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The Anime Economy - Part 3: Digital Pennies


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agila61



Joined: 22 Feb 2009
Posts: 3213
Location: NE Ohio
PostPosted: Fri Mar 09, 2012 10:03 pm Reply with quote
Cutiebunny wrote:
agila61 wrote:

"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.


..Until these same users find an alternative site.

Some do. Some don't. Don't stereotype: people in the real world never comes in the nice tide pigeonholes of online forum arguments. People in the real world lie along ranges on multiple dimensions.

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I think it's highly unrealistic to expect that the majority of anime fans will only buy manga, anime or both especially when there are free alternatives out there that are easily viewed.

So? "only buy" is a false dichotomy. There are people who will only consume legit media, there are people who will only consume legit media if they can't find bootlegs, and there are people on any spot you care to name in between the two extremes.

And "A majority of fans" is a red herring: there is no change to Crunchyroll's success whether 70,000 subscribers is 2% or 5% or 10% of fans. What matters is the total number of "fans" inside of the market. Whether there are an equal number, three times as many, or ten times as many outside the market doesn't change the revenue stream generated by the fans inside the market.

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Most anime fans are limited to the funds in their bank account and yet are bombarded by an infinite amount of products to buy. Economically speaking, the average person, in a similar situation, would enjoy whatever was available for free, and spend their money on other merchandise. It harks back to the "Why buy the cow...?" phrase.
But as RyanSaotome observes, the streams you can get for free are much lower quality. And downloading free anime is not free, any more than growing your own food in your own backyard is free ~ people who are working for a living will often be happy to pay someone else to store it and catalog it, to make sure its available for their tablet or TV set-top box without having to have a PC running as a media server, and etc.

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... 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.

Assuming they're just as impatient as American anime fans are when it comes to wanting anime/manga almost simultaneously to Japanese releases, they're probably fluent in English.

You can assume that US teenagers are fluent in English if you wish, I see the writing of some of them a couple of years later ... and so, no, I'm not going to assume that American teenagers are fluent in English.

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... While it's true that there are many fansub groups that do release anime in Spanish, French, etc., many times these groups translate it from the English fansub.

... how does a comment about US teenagers not necessarily being well educated turn into a discussion of anime in Spanish, French, etc. Spanish, I can see. French? How many US teenagers speak fluent enough French to be chasing down French fansubs?

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Assuming that they're watching it in English and are not living in a predominantly English speaking country, that means that they have a decent level of education or come from families that are well educated and multilingual.
I don't think that the US can yet be characterized as not living in a predominantly English speaking country.

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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.

Has there ever been a survey to the effect of "If you stream/torrent anime on a weekly basis, do you buy any authentic anime merchandise, and, if so, how much do you spend on it per year?". I can't recall ever seeing any survey done. I assure you, if this were asked, you would find that the majority of people who stream/torrent purchase at least 1 authentic good per year.
The R1 industry doesn't have that kind of money and anime is not a big enough portion of the US entertainment industry to attract many academic researchers into doing just surveys. So the surveys that are done are on broader types of media, which gives us a range of way that people act with different media.

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The industry needs to come to the realization that, with limited funds, people will choose to make the most of it...meaning that, if anime/manga is readily available and free, they're going to go that route and spend their money on something else. Merchandise is probably the best bet for the industry - I can watch/read whatever I want online, but I can't print out a Tiger & Bunny nendoroid or an oppai mousepoad.
Or sell services of value to people who have the money to pay for them. We know that given a choice between free downloading and free streaming, a majority of bootleg viewers prefer streaming at a steep reduction in video quality. So it might be that there are some people who would be willing to pay for the convenience of streaming but at the higher quality of video possible when the site hosts the stream rather than leeching off a free video upload site ... and getting the stream to devices you already have, when you want to have it.

I know that in the theoretical model you have constructed here those people won't exist ~ but it seems that there are over 50,000 of such non-existent people, and given the rate of growth between 2010 and 2011, likely eventually over 100,000 and possibly 200,000 or more such non-existent people.

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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.

I've read, several times on these forums that various users have said that they have viewed an anime via stream/torrent and, when released in the US, bought the licensed DVDs. The industry would lose these sales if these fans did not watch the anime via free stream/torrent.
Well no, not the first release buyers, since the people willing to pay $60 for an anime box set will often be happy to pay $20/quarter for four to eight to sixteen series simulcasts, while understanding perfectly well that the simulcast is just paying for access, like watching a TV show, or reading a manga serial, not paying for ownership, like a BD or a tankoubon.

