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Anime Expo 2008
Industry roundtable: Fansubs - The Death of Anime?

by Mikhail Koulikov,

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Expanding on a program feature that was first launched at last year's Anime Expo, AX 2008 again features a line-up of four roundtable discussions bringing together key speakers from around the North American anime and manga market. The first of these, held at 11:30 a.m. on Thursday, July 3, touched upon probably one of the most controversial issues the industry is coming up against: fansubs. Over the next hour, eight media, licensing, distribution, production and legal professionals shared their own thoughts and their companies' views on unauthorized fan distribution of anime. Anime Insider's Summer Mullins led the discussion, joined by Society for the Promotion of Japanese Animation CEO Trulee Karahashi, Axis Entertainment's Jeff Conner, Funimation's Lance Heiskell, Shawne Kleckner (The Right Stuf International), ANN's own Justin Sevakis, Ken Iyadomi of Bandai Entertainment, and Bandai's general counsel, Cynthia Ishimoto.

Mullin opened the talk by acknowledging that fansubs are an "often emotional and difficult issue", especially as anime is clearly becoming more and more popular while anime DVD sales have declined by a fifth. Her first question asked the panelists to talk about how, in their opinion, fansubs have hurt the industry, how - if ever - they have been a help, and whether at least some aspects of fansubbing can be legitimized. Answering whether fansubs have ever had a legitimate place in anime, Heiskell acknowledged that while illegal, at least at one time, fansubs did spread the word about new anime when there was no other way to educate fans. Now, however, even the ethic of fansubbing has changed from being involved with promotion to simply a means of showing status as an anime fan.

Justin Sevakis added that from the point of view of the anime industry, fansubs have no had a viable role since at least the midpoint of the "VHS days", in the mid to late 1990's. At the same time, for anime consumers, fansubs are still the only way to reacha fairly significant percentage of the titles that are potentially available, and almost the only means to stay current with the latest Japanese releases. "They are the only choice for any number of series - and that's a problem," he concluded.

Heiskell then returned to the history of fansubbing by describing the four generations of fansubs. In his view, the first generation was marked by original sources taped from Japanese television or copied from Japanese laser disks, and distribution of fansub VHS tapes via the mail. The next step saw tapes replaced with CD-R's, then, as broadband access grew, came the emergence of peer-to-peer download sites, from Napster to Hotwire, to BitTorrent. The current - and fourth - stage, about a year and a half old now, is driven by user-created content sites, the most well-known - though by far not the only one of which - is YouTube. At this stage, fansubbing has gone from something that requires a significant time investment and a level of technical expertise on the part of the potential viewer to mass penetration, with video quality that is sometimes beyond what the anime companies themselves are able to provide on their legit releases.

One root of this entire issue, notes Sevakis, lies in the fact that the entire demographic of anime fans has been shifting younger. Most fans are now in their teens, without a lot of discretionary income, and at the same time, convinced that the idea of paying of anime is ludicrous, not necessarily out of malice, but out of simple ignorance of the economics of content.

All of the panelists, led by Bandai's Iyadomi, strongly supported the need to educate fans in the ethical, legal, and economic aspects of fansubbing, in particular of the ways illegal distribution is beginning to affect anime's Japanese producers and creators. Parallels will have to be drawn to the current plight of the movie industry, noted Kleckner, especially as rising costs begin to limit the added value that anime companies can provide with dubs, packaging, and bonus features. More specifically, Conner argued that an "iTunes model" will need to be developed for anime distribution, with a global approach that seeks the goal of day-and-date download options for fans around the world. Once this is in place, the entire American anime market could split into a side providing access to unpackaged content, and a second area offering "fetish objects" (i.e. packaged products).

Heiskell followed this up with an appeal to all of his panelists to do a better job of matching fans' expectations. No matter what happens, "great stories" will still be created by Japan's animators, and American fans will want to access them. The real task for the strategists of America's anime industry will be figuring out a way of participating in this process.

Of course, there will be many difficulties. Karahashi brought up anime fans' increasing frustration with delay times between licensing and release of anime in America. Sevakis noted that even in principle, comparing the mechanics and scheduling details of a Japanese television show and an American DVD release is difficult, if not impossible. Sevakis noted that it's tough to compare Japanese TV to American DVD; download-to-own sites and services bring their own issues, in particular having to do with digital rights management, many of which have not yet been resolved .

