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Last edited by 504NOSON2 on Tue Mar 06, 2012 9:46 pm; edited 4 times in total

dtm42 wrote:

.

(Note to Moderators: this is officially my last off-topic addressing to this person in any thread. You have my word)

You're attempts to get me to engage in these childish tit-for-tats with you, that fall outside of the bounds of current discussion, and cast me in a similarly negative light as you are futile. Since 2/5/08, 6334 posts later, you've survived an extended temporary ban, a couple of Moderations, have been kicked out of threads, has had posts censored/removed, has had an innumerable amount of post reports and PM complaints to staff about you, and has received more reprimands from staff members than I have posts here... literally! Plus, you're responsible for one of the best damned moderators/posters quitting and becoming sporadically active.

While I, on the other hand, have not had to be warned by staff to be polite, to keep my posts on-topic, or to follow any of the laws of the land. You have nothing to lose by defiling the rules. Your credibility or reputation can't be anymore damaged than they already are, here. While I -- even having particularly unpopular opinions, though always delivered intelligently and supported by evidence -- have a comparatively fairly-clean record to blemish, messing around with likes of you. Like I said, this is the last time I'm going to address any personal attack towards me from you. I'll leave the rest to the proper authorities.

It seems as if ANN Publisher & CEO Christopher Macdonald's request for politeness and respect falls on blind eyes.

Edit: Proof added above. Don't take my word for it. Take ANN Executive Editor Zac Bertschy's, instead

Quote:

^
Reminds me of how Pizza Hutt supports the rebellion.

I guess Domino's supports cockfighting?

504NOSON2 wrote:

Plus, you're responsible for one of the best damned moderators/posters quitting and becoming sporadically active.

Oh come off it. You really think I have that sort of power? If I could drive people away don't you think that maybe certain users wouldn't be here anymore? I will say this about Peter; he's his own man, and I don't think for one minute that he would quit just because of me. Sure, I'd be flattered if that was the case, but it isn't the case now, is it. I'm certainly not going to take your word for it, that's for sure.

Basically, you're merely justifying my initial claim.

jsevakis wrote:

This. That giant breakdown RyanSaotome did a few pages ago is pretty much meaningless, hate to say. There is no magical formula for determining whether a show was successful or a dismal failure because those two variables are not public information. Even if they were, the royalty breakdown for different kinds of merchandise changes on a case by case basis, so you can really only guess here.

True, but the breakdown and using the Manabi line is pretty much the few things foreign fans can use to discuss sales and the potential sequel of any given show without knowing insider knowledge.

I remember the author of Hidan no Aria was pleading for people to but the anime (I think it averaged like 4.5K at the end) to help guarantee a sequel since it wasn't doing that great after the sales of the first or second volume.

I do look forward to part two of your article though. =D

agila61 wrote:

It also seems to explain part of how the third TV season of Marimite got financed.

Reminds me that Ben-to was essentially an advertisement for the Sega Saturn. Pocari Sweat also made lots of appearances (I think it's the only time I've that drink advertised without any name change in an anime).

AnimeMaine wrote:

I didn't notice the answer to this in the article, or the posts [which I admittedly scrolled through.]:
What is meant by break-even? Does that include the time value of money? For example, if an anime cost $3,000,000 to make, and earned $500,000 a year for 6 years, it would appear to "break-even" at that point. However, if the production committee required a return of 10%, the $500,000 for 6 years would only be worth $2,178,000 compared to a cost of $3,000,000.

Break-even in the entertainment business just means you broke even in the most literal sense. The dollars you spent have been recouped in actual dollars (or yen), not adjusted for inflation or potential interest.

Nice article, now I start to understand much more. Quite unbelieveable as I see quite lot of anime which I think doesn't really appeal to the audience yet it's invested into producing it.
I like to also know some numbers for Clannad anime though... hehe

Quote:

But more often than not, the director just blows his deadlines, causing the entire production to run late. There have been incidents where the final master tape shows up at the TV studio only hours before it airs!

I remember hearing that Madoka was like this, with the web-delivered episodes frequently having more polished special effects and backgrounds than the episode that was seen on broadcast TV. This was one of the main reasons for the delay in the final two episodes after the earthquake/tsunami. With the rolling black-outs, they couldn't get the show done in time to air and decided that it would be better to wait than to put out crap for the pivotal episodes of the series. Good choice!