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You can argue that they'll buy the series if they watch it first on CR, but that's a stupid argument.

OK, instead of arguing they will, I'll observe that they do. If people "on these forums that various users have said" is evidence that people watch bootlegs and then buy the DVDs, the fact that people on these forums and Crunchyroll's have said they bought a series after seeing the Crunchyroll stream is evidence with exactly the same weight.

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Why would you pay twice for the same good? If I pay to watch a series online, why would I spend more money to have a hard copy of it?
To have the hard copy.

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I would *really* have to love a series for me to spend $50+ to own the full series. And I really doubt that the average fan would be willing to do that with a lot of series, especially when there are free alternatives.

The free alternative to buying a hard copy is shoplifting? I'm not sure what is the free alternative to buying a hard copy.

For most people, there'd be no difference between the interest in buying a DVD or BD of a series that has been watched as a bootleg and a series watched as a legit stream. You buy it because you want a hard copy of that series.
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TheAncientOne



Joined: 06 Oct 2010
Posts: 1868
Location: USA (mid-south)
PostPosted: Fri Mar 09, 2012 10:43 pm Reply with quote
Cutiebunny wrote:

Merchandise is probably the best bet for the industry - I can watch/read whatever I want online, but I can't print out a Tiger & Bunny nendoroid or an oppai mousepoad.

That is true for now.

If you could take a peek into the future 20-25 years down the road, I am certain you would see complaints for figure makers about copies of their designs being uploaded to the internet and used to make knockoffs using home 3D printers.

For anyone that thinks this assertion is silly, I have the perspective of easily remembering when inkjet printers were almost as expensive as the current low end 3D printers are and almost as crude, and laser printers cost close to what one might pay for a car.

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You can argue that they'll buy the series if they watch it first on CR, but that's a stupid argument. Why would you pay twice for the same good? If I pay to watch a series online, why would I spend more money to have a hard copy of it? I would *really* have to love a series for me to spend $50+ to own the full series. And I really doubt that the average fan would be willing to do that with a lot of series, especially when there are free alternatives.

There really is little need to "argue" as unless a number of people are habitual liars, they do exactly this. Some people have a need to own something physical, or the reliability of having access even if license agreements lapse.

Many of those same people also believe in supporting legitimate avenues, especially since they probably aren't going to purchase every series they view (and viewing something you enjoy, with no intention of compensating the rights holder is piracy, pure and simple).

For someone that is employed, paying for CR is a very marginal cost. I pay for a CR premium membership, TAN membership, and Funimation Elite membership, all while living on my own and currently working only a part-time job.

Back in the days when I still did fansubs, you couldn't count on any real schedule from streaming sites. Stream quality could vary depending not only on the third party host being used, but the experience of the person handling the encoding. Subtitles could vary in style and tone within the same series (especially if the site went for "earliest source available"). Episodes could disappear if takedown notices were issued. Episodes could be delayed if the popularity of the show waned and the fansub group lost interest. I've found none of these to be a problem with legitimate streams.
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androvsky



Joined: 22 Jul 2003
Posts: 20
PostPosted: Fri Mar 09, 2012 10:59 pm Reply with quote
Just catching up on the thread, but to echo some of the first page comments, not only have I seen the flood of people convinced that a recently shut down streaming site was legit, I've seen people within the last year who thought Crunchyroll was still a bootleg operation. I think there's a serious visibility problem with them even among anime fans. Finally getting their app on game consoles will help a lot, I'm sure, which is what I suspect their big announcement is.
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Spotlesseden



Joined: 09 Sep 2004
Posts: 3514
Location: earth
PostPosted: Sat Mar 10, 2012 2:06 am Reply with quote
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.

So it could be anywhere from $4.17/mth to $6.95/mth. I've been using $5/mth as a conservative guesstimate.


you are math is off. because if you paid $59/12month or $50/12mth, that means they got all the money already. They are going to use those money for investment into other stuffs.

And the average return in the stock market is around 10%.

