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Is Anime Streaming Consumer-Friendly Right Now?

by Justin Sevakis,

On Wednesday I wrote about the current state of anime streaming to North America, and how it might be better than there being a single place to stream everything, because that would've created a monopoly. While the column was fairly well-received, there were a few dissenters and a few different points of view that were raised that I think deserve some discussion. Is the anime business consumer-friendly right now? What would real competition look like?

The current state of streaming anime doesn't work for a number of fans. When the streaming world pretty much revolved around Crunchyroll, fans got used to the idea of paying a few dollars a month for access to nearly all of the anime coming out. But competition eventually gained a foothold, and now there's Amazon's Anime Strike, there's HIDIVE, and there's usually a couple of shows on Netflix. That's a lot of services to subscribe to, especially for the young and broke (as anime fans tend to be). The young and broke aside, though, many fans just don't want to pay for half a dozen different streaming services in order to get access to the shows they want. It's tough to keep track of and everything's a monthly service - getting access to everything right now costs in excess of $50/month. You're 1/3rd of the way to a cable bill there. Not ideal, and not particularly consumer-friendly.

But I don't know how to fix that, or even if it's rational to expect such a thing. A basic law of economics is that you can't always get everything you want, and that absolutely applies to media. With media becoming so accessible in the internet age, people no longer accept this, and some fans will go to illicit sources to get a few shows every season. The industry may just have to accept that fact as a consequence of having a functional business -- that it can't satisfy everybody.

One of the thoughts that people had in response to the article was that since most anime streams exclusively to one platform or another, that there really isn't actual competition between the services; that they each have a monopoly on their own exclusive shows. Since the fans are forced to go where the content is, there really isn't any competition here that benefits the fans. Some would say that there's not much difference between the platforms aside from this. All the competition is for new simulcasts.

I don't quite agree with this perception. It's not that there's no difference between the services or that they haven't tried to make their services more popular in other ways. There are substantial differences in device support, subtitle styling, site design and video encoding. Most of the services have invested tons of resources in back catalog content, which varies wildly between the sites. Unfortunately, few people seem to care. (In fact, most old shows drive so little traffic that Hulu deleted a huge amount of their back catalog not too long ago.) Simulcasting new shows with a functional player, reasonable quality video and comprehensible subtitles seems to be the only thing enough people care about that it actually affects subscriber numbers. That's the bottom line - fan conversation can go in whatever direction it likes, but subscriber numbers are what matters here. That's what these companies react to.

Should streaming video networks like Crunchyroll, Hulu and Amazon work on something like Spotify, wherein there might be an occasional exclusive to one or the other, but for the most part everything is available from everybody? While that would be nice, Spotify and the other music streaming services are modeled after the radio business, wherein stations could play whatever they wanted as long as they paid their royalties and filed their reports. TV has never worked like that, because TV is an inherently less whimsical medium. Few people watch most shows more than once. If a viewer watches a show on one service, they'll likely never revisit it on another service. Advertising and subscriptions are both sold on the value of a network's individual programs. That means having exclusive rights to a show is where the value is for a business.

And so, very very very few TV shows of any kind are NOT an exclusive part of one network or another. Having that show exclusively is its sole value to a network. If you spread out the audience to different places, it ceases to be worth much to the networks, because it no longer drives subscribers OR advertisers. That service is no longer special for having it. TV works like this across the board, and CAN'T work if everything's non-exclusive. It's probably unreasonable to expect anime to work differently from the entire rest of the entertainment world.

Things are different in Japan. The "broadcast" is not the revenue driver. Most anime exist to promote other products, its own DVD/BD releases, the original manga, light novel or game, and/or merchandise. Anime producers PAY Japanese TV networks to broadcast new shows, just to get them out there and seen. So it's no big deal for these companies to distribute Japanese streaming rights to Niconico, d TV, Amazon, Google, PlayStation Video, Rakuten ShowTime and tons of other streaming services at the same time. It's all about getting as many people in Japan to watch the show as possible so they'll buy other things in Japan.

Anime does not work that way overseas. In the West, the anime IS the product they're selling. And the sole way for those shows to make money for the companies that produced them in Japan is almost always via license fees, partially for physical media, but mostly for exclusive streaming rights. There simply isn't another good source of revenue.

It's worth noting that the Spotify model isn't working out too well for anybody BUT consumers. Musicians have been hurt badly by the decline of iTunes sales and the shift to streaming, especially at the cult/niche level (which is what anime would be). Prominent indie electronica producer Joshua Eustis (Telefon Tel Aviv, The Black Queen, Sons of Magdeline, Second Woman) has been in the scene for nearly 20 years. "Mid-level bands used to be able to live on royalties and small touring during the heyday of iTunes," he tweeted in August. "Those royalties are now largely gone -- what was a teacher's salary is now maybe at best a drum machine. So we all hit the road a lot more. All of us. Used to book shows a month out. Now it's 6-12 months out, and everyone fighting for time."

In fact, Spotify itself has never made money, and despite having over 60 million users, the service loses hundreds of millions of dollars a year, a loss that accelerates the more users it has. It's a completely broken business model being propped up by an industry out of ideas, seemingly intent on committing suicide (or cashing out with an IPO, whichever comes first). Competing services from Apple, Google, Amazon and others have sprung up, but none of them break out the numbers of how much money they make for themselves or artists. It's not something that's worth emulating on any level - and isn't replicated in any other artistic medium. There is no Spotify for games, movies or TV - why would anime be any different?

So, whether we like it or not, the current players in anime streaming are probably here to stay for the foreseeable future, each with their respective exclusives every season. That's probably not going away. Perhaps in the future other producers will go the route of Aniplex, and put their shows on multiple services so that they can drum up interest in physical discs and merchandise, which might help consumers see the sort of competition that actually benefits them - streaming companies competing with each other on customer service and value, not on exclusive content. But that's largely up to Japan.

What else can streaming providers do to better serve their customers? What can be done as consumer-facing competition? What can be done to ease the frustrations of international fans? What, aside from carrying more simulcasts, can these sites do to win your business? I'd love to hear your feedback on this in the comments.

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Anime News Network founder Justin Sevakis wrote Answerman between July 2013 and August 2019, and had over 20 years of experience in the anime business at the time. These days, he's the owner of the video production company MediaOCD, where he produces many anime Blu-rays. You can follow him on Twitter at @worldofcrap.

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