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"...Tsuchiya states that one of the reasons Japanese animation has been so successful worldwide is that pirates bore much of the cost of experimentation and promotion. At the same time, anime piracy continues to cut down on the possible profits companies in Japan and in the US can make."
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Interesting on a personal note. After getting soundly flamed on here months ago when posting a short description of what I termed, "saturation market economics," someone in the industry validates the intent of what I was describing.

Tsuchiya's statement is not without some historical precedent. AutoCad became an industry powerhouse due to disks being traded liberally in the late 80's. Once they established a dominant foothold, they became aggressive in enforcing copyright (primarily through association with the BSA). NOTE: I work in architecture, but don't represent AutoDesk or AutoCad. I am also INTIMATELY familiar with creative copyright (media and instruments of service).

Unfortunately, 21st century media business models are too often explicitly or implicitly trying to enforce outdated legal models in age of information saturation, which can lead to market alienation or outright indifference. Personally, I think the solution is simple: value-add. Provide a differential product that is exemplary without restriction that allows the consumer to feel a purchase is above and beyond what is offered via gray channels.

Simply put in anime terms, let the fansubbers do the legwork of "saturation market economics" and offer a product via soft-media (the internet without DRM) or hard-media (DVD, CD, HD) that makes people say, "Damn! I MUST buy this!" I know I'd love to see the anime I like upsampled or filmed for HD (once the standards war levels out). I'd plunk down a large amount of cash.

As a note, I doubt I'll argue any points regarding my views (no one's going to change them at present--I do my own business model research), but I'm interested in reading intelligent rebuttals or affirmations that aren't from the mouths of simple-minded zealots.

Quote:

In 2006, the US market for anime is $4.35 billion; the market for manga another US$200 million.

I don't know much about business and economics and the like but HOLY COW! That's a lot of money!

LD, those numbers impressed the hell out of me....and depressed me too. I should have stayed in the art/manga/anime field instead of going into architecture.

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On a completely different note, I just got a stack of DVD's in from rightstuf. Finally got my Texhnolyze collection!

Those numbers surprised me too. But for different reasons. I figured anime would be in the billions, but certainly not close to four and a half. And manga, I figured whould be 2.5 times what it is. Hell assuming these are total market figures, and considering how much manga is actually made available to us. I am surprized we get what we do here in the US. Considering how many companies there are, and the amount of print required, 200 million is a small number. I have a newfound respect for these companies, they must run a very tight ship.

_____________________________

(I am all paying for things, but I am no saint either, and without getting into an elaborate Fan debate, lets just say I have about 15 3.5" AutoCad disks lying around here somwhere collecting dustfor free. Didn't go into that field though.)

ironwarrior wrote:

Unfortunately, 21st century media business models are too often explicitly or implicitly trying to enforce outdated legal models in age of information saturation, which can lead to market alienation or outright indifference. Personally, I think the solution is simple: value-add. Provide a differential product that is exemplary without restriction that allows the consumer to feel a purchase is above and beyond what is offered via gray channels.

Couldn't agree with you more. I think the Digital Millennium Copyright Act is a prime example of such poorly written legislation. Which it shouldn't be, considering it was written in the late 90's. It probably started with good intent, but throw in that 2 very old gray-haired judges oversaw it, and wrote it, it is no surprize that it ignored modern buisness models or technolgy. Despite its modern sounding name, it is nothing more than laws imposing the old ways of doings things on to people(for various reasons I might add), while at the same time stifling new ways. When one gets down to the nitty gritty it is a huge roadblock in the entertainment free market.