Even if they put the money in the bank and do nothing. $50/12 month is not = $4.17/month because of compound interest.
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Kohii



Joined: 12 Nov 2010
Posts: 428
PostPosted: Sat Mar 10, 2012 2:44 am Reply with quote
That was a very enlightening trilogy. Thank you for these very educational articles. My first experience with anime was back when I was 7, watching Saint Seiya and Captain Tsubasa on Saturday mornings. Then came Dragon Ball/Z/GT, then I pretty much forgot about til I re-discovered Ranma on youtube. I liked it so much that I started collecting the manga (from Borders, no less). Then came Chobits, Elfen Lied, Haruhi, and now I have a pretty stacked bookshelf. I started getting into figures (esp. those lovely nendoroids) but I'm really trying to quit on buying those (once I'm done with all of GSC's Madoka scale figures I'll be done, I promise...).

At any rate, I'm glad for the way things are going for CR and wish them even better. I have a premium membership. I don't have one for TAN since I buy most Sentai shows that I like, and quite frankly, their website is a little unappealing (I know it is stupid, but it kinda turns me off). Anyway, thanks again for the articles and here's to hoping the American licensors figure something out soon.
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BruinOtaku



Joined: 10 Mar 2012
Posts: 1
PostPosted: Sat Mar 10, 2012 5:11 am Reply with quote
Spotlesseden wrote:
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.

So it could be anywhere from $4.17/mth to $6.95/mth. I've been using $5/mth as a conservative guesstimate.


you are math is off. because if you paid $59/12month or $50/12mth, that means they got all the money already. They are going to use those money for investment into other stuffs.

And the average return in the stock market is around 10%.

Even if they put the money in the bank and do nothing. $50/12 month is not = $4.17/month because of compound interest.


Please tell me how I can get an average return in the stock market of 10% at the current times. I know the historical returns of the stock market are around 10% but the best I can do recently are dividend paying stocks and ETF's at around 5-7%.

By the way, I am also a Crunchyroll Premium member and I also buy box sets of series that I like as well as buying figures/merchandise of my favorite series from US and Japanese retailers. Very interesting series on the economics of anime that I really enjoyed reading by the way.
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Polycell



Joined: 16 Jan 2012
Posts: 4623
PostPosted: Sat Mar 10, 2012 5:58 am Reply with quote
Kohii wrote:
I have a premium membership. I don't have one for TAN since I buy most Sentai shows that I like, and quite frankly, their website is a little unappealing (I know it is stupid, but it kinda turns me off).
I'm glad I'm not the only one. I was going to get a month's subscription to finish Ro-Kyu-Bu, but the signup process completely turned me off(I'm just here to watch anime, not for Facebook-lite).
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aeris2001x2



Joined: 16 Oct 2008
Posts: 64
PostPosted: Sat Mar 10, 2012 6:37 am Reply with quote
From a moral stand point, could anyone rate my current anime habits?

I subscribe to Crunchyroll even though I don't watch anything on there. I download fansubs constantly. The shows that are good enough I buy on DVD if they get a UK release, and if no UK release will import from the US if no more then a British pound an episode. Have spent about two thousand pounds last 4 years (most shows not good enough to own) I figure the Anime shows that were not good enough are covered by my crunchy roll subscription. I also spent 6 years buying thousands of pounds of Anime blind. 1998-2004

Can I sleep well at night or should I be kept up by my conscience? If the latter in what ways can I improve my support?
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Kayakuguri



Joined: 28 Jan 2012
Posts: 8
PostPosted: Sat Mar 10, 2012 6:44 am 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 teared up when I read this. Is that normal?

Thank you for this most insightful article. It makes one appreciate the industry and the risks they take a lot more, even if they only do so for the money. I think a lot of fans take anime for granted, and those who aren't fans quite often underestimate the effort required to make anime.
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agila61



Joined: 22 Feb 2009
Posts: 3213
Location: NE Ohio
PostPosted: Sat Mar 10, 2012 7:15 am Reply with quote
Spotlesseden wrote:
Even if they put the money in the bank and do nothing. $50/12 month is not = $4.17/month because of compound interest.
The term for this is quibbling ~ with neither the number of subscribers known with precision, nor the distribution of subscribers, the approximation is too rough to be affected by currrent rates of return on risk free securities over an average of six months.
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_V_



Joined: 13 Apr 2009
Posts: 619
PostPosted: Sat Mar 10, 2012 12:52 pm Reply with quote
Quote:
It wasn't until the 2011 Tohoku Earthquake and tsunami wiped out Sony's only broadcast tape manufacturing plant (and the worldwide tape shortage that followed) that many of the bigger licensors started taking a serious look at going "tapeless".


