Would you download free ad-supported anime instead of fansub?

[cyth]

You might have based it on facts from the mainstream market. This is, however, not the mainstream market. There's a fine line between selling niche content and mainstream content, and you're obviously not seeing it.

(BTW, check my previous post for an edit)

[bigsocce]

Originally Posted by Toua

You might have based it on facts from the mainstream market. This is, however, not the mainstream market. There's a fine line between selling niche content and mainstream content, and you're obviously not seeing it.

(BTW, check my previous post for an edit)

To me, a viewer is a viewer. It doesn't matter if that viewer is watching Jericho on CBS or a program on Animal Planet as long as that viewer is both equally desirable for the ad companies.

Okay, let's say I agree with you guys that anime won't get the same rate per viewer as mainstream TV shows (even NHL hockey on Versus).

How much can anime studios charge per ad per viewer?

It's 2 cent per ad per viewer for TV shows on network TV and cable shows.

Even at 1.5 cent per ad, it is still better than getting NOTHING as it is right now with fansub. Of course, if the file can be made unskippable, it will be worth a lot more in ad revenue since with TV ad, you can always change the channel. Can't do the same with prosub.

[bigsocce]

Originally Posted by Toua

What was that AZN channel that went out of business recently because it had difficulties securing adverts? Here we go.

I wish people would stop applying Economics 101 to anime business... :V

I think AZN went out of businesses because not many people have the channels.

From that article:

According to Comcast, the channel attracted about 13.9 million viewers, which was lower than expected, and the audience was not increasing. The channel also had difficulty securing advertising.

Cable channel can't survive with only 14 million subscribers. The average viewership must have been very very low.

To give you some idea, Versus has over 70 million subscribers and its average viewership is less than 100,000. NHL on Versus is one of its highest rated shows and it only average around 150,000.

------------------------------------------------------------

Since some think that 3 cent per ad per viewer is way too optimistic, I will revise it down to 1.5 cent per ad per viewer.

This 1.5 cent could go much higher if the ads can't be skipped when played.

---------------------------------------------------------

[cyth]

Originally Posted by bigsocce

Cable channel can't survive with only 14 million subscribers.

So this should give you a good idea how a webservice with only 100,000 downloads per episode would do. What people have tried telling you is that, within the niche, not only do viewership figures change, but also ad schemes and prices. Frankly, I don't know how much these ads would cost (I think none of us do), but I can take a quick guess and estimate a figure well below 2 cents per view. I'm basing my rough estimates on the nature of anime content. Then if you start taking into account bandwidth, development and maintainance costs, marketing costs etc. you get a nice picture of how things play out. That is IF licence holders get ahold of advertisers, or partner with Google or some ad corp that will take a massive share of income for themselves.

[SeijiSensei]

NPR reported this morning on the terms of the proposed agreement between the studios and the Writers' Guild. Guild members will receive income from shows distributed online, however for the next three years the amount they get paid will be based on a flat revenue base of $40,000 per show (per episode? the story wasn't clear, but probably) regardless of how well it performs. That gives us some idea what network executives and the writers think is a likely average online income for a show. Of course, we're talking about shows like Lost here, not some niche anime program.

[bigsocce]

Let's see how many downloads a show like Clannad can get:
I select episode 5 for testing:

http://eclipse.no-sekai.de/projects/clannad
2007-11-25: Clannad 05

h264 171 MiB download torrent 4 downloaders 15 seeds 12185 completed
h264 1024x576 168 MiB download torrent 4 downloaders 22 seeds 27832 completed
XviD 170 MiB download torrent 13 downloaders 61 seeds 37713 completed
XviD 704x400 170 MiB download torrent 2 downloaders 5 seeds 10352 completed

12,000 + 28,000 + 38,000 + 10,000 = 88,000

6,000 on mininova (xvid)
5,000 on mininova (h264)

99,000 downloads just from these two sources.


This is not counting direct download sites, IRC, private bittorrent sites, other bittorrent sites, and other fansubbers version of Clannad episode 5. I wouldn't be surprised if Clannad fansub has a viewerbase well over 200,000 each week.

Granted, Clannad is a popular show. It just go to show you that many companies would pay to advertise on many anime.

[cyth]

Originally Posted by bigsocce

I wouldn't be surprised if Clannad fansub has a viewerbase well over 200,000 each week.

OK... now split that figure between 30 or so most developed countries. I think we already said a thing or two about profitable regional ad schemes...