Like I said, they probably had the best intenions, but was horribly written as it ignores reality. Without providing the numerous examples, I will give just one off the top of my head. Internet radio, larger than both XM and Sirius combined. They pay for the music they play. Using this bill compaines are tying to shut them down. Result if it happens, people who listened for free before with ADs to there favorite tunes on radio stations that payed royalites, will now listen to them for free by downloading them. Losing their value-added genre specific, radio hosts and track selection for there favorite types of music. All of which they would now have to do themselves. And companies lose another way they can collect money for there products.

ironwarrior wrote:

"...Tsuchiya states that one of the reasons Japanese animation has been so successful worldwide is that pirates bore much of the cost of experimentation and promotion. At the same time, anime piracy continues to cut down on the possible profits companies in Japan and in the US can make."
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Simply put in anime terms, let the fansubbers do the legwork of "saturation market economics" and offer a product via soft-media (the internet without DRM) or hard-media (DVD, CD, HD) that makes people say, "Damn! I MUST buy this!" I know I'd love to see the anime I like upsampled or filmed for HD (once the standards war levels out). I'd plunk down a large amount of cash.

Exactly why I was happy to spend every penny on the entirety of the NGE Platinum editions with the silver covers, and all current and upcoming Limited Edition volumes of Suzumiya Haruhi no Yuuutsu, to name examples.

I doubt without a.f.k., Haruhi would have done so well here, let alone anybody have known about it, and exactly because no one knew what it was; it really did come out of nowhere.

Dargonxtc, thanks for replying! And, I still have nightmares about floppy disks Wink

I have been watching the internet radio fiasco intently as I believe the outcome will set precedent for future online media distribution. Unfortunately, a "win" for consumers could be a loss due the RIAA, arguably the most hated legalistic group in the world.

Here in redneck country, we have a saying, "Pigs get fed and hogs get slaughtered." Basically: greed is NOT good. I obviously have a vested interest in copyright protection, but not to the point that end-users/consumer bear an unreasonable cost for services/products that don't convey value, be that value explicit (hard) or intrinsic (perceived). I believe value-add can provide a balance.

SharinganEye, you make an excellent and salient point and definitely reiterate Tsuchiya's statement.

"I doubt without a.f.k., Haruhi would have done so well here, let alone anybody have known about it, and exactly because no one knew what it was; it really did come out of nowhere."

Before I had access to broadband and fansubbing on a regular basis, I might have spent $100 in a year on anime. Ever since I have been downloading anime, I have spent $1000's of dollars on DVD's due to being exposed to a tremendous amount of material.

As with you, I look for the value-added sets that provide something that can't be offered except through a corporate license and distribution. Noir was a good example for me by way of something very simple: a free T-shirt. Instead of buying a thinpak, I bought the collector's box and individual DVD's because I wanted that damn T-shirt! (ha-ha).

I hope the distributors see past marketing models created by lawyers and expand to market models that satisfy consumers.

LydiaDianne wrote:

Quote:

In 2006, the US market for anime is $4.35 billion; the market for manga another US$200 million.

I don't know much about business and economics and the like but HOLY COW! That's a lot of money!

A-MEN!!! My mouth is on the floor.

I think you're beginning to see people holding anime back since so many people have "already seen it" that there isn't enough money to be made.

I mean, now you're seeing titles in the company booths going past the $30 mark. One has to really wonder when we're finally just going to see the JASRAC lawsuit against YouTube (I'm already 'over' by 4 months.) and be done with it.

I mean, I can understand how companies believe the piracy and the fansubs and downloads of already-licensed titles are undercutting the industry -- and the fact is that, sooner or later, the excrement is going to hit the air circulator.

On the other hand, there is the thing I told one of the main licensing guys at ADV: There are things I've seen in fansubs (the two unlicensed Kaleido Star OVA's, as two examples) that are simply that good that "You license it, and I'll be first in line to get it."

One really has to wonder whether the anime fans, at this point, are more blessing or curse.

ironwarrior wrote:

Personally, I think the solution is simple: value-add. Provide a differential product that is exemplary without restriction that allows the consumer to feel a purchase is above and beyond what is offered via gray channels.
Simply put in anime terms, let the fansubbers do the legwork of "saturation market economics" and offer a product via soft-media (the internet without DRM) or hard-media (DVD, CD, HD) that makes people say, "Damn! I MUST buy this!" I know I'd love to see the anime I like upsampled or filmed for HD (once the standards war levels out). I'd plunk down a large amount of cash.

