The 'heat death of the anime industry' thread

[blkmage]

So according to the ufotable staff blog, the North American version of Kara no Kyoukai has sold out. Remember that this is a $400 USD Blu-ray set for seven movies and a bunch of extras (including a veeeeeeeeery nice artbook).

Which leads me to pricing. TheSubtleDoctor is right in that explicitly arguing that prices are too high is a poor justification for piracy. However, if we're talking about pricing from a theoretical standpoint, that's really the only explanation that no one's buying anything. Note that what I'm arguing isn't whether a price is reasonable or whether people should buy a particular price point.

It's pretty clear that digital things and their ease of copying and distribution have lead to a sharp decrease in perceived value of various products, namely music and video. A very shallow reading of the situation is that people pirate because they can get things for free that they would otherwise have to pay for. There is probably some truth to that, but that doesn't explain why I see more people who download fansubs and proceed to get R2 DVD or Japanese BD releases.

So what else is there to cause a gulf in value? For DVDs and BDs, it's important to consider the differences in how the JP and NA markets consider discs.

In Japan, anime is aired on TV as a way to get you to buy discs and merchandise. You can watch a show and if you didn't like it, you were not obligated to buy it. In America, up until very recently, the expectation is that you buy whatever you watch.

But then, you ask, what incentive is there for the Japanese to buy discs, if they can just watch it on TV? And this is where value comes into play. Because the value of the disc isn't something that gives you the right to watch something, but it's something that you chose to buy because you liked it.

Once we turn our eyes back to the American anime disc market, we begin to see problems arise. Because the American disc market is still oriented towards 'buy this so you can watch it' rather than 'buy this because you like it'. And I'm not talking about how licensors position themselves now (because they do realize this), I'm talking about how licensors have created this mentality which is now backfiring on them.

Because if we're talking about access, then the price of access has fallen dramatically over the last few years. The only thing causing people to buy discs was because the barriers to access were so high, but that's different now. Now, the situation has reversed itself. Fansubs are faster and easier to access and have higher quality (if not translation, then most definitely in terms of video quality). It's not necessarily that fansubs are free, but it's the question of 'if a bunch of guys working in their homes or at Starbucks or on campus through an IRC channel can get a release out in under 12 hours from airing and distribute it to everyone around the world for almost nothing, is it really that hard and expensive to make?'

So the problem licensors are faced with is not pricing, per se, but in creating value for whatever they're selling. How do the Japanese do it with their preposterously priced LEs? By including things like the OST and booklets and prints and singles and stuff. It's the difference between a distinctive product and a commodity. Limited Editions with high quality goods (not cheap stuff like a bookmark or something) are distinctive. Selling access is a commodity.

I suspect that if licensors created a larger divide between their LEs (by making them more expensive and adding more high quality goods) and their cheap discs (by making them cheaper), they'll see increased sales on both ends.

Basically, what I'm saying is whoever gives me a Hidamari Sketch release with the Yunocchi USB key will have all of my money.

[Yamamaya]

The only thing you have to pay in Japan to get your animu is your cable/sattelite bill(and any other additional channels you get). On the other hand, companies like Funimation put very few of their shows on T.V. They work under the assumption that you should just blow 50-60 bucks on a show you've never seen. They're starting to change this with their streaming policy which is certainly a step up. However, like blkmage mentioned, they tend not to provide a great deal of extra crap. That extra crap provides extra value to a product.

For example, I bought the special edition Code Geass Part 1 DVD set mainly because it came with so much extra crap such as an OST, drama C.D., vol 1 of the manga, and an artbook.

[TheSubtleDoctor]

On the other hand, companies like Funimation put very few of their shows on T.V. They work under the assumption that you should just blow 50-60 bucks on a show you've never seen.

Well, to be fair this exists. You just have to pay a blanket subscription fee for whatever cable package carries it, or you can cough up like .99 cents per episode for most on-demand shows.

[blkmage]

Well, to be fair this exists. You just have to pay a blanket subscription fee for whatever cable package carries it, or you can cough up like .99 cents per episode for most on-demand shows.

