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INTEREST: Yaoyorozu Studio's Producer Proposes Partnership System to Replace Anime Production Commit




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Sam Murai



Joined: 01 Dec 2006
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PostPosted: Fri Mar 16, 2018 6:18 pm Reply with quote
Very interesting, as I always thought that studios (the main "animation production" ones credited) held some kind of right or equal rights over the shows they made. It's a little odd to hear, given they are often the "face" of the production effort (which also sounds somewhat like the reverse of music, where the singer/performing artist is the "face" of the song, but the songwriter is the one with the main rights and royalties).

I think early shades of the presented model have already been popping up in recent years and I can definitely see a few studios going this exact route (though I do wonder if that arrangement could be exploited by inflating costs of production in order to get bigger fees). I'd like to see how this, and other experimental systems, would fare, and if Yaoyorozu is willing to do it, themselves…
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ultimatehaki



Joined: 27 Oct 2012
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PostPosted: Fri Mar 16, 2018 7:04 pm Reply with quote
Sam Murai wrote:
Very interesting, as I always thought that studios (the main "animation production" ones credited) held some kind of right or equal rights over the shows they made. It's a little odd to hear, given they are often the "face" of the production effort (which also sounds somewhat like the reverse of music, where the singer/performing artist is the "face" of the song, but the songwriter is the one with the main rights and royalties).


This was brought up in the answerman column a while back, buy anime studio's are basically just contractors. They have absolutely no rights to an anime they produced, they're allowed to say "hey we made this" and that's it, unless they fund the whole thing themselves. (Which pretty much never happens).
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configspace



Joined: 16 Aug 2008
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PostPosted: Fri Mar 16, 2018 7:38 pm Reply with quote
Sam Murai wrote:
Very interesting, as I always thought that studios (the main "animation production" ones credited) held some kind of right or equal rights over the shows they made. It's a little odd to hear, given they are often the "face" of the production effort (which also sounds somewhat like the reverse of music, where the singer/performing artist is the "face" of the song, but the songwriter is the one with the main rights and royalties).

From what I understand even with music or books, it is the same. The publisher (album label) owns the rights, and although the band gets royalties, they don't get to take their songs with them if they leave the publisher. Indie labels sometimes have more flexible contracts. For me with anime, I've gotten used to anime studio being the contractor and anime producers such as Lantis, Avex, Aniplex, Kadokawa, Dentsu etc. being the real money men owning the work. If you do look closely you will see them credited somewhere. For Japanese TV, the little snippet just after the anime opening announcing "kono bangumi wa..." with show sponsors will also have some of the producers logos, but this part is missing in foreign streams.

I think the partnership system he's proposing certain sounds better for the studio in a partnership, but it does have drawbacks--namely, a whole lot less quanity and less variety of anime will be made if we solely rely on it. Given that the partners will have to pay a lot more money to be a production partner to actually cover the costs of the anime production, they'll be very, very selective, much more than the usual business of just licensing after the show is produced like they do now.

And given that anime production is already very costly at low wages and that this is proposed as way to address it, I think the distributors who he proposes to pay to cover studio costs, will also want to maximize their profits too and will likely compare with the current costs and push back as well in their negotiations (i.e. you've been doing it for this much all along, you should be glad we're agreeing to royalties, or else we'll just to another studio who will negotiate for less)

So ultimately I think both models will co-exist. It would likely only be used for a few original anime productions with the rest of the adaptations relying on the regular production committee model that includes the original work's publisher as a committee member or the main producer.
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AngKear



Joined: 16 Mar 2018
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PostPosted: Fri Mar 16, 2018 11:12 pm Reply with quote
Quote:
The report stated that anime production companies (i.e. anime studios) only earned an estimated 230.1 billion yen (about US$2.17 billion), which was about one tenth of the industry's total market value.


This is astonishingly low. I expected at least a quarter of the revenues make it into the anime studios. If someone could translate a breakdown chart of the overall revenues flow and the parties involved, I would be highly appreciated.
I saw a bunch of those in the pdf from AJA report, but sadly I can't read Japanese.
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AsuraTheDestructor



Joined: 24 Dec 2013
Posts: 369
PostPosted: Sat Mar 17, 2018 1:29 pm Reply with quote
This whole thing feels like a sublte fudge you to How Kadokawa treated TATSUKI.
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SWAnimefan



Joined: 10 Oct 2014
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PostPosted: Sat Mar 17, 2018 1:38 pm Reply with quote
I'll be honest, I'm torn. I can understand the reason for Anime Studios wanting part ownership as they making the visual content of a series and even contributing to it's creation. And it potentially could help put money back in the studio and increasing wages.

