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The Anime Economy - Part 3: Digital Pennies


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Yorozuya



Joined: 11 Mar 2009
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PostPosted: Fri Mar 09, 2012 12:18 pm Reply with quote
So crunchyroll might be okay?
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Divineking



Joined: 03 Jul 2010
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PostPosted: Fri Mar 09, 2012 1:09 pm Reply with quote
I find it pretty interesting that having a minimum guarantee for simulcasting is something that's only recent...but then the whole thing did start off as only experimenting in a way so I suppose it's not that surprising that it took a while to come with better ways to stablize it.

I do agree that promoting simulcasts can be difficult to do, but it can be done if enough effort's put in. Tiger and Bunny is a reasonable example. It;s safe to say Viz put in a LOT of promotion while they were simulcasting it(though I imagine Sunrise was pushing them a bit). and it looks like it'll pay off...though I guess we won't know till a physical release comes out.
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ABCBTom



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PostPosted: Fri Mar 09, 2012 1:10 pm Reply with quote
I'm sure you can only speculate, but how hard to you imagine Crunchyroll will be hit by the ending of Bleach? I guess it's good Naruto has a Rock Lee spinoff that will be able to hopefully bring in some views.
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050795



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PostPosted: Fri Mar 09, 2012 1:32 pm Reply with quote
Quote:
The real damage they do is more subtle: they allow unsuspecting and uneducated fans to consume anime outside the system, never engaging, never seeing an opportunity to give back. It's a loss of something even less tangible than a potential sale: it's the loss of mindshare.


Ah yes that explains it perfectly, fans today just aren't like they used to be (well most of them anyways).
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agila61



Joined: 22 Feb 2009
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PostPosted: Fri Mar 09, 2012 1:50 pm Reply with quote
As a side note, $6.95 is the per month rate ~ Crunchyroll also has $19.95/3mth and $59.95/12mth, and has had $50/12mth Premium (anime+drama) memberships the last two Cyber Mondays.

So it could be anywhere from $4.17/mth to $6.95/mth. I've been using $5/mth as a conservative guesstimate. While they haven't confirmed TV Tokyo's "almost 70,000", they have repeatedly stated that over half of what members pay goes to the original producers in Japan, which would be over $175,000 a month. $2,000 MG per episode would be around $176,000 for the 22 full length episode series, so add in episodes that beat their MG and that "over half" would seem to have to be correct.

So overall, over 22 full length episode series and so around 90 episodes a month, the funds from Crunchyroll would cover the cost of about one episode ~ if the streaming process itself was cost free, which it is not.

ABCBTom wrote:
I'm sure you can only speculate, but how hard to you imagine Crunchyroll will be hit by the ending of Bleach? I guess it's good Naruto has a Rock Lee spinoff that will be able to hopefully bring in some views.

Crunchyroll is teasing that they have a big announcement coming sometime this month. They're very tight lipped compared to some teasing that they do: BasouKazuma says
Quote:
Probably the biggest announcement of the year should be coming within a month.

... and then after people start guessing:
Quote:
Can't confirm or deny anything.


The only two things that come to my mind as being really big deals would be global ex-Japan distribution on a slate of longer running shows, and the one of the "Big Three" that they do not have. But my crystal ball is in the shop, so its likely something else entirely.


Last edited by agila61 on Fri Mar 09, 2012 1:56 pm; edited 1 time in total
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Cutiebunny



Joined: 18 Apr 2010
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PostPosted: Fri Mar 09, 2012 1:52 pm Reply with quote
Quote:
The real damage they do is more subtle: they allow unsuspecting and uneducated fans to consume anime outside the system, never engaging, never seeing an opportunity to give back. It's a loss of something even less tangible than a potential sale: it's the loss of mindshare.


I've always been amused by how much people affliated with the industry think that those who refuse to pay for this week's episode of whatever anime du jour refuse to buy any legally released anime products. It's as if the industry thinks that these anime fans (or what I assume are probably the vast majority of fans) sit at home in their parents' basement, unemployed, downloading/streaming anime, wearing stained sweat pants and holding a slightly warm cup of Top Ramen.

