Netflix’s Animated Double-Down

Producer Jed Schlanger and actor Karl Urban
Producer Jed Schlanger and actor Karl Urban at the premiere of Netflix's The Sea Beast. Photo: Rodin Eckenroth/Getty Images
Julia Alexander
July 24, 2022

In the entertainment business, there are generally two types of acquisitions: the mega-deals, like Discovery and WarnerMedia, that bring the market to a halt and invite endless speculation and redefine the landscape, at least momentarily; and then there are the smaller deals that barely register for years until their output can be deemed a success or failure. Within the last week, however, two smaller deals were announced that seem to eminently herald major strategic initiatives for the general streaming economy. Netflix and Nintendo’s recent acquisitions of Animal Logic and Dynamo, respectively, suggest the latest iteration of the entertainment industry’s optimism about the power of animation to drive subscriptions and revenue.

Demand for animated content has grown consistently over the last several years, making up just over 7 percent of the total global demand share for content in 2020, according to research firm Parrot Analytics, where I work as director of strategy. On top of that, demand for adult-oriented animation and adult-oriented anime has consistently grown, with a projected global market share of $43.73 billion by 2028, according to global marketing research firm Brand Essence. 

Netflix, of course, has largely been acquisitive-shy in the past, preferring instead to build from within. (The exceptions have generally coalesced around its nascent gaming strategy.) But its purchase of Animal Logic, and the simultaneous restructuring of its animation film executive team, foreshadows an intriguing recommitment to a division that the company once touted as core to its central offering. Nintendo, meanwhile, like so many of its gaming competitors, is exploring new linear pathways to broaden its sizable audience. There’s already a Super Mario movie in the works from Universal’s Illumination Pictures. Now, Dynamo can help create new anime titles for streaming platforms using Nintendo’s wide-breadth of I.P., similar to what Netflix did with Konami’s Castlevania franchise, the 80s semi-legendary fantasy video game.