That's not equivalent at all. Japanese broadcasts aren't on premium channels, which is one of the reasons why the show anime => sell products model even works.

The thing that we need to always keep in mind is that in the Japanese market, the show itself is not what they're trying to sell. In Japan, anime is a means to sell more things, while here, selling anime itself is the ends and this is fundamentally why the foreign market is screwed if it doesn't change.

This is why the Japanese don't really care that much about the foreign market, at least not until we start going crazy with buying goods.

[TheSubtleDoctor]

I don't disagree with any of that. I wasn't talking about supposed-equivalent business models. The issue I wanted to address was the opinion that Funimation is stupid and evil for making people pay $60 for anime that they give us no opportunity to watch. Actually, Funi is providing opportunities for (some of) us to watch their shows before we buy in the forms of streaming (which Yama mentioned) and their cable channel. What they provide isn't isomorphic to what Japanese TV provides, and I wasn't claiming that to be the case.

[blkmage]

I talked about business models because it helps to understand why these companies make decisions like they do. That it simply exists doesn't mean that it's a viable option and if it's not a viable option, then it absolutely means that Funimation isn't doing enough. Sure, I'll accept that Funimation is trying, but is it working? There are a number of problems that come to mind when I consider a premium TV channel as a way to sell DVDs.

EDIT: I think it's pretty obvious from what I've said so far that I think streaming to be the best way to accomplish this. IMO, it's far more likely that the TV channel is more of a way to generate revenue than to sell DVDs (not that I know the cost of running a TV channel). Now the problem with streaming shows is that, at least for a lot of the newer shows, they don't seem to be releasing any DVDs to buy in a timely fashion and, so, are giving up on that possible revenue stream.

[MasterDias]

On the other hand, companies like Funimation put very few of their shows on T.V. They work under the assumption that you should just blow 50-60 bucks on a show you've never seen.

This isn't their fault. Funimation would love to get their shows (particularly series like One Piece) on mainstream television, but US TV networks have largely lost interest in airing anime.

[Nate]

Well, to be fair this exists.

Sweet! Let me just call my cable company and...

...

...oh they don't carry it, meaning I can't even pay for it if I wanted to.

you can cough up like .99 cents per episode for most on-demand shows.

Which is still forcing consumers to pay before they can view, which is again a problem since Japan does not have the same barrier to entry. While I realize you're admitting the US industry is not the same as the Japanese industry, it's still a problem.

[TheSubtleDoctor]

Japan does not have the same barrier to entry.

Do the Japanese get free cable TV?

Sheesh, you'd think Madhouse was leaving disc-loaded gift baskets on peoples' doorsteps, the way some people talk.

While I realize you're admitting the US industry is not the same as the Japanese industry, it's still a problem.

Isn't it the same problem for both? Do rural regions get the same channels/shows as Tokyo? I am asking because I am unsure.

Also, pretty much all of Funi's shows you can stream at least a couple of episodes for free (minus the costs of the internet bill of course).

[blkmage]

Anime in Japan isn't typically broadcast on premium channels (there are a handful of exceptions), so no, anime on TV definitely does not have the same barrier to entry in Japan as US TV. It's the difference between paying for cable (which most households have) and paying for cable + premium channels.

As far as I know, there's some regional shenanigans, but for the most part, they all seem to eventually get the same shows, although there's a difference of up to a few days in some regions for when a show airs (I remember when Haruhi season 2 was starting, there was a bunch of people who got hotels in the region where it was airing first so they could be there for the glorious return of Haruhi).

[Nate]

Do the Japanese get free cable TV?

No, but cable TV isn't the only TV service where anime airs on Japanese TV. Show me a regular broadcast station in the US that airs anime, then I'll concede your point.

Isn't it the same problem for both? Do rural regions get the same channels/shows as Tokyo? I am asking because I am unsure.