I would say that the vast majority of anime fans that do stream/torrent/etc. are probably well educated. They know what they like and they know how to find their fix. Many of these same fans are the ones that attend conventions (where they talk about what they watch/read), buy DVDs/BluRay and other merchandise, both domestic and import.

While possibly hurting US fans by limiting the amount of anime that will be released on DVD/Bluray, streaming/torrent sites have spurred the industry to embrace 21st century technology. Had the industry had its way, we'd either be importing expensive DVDs from Japan or waiting until the anime is localized and released on DVDs for the crazy prices that fans paid for an anime VHS (3 episodes!) in the 1990s. While the anime industry might have been more robust had streaming/torrent sites not drastically changed the game, I think that, overall, the industry would be weaker due to less exposure to anime.

I'm not saying that we should present streaming/torrent sites an award for their service to anime fans worldwide. But I'm saying that they deserve at least some credit in the relative speed that anime is now released outside of Japan.
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Saffire
Aria CompanyAria Company


Joined: 25 Nov 2007
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PostPosted: Fri Mar 09, 2012 1:55 pm Reply with quote
Thank you for this fantastic series.
agila61 wrote:
As a side note, $6.95 is the per month rate ~ Crunchyroll also has $19.95/3mth and $59.95/12mth, and has had $50/12mth Premium (anime+drama) memberships the last two Cyber Mondays.
Although true, a lot of the "lost revenue" is covered by the fewer transactions; credit card transactions are surprisingly expensive. So it shouldn't make a lot of difference overall except for the sales.
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Shiroi Hane
Encyclopedia Editor


Joined: 25 Oct 2003
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PostPosted: Fri Mar 09, 2012 2:04 pm Reply with quote
Justin Sevakis wrote:
TV shows, generally, are meant to be disposable entertainment. The entire medium was designed with impermanence in mind: before the VCR, a show aired once or twice and was gone forever.

Nothing hammers that home more than all the early episodes of Doctor Who that were wiped and lost forever.

That machine strongly appeals the part of me that still lusts after boxes covered in buttons.

Quote:
Just google "streaming anime", and you'll get a huge list of websites offering instant access to the latest shows.

Googling the name of a show is just as bad - especially if you are looking for a blog post about of a particular episode for reference - google "nisemonogatari episode 5" and the entire first page is streaming sites. Crunchyroll doesn't appear until page 2.

And because I clearly don't quote him enough, a lot of this interview with Jonathan clements is relevant:
http://media-without-borders.blogspot.com/​2011/​11/​jonathan-​clements-​e-​mail-​interview.​html

The "No Format" article from SMC that is referenced can be read in Google Books.

Quote:
The last article in Schoolgirl Milky Crisis (the book) repeats something that I heard a producer say eight years ago: "the next format is no format." Regional lockout is an anomaly. It'll be gone in ten years, because media will be more centralised. Or rather, you will still be locked out in your region until you pay up, but then access will be immediate. There will, however, be other collateral damage: SMC - Blu-Ray Blues

Quote:
The simulcasting model is the future. When there are no packaged goods to put a price tag on, media will be swiftly centralised on servers. Of course, that's going to kill an entire stratum of retail, and probably marketing, too, in many countries. But more work for tech support and programmers.

Quote:
It's also worth remembering that the concept of paying directly for anime, apart from via movie tickets, is a relatively new development. It was only introduced in 1983 with the advent of home video. For the bulk of anime's 94-year history, and for the majority of anime's thousands of hours of content, it has been given away, for "free" to consumers in exchange for advertising messages about chocolate, or product placement and context integration selling robot toys. So I suspect that in a decade's time we may be regarding the period 1983-2013 as something of an anomaly, and everything may well return to "normal".


-- added --

Cutiebunny wrote:
I would say that the vast majority of anime fans that do stream/torrent/etc. are probably well educated.

