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NEWS: 11 Arrested in Japan for Uploading via Share Program


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Annf



Joined: 20 Feb 2009
Posts: 578
PostPosted: Sat Dec 05, 2009 12:58 am Reply with quote
PetrifiedJello wrote:
Annf wrote:
The "other merchandise makes way more money than DVDs" thing is extraordinarily misleading.

It's not misleading at all.

If you don't think the rest of my post was relevant, then we're probably not quite talking about the same topic.

What I was talking about is that it doesn't matter how many kids are buying Yugioh cards--that's not going to provide incentive to produce the next Toradora! or Bakemonogatari or Hellsing OVA or anything else not aimed at children. Unless you have access to numbers that separate adult-targeted shows from mega-hit kids shows, then we might as well have no numbers at all.

So those numbers have been a pet-peeve of mine for a while.

But:

PetrifiedJello wrote:
it's quite clear DVD sales have been pretty steady over 6 years

This part by itself is vaguely interesting in a very broad sense, though even just the DVD data is hard to make use of to extract useful info regarding the economics of niche shows like, say, Kannagi because shows like that are totally lost in that numbers sea full of DVDs of mass-market children's shows.
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ikillchicken



Joined: 12 Feb 2007
Posts: 7272
Location: Vancouver
PostPosted: Sat Dec 05, 2009 1:27 am Reply with quote
edzieba wrote:
DVD profits in 2007 were a mere 11% of character good profits, and that's just for the US!


Hang on hang on. Time out. I can't believe I missed this initially. Your merchandise theory doesn't even work in any case under what you were advocating initially. According to you "The concept of OWNING a thought ('intellectual property') is outright bonkers, and too few people question it." Now unless you only apply this view when it suits you, it would follow that you can't really own the rights to characters or their names or images. Ergo, anyone is free to produce merchandise based on popular anime. With that, any hope of the merchandise model dies. Sure you can make a profit of selling figures, but since anyone can do it, there's no benefit in being the one who actually created the initial anime. Therefore, nobody is going to put in the massive cost required to do so when they don't even know if it will be a hit and even if it is there's no real advantage to being the one who made the hit. Everyone else is just as free to capitalize on it's popularity as you when it comes time to actually profit.

(Forgetting the complete abandonment of IP I still disagree with the merchandise model though. As others have explained that statistic is skewwed by a handful of series aimed at kids.)

edzieba wrote:
WHICH IS WHY YOU DISTRIBUTE DIGITALLY WHERE THE DISTRIBUTION COST IS EFFECTIVELY ZERO. Fullcaps for emphasis, as you appear not the have read my previous post in full.


Yes I understand that. However, distribution costs are largely irrelevant. Anime creators don't simply use their magical magical powers to pull anime right out of their own ass. There is a massive cost in creating it in the first place. This is the main cost that must be overcome. Quibbling over how you can or can't reduce distribution costs is largely irrelevant because of this.

Quote:
Ad Hominem ahoy!


I'm not trying to attack you. I'm trying to explain that just because something is the optimal situation from the consumer perspective, that doesn't mean that it is automatically a feasible business model. Yeah, I'd like it if we could just all download anime for free and the industry could still work. It can't though. There needs to be some kind of revenue directly from the watching of anime itself. Now maybe that needs to be from ad revenue or something but whatever the case, it does need to come from somewhere. In either case it clearly requires some degree of copyright protection.
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Mohawk52



Joined: 16 Oct 2003
Posts: 8202
Location: England, UK
PostPosted: Sat Dec 05, 2009 1:46 am Reply with quote
PetrifiedJello wrote:

Mohawk52 wrote:
Here is a little something to add to the plate for chewing over.

Right back at you:
Many are paid by the number of sketches they produce, and that price has changed little in three decades.

