Why Do Companies Buy Rights For Territories They Don't Service?

by Justin Sevakis,

Corey asks:

Hi! I'm asking this on the heels of the recent announcements from Amazon regarding Kabaneri of the Iron Fortress, and now the entire Noitamina lineup. Amazon announced global streaming rights to Kabaneri, even though they only operate in a few countries. I know this is nothing new. Canadian anime consumers have been hounding Viz Media for a while for not making shows like Sailor Moon available to stream in Canada despite holding the rights for North America. It feels like these companies should sublicense to providers in these territories, but I don't hear much news about that ever happening, so I'm not sure how often it does. Why even bother buying up the rights in the first place only to squat on them and not sell the product to the consumers living in those territories?

Nobody is intentionally spending money on rights they're not going to use. But that's usually how rights are sold.

In content licensing, whether anime or other sorts of media, territories are usually broken up by continent, by language, or worldwide (possibly with some limiting factor). This is almost always at the discretion of the licensor. You can have a contract that covers all of North America, all "English speaking territories" (which would cover North America, UK and Australia), or the world except for Asia. The company buying the rights doesn't really have much of a say over what's being offered -- it's up to the eternally understaffed licensor, and how many different publishers they have the ability to deal with. Sometimes these territories are actually broken up at the production committee level, and different companies in that committee act as licensors for those different territories.

There's always been a spirit of cooperation between North American publishers and those in the UK and Australia. Funimation and Sentai often end up with all English Speaking Territories, and then re-sell those rights (often with a finished DVD and Blu-ray) to the smaller publishers in those countries. Usually those rights come with online rights, so those companies will then sell those rights in those territories to the local offices of Netflix, or perhaps Viewster or another service.

But the streaming business outside of the US is not as well developed, and not every company has found a way to stream to certain countries in a way that makes business sense. You bring up the topic of Viz not finding a good way to stream to Canada. (With a serious lack of high paying video ads in Canada, nearly every company that streams there for free does so at a loss.) Sometimes the UK and Australian publishers pass on publishing a title in their countries, leaving the publisher with rights that they don't really have the current ability to exploit.

This is never intentional, but the way licensing works, they really never had an ability to break apart the package of rights they bought. The licensor wanted a single company to handle everything, and so they got all of the rights. If they can find a way to exploit those rights, they will, but really the focus is on making back the money they spent, because that's how they stay in business.

Amazon's new deal with Fuji TV for several NoitaminA shows, however, is a different ball game entirely. It's impossible for me to overstate what a big deal that was. Amazon has more money than God, and the amount they were rumored to be offering for exclusive worldwide streaming rights for a series was by far the highest price I've ever heard of being paid for anime rights -- enough to pay for the entire production and then some. Amazon is serious about beefing up their video platform's offerings in all categories, and they don't particularly seem to care about making back their investment right away. They're building up a library to make their platform a viable offering compared to Netflix.

Amazon Prime Video isn't yet available in places outside of the United States, United Kingdom, Japan, Germany and Austria, but you can bet they have plans to launch in many more countries as soon as they think it's viable.

I expect Amazon's deal with Fuji, and also Netflix's deal with Production I.G for Perfect Bones, to significantly change how this industry operates. This is also a significant reason why Funimation is starting to stream outside of North America, and why Crunchyroll has been pushing hard into non-English speaking territories. Anime streaming is going global. But not every country is ready yet from a business standpoint, so it's going to be a piecemeal affair for quite a while.

Got questions for me? Send them in! The e-mail address, as always, is answerman (at!)

Justin Sevakis is the founder of Anime News Network, and owner of the video production company MediaOCD. You can follow him on Twitter at @worldofcrap. Please note that he does not take question submissions via Twitter.

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