Thanks for the article! It is informative and quite well done. I look forward to the rest of the series!

Haven't posted here for a while, I just wanted to say thanks for this article.
It's not that all of this is new to me, but it's more in-depth and it also confirms that the way I thought the system worked is not completely wrong. Which is nice.
Looking forward to parts two and three.

HeeroTX wrote:

HitokiriShadow wrote:

And then there's the exchange rate, which would also likely have hurt them in that regard.

While you are more than likely right, this would depend entirely on the terms of the contract. In fact, if contracts had been written with a requirement of return in yen, it would explain the timing of a lot of American anime company issues pretty neatly.

If the royalties are set in terms of the export market currency, then the FX risk is the same drop in export income that most Japanese exporters experience when there is a stronger yen.

Royalties set in terms of yen would look at first glance like they would stabilize the return, but if the overseas distributors are prudent about FX risk, will lead to lower initial Minimum Guarantee offers to give a cushion in the case of FX rates going to the advantage of Japan and disadvantage of the overseas market.

One way to bridge the gap would be to set a royalty in the overseas market currency but ask for the Minimum Guarantee to be set in yen: since the MG is mostly paid up front (say, spread across signing, delivery of materials, and first release), there is much less FX risk for the overseas firm, a reliable yen value could be written down as the MG. If residual royalties in excess of the MG are treated as "found money", the fact that total residual income from the country goes up when the FX rate moves against the yen and goes down when the FX rate moves in favor of the yen does not upset the baseline budget.

HitokiriShadow wrote:

Part of it is that that's the area that we know the least about (so it would be nice if Justin's articles could shed some light on how those factor in). Unlike DVD/BDs, we can't get any information on how any of that stuff does. We don't see any sales numbers for figures or body pillows or pencil boxes, etc. Most shows have separate OP/ED CDs to sell, but some shows get character CDs and others don't, and only a select few shows have huge numbers of CDs of any sort (and naturally, its usually a musically oriented property like K-On).

It's also not like there's a pot that gets divvied out among the committee - the music producer will be hoping to make a lot of their investment back on CD sales etc., and the other members of the committee will neither see any of that money nor necessarily be aware of the sales figures.

CKSqua wrote:

Another thing to note is that sourcing work to a Japanese or South Korean company doesn't necessarily mean that it'll be done within those countries. For instance, work can be outsourced to a South Korean company, who in turn outsources it to people in another country through their own connections (regarding American productions, there was some controversy over South Korean contractors outsourcing animation to North Korea).

Yes. Credits for stuff like inbetweening are a mix of individual names and companies. Where you only see a company name that work could be being carried out anywhere, and often times that company has no website and very little is known about them other than the name.

504NOSON2 wrote:

So, basically, the vast majority of all releases don't break even for years, and *30%* of them never, ever, EVER do so.

That means it's practically impossible for companies to accurately predict a sustainable amount of physical copy prints, most of the time, and they're basically just hoping/praying/wishing that they'll be able to compensate for loss dough, that was used to produce the show(s) in the first, with future "successes"; which is nigh impossible, because many of these shows become massively popular and clock fantastic download numbers in the world of "digi-subs", but are comparatively mediocre, lackluster or failures in the legal physical release world, and also, to quote Justin... "No mother dreams of having an ugly baby, and yet ugly babies are born with astonishing regularity. Likewise, no producer dreams of making a terrible show, and yet they happen all the time."

That it takes years to recoup investment basically puts the anime industry on a constant conveyor belt - as the latest property is burning through their cash they are finally able to write off Show X from 5 years ago. Geneon USA got trapped in a similar cycle, although one with little prospect of ever seeing profit until they tripped and flew off the back.
OTOH, this is only looking as a whole - contractors like the animation studio do their job and get paid for it.

configspace wrote:

He's saying a show--as in some--not all shows. Justin can correct me of course, but I presume he will illustrate how foreign licensing can help or even make the unprofitable now profitable. But to imply as if every show is designed for or that the production committee must target a foreign audience, is also an attempt to distort reality. How would you explain the discrepancies of what sells and what doesn't that continuously and regularly occur between the Japanese market and the foreign market for the same titles?