However, if you look it from the creator's perspective, it's like these studios wanting a piece of your property. That doesn't sit well for me. Especially if a creator funds the series themselves.

Another major detractor is if you share a property how would it be split should occur? Just look at the fiasco with Star Trek when it was split between CBS and Paramount. Or a better example with anime fans, the situation with the Macross series, where property was divided so badly we still are trying to make sense of it. (Not to mention the Harmony Gold situation).

So if something should happen to the partnership, then how would a series be handled? So to prevent a Macross redux, the legal work will be insane with contracts and agreements. Potentially only benefiting large corporations and hurting small or independent studios.

That's my 2 cents.
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FD2Raptor



Joined: 21 Dec 2011
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PostPosted: Sun Mar 18, 2018 1:34 pm Reply with quote
Quote:
To confront these problems, Fukuhara suggested a new "partnership system." In this scenario, anime studios are in leadership positions, and foreign distribution companies such as Amazon and Netflix become their partners. The distribution companies would pay distribution fees in proportion to the entire cost of production. Ultimately, the main purpose of distribution license fees is to allow copyrights for a work to remain with anime studios in this system. Studios could then individually sell rights to licensees and expand into businesses for secondary usage.


So................
Correct me if I am wrong, but did he just say that the distribution companies should front majority if not all of the production cost just to get the distribution rights; i.e. the licensing cost to be increased since the other partners in the usual production committee is going to be left out in this model? And then after that, the anime studios hold the main copyrights and can sell/license secondary rights to the show itself? i.e. is he asking the distribution companies to take greater risk with little to no returns?
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animefanworried



Joined: 09 Mar 2011
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PostPosted: Sun Mar 18, 2018 8:51 pm Reply with quote
What he is suggesting would result in anime series becoming significantly more mainstream and in American super corporations getting a significant advantage over Japanese investors. Coincidences I'm sure.
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relyat08



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PostPosted: Sun Mar 18, 2018 10:57 pm Reply with quote
Interestingly enough, his suggestion is kind of what we've seen happen with all of these "Netflix Originals". None of them are owned by Netflix, and every one of them has had the Animation Studio on the Production Committee, as far as I've researched, while Netflix pays for essentially the entire production cost. Now the issue is getting rid of the other companies on the production committee, so that the master owner is the studio and only the studio.

SWAnimefan wrote:
I'll be honest, I'm torn. I can understand the reason for Anime Studios wanting part ownership as they making the visual content of a series and even contributing to it's creation. And it potentially could help put money back in the studio and increasing wages.

However, if you look it from the creator's perspective, it's like these studios wanting a piece of your property. That doesn't sit well for me. Especially if a creator funds the series themselves.


What? Production Committees aren't the creators. They are a bunch of companies getting together and chipping in a little bit of money so that they can cannibalize the work of actual creators(mangaka, authors, etc) and take advantage of animation studios who actually do create the animated project, including the writers, the animators, the directors, etc, who all get paid bottom dollar while doing all of the work.
The original creator of a work, like the mangaka, would be getting their own royalties regardless, as per Japanese law.

Quote:
Another major detractor is if you share a property how would it be split should occur? Just look at the fiasco with Star Trek when it was split between CBS and Paramount. Or a better example with anime fans, the situation with the Macross series, where property was divided so badly we still are trying to make sense of it. (Not to mention the Harmony Gold situation).

So if something should happen to the partnership, then how would a series be handled? So to prevent a Macross redux, the legal work will be insane with contracts and agreements. Potentially only benefiting large corporations and hurting small or independent studios.

That's my 2 cents.


Production Committees have literally been doing this whole partnership thing that you're worried about since the mid-90s. That's exactly what Production Committees are. This would be a massive simplification of the whole system, with the ownership rights of the work being entirely with the studio so that they actually make some profit, and of course the original creators would get their royalties.


