Tom & Jerry. At the same time, new releases are thin on the ground until the back half of May, which sees the release of Spiral (Lionsgate, May 14), Those Who Wish Me Dead (Warner Bros., May 14), Cruella (Disney, May 28), and A Quiet Place Part II (Paramount; May 28). Two of those films are going day-and-date, something that Berger doesn’t see in the cards for Funimation. The theatrical popularity of Demon Slayer “says that the business is still there, the audience is still there, and this industry is going to come back,” he says. “The more content that comes out, I think the fans are going to show up and watch it. And that’s phenomenal news, because I’ll tell you from our perspective, we are committed to theatrical. We’ve got a really great slate coming up over the next 12 months. We think we’re going to be able to build on the success of Demon Slayer. And we’re looking forward to continuing to partner with exhibitors, to bring anime to folks for the long term.”