I have to ask - have you ever read the comments on YouTube and Crunchyroll? ^^;
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redcar



Joined: 04 Jun 2009
Posts: 95

PostPosted: Fri Mar 09, 2012 2:40 pm Reply with quote
Thanks for the trio of articles, Justin! Learned a lot of stuff here that I never knew before.

Cutiebunny wrote:
Quote:
The real damage they do is more subtle: they allow unsuspecting and uneducated fans to consume anime outside the system, never engaging, never seeing an opportunity to give back. It's a loss of something even less tangible than a potential sale: it's the loss of mindshare.


I would say that the vast majority of anime fans that do stream/torrent/etc. are probably well educated. They know what they like and they know how to find their fix. Many of these same fans are the ones that attend conventions (where they talk about what they watch/read), buy DVDs/BluRay and other merchandise, both domestic and import.

By saying "unsuspecting and uneducated fans" it sounds like he was referring to people just getting into anime. While the majority of current fans may be well-educated, and willing to spend money on the things they love, the industry cannot be sustained if all the new fans never even learn they can (or need to) spend. Just as with other things in life, people leave anime all the time, and those spenders that leave need to be replaced by fresh blood.

I do, however, think a certain mitigating factor to this issue often goes unnoticed: the aging fan. A teenager that starts out watching every illegal stream under the sun may well begin to collect merchandise--once they pass into college and beyond and begin having disposable income. I think the problem arises when this type of fan a) leaves anime before they have a chance to give back or b) are led by habit never to support anime, always to continue illegal streaming alone. There's not much to be done about group a, and there are always going to be people in group b, but I think the anime companies' attempts at connecting with the fans is a step in the right direction towards minimizing group b. As long as the industry can find ways to nurture new fans, and make it easy for them to support the things they love when they become able, I feel like things will turn out ok.

All that being said, I still drool when I think of the places anime could go if everyone paid a quarter to the creators for each episode they consumed outside of legal channels Laughing
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invalidname



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PostPosted: Fri Mar 09, 2012 2:54 pm Reply with quote
Justin: I get Anime Network "On Demand" as part of my DirecTV package. Is there any meaningful flow of money from my DirecTV subscriber fee back to AN (and ultimately back to Japan) as part of this, or is it only valuable as an advertisement for DVDs from Sentai (and [rarely] partners like Nozomi)?

Also, would a VOD network get a straight per-subscriber fee, or would it be based on the actual number of episodes downloaded by subscribers?
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jsevakis
ANN Director of New Media


Joined: 28 Jul 2003
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PostPosted: Fri Mar 09, 2012 3:09 pm Reply with quote
invalidname wrote:
Justin: I get Anime Network "On Demand" as part of my DirecTV package. Is there any meaningful flow of money from my DirecTV subscriber fee back to AN (and ultimately back to Japan) as part of this, or is it only valuable as an advertisement for DVDs from Sentai (and [rarely] partners like Nozomi)?

Also, would a VOD network get a straight per-subscriber fee, or would it be based on the actual number of episodes downloaded by subscribers?


The Anime Network's business model is a patchwork, based on whatever level of carriage they could get with each cable and satellite operator. I don't think any of them are paying TAN a subscriber percentage like the big cable networks/conglomerates get, so that revenue is probably not happening. If you're paying anything extra for it in your area (either on a per-show or a monthly fee basis), that money is mostly going to them. But if it's just free, it's likely just marketing.

But even if it is, hey, you know what? That's their decision to offer it for free, so I certainly can't fault you for taking it! You're already an engaged fan, you know where to get the DVDs if you want them, and they're probably making you sit through a few promos before the show starts. That doesn't seem like such a terrible deal to me, but yeah, I can't really check an "I supported the industry" checkbox for that one.
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agila61



Joined: 22 Feb 2009
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PostPosted: Fri Mar 09, 2012 3:14 pm Reply with quote
Cutiebunny wrote:
Quote:
The real damage they do is more subtle: they allow unsuspecting and uneducated fans to consume anime outside the system, never engaging, never seeing an opportunity to give back. It's a loss of something even less tangible than a potential sale: it's the loss of mindshare.