There are several other issues that are just now emerging in the media distribution space both in Japan and in the U.S. that may affect unauthorized fan distribution. One of these, noted by Conner, has to do with Internet providers increasing interest in returning to monitoring and potentially limiting bandwidth use. Another, which Heiskell cited as a major issue, is the emergence of fee-based Internet sites that do not have relationships with anime license-holders, and in fact, operate entirely within the realm of media piracy. Releasing English-subtitled or dubbed anime online at the same time that it is aired in Japan has been mentioned frequently as a possible solution to the fansub crisis, but Klenckner reminded his fellow panelists that appealing as that sounds, often it is simply not feasible. Episodes are frequently delivered to Japanese broadcasters with very little lead time before their scheduled broadcasts, there are often significant differences between TV and DVD versions of Japanese anime, and if nothing else, significant time is needed to actually put together licensing contracts. He also reminded both the panelists and the audience that while it is easy to imagine that Japanese customers get free access to televised anime, what needs to be kept in mind is that they are also exposed to advertising and subscription fees. Iyadomi brought in a further complicating factor. When anime series are created and produced in Japan, often by committees of tens of individual companies, digital rights are frequently simply not considered. Any digital distribution contracts may have to be approved by all of the participants in the process, and that too is likely to take time, money, and effort.

Another question all of the panelists approached centered around ways of educating anime users. Funimation very much has, with an FAQ of Fansubbing hosted on their company's website, and an overall strategic three-pronged approach. Fan education is one of its aspects, providing legal alternatives to fansubs is the second, and the third and final is active enforcement of its licenses and copyrights, although with an emphasis on interdiction at the level of fansub distribution sites, not individual downloaders.

To this end, Funimation's legal staff monitors its properties daily on eBay and various user-generated content sites. In the last six weeks, for example, some 20,000 clips of Funimation's anime series and movies have been taken out of illegal distribution, five thousand of them from a single site. In a span of six unspecified months, there were 200,000 such clips removed from a range of websites. In Heiskell's words, the fight against fansubs is a mountain, but with sufficient resources, companies can climb it.

As an outside, third-party observer without a direct stake in the industry, Sevakis noted that ultimately, the anime industry has lost control over how its content is used and disseminated. Fansubs and illegal distribution in general will always go on at some level, so emphasis should fall on addressing the demand for anime first, while of course limiting the supply of illegal content by going after the worst offenders.

This, of course, is also not always nearly as easy as one would hope. Ishimoto noted that many individuals and sites are located outside the U.S., and there is little an American company can do against them. At the same tiime, in Japan, anime companies like Sunrise are beginning to directly pursue those who upload anime for online distribution. Until the "safe harbor provision" of America's Digital Millennium Copyright Act, which places the burden of enforcing distribution of unauthorized content on its producers, rather than on the hosts is addressed by U.S. courts, as it may be in the current litigation by Viacom against YouTube, anime companies will remain constrained in their ability to respond to fansub distribution.

Recently, there has been at least one case of a website known for illegal distribution actively working with Japanese anime distributors and attracting investment capital. The panelists were asked whether, in their opinion, it would ever be a good move to ally their own companies, or others in the industry, with sites of this type. Heiskell's answer was that if a service has broken off all ties with its shady past and has gone "100% legit", there should be no issues cooperating with it. In general, Funimation has been viewing its corporate role as one of acquiring rights, not DVDs, and that in general, there is no reason for any company to be particularly attached to distribution via DVD, as opposed to any other method.

As the panel wrapped up, Sevakis predicted that ultimately, the anime DVD market in North America will be reserved for the "really A-list", collectible titles, while the average Japanese animated television series, dozens of which come out every season and float off into obscurity several months later, not particularly missed by anyone, will be prime candidates for digital distribution. Kleckner agreed, though noting that a significant number of American fans are still interested in hearing English voices on their anime, a sevice that fansubbers (though not illegal distributors) will be unable to provide by definition.

For the final question of the hour, the panelists were asked to talk about the changes they see in how anime is distributed in the U.S. Conner is of the opinion that anime companies need to look at other ways of expanding revenue. DVD distribution may not be enough, and even anime itself may be too niche a market to support the costs that any company is faced with. Karahashee agreed, saying that anime companies both in the U.S. and in Japan need to be more revolutionary in their thinking in order to create a bigger market for Japanese animation. At the same time, more anime fans need to be aware of the full results and implications of illegal and unauthorized distribution of fansubs. For Funimation, continuing the three-pronged approach of fan education, ownership of digital distribution, and active enforcement will continue to be the priority.

Kleckner's view is that the DVD-is-dead mantra is at least a few years too early. The anime industry has to keep adapting to user needs. Bandai, for its part, is committed to studying the feasibility of simultaneous worldwide releases of its anime and ways of increasing advertising revenue. Sevakis wrapped the panel up by reminding that the issue of unauthorized content distribution is not limited to anime. Ishimoto closed the hour by stating unequivocally that from a legal perspective, fansub distribution is stealing; it can be explained, but not justified.

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