The importance of foreign money bloomed during the late 90s/early naughties to the point that a lot of projects wouldn't get started until an American company pitched in. That bubble has long burst and overseas sales are more of a "nice to have" than a necessity, hence more K-ons and less Cowboy Bebops.

zensunni wrote:

Quote:

But more often than not, the director just blows his deadlines, causing the entire production to run late. There have been incidents where the final master tape shows up at the TV studio only hours before it airs!

I remember hearing that Madoka was like this, with the web-delivered episodes frequently having more polished special effects and backgrounds than the episode that was seen on broadcast TV. This was one of the main reasons for the delay in the final two episodes after the earthquake/tsunami. With the rolling black-outs, they couldn't get the show done in time to air and decided that it would be better to wait than to put out crap for the pivotal episodes of the series. Good choice!

This is SHAFT however. I would not be surprised if they were glad for the excuse ^^;

zensunni wrote:

I remember hearing that Madoka was like this, with the web-delivered episodes frequently having more polished special effects and backgrounds than the episode that was seen on broadcast TV. This was one of the main reasons for the delay in the final two episodes after the earthquake/tsunami. With the rolling black-outs, they couldn't get the show done in time to air and decided that it would be better to wait than to put out crap for the pivotal episodes of the series. Good choice!

SHAFT is infamous for this sort of thing. Look up the Mt Fuji incident for the second season of Hidamari Sketch Smile

))

Shiroi Hane wrote:

... It's also not like there's a pot that gets divvied out among the committee - the music producer will be hoping to make a lot of their investment back on CD sales etc., and the other members of the committee will neither see any of that money nor necessarily be aware of the sales figures.

That's how I understood it ~ at least, coming at it from the perspective oft the manga publishers of anime made from a manga ~ when a publisher puts some money into the pot to help make the budget for an anime made with their property, the increased sales of titles of the serials and tankoubon is the reward.

That's why there's normally no way of saying from the outside whether a particular level of sales made or lost money for the DVD distributor on a particular title ... we can only guess what the budget is, and even if we guess close, we have no way of knowing whether they put in 10% of the budget or 50%, so we have no way what production budget share that they have to pay back in order to make money on the DVD release.

Indeed on a marginal title, the merchandiser might make a bit of money, the DVD distributor lose a bit of money, the publisher make a bit of money, and etc ~ and a slightly different sharing out of budget costs might swap around the marginal winners and the marginal losers.

That is, most everyone is likely to lose on a stinker, most everyone make money on a hit that was made on time and on budget, but there's a bit of responsibility to look out for yourself as well. If the DVD distributor doesn't hit the right price point or misses a marketing opportunity, the merchandiser or international licensor wouldn't want to wear that loss.

Part of the consequence is one of the things that infuriates overseas fans, which is that international rights are not necessarily held by one member of the production committee ~ its possible for one member to have Asian rights and another to have Rest of the World rights. Add that on top of the fact that the rights holder might not manage the rights in a single division but might place different divisions in charge of handling the rights for different parts of the world, and we see the region restriction checkerboards at Crunchyroll where South America gets this, Scandinavia gets that, Australia gets that plus this as well, etc.

zensunni wrote:

I remember hearing that Madoka was like this, with the web-delivered episodes frequently having more polished special effects and backgrounds than the episode that was seen on broadcast TV. This was one of the main reasons for the delay in the final two episodes after the earthquake/tsunami. With the rolling black-outs, they couldn't get the show done in time to air and decided that it would be better to wait than to put out crap for the pivotal episodes of the series. Good choice!

It likely had little or nothing to do with the rolling black outs. Shaft has a long history of airing blatantly unfinished episodes. Bakemonogatari episode 9, Moon Phase 12(?), and others I'm forgetting. It tends to be more surprising when it DOESN'T happen for their shows.

Shiroi Hane wrote:

It's also not like there's a pot that gets divvied out among the committee - the music producer will be hoping to make a lot of their investment back on CD sales etc., and the other members of the committee will neither see any of that money nor necessarily be aware of the sales figures.

Yeah, that too. Though I'd imagine even that varies by member of the group and by project. *Someone* is probably getting some sort of royalties on the figures and other merchandise and maybe the CDs, but its obviously not being split among everyone in the production group. I would imagine royalties would get paid either to the original publisher/copyright holder or whichever member of the group was spearheading the project and putting up the most money.