[bigsocce]

Originally Posted by Toua

So this should give you a good idea how a webservice with only 100,000 downloads per episode would do. What people have tried telling you is that, within the niche, not only do viewership figures change, but also ad schemes and prices. Frankly, I don't know how much these ads would cost (I think none of us do), but I can take a quick guess and estimate a figure well below 2 cents per view. I'm basing my rough estimates on the nature of anime content.

Fair enough. Since anime is a niche, it can't expect the usual 2 cent per ad per viewer like normal TV shows.

Back to point aout AZN, 100,000 downloads = 100,000 viewerbase. This is much much higher than AZN.

AZN probably average at most 20,000 viewers (judging from 14 million subscribers).

http://www.nytimes.com/2008/01/23/sp.../23versus.html

Through 29 games, Versus’s 0.3 rating is modest, but it is 50 percent higher than the 0.2 average at the same time last season. In that period, viewership swelled to an average of 261,760 a game from an average of 195,666 a game last season.

During the 2006-7 season, Versus’s N.H.L. rating stayed flat at a 0.2, but because of the overall growth of subscribers, viewership rose 31 percent to 212,366.

Harvey said the deal was turning a profit.

Since the Comcast-owned Versus acquired the rights to the N.H.L. — after ESPN vowed to drastically reduce its rights payment to the league — the network has grown by about 10 million subscribers to 74 million, more than 22 million fewer than ESPN or ESPN2. It has also increased its subscriber fee to about 26 cents a month, from less than 20 cents.

Versus: 74 mil subscribers (AZN's 14 mil)
Average viewership: less than 100,000 (AZN's ???)

Its best is NHL which average around 212,366 viewers for 2006-2007 season. (Versus paid $70 million a year to broadcast hockey).

Then if you start taking into account bandwidth, development and maintainance costs, marketing costs etc. you get a nice picture of how things play out. That is IF licence holders get ahold of advertisers, or partner with Google or some ad corp that will take a massive share of income for themselves.

If a site like animesuki.com can set up a website to distribute fansub very cheaply, I don't think it will be very expensive for a website dedicated to prosub. There will be no marketing cost. Fansub doesn't require marketing. Why should prosub? It's a transition from fansub to prosub.

Considering that if it receives 2 million downloads per week, this would equate to $240,000 a week at 1.5 cent per ad per download with 8 ads total. (2 mil x 12 cent per download).

$240,000 a week would pay for any bandwidth, server, maintenaince cost.

[bigsocce]

Originally Posted by Toua

OK... now split that figure between 30 or so most developed countries. I think we already said a thing or two about profitable regional ad schemes...

200,000 downloads worldwide of Clannad episode 5 subtitled in English.

I would guess most are from English speaking countries since the fansub is in English.

USA: pop: 300 mil
UK: pop: 70 mil
Australia: 30 mil
Canada:
New Zealand:
Other non English speaking countries:

I am willing to guess that 140,000 out of 200,000 downloads is from the USA.

[bigsocce]

Assume the new ad rate is 1.5 cent per ad per viewer instead of my optimistic 3 cent per ad per viewer. With 8 ads, this equate to 12 cent revenue per download.

If Clannad goes from fansub to prosub and assume the usual 200,000 fans download and watch them. The revenue would be:

200,000 downloads x $0.12 per download = $24,000.

26 episodes x $24,000 = $624,000

Assume that the cost associated with it (translation, bandwidth, website server etc) is $124,000, this leave $500,000 in pure profit.

Fansub: $0 profit for the anime studio
Prosub: $500,000 profit for the studio by prosubbing Clannad

I believe that the anime studio will be able to find advertisers for Clannad at 1.5 cent per ad per viewer. I already mentioned the usual suspects: Sony (PS3) MSN (XBOX), Nitendo (Wii) Movies Studio (Movie Trailers) etc....

[Xellos-_^]

Originally Posted by bigsocce

If a site like animesuki.com can set up a website to distribute fansub very cheaply, I don't think it will be very expensive for a website dedicated to prosub. There will be no marketing cost. Fansub doesn't require marketing. Why should prosub? It's a transition from fansub to prosub.

Considering that if it receives 2 million downloads per week, this would equate to $240,000 a week at 1.5 cent per ad per download with 8 ads total. (2 mil x 12 cent per download).

$240,000 a week would pay for any bandwidth, server, maintenaince cost.

Just to make a point. Animesuki does not host any of the fansubs. It just has a collection of links to the fansub torrents.

