Japan Asks America to Stop Illegal Net Releases of Anime

[cyth]

Originally Posted by Mentar

Welcome to the wonderful world of the free market.
[...]
I'm agreeing with your analysis here, but I just want to point out: This is once again placing the blame on the customer. And sorry, in my book a merchant who is blaming his customers for simply refusing to buy his goods for the demanded price is kind of a sorry figure.

I'm not blaming anyone here, much less the consumer (read the reply to the next quote), that's why we have all this talk about alternative distribution methods these day. But I do want this discussion to continue with intelligent thought backed up by some factual data. Industry people have been watching this thread.

The anime companies simply can't charge more for their shows than the customers are willing to pay for them.

Yep, they can't. Well, they can, but anime aren't perceived as luxury goods in the U.S., so good luck to them; my arguments are "blaming" in on the anime consumer volume, not the actual consumers.

Or you could turn that around: While anime companies are demanding prices which are too high, they will not reach mainstream status in the U.S. or elsewhere. *shrug*

The difference between American TV shows and anime is that the majority of anime titles don't air on domestic TV channels, thus the anime home video industry can't even attempt to adjust prices to mainstream tastes. Doing so would practically be suicidal.
Last time I checked, the most downloaded English fan-subtitled anime show on the planet is Naruto with over half a million downloads each week (it also airs on American TV), while NBC wants to can Journeyman (great American TV show, btw) because its domestic TV ratings can't top 6.2 million viewers per episode. This is just to give the taste of the difference between mainstream and niché.

Sober up. The production costs are an entirely different issue. Lord of the Rings wasn't paid by DVDs in its entirety either (even though DVD sales are more important than the box office results already), and the DVDs are dirt cheap compared to the required production costs.

Should I even bother responding or can we just agree that comparing TV anime releases to major theatrical movie releases is simply a bad idea?

Blaming these very much homemade problems on the customers (and now, increasingly on the fansubbers) is very naive. I don't see any solution going down this road. No matter how hard they dream of it.

I'm pretty disappointed that it took years for the anime community and the industry to acknowledge that anime fansubbing is a lot more than just blatant piracy. Of course, bad anime properties will remain bad, and even fansubbing can't save those (it can also have a negative effect on their sales). I think the U.S. industry will just have to accept the harsh reality that anime is changing, and that fans have changed and tightened their wallets (due to various circumstances). The American anime volume may be getting bigger as these changes take effect, but the American anime consumer volume has grown smaller and become more mature and demanding. Low-priced box sets and anime DVDs may really just be an artificially perpetuated dream of the early 00's.
I agree with John on a lot of things, and I also favor his "fearful suspicion" that "American anime industry that returns to its roots as a small, cultish industry that markets to hardcore fans". I'm probably one of the few that doesn't see this as a bad thing (that way the industry will actually have to listen to wishes of hardcore fans for a change ), especially with the Internet remaining as a viable option for watching anime, but the American anime industry has a lot to lose from such an outcome. If the situation is indeed unraveling in such a direction, we might be seeing a few more American anime distributors meeting the same fate as Geneon (albeit not out of the same reasons).

[Mentar]

Originally Posted by Tri-ring

The Hong Kong boot leggers doesn’t have to deal with things like middleman margin, marketing cost, and licence fee not to mention cost differentials of Japan and China(they probably own their own machine happily churning out everything from the Matrix to anykind of anime) so yeah, they can probably make a pretty penny, but I guess you’re too busy trying to justify yourself to figure that out.

Hey, YOU are the wiseguy who is distributing numbers without any trace of proof, but which are easily and openly contradictable ... see below and learn some manners.

Physical production expense alone is at 10 dollars (approx. break down for 30,000 copies $3.5 per DVD press including basic label printing in 4 colors, $2.5 for printing of package in four colors, 70 cents for raw package, 70 cents for assembly, $2 for creative production) a unit means it’s occupying one forth of the total amount of retail price here in Japan.

Maybe that's the price for which YOU are able to produce DVDs, but that's obviously not the only and most definitely not the cheapest way to do it. Simple example: Look at bootlegs for Naruto. I don't want to list it here, but I can provide anyone PMing me with a challenge a link. Full Naruto collection of 26 DVDs with 104 episodes. Color printing, full-quality label printing, raw package, assembly and whatnot. By YOUR prices, the physical production costs would be around 100$. The bootleg shop offers all of it for 66$. They're really making a killing (of themselves)

Or look at Funimation: 5 pieces GTO boxed set for 28$. With your pricing list the physical production alone would be more than 23$, plus licences, translations, dubbing distribution, marketing, overhead, taxes etc. Does that sound reasonable for you? Or do you think they made a run of 100k pieces?

