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Nonaka Machine Gun B



Joined: 03 Feb 2009
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PostPosted: Fri Jan 09, 2015 12:35 pm Reply with quote
Wow, I would have never thought people directly involved in a show, such as the head writer or voice actors, get overseas royalties. You'd think that was freelance work and selling the show would be the sole business of the producers.
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ChibiKangaroo



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PostPosted: Fri Jan 09, 2015 12:44 pm Reply with quote
In regard to the US divisions/subsidiaries of companies paying licensing fees to their "overlords," there may also be more shadowy reasons for that type of thing to take into consideration. Average people often don't have any exposure to some of the more complicated aspects of international business, but there is a whole lot of funny stuff going on behind the scenes by the accountants and tax professionals. Money moves around in ways that might seem strange to us but may serve some arcane purpose due to international taxation for example. Like, I would assume that a US division of an international company could lower its tax burden by paying "expenses" to its overlords over seas, when in reality that money will be profits for the stakeholders. They shift the money out of the US to avoid US taxes and then bring it back in in other ways. I'm not saying that is definitely what is going on with the examples discussed here, but just saying that there is a lot of funny stuff that goes on behind the scenes with international business.
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Sam Murai



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PostPosted: Fri Jan 09, 2015 1:15 pm Reply with quote
Nonaka Machine Gun B wrote:
Wow, I would have never thought people directly involved in a show, such as the head writer or voice actors, get overseas royalties. You'd think that was freelance work and selling the show would be the sole business of the producers.


Given how much power those voice actors (particularly, their agencies) and head writers can pull over monetary matters, it is very much a reality. Japanese business mores leave it more open to give content creators or major production participants a slice of the pie, though based on stories, it can become quite obtuse and straining.
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mgosdin



Joined: 17 Jul 2011
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Location: Kissimmee, Florida, USA
PostPosted: Fri Jan 09, 2015 1:26 pm Reply with quote
Pulls out Green Eye-shades, blows dust off ( Cough! ) and rolls up sleeves.

[Beancounter Mode - Engaged]

I've personally done a lot of accounting work between business subsidiaries that were wholly owned, partially owned but fully controlled, partially owned and independent and every permutation thereof. What you say about licensing fees makes excellent sense, even under fully domestic US regulations not adding in the complexities of whatever Japanese laws apply. It's a hideously complicated mess of rules, regulations, laws, lawyers, accountants and politicians. There's a good reason why I don't do accounting anymore.

[Beancounter Mode - Terminated]

I do think Pony Canyon is taking a gamble on beginning distribution in the US. Others have walked that path and have paid the price of failure, some of their bones still sit on the shelves of RightStuf's warehouse and occasionally show up in the clearance bins. I sincerely hope that they don't hurt themselves by doing this.

Mark Gosdin
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Hameyadea



Joined: 23 Jun 2014
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PostPosted: Fri Jan 09, 2015 4:07 pm Reply with quote
ANN wrote:
Counter-intuitive, yes, but there are good reasons why this is the case. Those American publishers, while being owned partially or entirely by their Japanese overlords, are legally separate companies. Whenever a manga or a book or an anime gets transferred to another company, several people, and usually several different companies, need to get paid. When they get paid, they get a percentage or an amount based on, whatever the license fee was. These people include the author and their agent or estate for manga. For anime, we can also add every other company on the Production Committee, the head writer (series composition), some voice actors, and often music composers and publishers.

So even if and when those companies (branches?) in the west are owned by some percentage by their Japanese HQ, due to bureaucratic proceedings those companies are literally paying to themselves for the rights they already own. Yes, I'm aware that technically companies like Kodansha and Kodansha USA are two separate entities, but is still buffles me...