[bigsocce]

Just for fun, look at Claymore

http://eclipse.no-sekai.de/projects/claymore

2007-12-23: Claymore 14
h264 171 MiB download torrent 0 downloaders 9 seeds 22217 completed
XviD 168 MiB download torrent 16 downloaders 25 seeds 164826 completed
DVD 232 MiB download torrent 5 downloaders 9 seeds 3833 completed

2007-07-11: Claymore 15
h264 169 MiB download torrent 4 downloaders 8 seeds 28960 completed
XviD 168 MiB download torrent 14 downloaders 29 seeds 175862 completed

200,000 downloads just from Eclipse site alone.

Add that to mininova, piratebay, other bittorrent sites (public and private), MIRC, Direct download sites, rapidshare/megaupload etc.....

The viewerbase would be at least 300,000. AT 1.5 cent per ad per view:

300,000 x 26 episodes x $0.12 = $936,000 in ad revenue.

I don't want to know how much Bleach/Naruto would get.....LOL.

[Kamui4356]

Originally Posted by bigsocce

The premium comes from the anime demographic and because few TV watchers ever watch ads (they change the channel).

So basicly you say you can charge a premium because you say so? They can reach the same demographic on tv, in greater numbers for less. Why would a company pay more for less effect? A best you'll be able to charge the same rates as tv ads. However, given that this is a relatively new format, the initial fees will have to be discounted to get advertisers interested.

Originally Posted by bigsocce

LOL. Why won't it be profitable?

Well, let's take your own numbers here.

Even if only 20,000 people download an episode at 3 cent per ad. 8 total ad = 24 cent each.

20,000 downloads x $0.24 = $4,800 per episode.

It costs more than that to license the episode in the first place. Let's be realisic here, the japanese studios aren't going to do this for north america. It'll be the north american companies if anyone, and they need to make enough to cover at least a portion of their costs from licensing the series, as well as any expenses like bandwidth from the program. Services like this already exist as well, though it's streaming video with dubs.

$4,800 for 1 episode isn't much. But right now, the anime studios get NOTHING from fansub. With 13 prosub episodes, this work out to be $62,400. Not bad for an anime that only 20,000 want to watch.

The costs associate with doing this are:

1) Translation cost (which will happen anyway if they come out with a DVD with English subtitle)
2) Bandwidth cost: very small for direct download and virtually free with bittorrent
3) Website cost: maintaining a central website where fans get the prosub. If fansub.tv, animeotaku can maintain a website for direct download anime on the cheap, I don't see this being expensive.

The overhead will get marginally smaller with more prosubs.

Less popular anime (20,000 viewers) = smaller revenue ($62,400 for 13 episodes)
More popular anime (200,000 viewers)= bigger revenue ($624,000 for 13 episodes).

Ok, let's assume the japanese companies decide to do this themselves.

Translation cost is a new expense for them. They don't normally translate the series now. That's left up to the NA distributors.

Bandwidth cost you're probably underestimating. Don't forget they also have to have servers that they can host the content on, either buying them or renting.

Website cost will be cheap enough to not have a huge impact. However, they'll need to pay people to maintain the site. Fansub groups can maintain the sites themsleves. Companies have to pay people to do it.

Let's not forget they need people in the US to make the deals with american advertisers. That means they need an office in the US and all the expenses that come with that.

Sorry, but it won't work out without solid dvd sales to make up the slack, which brings us back to where we are now.

Remember, a company gets about $2 an episode from dvds, assuming 4 episodes at $8 wholesale. You're proposing a system that gets 1% of that per viewer. Without large numbers of downloaders, that just doesn't scale. Only series like Naruto and Bleach have to potential to draw in the numbers required for a real profit. Those are already on tv in the US though, so doing it with them is kind of pointless.

[SeijiSensei]

Remember also that any provision of services has to cope with the problem of "lumpy" demand. Probably most of the downloads will occur within the first 24-48 hours after release for any popular series, so you have to budget enough to support your peak demand. If you consider the number of episodes that gets listed on AS each day (a dozen or more as a rough guess), you'll quickly be looking at some hefty charges for bandwidth.

