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"Helping the Industry": Otaku Coin, The Flying Colors Foundation & You

by Callum May & Zac Bertschy,

Not too long ago, the options for supporting the anime industry were not nearly as numerous as they are today. For fans outside of Japan, it was simply a case of purchasing what was eventually licensed and picking up the occasional official merchandise that made its way overseas. This method hasn't changed and for many anime fans this is still the preferred way of making sure their money is making its way back to Japan.

While this money may make its way towards the anime industry, it's been clear that it hasn't made its way towards the creators themselves. In 2015, these issues were discussed in more detail by Studio Pierrot animator Henry Thurlow who described the shocking work conditions present at one of Japan's most successful anime studios. Animators surviving only via family assistance, exploitative production committee accounting and an average monthly wage of just US$900 are just some of the major problems described in detail by the working people of the anime industry in Japan.  For many, it soon became clear that “supporting the anime industry” and “supporting anime creators” wasn't necessarily the same thing.

The extensive media coverage of these garbage conditions opened up a wave of much-needed sympathy and understanding from the fan community at large – and also a new avenue for potential exploitation. In recent months, a whole bunch of new initiatives have popped up, all claiming to help you support the industry directly in a variety of creative ways. They range from things that seem perfectly trustworthy - like legitimate crowdfunding initiatives by trusted creators - to things that seem to raise more questions than they answer, like the Flying Colors Foundation's recent data-gathering survey. Even cryptocurrency is being invoked as a solution for the anime industry's problems, if only you'd buy in. It can be confusing to know which avenues will support creators, which will support the anime industry at large, and which ones will only support whoever's asking you for money (or data) in the first place.

In this editorial, we're going to examine a few of these recent initiatives – some of which are still ongoing, some of which have already shut down – in order to help illuminate some of the questions we should consider asking any organization claiming it needs our money, data, time or resources to help “save the industry”.

Our biggest – and still ongoing – example is the cryptocurrency project Otaku Coin.

Otaku Coin (and other cryptocurrencies)

The recent announcement of Tokyo Otaku Mode's Otaku Coin cryptocurrency project has led to a series of confusing announcements and claims. The main idea is thus: by investing in the Otaku Coin cryptocurrency project, fans can fund projects that will “contribute to the development of otaku culture”. Tokyo Otaku Mode already has a system for funding projects from their business partners named “Tokyo Otaku Mode Projects”, although the apparent benefit of Otaku Coin – according to Tokyo Otaku Mode - would be the lack of exchange fees involved in funding these projects.

The exchange fees aren't really what they're using to sell Otaku Coin to the masses, though – they're doing that by claiming that purchasing Otaku Coin is a direct way to support the anime industry. Most recently the project's English Twitter feed claimed that “Otaku Coin will be able to solve the problems in anime industry such as fund, monetization, pirated version, etc.!” This has been a part of Otaku Coin's messaging from the very start, with their initial statement claiming that Otaku Coin will let users support anime creators through donations.

By announcing Otaku Coin long before the project was ready to be launched, there has been mixed messaging regarding whether it would or wouldn't be an Initial Coin Offering (ICO), which is basically an unregulated fundraising period for a new cryptocurrency offering, allowing buyers in early for a percentage – also a haven for fraud. There was further confusion over what services would accept the cryptocurrency, and at the very least, the strong appearance of a conflict of interest with Tokyo Otaku Mode. After these questions were raised again and again, Tokyo Otaku Mode announced the company would “distance itself” from Otaku Coin and consider launching the currency without an ICO, but very few details about what this meant from a practical or material standpoint were given. Meanwhile, it was previously stated that Otaku Coin would launch by providing coins to Tokyo Otaku Mode users first – and their May 9th meeting made no mention of the ICO idea at all. It isn't clear how Otaku Coin is supposed to help these working people – which leads us to another important question to ask.

Who Supports Otaku Coin?

With regard to supporting underpaid animators and the industry-at-large, the important question to ask is, “Are any of the people this project is supposed to help actually supporting it?” In the case of Otaku Coin, there are no animators or 2D animation teams involved. Rather, the board of advisors is made up of CEOs of IT companies familiar with blockchain, as well as anime journalists, including briefly the publisher of this site, Christopher Macdonald, who responded to request for comment by explaining why he joined the board:

"I joined the board because I was extremely skeptical that a cryptocurrency project could benefit the anime industry in a meaningful way, but I supported the goals of the project such that I believed that it deserved to be given the chance and researched. I haven't been involved, or paying close attention in quite a while, so I don't know where things stand now, but I am happy to see they are thinking of abandoning the ICO model, which is one of the biggest problems with cryptocurrencies." Macdonald left the advisory board in Spring 2018; no further comment was given.