30 years? So, when you're making a remark about "stealing" dollars, who's really doing the stealing again? I'm confused.
I appears you are. If I could make a graph I would, but contemplate this. In that thirty years anime has risen in popularity logarithmically world wide, and likewise due to various reasons, valid, or not, piracy has risen with it almost in parallel. This naturally reduces the profits that a title could possibly make which means that after the usual overheads for bills, taxes, insurances, and infrastructure operation and maintenance, there is now a lower pool of money for freelance pay. So by cause and effect the pay to those sketch drawers has risen by little, but it still has risen. Still confused? Ask yourself this, how many anime studios CEO’s are on the Fortune 500 list? How many are even listed on the Nikkei? Where are all those rich anime company board members, living like lords of the manor born, on the money held from the backs those labourers?
Are they working on the top levels of one of those tall glazed towers of commerce and finance? Oh yeah, in a clapped out office over a grocery store. What a des res?!
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CCSYueh



Joined: 03 Jul 2004
Posts: 2707
Location: San Diego, CA
PostPosted: Sat Dec 05, 2009 2:40 am Reply with quote
edzieba wrote:
I'll to resort to fullcaps again for comedic value: DISTRIBUTE DIGITALLY. DISTRIBUTION COST EFFECTIVELY NILL. NO RETAIL MARKUP. PROFIT INCREASE WITH PRICE DECREASE.


Guess what
Some of us do not want to deal with fricken downloading their anime & manga. I am one of those who wants the book in my hand. Reading manga on my computer drives me crazy. My eyes do not like it.
I'm supposed to download & then print my own copy? Why?

I have over 2300 anime dvds. I DO NOT WANT TO DOWNLOAD.
I WANT extras.
I WANT cast interviews.
I WANT omake.
I WANT a poster if it's included
I HAVE so many cool mini pencilboards from Geneon. How would I download a cool Saiyuki pencilboard such as the Sanzo one I am using as my dektop?
I HAVE cool cards for various titles.
I HAVE cool boxes for some of these sets. HOW THE HELL would I download the Ruroni Kenshin bento box cases? The slip case Nanako or Comic Party? The hinged Bebop & Escaflowne boxes? The steel Hellsing & Appleseed boxes. The wooden Basilisk box? The cool Code Geass box?
How could I download the Black Escaflowne that came with the box? The Hellsing Blood Pack that came with the box? The Hellsing Armpatch that came with the dvd?The artbook that came with one of the Hellsing volumes? The wallscroll that came with the Basilisk box? The pins that were included in the Azumanga Daioh dvds? The cool slides that came with Kyo Kara Maoh? The Postcards that came with the FMA movie? The manga volumes included with Gundam 00 & Code Geass that cost less than buying the manga separate? The artbooks that came with Code Geass Season 1? The Death Note figures that came with the dvds?
I'm supposed to sneak my own Easter eggs on dvds I've burned from stuff I've downloaded? Make up my own commentaries?

YOU may live/breathe/eat/sleep downloads. Not all of us do. I am still resisting my daughter pushing me to get a cell phone because I hate talking on the phone, why the hell do I want to drag one around with me?
Believe it or not, some things WERE better in the past. Most things I've read agree live operators are superior to machines, but machines don't need medical coverage, etc. so everyone's gone (or going) automated.
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Shale



Joined: 04 Dec 2002
Posts: 337
Location: The Middle of Nowhere, DE
PostPosted: Sat Dec 05, 2009 3:07 am Reply with quote
ikillchicken wrote:

However, distribution costs are largely irrelevant. Anime creators don't simply use their magical magical powers to pull anime right out of their own ass. There is a massive cost in creating it in the first place. This is the main cost that must be overcome. Quibbling over how you can or can't reduce distribution costs is largely irrelevant because of this.


Let's look at this through the lens of the last ANNCast, since it had some nice insider info about licensing/production costs. Take Vandread, for instance. In order to break even on the licensing deal, Vandread had to sell 20,000 units at $30 a disc. At $3 a disc, it would have had to sell ten times as much, or two hundred thousand units. That's a tall order in itself - 180,000 extra customers? Really? - but even that's not the whole story, because Vandread didn't sell 20,000 units. From what Kime said, it didn't even come particularly close. So even multiplying the sales by ten still doesn't hit the break-even point. You need twelve, fifteen, maybe even twenty times the DVD sales. And you're still just breaking even!