The funny thing is that I don't even doubt that the prices you listed were off for YOU. I do believe you that these were indeed the prices which YOU'D have to offer to customers for orders of this size. But everybody with only half a brain (I hope that includes you) can easily verify my numbers and see that your prices are not realistic for commercial anime productions. They are simply WAY too high. And it does not reflect well on your self-proclaimed insider knowledge that you didn't even NOTICE that they are not competitive. In other words: There are other competitors which offer a better deal.

The MaiHime example is interesting but since you have not given detail such as was it sold as a discount or was it full retail price, how many were pressed, and how much the distributors arranged hedge for loss, which normal consumers have no access to that kind of information so the comparison is basically irrelevant.

No, it's not. Because first of all I _did_ give the numbers in the response to Toua, and the numbers are representative for almost all shows, regardless of the names. If you don't know that either...

To tell you the truth they probably have no idea on how it should be priced or marketed since the studios do not have the man power, experience nor the channel connection to do it in the US, not to mention the business model is completely different then the one in Japan which is heavily dependent on rental shops as main source of purchase.

Who are "they"? You mean, the people running the anime shops in the US for the prices I listed? Well, maybe I should better send these unprofessional n00bs to you. How can they dare to do what they do?

The only thing you have demonstrated is that you lack knowedge in expense and profit.

[Kyuusai]

@Tri-Ring and Mentar:

Mentar is discussing solely physical expenses while Tri-Ring is including all expenses from press to distribution. That's where your differences in argument come about. Go back and check.

Even taking into account the full range of expenses, margins are still very high compared to other small-run DVD productions. It can be argued that they have to be, of course, but that's the way it is at the moment.

[Mentar]

Originally Posted by Toua

I'm pretty disappointed that it took years for the anime community and the industry to acknowledge that anime fansubbing is a lot more than just blatant piracy. Of course, bad anime properties will remain bad, and even fansubbing can't save those (it can also have a negative effect on their sales). I think the U.S. industry will just have to accept the harsh reality that anime is changing, and that fans have changed and tightened their wallets (due to various circumstances). The American anime volume may be getting bigger as these changes take effect, but the American anime consumer volume has grown smaller and become more mature and demanding. Low-priced box sets and anime DVDs may really just be an artificially perpetuated dream of the early 00's.

Overall I think I agree with you, but do you really think that the number of box-sets is going to shrink? To be honest, I think I've rather been observing a different trend to MORE box-sets lately. At least, I can say for sure that most of my recent anime DVD purchases have been box-sets (GTO, Elfen Lied etc), and they left me with a fuzzy feeling. Am I part of a minority here?

I agree with John on a lot of things, and I also favor his "fearful suspicion" that "American anime industry that returns to its roots as a small, cultish industry that markets to hardcore fans". I'm probably one of the few that doesn't see this as a bad thing (that way the industry will actually have to listen to wishes of hardcore fans for a change ), especially with the Internet remaining as a viable option for watching anime, but the American anime industry has a lot to lose from such an outcome. If the situation is indeed unraveling in such a direction, we might be seeing a few more American anime distributors meeting the same fate as Geneon (albeit not out of the same reasons).

I think that the American anime industry should probably change their self-image away from "enabler" to "refiner". I'd love to see some statistics here, but I wonder how many of the customers buying the anime know it beforehand, and how many buy "blindly", because I consider it extremely unlikely that I'll ever buy a new DVD without having seen it before.

I'll soon give an example in a new thread what would make _me_ a happier customer, and what would allow me to continue my personal support for the animes I like, and maybe even increase it. In a nutshell (and yea, seemingly utopian right now, but e.g. the music industry is already slowly moving in this direction) it would be some kind of flatrate agreement, in which a customer purchases the right to licence a distributor's material for his own personal use. Just the licence, and preferredly even some extra support. Like downloadable DVD images via torrent.

Anyway, that's for a different time.

[Mentar]

Originally Posted by Kyuusai

@Tri-Ring and Mentar:

Mentar is discussing solely physical expenses while Tri-Ring is including all expenses from press to distribution. That's where your differences in argument come about. Go back and check.

No. The prices which Tri-Ring listed are for the mere physical production, he explicitly said so. They do NOT include all the other extra costs, which are undoubtedly there.

My point is that Tri-Ring's numbers are way too high, at least for anything in the western-world price ranges. Based on these numbers, no American label could ever release anime in a profitable way.