An initiative that truly supports animators will be publicly supported by animators. Although many anime staff avoid speaking about the troubling issues in the anime industry out of fear of being blacklisted, some significant names in the industry like Fullmetal Alchemist: Brotherhood director Yasuhiro Irie do put their voice forward. These initiatives won't need flashy gimmicks to help sell them, and they won't need massive IT companies to control and manage them. If you're looking to support those within the anime industry, you will be able to see and hear from the exact people who need that help.

There's still one major question left to ask that Otaku Coin can help us illustrate.

Where Does Your Money Go?

It's important to know the specifics of anything that states that it donates your money to “anime creators”. In the case of Otaku Coin, they currently have imprecise plans for how to deliver Otaku Coin to your favorite anime creator, with Tokyo Otaku Mode COO Hajime Ataka stating that, “Fans can find out which creators are involved in series they enjoy by visiting anime database websites, and if they decide to offer the creators support, they can use Otaku Coins to do so.” This system would only benefit the names anime fans are aware of, while ignoring those who often go uncredited and underpaid. In 2015, Thurlow described the industry standard for crediting in-between animators claiming that “Pretty much all Douga-man, outside of the parent-companies’ personal in-between animation staff, don't get credited at all.”

Additionally, there's been further doubts about how much money Otaku Coin will give to those within the anime industry after claiming 39% for “operating expenses”, which means Tokyo Otaku Mode and the members of their Otaku Coin Preparation Committee take nearly half of  every transaction before any of it gets into the hands of the people they're claiming to support. When asked directly “isn't this just a scheme to make Tokyo Otaku Mode a lot of money?”, COO Ataka replied back with a list of their business partners, saying they'd like Otaku Coin to “become the currency of a community with shared goals and values”. That “community” appears to be defined entirely by Tokyo Otaku Mode and their chosen business partners. What remains to be seen – or even just explained – is how this currency would materially benefit anyone outside that group of investors.

Before supporting ambitious initiatives, it's important to know the specifics regarding who the money is going to and how it will be getting there. If you're not satisfied with the answers, it's definitely worth backing away and finding a project that can help you support the people you want to help.

Other Cryptocurrencies

Otaku Coin isn't the only anime fan-targeted crypto project out there - Chinese cryptocurrency MOE COIN claimed that it had the support of Seikaisha (Star Seas Company) and the IOEA (International Otaku Expo Association). The idea was that with the support of these companies, the cryptocurrency's goals would appear legitimate. However, it was later found that MOE COIN had lied about these connections and didn't have support from any of these companies, leading to both Seikaisha and the IOEA making statements claiming that their names were used without permission.

Given all these questions – and the answers (or lack of answers) to them – it's hard not to come to the conclusion that these cryptocurrency projects are putting the business interests of their creators first, with a nebulous plan for “helping the anime industry” presented as a lure for low-level investors. The appeal of cryptocurrencies for many people is that they go unregulated and have no centralized bank. However, in the case of a cryptocurrency driven by a group of corporations, they are the ones making the rules and can design exactly how the coin can be used and who it gets issued to. Even with frequent updates, there have been several mixed messages, lots of damage control and little actual explanation of how this coin works. All of that seems to obscure what the basic truth appears to be: the idea with Otaku Coin is to invest your money in an unregulated currency that Tokyo Otaku Mode and its business partners will control and profit from. That's it.

But even if we encounter a project that isn't asking for money – maybe they just want us to fill out a survey – there are still important questions we should consider bringing up.

The Flying Colors Foundation

Earlier this year, a new initiative named the “Flying Colors Foundation” was revealed to have received the support of several of the most popular anime-related YouTubers. The idea for the foundation was that it would redistribute donations and conduct surveys designed to empower and connect the anime community outside of Japan with the anime industry inside Japan. FCF was run by a group of sales and data analysts who collaborated with Youtubers to gather data on anime fans. This information was then said to be publicly shared with the hopes that it would find the attention of those within the anime industry.