FD2Raptor wrote:

So................
Correct me if I am wrong, but did he just say that the distribution companies should front majority if not all of the production cost just to get the distribution rights; i.e. the licensing cost to be increased since the other partners in the usual production committee is going to be left out in this model? And then after that, the anime studios hold the main copyrights and can sell/license secondary rights to the show itself? i.e. is he asking the distribution companies to take greater risk with little to no returns?


Netflix is already paying as much as it costs to produce a series without having any direct ownership rights. They make plenty of profit from subscriptions and viewership, so not owning the content is not really much of a downside from them, as long as they have exclusive streaming rights, they are set. There is no greater risk. On the other hand, now a small portion of the viewership profits will be royalties that do go back to the Animation Studio, and any merchandise licensing, additional adaptations, etc, would stay with them as well. The biggest downside would have to do with what kind of contract Netflix is signing for this stuff. If they don't ever expire, like Netflix probably wants, things might become problematic in a few decades if the landscape has changed significantly. And I'm sure it will.
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FD2Raptor



Joined: 21 Dec 2011
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PostPosted: Mon Mar 19, 2018 8:17 am Reply with quote
Quote:
FD2Raptor wrote:

So................
Correct me if I am wrong, but did he just say that the distribution companies should front majority if not all of the production cost just to get the distribution rights; i.e. the licensing cost to be increased since the other partners in the usual production committee is going to be left out in this model? And then after that, the anime studios hold the main copyrights and can sell/license secondary rights to the show itself? i.e. is he asking the distribution companies to take greater risk with little to no returns?


Netflix is already paying as much as it costs to produce a series without having any direct ownership rights. They make plenty of profit from subscriptions and viewership, so not owning the content is not really much of a downside from them, as long as they have exclusive streaming rights, they are set. There is no greater risk. On the other hand, now a small portion of the viewership profits will be royalties that do go back to the Animation Studio, and any merchandise licensing, additional adaptations, etc, would stay with them as well. The biggest downside would have to do with what kind of contract Netflix is signing for this stuff. If they don't ever expire, like Netflix probably wants, things might become problematic in a few decades if the landscape has changed significantly. And I'm sure it will.


I'm sure if you're just looking at the example provided, like Netflix and Amazon, you're not going to see any risk whatsoever to the whole category of foreign distribution companies; but what about the other foreign distribution companies like. you know, Crunchy/Funny/Sentai/etc? Are you saying that they have the ability to essentially give the middle finger to companies in the production commitee and get away with it?
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relyat08



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PostPosted: Mon Mar 19, 2018 10:08 am Reply with quote
FD2Raptor wrote:
Quote:

Netflix is already paying as much as it costs to produce a series without having any direct ownership rights. They make plenty of profit from subscriptions and viewership, so not owning the content is not really much of a downside from them, as long as they have exclusive streaming rights, they are set. There is no greater risk. On the other hand, now a small portion of the viewership profits will be royalties that do go back to the Animation Studio, and any merchandise licensing, additional adaptations, etc, would stay with them as well. The biggest downside would have to do with what kind of contract Netflix is signing for this stuff. If they don't ever expire, like Netflix probably wants, things might become problematic in a few decades if the landscape has changed significantly. And I'm sure it will.


I'm sure if you're just looking at the example provided, like Netflix and Amazon, you're not going to see any risk whatsoever to the whole category of foreign distribution companies; but what about the other foreign distribution companies like. you know, Crunchy/Funny/Sentai/etc? Are you saying that they have the ability to essentially give the middle finger to companies in the production commitee and get away with it?


No, that's absolutely fair. I was looking just at those big guys, because they seem to be what Fukuhara was referring too. I don't know if it's entirely sustainable with most of the smaller distributors, or any distributor that isn't world-wide, including Japan, so someone like CR or Funimation might be a problem(though I expect China's Tencent or BiliBili could easily afford to solo fund most anime projects as well). But at the same time, if CR or Funi has exclusive world wide rights to something, with a pretty long contract, and all of the same stuff remains true for their contract as would for Netflix, I don't see why they wouldn't be able to "give the middle finger" to the other production committee members and get away with it, so to speak.
Fukuhara didn't mention it specifically, but I think what may also likely happen is that many of these various production committee members would still end up involved in these productions, but on the other side of the deal. Rather than paying and ending up with small ownership rights for producing the music, broadcasting, producing the physical media, or whatever, they would be paid for their contribution as a contracted company. Essentially just flipping the production committee.
Anyway, these are all just ideas right now.
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