[Kyuusai]

Originally Posted by Mentar

No. The prices which Tri-Ring listed are for the mere physical production, he explicitly said so. They do NOT include all the other extra costs, which are undoubtedly there.

My point is that Tri-Ring's numbers are way too high, at least for anything in the western-world price ranges. Based on these numbers, no American label could ever release anime in a profitable way.

I'll be, you're right. That's what I thought he was saying last night, then I changed my mind this morning. I don't think I'm going to post anything before noon any more. My apologies.

Being corrected, then, I'll say...

$10 for pure physical expense is absolutely ludicrous in the US.
I can't speak for Japan, but in the US, for printed, pressed DVDs and packaging to reach the cost per unit that you quoted for Japanese expense, Tri-Ring, they would have to be printed in batches of only a couple hundred. For quantities of only a thousand, for the quality of printing we typically see here in the US, the cost of a pressed, color-printed DVD-5 (all that's needed for the typical three episode release) including a case, printed artwork (sleeve and insert) and shrinkwrap should run around 1.5 US dollars. That's for a tiny run with decent materials. I can certainly believe that some of the custom work or higher quality materials can run prices up a bit, of course, but not that much, and at increasing quantities of a thousand the prices drop fast.

Insert my standard bit about online distribution's relatively near-nil distribution costs here.

[cyth]

Originally Posted by Mentar

My point is that Tri-Ring's numbers are way too high, at least for anything in the western-world price ranges. Based on these numbers, no American label could ever release anime in a profitable way.

I think he was refering to pricing in Japan. He was making a point against your "Japanese people are trained DVD-buying monkeys" assessment, so your whole reply was kind of moot. :3

Physical production expense alone is at 10 dollars [...] a unit means it’s occupying one forth of the total amount of retail price here in Japan.

I'd still like to know where these numbers are coming from specifically if it's possible (can't hurt to have verified facts on the table).

Originally Posted by Mentar

Overall I think I agree with you, but do you really think that the number of box-sets is going to shrink? To be honest, I think I've rather been observing a different trend to MORE box-sets lately. At least, I can say for sure that most of my recent anime DVD purchases have been box-sets (GTO, Elfen Lied etc), and they left me with a fuzzy feeling. Am I part of a minority here?

Box sets are basically revenue salvage releases. They may bring very little revenue per unit, but at least people will buy them. Titles these days quickly lose on consumer interest, so I'd think providing box sets as quickly as possible is the only way to go before the consumer body forgets about them. At least that's my assessment of the situation.
One thing's for sure: If the American anime industry decides to cater to hardcore anime fans and collectors only, you can bet most of the casual viewers will simply stop buying anime because prices will have to be inflated, consequently the market will shrink (IMO not such a bad thing), and box sets will be hard to come across. This *can* happen, distributors will just have to come to terms that the number of consumers will decrease drastically and adjust prices accordingly. This business model has been used successfully in the U.S. in the past (i.e. obscure gaming consoles).

[Vexx]

It also works quite nicely on "special interest" DVDs like the ones Lonely Planet, NatGeo, self-help, and the myriad other 'small volume' units seem to survive with. Many of them also cross-market with other merchandise. gosh does this sound familiar?

Of course, this is a bit self-serving because I'd be just fine with the market trending to the smaller crowd with revenue streams (a variation on the "patronage" system).

[valet]

Originally Posted by Toua

One thing's for sure: If the American anime industry decides to cater to hardcore anime fans and collectors only, you can bet most of the casual viewers will simply stop buying anime because prices will have to be inflated, consequently the market will shrink (IMO not such a bad thing), and box sets will be hard to come across. This *can* happen, distributors will just have to come to terms that the number of consumers will decrease drastically and adjust prices accordingly. This business model has been used successfully in the U.S. in the past (i.e. obscure gaming consoles).

Speaking as a casual viewer, I think this is exactly what would happen. I buy box sets because the prices are reasonable, but for $30 a disc and 5 discs a series, there's no just no way I'm a customer. I guess I couldn't blame the anime industry if it went in that direction, but ultimately it's going to put them at war with their customers. They'll be left marketing extremely expensive entertainment primarily to the US demographic least capable of paying for it and most capable of finding it for free. Even for diehard fans, the pressure to stop buying and start downloading will only increase right along with the rising prices. When you reach that point, is it even worth trying to stop people from sharing? The market is so small, the margins are so slim, you live or die by the financial disposition of a few thousand college students, and right behind them (if you're lucky) is a new generation of anime fans who've probably never bought a disc in their life.

[Midonin]

I rarely buy my DVDs for $30. Waiting a few days on Amazon lets me be able to net them for somewhere in the $15~$20 range. Much more affordable.