While it's a common belief that the anime industry doesn't care about what foreign fans want, the truth is that data about anime viewing habits outside of Japan is already provided to those in the anime industry. In a statement from Joellen Ferrer, VP of Communications at Ellation, they write, “Viewership provides both monetary contribution as well as data insight, which allows great content to continue to be created. Over the last ten years, Crunchyroll has contributed over $100 million to the anime industry via royalty payments. Crunchyroll has invested in over 40 co-productions, helping to foster creativity within the industry.

Further issues emerged when the foundation failed to mention how the surveys would be delivered and included intrusive questions pertaining to mental health.

After publicly announcing the project, the Flying Colors Foundation received almost immediate backlash regarding its many flaws. The organizers had offered for-profit incentives to influencers in return for their backing, they had no evidence that the surveys would help the anime industry, and the survey itself was dangerously intrusive. After months of questioning and a lack of transparency from those involved, the Flying Colors Foundation announced that they would close the project immediately at the end of March this year.

The anime industry doesn't require information about your mental health, or anything else about you for that matter – they do need to know which shows you're watching, information already being provided to them by their business partners. Any initiative asking for our data should be able to answer our basic questions about these matters – otherwise, we can't be blamed for concluding that their project may be a naïve attempt at best, and a data mining scam at worst.

So How Can We Support the Anime Industry?

There will always be dodgy messaging and dishonest claims, but the reason why it's important to ask these questions is so that you can find your way back to a legitimate way to support the anime industry. In an interview with Crunchyroll, the staff of Classroom of the Elite were asked how fans could support anime. Director Seiji Kishi's response was, “The best way to support anime is definitely just to watch it and enjoy it in any way you can. And if you can, to buy the DVDs and such. Also, nowadays, crowdfunding is an option. Since there are ways you can support it directly now, we'd love it if you participate in that aggressively, and help make anime even better.

In regards to simply helping more anime get made, the answer is fairly simple. Anime streaming services send money back to the anime industry based on your viewing habits and purchasing licensed merchandise and physical media is always an extra bonus for those that can afford it. Crowdfunding also offers a way for ambitious projects to get greenlit and receive further support. Most recently Gunsmith Cats creator Kenichi Sonoda successfully reached his first goal on Kickstarter for his new Bean Bandit short film.

However, these are only ways to support the creation of anime, rather than the creators of anime. For example, AEYAC is a non-profit organization dedicated to helping young animators. They provide job hunting support, training and information on how to create a stable career within animation. All of the information you'll need regarding their activities and what they spend donations on is publicly reported on their website. They occasionally do drives for donations and public events, so it's worth keeping up with their feed on Twitter.

There is also the Japanese Animation Creators Association (JAniCA) that hopes to improve conditions for anime creators in the industry. The project is run by notable creators within the anime industry to campaign for better health care, training and working conditions. Their most successful program is the Young Animators Training Project, which was approved for funding by the Japanese Government. This project encourages anime studios to train young animators in the studio by creating short animated films. Some of these, like Death Billiards and Little Witch Academia were later picked up for full-length series. JAniCA is funded through a membership program for individuals and corporations. Information on that membership program is available here.

A more personal initiative is the Animator Supporters Dormitory Project. This is a program by producer Jun Sugawara to help sustain the living of a select group of talented animators. They do crowdfunding campaigns in Japanese and English each year as well as exhibited at Animazement 2018 this year. Their aim is to expand their dormitory spaces so as to support the living of an increasing amount of animators. They also run a competition called the “Animator Grand Prix” where the winner receives a year of free rent at the dormitory. This has led to some of today's best young animators being able to sustain themselves in the anime industry early on. Animator Supporters is currently running this year's crowdfunding campaign to continue expanding their dormitories whilst also creating their own short animations where proceeds will go directly back to the animators. You can learn more and support their current campaign here.

(Full disclosure: The author of this article has voluntarily assisted Animator Supporters in promotion for their crowdfunding campaigns.)

For those that want to avoid dishonest marketing and truly support anime as both an industry and a career, these are all essential questions to ask. The problems in the anime industry are complex, so it's worth being initially skeptical of any initiative claiming to “fix” everything. Decide what you want to support and consider using some of these questions to determine the best way to do so. If you know of any other initiatives that work to support those in creative industries, please share them in the comments!

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