Last edited by Hameyadea on Fri Jan 09, 2015 4:28 pm; edited 1 time in total
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mdo7



Joined: 23 May 2007
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Location: Cypress, Texas, USA
PostPosted: Fri Jan 09, 2015 4:27 pm Reply with quote
The last question got my attention the most. Because I was kinda surprised (or maybe not) that companies like Viz and Kodansha USA even if it was owned by a Japanese companies still have to paid license fee back to their Japanese "overlords"

ChibiKangaroo wrote:
In regard to the US divisions/subsidiaries of companies paying licensing fees to their "overlords," there may also be more shadowy reasons for that type of thing to take into consideration. Average people often don't have any exposure to some of the more complicated aspects of international business, but there is a whole lot of funny stuff going on behind the scenes by the accountants and tax professionals. Money moves around in ways that might seem strange to us but may serve some arcane purpose due to international taxation for example. Like, I would assume that a US division of an international company could lower its tax burden by paying "expenses" to its overlords over seas, when in reality that money will be profits for the stakeholders. They shift the money out of the US to avoid US taxes and then bring it back in in other ways. I'm not saying that is definitely what is going on with the examples discussed here, but just saying that there is a lot of funny stuff that goes on behind the scenes with international business.


Hameyadea wrote:

So even if and when those companies (branches?) in the west are owned by some percentage by their Japanese HQ, due to bureaucratic proceedings those companies are literally paying to themselves from the rights they already own. Yes, I'm aware that technically companies like Kodansha and Kodansha USA are two separate entities, but is still buffles me...


Yeah Japanese business hierarchy confuse me. It get's worse I read that doing business in Japan can be difficult and has a lot of red tapes:

The Economist-Red tapes in Japan

Is Red Tape Slowing Japan’s Quake Recovery?

Japan: 'A tough market to crack'

A Clouded Outlook: Why Japan find it hard to change
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Juno016



Joined: 09 Jan 2012
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PostPosted: Fri Jan 09, 2015 7:02 pm Reply with quote
Hameyadea wrote:
So even if and when those companies (branches?) in the west are owned by some percentage by their Japanese HQ, due to bureaucratic proceedings those companies are literally paying to themselves for the rights they already own. Yes, I'm aware that technically companies like Kodansha and Kodansha USA are two separate entities, but is still buffles me...


The reason "rights" are purchased are so that the owners to those rights are paid for their work on the product itself. Licensing is the primary way that rights owners get paid for their work. The US branch is separate company, so it doesn't directly share the money pool as its owner. Thus, contracts have to be made so that everyone gets their fair share. If they didn't purchase the rights, then all of the money would fall into the US branch's paycheck and they'd have to find a different way to pay the rights owner so that the parent company could get its proper royalties like every other rights owner. Treating them as two separate entities is not only proper--it's convenient because they can license anime the same way everyone else does.
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Kadmos1



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PostPosted: Fri Jan 09, 2015 7:26 pm Reply with quote
By comparison, would the American division of a foreign car company be paying such fees to their foreign parent company?
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mdo7



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PostPosted: Fri Jan 09, 2015 7:54 pm Reply with quote
Kadmos1 wrote:
By comparison, would the American division of a foreign car company be paying such fees to their foreign parent company?


That is a good question and I don't know. But I know Japanese management culture is very unique from others.
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Yttrbio
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Joined: 09 Jun 2011
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PostPosted: Fri Jan 09, 2015 8:06 pm Reply with quote
ChibiKangaroo wrote:
In regard to the US divisions/subsidiaries of companies paying licensing fees to their "overlords," there may also be more shadowy reasons for that type of thing to take into consideration. Average people often don't have any exposure to some of the more complicated aspects of international business, but there is a whole lot of funny stuff going on behind the scenes by the accountants and tax professionals. Money moves around in ways that might seem strange to us but may serve some arcane purpose due to international taxation for example. Like, I would assume that a US division of an international company could lower its tax burden by paying "expenses" to its overlords over seas, when in reality that money will be profits for the stakeholders. They shift the money out of the US to avoid US taxes and then bring it back in in other ways. I'm not saying that is definitely what is going on with the examples discussed here, but just saying that there is a lot of funny stuff that goes on behind the scenes with international business.
Under U.S. tax law, I believe they're actually legally obligated to engage in that funny business. Moving stuff from one entity to another needs to be accounted for, which is feasible (if fudgeable) with physical stuff, but when you get into intellectual property and intangible value, you may as well be determining the market value of a unicorn.
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reanimator