[ZeusIrae]

You know, the discussion is intresting but it's a little hard to discuss without data.There's too much propaganda.

For exemple John Oppliger(the ask john column) says that fansubed shows sell better.But how is this compatible with the absolute certainty tha some have(read the ANN forum) that all market studies show that dubbing is absolutely necessary in order to sell anime DVDs?

It doesn't make sense.One of the two ideas is false.But without data, it's impossible to say which one.

[cyth]

Originally Posted by ZeusIrae

For exemple John Oppliger(the ask john column) says that fansubed shows sell better.But how is this compatible with the absolute certainty tha some have(read the ANN forum) that all market studies show that dubbing is absolutely necessary in order to sell anime DVDs?

Fansubbed shows produce interest, dubbing gets them into stores. Most retail chains flat out refuse to carry DVD titles without English dubbing.

[bayoab]

Originally Posted by ZeusIrae

You know, the discussion is intresting but it's a little hard to discuss without data.There's too much propaganda.

For exemple John Oppliger(the ask john column) says that fansubed shows sell better.But how is this compatible with the absolute certainty tha some have(read the ANN forum) that all market studies show that dubbing is absolutely necessary in order to sell anime DVDs?

It doesn't make sense.One of the two ideas is false.But without data, it's impossible to say which one.

It makes perfect sense. Let's take a standard random show that isn't too niche and has broad appeal like Slayers. Let's say 80% of people who buy a show buy it with a dub and 20% of people who buy a show buy it after seeing a sub.

No dub? Instantly 80% of your potential sales are gone. Note that these people have a slightly higher attach rate than fansub watchers.

Wasn't fansubbed? Then all potential sales from the people who would have seen it and liked it are gone. This could have been up to 20% of the people, but it is still a glass with 20% more water.

Now, 20% is likely only to be 200 copies or so, but it is still 20% in an industry where the difference between a top seller and failure can be measure in hundreds or even a thousand or so sales. 80% is 800 copies and clearly makes a difference. (Super Gals S2 needed ~700 copies to break even, sub only.)

[Mentar]

Originally Posted by bayoab

It makes perfect sense. Let's take a standard random show that isn't too niche and has broad appeal like Slayers. Let's say 80% of people who buy a show buy it with a dub and 20% of people who buy a show buy it after seeing a sub.

No dub? Instantly 80% of your potential sales are gone. Note that these people have a slightly higher attach rate than fansub watchers.

Wasn't fansubbed? Then all potential sales from the people who would have seen it and liked it are gone. This could have been up to 20% of the people, but it is still a glass with 20% more water.

Now, 20% is likely only to be 200 copies or so, but it is still 20% in an industry where the difference between a top seller and failure can be measure in hundreds or even a thousand or so sales. 80% is 800 copies and clearly makes a difference. (Super Gals S2 needed ~700 copies to break even, sub only.)

I really wonder where you're pulling all those numbers from. *shrug*

200 purchases only from fansub viewers? Care to list the last anime DVD top seller which wasn't fansubbed and what you base that on?

[ZeusIrae]

It's not important, the figures are just examples.He's right on what matters, I made a stupid post and I should have thougt about it a little more.

[Vexx]

Mentar also has a point ... all viewpoints here are operating on assumptions because the data is obscured. That makes it too easy to 'propagandize'. Since the data holders are one particular point of view -- it makes their viewpoint more suspect.

[bayoab]

Originally Posted by Mentar

I really wonder where you're pulling all those numbers from. *shrug*

200 purchases only from fansub viewers? Care to list the last anime DVD top seller which wasn't fansubbed and what you base that on?

I just used 1000 DVDs sold as a reference point with no specific title in mind because it produces nice and clean numbers to see the issue at hand. The 20/80 was just randomly picked. Same thing applies with 30/70. (I've never heard anything lower than 33/66 said.)

Originally Posted by Vexx

Mentar also has a point ... all viewpoints here are operating on assumptions because the data is obscured. That makes it too easy to 'propagandize'. Since the data holders are one particular point of view -- it makes their viewpoint more suspect.

It is true that we are relying on word of mouth, but it is impossible to also truly gauge who buys what now. However, it wouldn't make much sense to say "dub sells better" and keep making dubs when it doesn't.

[Raptor73]

Very few people are willing to buy a product if they know nothing about it, and with Anime fansubbing allows us to watch the Anime as if we were watching it on T.V. Of course, there will always be freeloaders who have 2 TB of Anime on their hard-drive and not a single Anime DVD on their shelf, but for the majority of fans if an Anime is good, then people will buy the DVD when it becomes licensed.