I remember that Sam Pinansky explained this during the ANNcast following the 2011 earthquake, but just exactly how bad did that shortage turn out to be?

Did it affect release schedules in any significant way? Or was it more that the fear of an even bigger shortage made them finally question why they still use tapes, thus serving as a wake-up call to the industry?
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Saffire



Joined: 25 Nov 2007
Posts: 1255
Location: Iowa, USA
PostPosted: Sat Mar 10, 2012 1:31 pm Reply with quote
_V_ wrote:
Quote:
It wasn't until the 2011 Tohoku Earthquake and tsunami wiped out Sony's only broadcast tape manufacturing plant (and the worldwide tape shortage that followed) that many of the bigger licensors started taking a serious look at going "tapeless".


I remember that Sam Pinansky explained this during the ANNcast following the 2011 earthquake, but just exactly how bad did that shortage turn out to be?

Did it affect release schedules in any significant way? Or was it more that the fear of an even bigger shortage made them finally question why they still use tapes, thus serving as a wake-up call to the industry?
Sam actually talks about this for a bit in the newest ANNCast. To help studios keep going, broadcasters ended up sending out their archived tapes to studios to be recorded over. They've got entire vaults of them, so it hasn't been a major issue yet.
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agila61



Joined: 22 Feb 2009
Posts: 3213
Location: NE Ohio
PostPosted: Sat Mar 10, 2012 1:54 pm Reply with quote
Saffire wrote:
Sam actually talks about this for a bit in the newest ANNCast. To help studios keep going, broadcasters ended up sending out their archived tapes to studios to be recorded over. They've got entire vaults of them, so it hasn't been a major issue yet.

Though unless they wanted to lose the archival footage, they would have had to digitize that material before sending the tapes.
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NotintheMood



Joined: 11 Feb 2012
Posts: 36
PostPosted: Sat Mar 10, 2012 2:14 pm Reply with quote
Quote:
If you could take a peek into the future 20-25 years down the road, I am certain you would see complaints for figure makers about copies of their designs being uploaded to the internet and used to make knockoffs using home 3D printers.

For anyone that thinks this assertion is silly, I have the perspective of easily remembering when inkjet printers were almost as expensive as the current low end 3D printers are and almost as crude, and laser printers cost close to what one might pay for a car.


I hadn't thought about this until you pointed it out, but it's true. I can not believe how cheap 3d printing is now.

Back in the day, I used to mess around with the 3d printer and scanner at the UW and I remember the 3d printer being really easy (and slow) to use. But the 3D scanner was a pain. It had a hard time with reflections and it would show up as spikes on the 3d model that would take hours to clean up. But if I had wanted to make a copy of a figure and wanted to waste an entire weekend, I could have done it.

But if the 3d scanners improve to the point that you can get a clean printable scan with almost no work. Then anyone could scan, print and upload a file.

Printing out fan art is totally do-able now, it looks like you could just get a fan art file from Thingiverse http://www.thingiverse.com/thing:12146 and print it with a 3D printing service like Shapeways http://www.shapeways.com/materials

a ceramic Totoro any one?

ETA: As an artist, I find the idea that anyone could copy your work a little frightening. But as a person that drops plates in the sink all the time; I would love to be able to print them out. Smile
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jsevakis
Former ANN Editor in Chief


Joined: 28 Jul 2003
Posts: 1684
Location: Los Angeles, CA
PostPosted: Sat Mar 10, 2012 2:48 pm Reply with quote
aeris2001x2 wrote:
From a moral stand point, could anyone rate my current anime habits?


If you feel you need to ask the question, you're a good enough person that you don't need to bother.

We spend WAY WAY WAY too much time measuring guilt in this fandom. If you spend money on and support the shows you like through legal channels, you are doing as much as can reasonably be expected of any fan. If you want to give more, buy more, or spend more, it's 100% your perogative at this point, and anything you do in that direction is something to feel good about, rather than chastising yourself for not doing before.

tl;dr: DON'T WORRY BE HAPPY
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