In 100% agreement with you up until this point. While I agree that this is the right track of thinking, the problem is that nobody yet has figured out what value-add would entice enough people to buy. The industry has so far tried everything from toys to OST's to premium packaging. When the product itself remains stolen and everywhere, no bonuses are all that compelling to non-hardcore collector consumers. (It could be argued that non-collectors buying anime before its common availability on TV and online was a market bubble, and that artificially inflated expectations on all but the truly A-list anime.)

The issue with the value-add itself being media is that if the value-add is that compelling (and DRM-free), it gets traded online too and joins the gray/black market, therefore limiting its usefulness.

If there's one thing the industry has going for it (for the time being), it's that an HD-DVD or BD is still waaaay better quality than a reasonably-sized fansub, even if it's 1080p/h.264/DD5.1/Softsubbed. But how long will that gap last, with technology improving at the pace it is?

Honestly, I think things will eventually evolve to a point where iTunes is just now approaching for music, where purchases are so easy to make and use that laziness wins over cheapness and people simply buy rather than try to track down a torrent file. But things are still shaking out, and nobody has any idea what will come to pass.

What's that old Chinese curse? "May you live in interesting times"?

Finally someone with reason has spoken - but they still missed the final point. What they should be doing is taking a detailed look at what people are doing to get their anime fix out there. And it boils down to - they dont care what it looks like, they are either in the camp of "must be dub" or "must be sub", and they have very limited cash and cant afford the normal DVD prices and dont have credit cards available, and want to WATCH it online, and dont want to download it.

So that being said, what is the future of anime? An online master library of all anime ever produced, available as dubs and subs for every language in the world, directly viewable from your computer, that you can buy a gift card for in the store with cash to power up your account (or use a credit card online), that doesnt cost an arm and a leg.

Where that will lead to is cheap subscription based VOD systems, since PPV doesnt work in the end - although people think PPV is cheap, when they start to add up the PPV cost of watching a ton of anime, they then wonder if they can get to view a ton of anime for a real low price.

Finally, they will have to change the VOD subscription to VOD a-la-carte and make it so that anyone can come in and buy 1 month of access, or 3 months of access or 1 year of access at a time, and keep their account on "standby" until they can afford to next refill it.

So far I think that this is slowly happening in the background with The Anime Network - especially as they try to work out a deal for Akimbo on PC, since the Akimbo box is going away.

LydiaDianne wrote:

I don't know much about business and economics and the like but HOLY COW! That's a lot of money!

That's a total that includes merchandise, tv broadcast, licensing, games, DVDs, etc... DVD sales were only around 600~700 million or so.

That $4.5 billion might be impressive, but it's been pretty stagnant for the past 3 or 4 years....

-t

Last edited by Zalis116 on Fri Jul 06, 2007 10:13 pm; edited 2 times in total

Like Justin says, companies have been searching far and wide for the Holy Grain of pack-ins and value-addition. But at the same time, they've been remarkably monolithic in how they actually present the anime. I outlined a list of things that "1n7eRnet fAn$su8 f4nZ" like about fansubs and dislike about DVDs in the future of anime Talkback Thread, along with what I perceive to be some minimal-cost, technologically-feasible changes to DVDs that have a chance at appealing to these viewers.* Sure, some fansub viewers will always come up with a cheapskate justification not to buy anything, and I'm not saying that DVDs shoud alienate non-fansub-viewers by going the leet-fansub route and start throwing hardsubbed karaoke and hardsubbed text signs all over the place. But if the situation is so stagnant/desperate, wouldn't making a few little changes be worth a shot? After all, when massive blocks of relevant Japanese text go untranslated on a DVD, yet are perfectly/adequately translated in the fansubs, that's not going to change anybody's attitude for the better. Maybe I'm over-optimistic, but we all know DVDs can't compete with downloaded fansubs in speed or price. Imho there is room for improvement in DVD presentation style and quality.

Another solution might be to just give up on and stay away from certain series that gain a lot of popularity from "that" sector of the online viewership, but aren't very marketable to the general public or even the general anime viewer base. Rozen Maiden comes to mind, along with (unfortunately) others like Azumanga Daioh, AIR, and Strawberry Marshmallow. Heck, out of pity I might go get that lovely velvet artbox of RM, even though I was planning on waiting for the collection...which leads me to another point, the "wait for the boxed set" mentality.

