Anime Expo 2008
Industry Roundtable: The Future of Anime

by Mikhail Koulikov, Jul 10th 2008

The fourth and final of Anime Expo 2008's industry roundtables, The Future of Anime in Movies, Television, Videogames, Online and Cable, was chaired by distinguished film journalist Charles Solomon. A long-time supporter of anime, he has reviewed films like Princess Mononoke for the New York and Los Angeles Times and dozens of other newspapers. Recently, Solomon has also been teaching a course on animation history at UCLA.

For most of the speakers on the panel, it was their second or third appearance on an industry roundtable. Trulee Karahashi, Vu Nguyen and Ken Iyadomi all again stepped up; however, this time around, they were joined also by Adam Zeher, the director of acquisitions and licensing at FUNimation Entertainment, Toshifumi Yoshida, who formerly worked at Viz and and recently joined Bandai, a representative from the videogame publisher Tomy, and, as a special guiest, Masahiko Minami, the co-founder of Japanese animation house Bones.

Solomon's brief introductory remarks called this year a "curious time in the history of anime in America." The medium is more popular than it has ever been, more people than ever before are becoming interested in Japanese entertainment, its influrnce in Hollywood is growing - and yet, the video market for anime is more or less flat. Can these trends be explained or reconciled, and does the future for anime America continue to lie in home video and online? Or is it finally time for Japanese animation to break out of the home, and into the movie theater in a big way?

To a question as categorical as this, the answer is still largely 'no.' Funimation's Zeher is not at all confident that anime specifically is ready to make a large-scale theatrical impact. The caveat is that as more and more American intellectual properties undergo the Hollywood treatment, to the point where most of the truly memorable ones have already been mined, opportunities for live-action remakes of classic - or just interesting - anime series are on the rise. And even if anime companies themselves, Iyadomi reminded, were interested in breaking into the theatrical film market, they would quickly find that they generally lack the marketing budgets necessary to support wide releases of movies. The success of anime in local movie theaters will be predicated on it becoming a regular feature on the schedule, something that fans know to expect and to look forward to.

So far, anime in North America has primarily been a market driven first by VHS and then by DVD. The advent of the Blu-Ray format is now upon both casual viewers and collectors, in Japan as well as in America. How will this new format affecting sales and availability?

Interestingly, according to Mr. Minami, for Japanese animators, it is actually easier to create a high-definition version of an older anime series that was created on film than of an early digital work from the late 1990's. In Zeher's experience, too, there are some older anime where the only available copies are so degraded that remastering or up-converting them will not be justified. Overall, though, he predicts that the market penetration of Blu-Ray across all segments will grow much faster in the U.S. than in Japan. At the same time, plans for anime releases on Blu-Ray in the North American market are still in their infancy, as Karahashi pointed out.

Recently, much has been said about a possible peak in the Japanese manga industry. The best and brightest new creators and artists in the Japanese entertainment industry are actually flocking to jobs in videogames, not manga, larglely because of better salaries. Is it possible, Solomon asked, that as time goes on, manga will grow less dominant as a source of anime adaptations, while videogames increase in prominence?

Karahashe agreed with this assessment, while also adding that more and more source material for anime is beginning to come from outside Japan. Younger creators and staff are certainly very discontent with the traditional low salaries of the anime/manga industry, and may be looking to shake it up radically. Tomy's representative was supportive of the viewpoint as well. Videogames provide an additional outlet for creative content, and more opportunities for establishing cross-property synergies between anime, manga and videogames are emerging. At the same time, Japanese videogame companies are really beginning to understand and accept the potential of sales outside the home territory.

The nature of the anime market itself is changing, says Minami. The total number of manga that are being published in Japan is still increasing, but shorter animated series that do not require as much of a commitment either from viewers or from their staff and broadcasters are continuing to gain in popularity.