I'm not an expert on Japanese TV either so I don't know. However Super Sentai/Kamen Rider are revered all over Japan so we can be sure at least some shows are everywhere even if not on the same channel (those two air on TV-Asahi for example; not every area might get TV-Asahi but we can be sure that other channels at least show these).

[TheSubtleDoctor]

OK. Thank you blkmage; that is good knowledge.

Which is still forcing consumers to pay before they can view, which is again a problem since Japan does not have the same barrier to entry.

As I suspected, Japanese people do, in fact, have to pay something if they want to watch anime legally on TV. Studios aren't giving the stuff away.

Show me a regular broadcast station in the US that airs anime, then I'll concede your point.

See MasterDias' earlier post. This is not the fault of Funimation or other North American anime distributors.

However Super Sentai/Kamen Rider are revered all over Japan so we can be sure at least some shows are everywhere

To bring this thread back to its original topic, would that be good enough for North American anime fans? I know I am opening a huge can of worms here, but I just don't feel that "some shows" getting put on a network that we assume most people can view is this utopian system when compared to North America. Sure it's nice and I'd love it. But, would people stop complaining about the ineptitude of companies like Funimation if, by some crazy turn of events, ABC began a weekly broadcast of One Piece, Detective Conan, and two new shows? Would people stop pirating anime? What would North American anime fans actually consider to be satisfactory on the part of Funimation?

[blkmage]

As I suspected, Japanese people do, in fact, have to pay something if they want to watch anime legally on TV. Studios aren't giving the stuff away.

Funny you should mention that, because the situation is exactly the opposite. Not only are they giving the stuff away, production committees are paying networks to air their stuff so they can have the chance to entice people to buy things. So when only considering broadcasts, they actually lose money from doing broadcasts. But if they lose money on broadcasts, why do they do it? Because it gives them the opportunity to advertise (the anime is the advertisement, not the commercials) the anime goods they're selling.

See MasterDias' earlier post. This is not the fault of Funimation or other North American anime distributors.

This kind of ties into what I'm saying. No, it isn't their fault, but that doesn't mean they can just stop there and sit in the snow and be sad at their misfortune. Because they don't have the luxury of putting their stuff on TV, that means they need to come up with another way to get their shows out there. For a while, they were able to survive without it, but that bubble has burst now.

[Nate]

Also remember that in the US, anime pretty much exclusively airs on cable channels and not broadcast channels. To get a broadcast channel all you need is a TV and an antenna; in other words, Japan can still view quite a bit of anime with just an antenna. For the US, this is not the case. There was 4Kids TV/Fox Box for a while and I'm sure on Saturday mornings there may still be a few sparse shows...I dunno, I don't watch Saturday morning TV anymore. XD But for the most part, if you're in the US, if you want anime, you need to go to premium/cable channels which costs extra. In Japan, for the most part, you just need to have a TV and an antenna, no cable bill required.

[TheSubtleDoctor]

Funny you should mention that, because the situation is exactly the opposite. Not only are they giving the stuff away, production committees are paying networks to air their stuff so they can have the chance to entice people to buy things. So when only considering broadcasts, they actually lose money from doing broadcasts. But if they lose money on broadcasts, why do they do it? Because it gives them the opportunity to advertise (the anime is the advertisement, not the commercials) the anime goods they're selling.

I am aware of this. Sure, studios are paying the TV networks (I understand this is the way TV as such works in Japan, not just anime TV), but that is in order to have the fans, in turn, pay to buy the DVDs plus merch. I mean, the actual show is worth something to the studios for just those reasons you suggested.

Also, now we are talking about the cost of cable subscriptions, in which you can sample a bunch of shows, whereas we were talking about the cost of $60 dollar box sets sight unseen. The cost seems to be shrinking. Again, (1) What can Funi do to satisfy the NA anime fans that it isn't already doing? (2) Is what fans want free access to all anime at any time?

they need to come up with another way to get their shows out there. For a while, they were able to survive without it, but that bubble has burst now.

This seems like a decent start, right?