And that's leaving aside the fact that scaling back DVDs doesn't actually change the merchandising side of the business. If the toys sell, they sell - in a market where piracy is omnipresent, DVD sales aren't what generates a show's popularity, especially when we're talking about the segment of the fanbase" hardcore" enough to spend substantial cash on figures and suchlike. I don't see how cutting DVD costs would change the market enough to turn video releases into an effective loss leader.
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edzieba



Joined: 13 Dec 2006
Posts: 704
PostPosted: Sat Dec 05, 2009 7:53 am Reply with quote
Shale wrote:
In order to break even on the licensing deal, Vandread had to sell 20,000 units at $30 a disc. At $3 a disc, it would have had to sell ten times as much
A $30 DVD does not make a $30 profit. Far, far less, in fact. Especially with licensed DVDs.
Quote:
And that's leaving aside the fact that scaling back DVDs doesn't actually change the merchandising side of the business. If the toys sell, they sell - in a market where piracy is omnipresent, DVD sales aren't what generates a show's popularity, especially when we're talking about the segment of the fanbase" hardcore" enough to spend substantial cash on figures and suchlike. I don't see how cutting DVD costs would change the market enough to turn video releases into an effective loss leader.
Gundam would like a word with you. It is and always was, right from 0079, a vehicle to sell toys and kits. And has been immensely successful because of it. TV showings sell toys/etc because people then actually know about the show. Digital distribution has pretty much usurped TV already (with anime in Japan alone, Winny/Share/PD is the ubiquitous method for viewing, not DVR recordings). Removing the costs associated with having to press large numbers of DVDs, combined with a larger number of people watching, only means more sales for other merchandise.
CCSYueh wrote:
I have over 2300 anime dvds. I DO NOT WANT TO DOWNLOAD.
Then don't. Buy a nice artbox if it's produced. Just don't expect companies to produce them if hardly anyone wants them, or for them to be cheap.

On separating kids anime sales from other anime sales: the same studios animate both.
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ikillchicken



Joined: 12 Feb 2007
Posts: 7272
Location: Vancouver
PostPosted: Sat Dec 05, 2009 8:33 am Reply with quote
What's wrong edzieba? Cat got your tongue? We're all waiting for your explanation of how a merchandise model can work when nobody is allowed to own the right to create said merchandise. There's no point arguing over the details if you can't refute this key problem.

Shale wrote:
I don't see how cutting DVD costs would change the market enough to turn video releases into an effective loss leader.


No, you've misunderstood what I'm talking about. I'm referring to the initial cost of creating the anime itself. As in, the cost of paying writers, directors, and animators to actually make it.
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edzieba



Joined: 13 Dec 2006
Posts: 704
PostPosted: Sat Dec 05, 2009 9:23 am Reply with quote
ikillchicken wrote:
What's wrong edzieba? Cat got your tongue? We're all waiting for your explanation of how a merchandise model can work when nobody is allowed to own the right to create said merchandise. There's no point arguing over the details if you can't refute this key problem.
Imma collatin' mah research. Well, collectin' mah research really, there's few concrete (and nonmachine-translated) sources on how product licensing works in Japan. There's the old fallback of trademark vs. copyright, but it's easy enough to look that up elsewhere yourself, so there's not much point in me repeating it again.
For now though, some food for thought: bootlegged goods are everywhere, and garage-kits are tacitly approved. But the character goods market still booms.
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Shale



Joined: 04 Dec 2002
Posts: 337
Location: The Middle of Nowhere, DE
PostPosted: Sat Dec 05, 2009 10:12 am Reply with quote
edzieba wrote:
Gundam would like a word with you. It is and always was, right from 0079, a vehicle to sell toys and kits. And has been immensely successful because of it. TV showings sell toys/etc because people then actually know about the show. Digital distribution has pretty much usurped TV already (with anime in Japan alone, Winny/Share/PD is the ubiquitous method for viewing, not DVR recordings). Removing the costs associated with having to press large numbers of DVDs, combined with a larger number of people watching, only means more sales for other merchandise.