Solomon picked up on t his comment by bringing up an example of a well-known American animated film that went nowhere in theaters: Fox's Atlantis. In his own teaching, he demonstrates a single sequence from that film that, he argues, cost as much to create than the entire twenty-six episodes of Cowboy Bebop. His question to the panelists, then, was whether anime directors can still afford to be as creattive as they sometimes are because the medium they work in is still relatively cheap.

Iyadomi and Nguyen both agreed. In Crunchyroll's experience, anime productions' per-episode costs are still relatively fixed, making series budgets quite predictable. Bandai, nonetheless, is seeing more and more Japanese anime companies consider looking for outside funding sources. And Funimation, now the market-leading anime distributor in the U.S., has been approached repeatedly by Western companies with rights to well-known movies and books that are interested in commissioning anime adaptations of them, especially in cases when their proposals would be far too costly to ever bring to life as live-action films. A warning from Solomon, though, was that to this day, there is a cultural stigma attached to animation in the U.S. This is beginning to change, but there is still largely an understanding among American producers - and more importantly, American audiences - that animation yields itself well to certain types of stories, but is not even a viable choice for some others.

Another recent trend he brought up has been a cross-pollination in the American animation space, with several new series openly or implicitly aping an anime style and some that are created cooperatively by Japanese and Western studios.

Vu Nguyen's opinion is that pseudo-anime like these can work in general, but anime fans are often quite savvy, and may be reluctant to embrace a new series that is not in fact original to Japan. An outsider again, Karahashi still believes that there is a certain "quality of feeling" in Japanese animation that is not present in animated series from other countries. On the other hand, as another of the panel speakers commented, one particular purpose series like Ben10 and Avata: The Last Airbender serve is to expose viewers to the style and conventions of "real anime," to which they would presumably then make the leap. The Funimation panelist in particular thought that it would be interesting to see how the effect of these Cartoon Network and Nickelodeon animated series plays out as their prime viewers themselves enter adulthood and pass on their entertainment interests and preferences to their own children.

Over Anime Expo's previous days, much of the discussion at the industry panels and roundtables had centered around digital distribution, for example via iTunes, the XBox Live service, and other delivery methods. Solomon was interested in whether the iTunes model can present a viable "kicking-off point" for how anime will be brought to viewers in the future.

Crunchyroll, of course, is particularly interested both in this question, and in its possible answers. Nguyen notes that for many anime fans, the Internet remains their only real way of getting content. This does not, however, mean that there is also not a market segment that very explicitly supports DVDs. The digital model serves one part of the overall anime consumer population, but not its entirty.

Funimation's position has always been to be understanding of their target audience. "You can't blame fans for wanting to watch Japanese shows," says Zeher - especially those fans who do not have access to either anime sold in stores or cable channels. Digital distribution is one option, but untill and unless the number of fans who are willing to pay for anime on their computers goes up significantly, the margins on something like iTunes are extremely small. In fact, if the entire North American anime industry were to embrace digital distribution over DVD sales, the number of anime that could be licensed and released to the market would drop markedly. Ultimately, though, it will be fans, not anime companies, that determine which anime are actually available in America, and in what format.

It was particularly interesting to hear what Minami, the only Japanese participant on the panel, had to say about this. "When it comes down to it, as anime creators, we want people to see anime. But if we are not seeing any returns, it makes it a lot more difficult for us to continue doing business," he remarked.

With the hour almost exhaused, there was time for only a few audience questions to the panelists. One audience member asked whether, as anime expands globally, there will be an increase in the number of non-Japanese characters. In Zeher's view, that is not specifically likely, but different licensees in various countries may localize anime series in different ways that are relevant to their cultures. Iyadomi also brought up the point that frequently, Japanese anime creators simply have no idea how popular their current or future series are internationally, and do not see the need to go out of their way to attract or serve a foreign audience.

A second question asked whether anime series could be marketed effectively to potential viewers outside the fan community core. This is certainly possible, Zehar agreed, but identifying target subcultures and the best ways to reach them is difficult, time-consuming, and extremely expensive. It is also quite difficult, unless a major retailer or other commercial partner is on board, to organize anime promotional events at venues other than conventions.


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