[blkmage]

Oh, that stuff I said about cable in Japan, I mean broadcast, because I got confused and forgot that broadcast TV is a thing and is not the same as cable.

Also, now we are talking about the cost of cable subscriptions, in which you can sample a bunch of shows, whereas we were talking about the cost of $60 dollar box sets sight unseen. The cost seems to be shrinking. Again, (1) What can Funi do to satisfy the NA anime fans that it isn't already doing? (2) Is what fans want free access to all anime at any time?

I've kind of outlined what course of action I think they should take earlier in the thread here. Again, I think it's a mistake to think that anime fans are interested only in access. Like any consumer, they're trying to maximize value. If it were only about price and access, the Kara no Kyoukai BD box would not be sold out right now.

I think the right strategy is to offer cheaper cheap anime and more expensive premium editions with actual stuff people want (OSTs, OP/ED singles, physical goods that would be hard to get here). The cheaper sets appeal to a broader audience, while the more expensive sets need to contain some reason to get hardcore fans to buy them. The current one-size-fits-all strategy assumes there's only one kind of fan and it's likely considered too expensive for many and doesn't contain enough value for others.

EDIT: ^^^^ and yes, that is a decent start, which is what I've been saying

[TheSubtleDoctor]

I think the right strategy is to offer cheaper cheap anime and more expensive premium editions with actual stuff people want (OSTs, OP/ED singles, physical goods that would be hard to get here). The cheaper sets appeal to a broader audience, while the more expensive sets need to contain some reason to get hardcore fans to buy them. The current one-size-fits-all strategy assumes there's only one kind of fan and it's likely considered too expensive for many and doesn't contain enough value for others.

You are in luck, sir! This is exactly the kind of thing that Shawne Kleckner believes the market is moving toward, as I think you mentioned earlier.

[Nate]

that is in order to have the fans, in turn, pay to buy the DVDs plus merch

Minor quibble: to have the fans pay for the merch. Again, DVD sales are not the primary means of revenue for shows in Japan. It's a nice bonus and it's definitely added in, but the merch is more important. I feel like saying "buy the DVDs plus merch" reinforces the false belief that DVD sales actually matter in Japan when they really don't for the most part.

Also, now we are talking about the cost of cable subscriptions, in which you can sample a bunch of shows, whereas we were talking about the cost of $60 dollar box sets sight unseen.

Yeah but I don't even really watch cable. In fact if I wasn't living with my mom where she feels the need for it, I probably wouldn't get cable because I practically never watch TV. I'm not going to pay 60 bucks a month to watch one show, especially if I haven't seen it before. Though I do realize I'm in a minority since most people already have cable, but again, my point stands. In Japan, you don't need cable to watch most anime. In the US, you do. That's automatically a higher barrier to entry.

Is what fans want free access to all anime at any time?This seems like a decent start, right?

It would be if those channels weren't blocked outside the US. Again, the United States is not the only English-speaking country that likes anime. Or people living overseas like say, Fish and Chips who speak English but can't access that. So it's not really a decent start. On top of that, I know people whose computers are screwy at streaming, so they like downloads. Can I go to that Funimation site and download the anime to my hard drive for free to watch later? If not, that's a problem.

EDIT: If the US market is moving towards merchandising for anime then THAT is a good thing. Importing stuff from Japan tends to be expensive at times. Especially with the new shipping regulations.

[blkmage]

You are in luck, sir! This is exactly the kind of thing that Shawne Kleckner believes the market is moving toward, as I think you mentioned earlier.

Yeah, I think I might have extrapolated from his comments and/or lifted his theorycraft without knowing it.

EDIT: At least in the case of Funimation, I don't begrudge them for not offering service outside of North America (although I do begrudge them for offering poor service to Canada, which is in the region they serve), since they're primarily a North American distributor. CR is different because they're primarily a streaming service and doesn't do DVD distribution, so they're in a better position to open up to more territories.

And of course, it's not cost-effective to buy license rights for some particular territories, but in those cases, I think it's silly for them to get annoyed at unauthorized distribution taking places in those regions.