I don't think I'm mistaken when I say that a lot of DVD-buying fansub viewers and "DVD-only" fans exhibit this mentality in some form or another. People have gotten smarter; whether they've seen the fansubs or not, they know they can get a cheaper collection down the line if they play their cards right ("I know Media-Blasters has got to come up soon in the RightStuf sale rotation!"), so that drives down single-DVD sales and overall revenue. Perhaps the solution lies in creating "artificial scarcity" with shorter (and hopefully cheaper) licensing terms and cutting back pressings to cut down on inventory overstock, thereby forcing a "get it now or you're not going to get it" atmosphere. (What do I know, maybe this is being done already.) And the re-releases and re-re-releases have to have some kind of effect; Randall was talking in another thread about how TRSI had dramatically slashed prices on the old "premium" Saber Marionette J boxed set because they couldn't move it at normal prices. Well of course it's not going to sell at normal prices, because people can get the content-eqivalent, space-saving Anime Legends version for a small fraction of the LE's price.

Okay, that's enough "armchair market expert" for one post.

Very interesting Zalis.
I agree mostly with you. I think I would fall somewhere in the middle of the two categories you described. If it is something I really want, I will pay premium, but if it's a series I can hold of on I will wait till I can get the best possible deal, or until I can't take it anymore. Whichever comes first. I must say I did enjoy partaking in that Saber Marionette J ultimate box deal, which holds three complete series, Tony K. alerted me to that one. Smile

It is a dicey subject to be sure though, but I agree with your premise that the DVD producing companies can and should do a bit more. And that as you pointed out here and elsewhere, many of them would be at low cost.

That's not to say every change must be low cost either. But to explain this I would have to go into a long explanation of cost justification, and frankly I just don't want to do that right now. But it would most likely end in a sentence like "If done right, spending more money will end up making you more money". I know, I know. Cliche.

One little thing I would like to ask though:

Zalis116 wrote:

Another solution might be to just give up on and stay away from certain series that gain a lot of popularity from "that" sector of the online viewership, but aren't very marketable to the general public or even the general anime viewer base. Rozen Maiden comes to mind, [...] Heck, out of pity I might go get that lovely velvet artbox of RM, even though I was planning on waiting for the collection...

The way you wrote that makes it sound as if Rozen Maiden was doing bad. If it is, I would like to know your source for that information. Not only because I would like to have such a source, but also because I want to see Rozen Maiden do well. But for some reason, maybe even some of the ones you mentioned here and elsewhere, I have put that title on my "will get, but later" list much like yourself. However if you can show me it is doing bad, I think I will move it up a knotch to "start buying". I think it deserves to do better, if it's not, and one of the reasons I put it on the back-burner is I never thought the show would do anything but good and I am collecting many other new shows at the moment(<---biggest reason). And I certainly don't want the companies to stop licenseing shows like this.

Thanks

Last edited by Zalis116 on Sat Jul 07, 2007 9:05 pm; edited 1 time in total

To be honest, I don't have any more sales figures details than the next average user...I've just been seeing people say things on the AoD forums about how Rozen Maiden wasn't living up to expectations, according to Geneon's presence over there. I've heard similar forum rumors that Azumanga's sales didn't live up to its massive online popularity. And Strawberry Marshmallow....well, for all I know, it could be a "surprise hit," but it doesn't seem like it. Geneon hasn't been too anxious to get the OVAs, unless the announcement is coming up at a future con.

Sorry I can't offer more than "educated speculation"...Zac also noted this trend of "popular with the wrong kind of viewer" in another thread, where the conversation went something like this:

Zac wrote:

someone or another wrote:

Geneon got Nanoha? Man, they're so gonna ruin it *clutches R2 DVD rips*

*sigh* What is it about shows like this that attract fans like these?

EDIT: See also Zac's post here concerning Super Gals, Kaleido Star, and Princess Tutu.

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