I've always been amused by how much people affliated with the industry think that those who refuse to pay for this week's episode of whatever anime du jour refuse to buy any legally released anime products. It's as if the industry thinks that these anime fans (or what I assume are probably the vast majority of fans) sit at home in their parents' basement, unemployed, downloading/streaming anime, wearing stained sweat pants and holding a slightly warm cup of Top Ramen.

"Not paying" and "refusing to pay" are two quite different things. Every time there is a disruption in the bootleg anime supply chain, Crunchyroll forums are flooded by those that have had their viewing habits disrupted, and many of them state quite categorically that the site is legit, series "X" that has been available free streaming for several years and is coming out on DVD "is not available in the US", etc.

Quote:
I would say that the vast majority of anime fans that do stream/torrent/etc. are probably well educated.
... in the US at least, we would have to exclude those who are still in the process of becoming educated from this "vast majority" ~ a quite substantial share of US teenagers are less than well educated in every state of the US.

Quote:
They know what they like and they know how to find their fix. Many of these same fans are the ones that attend conventions (where they talk about what they watch/read), buy DVDs/BluRay and other merchandise, both domestic and import.

Andy many of them are the same fans that do not spend on dollar of their money in a way that sees any funds flow to the industry creating the media that they enjoy.

The various surveys that report that 5% to 25% of consumers of bootleg media also buy that media implies (1) that 75% to 95% don't, and (2) that appreciably less than 5% to 25% spend money on everything they consume as a bootleg. Watching 8 series a season and buying one of them a year would count in the 5% to 25% "who also buy that media", but being the production committees for those 32 cours with a 3.125% to 6.5% chance of being the lucky production committee that got that sale is not a very lucrative proposition.

Quote:
I'm not saying that we should present streaming/torrent sites an award for their service to anime fans worldwide. But I'm saying that they deserve at least some credit in the relative speed that anime is now released outside of Japan.

Oh, no, give them an award, as long as its a "retirement from US distribution" award, because any incremental benefit that they might have arguably provided in the past, for the majority of series each season that are licensed for streaming, at present they're just parasites in the gut of the industry.
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Veers



Joined: 31 Oct 2008
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PostPosted: Fri Mar 09, 2012 3:30 pm Reply with quote
Thanks for the interesting write-ups, Justin!

Quote:
The real damage they do is more subtle: they allow unsuspecting and uneducated fans to consume anime outside the system, never engaging, never seeing an opportunity to give back. It's a loss of something even less tangible than a potential sale: it's the loss of mindshare.
This quote really stood out to me, too, when reading this article.

spoiler[inb4 fansub ethics shitstorm]
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invalidname



Joined: 11 Aug 2004
Posts: 443
Location: Grand Rapids, MI

PostPosted: Fri Mar 09, 2012 3:37 pm Reply with quote
jsevakis wrote:
But even if it is, hey, you know what? That's their decision to offer it for free, so I certainly can't fault you for taking it! You're already an engaged fan, you know where to get the DVDs if you want them, and they're probably making you sit through a few promos before the show starts. That doesn't seem like such a terrible deal to me, but yeah, I can't really check an "I supported the industry" checkbox for that one.

No extra charge on DirecTV, just a bonus if you have the DVR. Still, it might not be unreasonable to take it as a marketing cost for Section 23 & friends, in the spirit of the late night TV runs in Japan. I wouldn't have bought Clannad and Revolutionary Girl Utena on DVD had I not seen them on AN (and yes, the latter was the dubbed, not-yet-restored CPM version of Utena).


Last edited by invalidname on Fri Mar 09, 2012 3:37 pm; edited 1 time in total
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pachy_boy



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Posts: 702

PostPosted: Fri Mar 09, 2012 3:37 pm Reply with quote
Mr. Sevakis, thank you very much for your insightful articles and helping us all better understand how things work. I definitely enjoyed reading them!
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