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Otakon 2004
State of the Anime Industry

by George Phillips,
Matt Greenfield (ADV Films, Director/Co-Founder), Lance Heiskel (FUNimation, Brand Manager), Eiso Kawamoto (Viz, Online Marketting), Kris Kleckner (Right Stuf, Producer), Judy Defrieze (Right Stuf, Asst. Producer), Kip Kaplan (ADR Director of Hammerboy)

In years past, the hot-topic was the industry's relationship to fansubs. This year proved no exception as the first question posed by the audience focused on Bittorrent and the new "culture" surrounding it.

Arguments in support of the distribution of fansubs included the prevailence of cosplayers wearing costumes from unreleased shows, including Full Metal Alchemist costumes. Some audience members suggested that fansubs acted as a form of advertsing. Greenfield dismissed those claims, and cited heavy losses in Asian anime markets due to prolific distribution of copied anime. Greenfield said "The US fanbase is pretty good about it, but other places are not. The problem is when you put a fansub up on Bittorrent, anyone can download it."

Rather than fansubs, Greenfield attributed the growth of the anime industry to TV exposure, where hundreds of thousands of people can see anime and then walk into a video store and buy it.

Greenfield said that he had no problem with conventions or clubs making their own in-house fansubs for screening purposes, but "whoever's doing it needs to buckle down" and buy Japanese DVD releases and not distribute the tapes, DVDs or other materials.

The bulk of bootlegging troubles is the non-enforcement of copyright laws in general, limited to a few countries.

By 1998, bootlegging became so prevailant that the anime industry was beginning to shrink. At the same time, however, the American and European industries grew to cover some of the loss. Animechecklist.net lists the number of anime produced for various years, and the downturn and subsequent recovery may be seen here.

The growth of American and European investments in anime might not directly influence the content of the anime itself. However, companies may be inclined to fund projects that would be potentially more successful in America. Japanese companies are also bending towards American and European audiences by using English signs, opening themes, on-screen text and other minor facets that the American and European markets might find attractive.

The weakening of the Japanese anime industry has also produced a large amount of series primarily devoted to selling a specific set of toys, such as Beyblade, Yu-Gi-Oh, and Pokemon. It's no longer profitable to make anime for TV and sell advertising. Instead, anime producers are increasingly relying on toy sales and international licensing to cover losses normally covered by video sales.

Looking to the future, there was general agreement that the DVD market would only last another 5 years, at which point a new technology would replace it. Blue laser DVDs and Universal Media Discs appear to be the new leading technologies set to replace DVD, and companies are already converting their catalog to high-definition. However, Greenfield said "no one wants to commit to a Betamax", referring to the old competitor to VHS tapes, which ultimately failed to remain in the market. "The world will move to high definition within the next 10 years." Another competitor is streaming media, which is also growing in Japan and abroad. Anime Network began as a Video on Demand channel, and Bandai and Adult Swim have their own VoD service. Manga Entertainment will be streaming Dead Leaves from sputnik7.com the same day as the DVD release.

The process of selecting an anime series is simple. "Ultimately, it's all entertainment. Do you like it? Is it worth doing? Those aren't always the same as making money."

Other Asian animation is entering the market, such as PlayHut Entertainment's recent release of several Chinese titles, including Bird Island, DeCheng, and Way of the Warriors. Other companies are importing flash animation and Korean animation.

Regarding "large scale theatrical releases" for anime, it's unlikely in the near future. Prints are $6-$7 thousand dollars per reel, and advertising nationwide is highly expensive. Additionally, there's little anime suitable for a wide theatrical release in the US. Instead, it's cheaper and easier to release limited prints regionally, and move them around the US over time.

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