No, that's not what I meant. I know shows can be effective merchandise machines. I'm a fan of the Yuusha series, for crying out loud. What I don't see is how changing your pricing to appeal to people who download anime expands the sales base for your merchandise. If somebody downloads anime and wants to watch your show, they're probably going to watch it regardless of whether or not they pay for it. Just because they're more likely to buy a legit copy under this model doesn't make them new fans for the purpose of merchandise sales.
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edzieba



Joined: 13 Dec 2006
Posts: 704
PostPosted: Sat Dec 05, 2009 11:01 am Reply with quote
Shale wrote:
What I don't see is how changing your pricing to appeal to people who download anime expands the sales base for your merchandise. If somebody downloads anime and wants to watch your show, they're probably going to watch it regardless of whether or not they pay for it. Just because they're more likely to buy a legit copy under this model doesn't make them new fans for the purpose of merchandise sales.
Not directly, no. But once customers are downloading from you rather than elsewhere, you can be a bit clever. Tail-end adverts for merchandise, for example (putting them before/during the show would drive people elsewhere), or mentioning them in whatever landing page is used for each series. A surprising number of people would love to buy certain pieces of merchandise, but never even know it exists, or don't know how to get ahold of it.
Control of the distribution channel is a powerful marketing tool, but must be used very carefully for it to even work.
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ikillchicken



Joined: 12 Feb 2007
Posts: 7272
Location: Vancouver
PostPosted: Sat Dec 05, 2009 11:27 am Reply with quote
edzieba wrote:
Imma collatin' mah research. Well, collectin' mah research really, there's few concrete (and nonmachine-translated) sources on how product licensing works in Japan.


What does how product licensing works have to do with it? There would be no need to license anything if you had your way. Again, not trying to attack you here but why is it you believe this so strongly if you can't even give at least a basic explanation of how this business model you're advocating would work without conducting a bunch of research?

Quote:
There's the old fallback of trademark vs. copyright, but it's easy enough to look that up elsewhere yourself, so there's not much point in me repeating it again.


What exactly are you referring to here? Both an anime itself and the right to the images of it's characters fall under copyright as I understand it. Trademark doesn't apply to either.

Regardless of what you call it, I hope you're not suggesting that copyright to merchandise is okay but copyright of the anime itself is not. If you disagree with "the notion that simply having a good idea is grounds of long periods of payment for that idea" as you said then you're basically saying that just because a company creates a popular anime doesn't mean they should have the exclusive right to profit from it. How is it that because a company comes up with the idea of a character they should have the exclusive right to profit from it? Why can they own the mere concept of that character but not the actual real (albeit digital) images and sounds of their anime? (If you're not saying this then disregard all this).

edzieba wrote:
For now though, some food for thought: bootlegged goods are everywhere, and garage-kits are tacitly approved. But the character goods market still booms.


A) Bootlegged merchandise is shit quality. Everyone knows it and so everyone avoids buying it. The reason it is shit is of course because it is totally illegal.

B) It's not everywhere. There's a ton of it in Hong Kong and in some parts of Asia. North America and Japan are more or less legitimate though. Nearly every large or reputable seller both online and in brick and mortar stores doesn't carry the stuff (in combination because it's shit quality and illegal as I mentioned above.) A bit might be found from independent sellers on eBay and the like but it's just not very wide spread.
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LordRedhand



Joined: 04 Feb 2009
Posts: 1472
Location: Middle of Nowhere, Indiana
PostPosted: Sat Dec 05, 2009 11:25 pm Reply with quote
Just to chime in on the bit of DVD's not making the company money...

They actually do, but not in the way you think they would, and I can explain it as people like to talk about mark-ups and all that fun stuff.


The mark-ups on DVDs are fairly small (department next to mine is movies, music and software.) With my employee discount I pay 10% more than what the company that I work for paid to get it. So take a Case Closed DVD set or a $59.99 set and I save $6.50. So mark-up is fairly small. Take a $24.99 toy, I'd save about $19.50, thus it has a ton of mark-up on it.