Do royalties tend to go to the original publisher/copyright holder no matter what, or do they tend to go to the member of the group that pays the most money for the production?

agila61 wrote:

That's how I understood it ~ at least, coming at it from the perspective oft the manga publishers of anime made from a manga ~ when a publisher puts some money into the pot to help make the budget for an anime made with their property, the increased sales of titles of the serials and tankoubon is the reward.

I'm curious what role publishers tend to play in this, particularly in how it relates to the above issue. I would expect them to be the ones driving the creation of an anime for something like Naruto, One Piece, etc. They know which of their shows at least have a good chance of being a huge multi-year/decade running hit and would want to be the top dog in that production committee and would pay more money if that's what it took to make sure they got all of the royalties.

But only a few shows even have that potential. It's not going to be worth their while to put up large chunks of money for the bulk of their catalogue. The publisher of something like C3 or R-15 surely knew they had no chance of being even moderate hits and likely would have seen the anime as little more than advertising for the books. So I could see them only wanting to pay a relatively small part of the production and give up the royalty money if necessary because they had no reason to expect much from it.

agila61 wrote:

Part of the consequence is one of the things that infuriates overseas fans, which is that international rights are not necessarily held by one member of the production committee ~ its possible for one member to have Asian rights and another to have Rest of the World rights.

And half of the "fun" might be just trying to figure out who has those rights to begin with. Though that may mainly be an issue for older shows.

Last edited by agila61 on Tue Mar 06, 2012 6:30 pm; edited 1 time in total

HitokiriShadow wrote:

Shiroi Hane wrote:

It's also not like there's a pot that gets divvied out among the committee - the music producer will be hoping to make a lot of their investment back on CD sales etc., and the other members of the committee will neither see any of that money nor necessarily be aware of the sales figures.

Yeah, that too. Though I'd imagine even that varies by member of the group and by project. *Someone* is probably getting some sort of royalties on the figures and other merchandise and maybe the CDs, but its obviously not being split among everyone in the production group.

Indeed, much of what the original character rights owner puts into the pot may well be the right to use the character. Justin referred to that party in the article. It would be interesting to know what things they get rights income for, but there's obviously be some consideration to the merchandiser in the production committee for their contribution to the budget and the resulting increase in marketability of the character rights.

Quote:

agila61 wrote:

That's how I understood it ~ at least, coming at it from the perspective oft the manga publishers of anime made from a manga ~ when a publisher puts some money into the pot to help make the budget for an anime made with their property, the increased sales of titles of the serials and tankoubon is the reward.

I'm curious what role publishers tend to play in this, particularly in how it relates to the above issue. I would expect them to be the ones driving the creation of an anime for something like Naruto, One Piece, etc. They know which of their shows at least have a good chance of being a huge multi-year/decade running hit and would want to be the top dog in that production committee and would pay more money if that's what it took to make sure they got all of the royalties.

Whether they are the driving force or the driving force is someone else who comes to them first, it seems unlikely that a production committee would let a publisher take a free ride on the contribution of the others.

Quote:

But only a few shows even have that potential. It's not going to be worth their while to put up large chunks of money for the bulk of their catalogue. The publisher of something like C3 or R-15 surely knew they had no chance of being even moderate hits and likely would have seen the anime as little more than advertising for the books.

That's what it is in any event ~ advertising for the serial that the title runs in and for the tankoubon volumes of the title. Putting together the production committee including the budget share will be a normal business negotiation, which in Japan is reputed to be like wrestling fog, but they seem to be able to make it work.

agila61 wrote:

Whether they are the driving force or the driving force is someone else who comes to them first, it seems unlikely that a production committee would let a publisher take a free ride on the contribution of the others.

I'm not sure how anything I said constitutes a free ride, I certainly didn't say they would pay nothing. Just that if who got royalties (or how much of the royalties) was related to how much they put in, in some cases they might forgo royalties or accept smaller royalties and pay less of the production cost.

Quote:

But only a few shows even have that potential. It's not going to be worth their while to put up large chunks of money for the bulk of their catalogue. The publisher of something like C3 or R-15 surely knew they had no chance of being even moderate hits and likely would have seen the anime as little more than advertising for the books.

That's what it is in any event ~ advertising for the serial that the title runs in and for the tankoubon volumes of the title.

Right, but what I'm saying is that there could be a difference in how a publisher approaches it depending on whether they expect it to be a huge money maker like Naruto or if they don't really expect to get much out of it other a boost in manga/novel sales.

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