Japanese Pop Culture Firms See Stock Surge Amid Global Interest

The Emmy-winning "Shogun" has piqued investor interest in Japanese content producers such as Sanrio and Konami. These companies, known for characters like Hello Kitty and video games, have seen stock highs despite market volatility.

Sanrio and Konami trade at around 30 times forward earnings, with Sanrio's return on equity (ROE) at 29% and Konami's at 14%. Their growth is fueled by intellectual property (IP) licensing, which offers high margins with minimal additional costs. For instance, Sanrio expects royalties to account for 46% of its revenue this year, driven by over 450 characters, including Hello Kitty and Cinnamoroll.

Toho, a movie studio, won an Academy Award for "Godzilla Minus One" and plans to self-distribute "My Hero Academia: You’re Next" in the U.S. The global market for Japanese content reached 4.6 trillion yen ($31.9 billion) in 2022, driven by online games and anime.

The post-COVID streaming boom has expanded licensing opportunities, allowing content companies to earn from both new and past works. This steady revenue stream supports their earnings.

Insights: The success of "Shogun" and other Japanese content reflects a broader trend of non-English media gaining global traction. Companies like Sanrio and Konami benefit from diversified IP portfolios, reducing reliance on single hits. The streaming era has unlocked new revenue streams, making content licensing a lucrative strategy. As global audiences embrace diverse media, Japanese producers are well-positioned to capitalize on this shift.