So from a retail point of view, buying toys would keep the retail store in business but buying DVD's keeps the anime studio/distributor in business as the store doesn't make a lot of money on it (about $8 versus $20.) So how do you get the store to buy more of your DVD's? Have people buy them and if your distributing through say a corporate website not to undercut your retail sellers too much.
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Mohawk52



Joined: 16 Oct 2003
Posts: 8202
Location: England, UK
PostPosted: Sun Dec 06, 2009 12:35 am Reply with quote
One also has to keep in mind that just about all anime is commissioned not by one producer, but by a commitee of them, each wanting their slice of the pie made from what ever item brings in the readies. Wink
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Cosplaybunny



Joined: 10 Apr 2007
Posts: 224
PostPosted: Sun Dec 06, 2009 1:04 am Reply with quote
edzieba wrote:
On separating kids anime sales from other anime sales: the same studios animate both.


Let's assume this is true. Your scenario still falls apart. We're working from the merchandise model: Pokemon makes money. Naruto makes money. One Piece makes money. Dragonball makes money. Evangelion makes money. You know what doesn't make money? Gankutsuou. Haibane Renmei. Ghost Hound. Paranoia Agent. Lain. Monster. Emma.

I haven't been able to find any Rakka plushes, keychains, T-shirts, action figures, or posters. Where does the money come from?

So, a studio gets to decide what the new project is. It can either animate a new shonen property with a bunch of toys, or it can animate a new series by Yoshitoshi ABe. Which does it choose? The series that will make money, or the series that will lose money?

Furthermore, you still haven't addressed ikillchicken's point. All intellectual property conventions worldwide have now been eliminated under your regime.

Bandai makes Gundam models. Mattel makes Gundam models. Hasbro makes Gundam models. Wal-Mart makes Gundam models. Everybody makes Gundam models. We have an issue of monopolistic competition, where everyone works to drive the price down, and try and differentiate product just enough to attract fans. Where is the incentive for Sunrise to make a new Gundam movie? Where is the incentive for Toei to make a new Gundam movie? What is the incentive for Warner Brothers to make a new Gundam movie? What is the incentive for Disney to make a new Gundam movie?

Gundam belongs to everyone, now. It's online for free, and toys are everywhere. It is impossible for any exclusivity agreements to be reached. Disney and Bandai can't team up to market Mickey Mouse Gundams. Mickey Mouse Gundam belongs to everybody.

Additionally: where do the ideas for new products come from? All visual novel games are online, and free, as they should be. All manga is available online in scanlations. How much manga merchandise does there tend to be?

Where's my Eden: It's an Endless World! t-shirt? Where's my Children of the Sea keychain? My REAL plushie? My 20th Century Boys special edition guitar? My Pluto garage kit?
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bayoab



Joined: 06 Oct 2004
Posts: 831
PostPosted: Sun Dec 06, 2009 7:33 am Reply with quote
LordRedhand wrote:
The mark-ups on DVDs are fairly small (department next to mine is movies, music and software.) With my employee discount I pay 10% more than what the company that I work for paid to get it. So take a Case Closed DVD set or a $59.99 set and I save $6.50. So mark-up is fairly small. Take a $24.99 toy, I'd save about $19.50, thus it has a ton of mark-up on it.

Something funny is going on or you aren't explaining something right. The standard web price for DVDs is 25% off MSRP and the law of doubling* applies to almost all DVDs. (A $60 set is bought for ~$30 and should be on the shelves for $45.) You should be paying ~$35 for a $60 set if you are paying wholesale+10%.

*Law of doubling says that every time a product changes hands, the price doubles. i.e. Sold to distributor at $15, sold to B&M at $30, on the shelf for $60.

Quote:

So from a retail point of view, buying toys would keep the retail store in business but buying DVD's keeps the anime studio/distributor in business as the store doesn't make a lot of money on it (about $8 versus $20.) So how do you get the store to buy more of your DVD's? Have people buy them and if your distributing through say a corporate website not to undercut your retail sellers too much.
A number of people who work for B&M retailers have said that during the anime boom, the reason the anime section grew disproportionately is that the retailers were making a killing on the markup.
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