The main issue with Anime at the moment is that it is still seen as being something for kids, where only those who are a big fans of Anime understand that there is more than just Anime for kids. This problem is less rampant than it used to be, but in order for many of the more mature series to go mainstream this problem needs to be rectified. Animes such as Pokemon and Naruto are widely recognised, as they have been effectively marketed, however for most Anime effective marketing isn't possible.

Fansubbing has given many people the opportunity to experience Anime without the risk of having to buy it upfront, having never had a chance to preview it. This has effectively become 'advertisement' for many series, and no matter how you look at it, Fansubbing increases sales of Anime, rather than decreases. An excellent example of this is Lucky Star. Without fansubbing, I can be almost certain there is no way it would have been licensed, as many of the jokes and situations reflect Japanese culture, and from a marketing point of view this would be a very dangerous series to attempt to promote. However, through fansubbing, a very large fanbase has become apparent, and without a cent being spent on marketing Lucky Star is very widely known throughout the English speaking Anime community. This example alone shows the power fansubs have. Very few people are willing to buy a product if they know nothing about it, and with Anime fansubbing allows us to watch the Anime as if we were watching it on T.V. Of course, there will always be freeloaders who have 2 TB of Anime on their hard-drive and not a single Anime DVD on their shelf, but for the majority of fans if an Anime is good, then people will buy the DVD when it becomes licensed.

The main issue with Anime at the moment is that it is still seen as being something for kids, where only those who are a big fans of Anime understand that there is more than just Anime for kids. This problem is less rampant than it used to be, but in order for many of the more mature series to go mainstream this problem needs to be rectified. Animes such as Pokemon and Naruto are widely recognised, as they have been effectively marketed, however for most Anime effective marketing isn't possible.

Fansubbing has given many people the opportunity to experience Anime without the risk of having to buy it upfront, having never had a chance to preview it. This has effectively become 'advertisement' for many series, and no matter how you look at it, Fansubbing increases sales of Anime, rather than decreases. An excellent example of this is Lucky Star. Without fansubbing, I can be almost certain there is no way it would have been licensed, as many of the jokes and situations reflect Japanese culture, and from a marketing point of view this would be a very dangerous series to attempt to promote. However, through fansubbing, a very large fanbase has become apparent, and without a cent being spent on marketing Lucky Star is very widely known throughout the English speaking Anime community. This example alone shows the power fansubs can have. I know I went out and bought DVD 1 of Haruhi a week after it was released (However, I was severely disappointed at the extremely poor translation choices.) If I had never watched the fansub, I would never have even considered the DVD, so once again the power of fansubs is being shown.

[Avatar_notADV]

If you think Lucky Star wouldn't have been licensed without fansubs, you're crazy. (Ditto anything by KyoAni right now! Criminy.)

People are mistaking correlation and causation. Series which are heavily fansubbed may be series for which there are high sales, but that doesn't imply that one causes the other; both are very heavily dependent on the confounding variable of whether there are a lot of people who might like the show! Saying that fansubs are responsible for the high sales of big hits is a little like a little kid with a pot for a helmet jumping out in front of a military parade and pretending to lead it.

[Raptor73]

Originally Posted by Avatar_notADV

If you think Lucky Star wouldn't have been licensed without fansubs, you're crazy. (Ditto anything by KyoAni right now! Criminy.)

People are mistaking correlation and causation. Series which are heavily fansubbed may be series for which there are high sales, but that doesn't imply that one causes the other; both are very heavily dependent on the confounding variable of whether there are a lot of people who might like the show! Saying that fansubs are responsible for the high sales of big hits is a little like a little kid with a pot for a helmet jumping out in front of a military parade and pretending to lead it.

I think I was a little hasty when I writing, however my main argument still stands. Lucky Star, despite both its popularity in Japan and the fact that it was animated by KyoAni, is a very risky Anime to license, as its main appeal is to the Otaku crowd. Many of the jokes in the series are not easily understandable by a mainstream overseas audience and therefore without both the fansubs and the huge success of Haruhi preceding it, it is not likely the series would have been licensed. The fact that it was a huge hit was because it was a great series, however fansubbing effectively acted as 'advertisement', exposing a large amount of people to the series. It is impossible for something to become popular if no-one knows it exists, and if Lucky Star were released on DVD, had the fansubs never existed, the series would probably not sell particularly well, as many Anime fans are not willing to pay for something they haven't seen or heard about. I'm not saying fansubbing causes high sales, rather that fansubbing causes an increase in popularity for a series, which then causes increased sales.