Joined: 25 Nov 2007
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PostPosted: Fri Jan 09, 2015 11:33 pm Reply with quote
Answerman wrote:
(Also, the long lead time and huge minimum orders required in getting those parts of the package makes them very hard to reorder, which is why those fancy artbook limited editions are typically limited to a single pressing.) The material cost per unit goes from around $5 (for a standard 2-disc, 13-episode BD release) to as high as $20 and up. When the product is that expensive to manufacture, it really only makes sense to do so as a limited edition. You want to be able to sell as many as you made, because every box of unsold inventory means that all the money you spent on manufacturing went to waste.


I know the quote is for domestic releases, but the packaging process also similarly applies to why Japanese discs are expensive.

Answerman wrote:
And so, yes, the salaried animation staff was cut loose, and if and when the studio churns to life again to create a new feature film, they will hire artists once again. Hopefully, many of the same ones will return. But this time, they'll be hired on a project-by-project basis, as they are at every other anime studio. It's a little sad, but it's the responsible way to keep the company going.


In terms of animation quality, Studio Ghibli's "loss" is gain for other animation studios. Ex-Ghibli animators like Masashi Ando, Kenichi Konishi, and Kenichi Yoshida worked on high budget anime films/TV after they left Ghibli.


Last edited by reanimator on Sat Jan 10, 2015 12:19 am; edited 1 time in total
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EnigmaticSky



Joined: 06 Aug 2011
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PostPosted: Fri Jan 09, 2015 11:33 pm Reply with quote
It's kind of a shame that they employees at Studio Ghibli won't have a stable workplace any longer, but I guess it's the best option for the studio at the moment. And I hope Ponycanyon's releases will be more similar to Funimation/NISA, but I guess we'll wait and see.
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Yuzu94



Joined: 08 Jan 2015
Posts: 1
PostPosted: Sat Jan 10, 2015 12:42 am Reply with quote
mgosdin wrote:
I do think Pony Canyon is taking a gamble on beginning distribution in the US. Others have walked that path and have paid the price of failure, some of their bones still sit on the shelves of RightStuf's warehouse and occasionally show up in the clearance bins. I sincerely hope that they don't hurt themselves by doing this.


We'll just have to see, won't we?

[Mod edit: Removed uncalled for snark. errinundra.]
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leafy sea dragon



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PostPosted: Sat Jan 10, 2015 12:58 am Reply with quote
Hameyadea wrote:
So even if and when those companies (branches?) in the west are owned by some percentage by their Japanese HQ, due to bureaucratic proceedings those companies are literally paying to themselves for the rights they already own. Yes, I'm aware that technically companies like Kodansha and Kodansha USA are two separate entities, but is still buffles me...


From what I can gather out of the answer, the money is going to certain groups and individuals on the Japanese side of things.

Correct me if I'm wrong, people who know more about this process than I do, but it seems the original Japanese companies had already paid these groups and individuals in order to make the show in Japan. Then, when the American branch wants to distribute the show in North America, these groups and individuals are paid again because the Japanese rights and North American rights are separate.

In other words, the logic here is treating companies not as one massive entity with a bunch of money and a bunch of intellectual properties, but as a large conglomeration of people, each with their own slice of various IPs and their desire to get some money out of any deals relevant to them.
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noblesse oblige



Joined: 22 Dec 2012
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Location: Florida
PostPosted: Sat Jan 10, 2015 1:44 am Reply with quote
I already knew that US subsidiaries had to pay licensing fees to their parent companies, but what I'm curious about, is whether they can get away with just oral contracts instead of the costly and time consuming contracts that usually have to be drawn up by lawyers in these licensing situations?
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