[bayoab]

Originally Posted by bigsocce

Let's see how many downloads a show like Clannad can get:
I select episode 5 for testing:

http://eclipse.no-sekai.de/projects/clannad
2007-11-25: Clannad 05

h264 171 MiB download torrent 4 downloaders 15 seeds 12185 completed
h264 1024x576 168 MiB download torrent 4 downloaders 22 seeds 27832 completed
XviD 170 MiB download torrent 13 downloaders 61 seeds 37713 completed
XviD 704x400 170 MiB download torrent 2 downloaders 5 seeds 10352 completed

12,000 + 28,000 + 38,000 + 10,000 = 88,000

Except, there is a huge problem with this calculation. You are adding the 4:3 users and the 16:9 users when it is more likely that the 16:9 users are mostly the same as the 4:3 viewers. 50,000 is probably a more reasonable number.

Originally Posted by bigsocce

200,000 downloads worldwide of Clannad episode 5 subtitled in English.

I would guess most are from English speaking countries since the fansub is in English.

USA: pop: 300 mil
UK: pop: 70 mil
Australia: 30 mil
Canada:
New Zealand:
Other non English speaking countries:

I am willing to guess that 140,000 out of 200,000 downloads is from the USA.

One of the largest groups of downloaders of anime is Singapore. Also, the majority of the people in Europe get English subs. Therefore, the above calculation clearly is wrong.

[bigsocce]

Originally Posted by bayoab

Except, there is a huge problem with this calculation. You are adding the 4:3 users and the 16:9 users when it is more likely that the 16:9 users are mostly the same as the 4:3 viewers. 50,000 is probably a more reasonable number.

Huh? I used the completed download number. Which add up to be 88,000. This is just from the Eclipse site alone.

One of the largest groups of downloaders of anime is Singapore. Also, the majority of the people in Europe get English subs. Therefore, the above calculation clearly is wrong.

What is the population of Singapore?

For every 200,000 English fansubs download, 70% of that are from the USA.
How is that clearly wrong when the USA has a population of over 300 million?

The other English speaking territories has to make up 30% (UK, Canada, Australia, NZ, Singapore, Hong Kong).

[bigsocce]

Originally Posted by Kamui4356

So basicly you say you can charge a premium because you say so? They can reach the same demographic on tv, in greater numbers for less.

Not greater numbers for less. Greater numbers for more.
You don't seem to get that 2 cent per ad per viewer with 100,000 viewers would get 10 times as much as 2 cent per ad per viewer with only 10,000 viewers.

Also, I revised it to 1.5 cent per viewer per ad. This is less than the typical 2 cent per viewer per ad for TV show.

Anime with 100,000 viewer: $1,500
TV show with 100,000 viewer: $2,000
TV show with 1,000,000 viewer: $20,000

Sorry, but it won't work out without solid dvd sales to make up the slack, which brings us back to where we are now.

Remember, a company gets about $2 an episode from dvds, assuming 4 episodes at $8 wholesale. You're proposing a system that gets 1% of that per viewer. Without large numbers of downloaders, that just doesn't scale. Only series like Naruto and Bleach have to potential to draw in the numbers required for a real profit. Those are already on tv in the US though, so doing it with them is kind of pointless.

DVD sales is not relevant. This is just replacing fansubs with prosubs.

This will have no effect on DVD sales. Might have a positive effect even.

Imagine the current DVD sales with fansubs around. Imagine DVD sales with prosubs and no fansubs. I am willing to bet that DVD sales might even increase because some people don't like the ads and thus they would buy the DVD to collect/own. Right now, they can do that with fansubs.

[bigsocce]

Originally Posted by Kamui4356

Ok, let's assume the japanese companies decide to do this themselves.

Translation cost is a new expense for them. They don't normally translate the series now. That's left up to the NA distributors.

That's a dumb argument.

Because the NA distributors don't have pay for translation cost, the Japanese studios can charge more for the anime license. Basically, translation cost is FREE. Because sooner or later, they or their NA distributors have to do it anyway for the anime DVD.

Bandwidth cost you're probably underestimating. Don't forget they also have to have servers that they can host the content on, either buying them or renting.

Website cost will be cheap enough to not have a huge impact. However, they'll need to pay people to maintain the site. Fansub groups can maintain the sites themsleves. Companies have to pay people to do it.

For a website that could generate $25 mil a year, bandwidth and website expense would be relative small in comparision to the total revenue. Fine, let's assume $1 mil in expense for it.

4 mil fansubs a week x $0.12 cent per download x 52 weeks = $25 mil revenue.

Let's not forget they need people in the US to make the deals with american advertisers. That means they need an office in the US and all the expenses that come with that.

Correct. Let's assume $200,000 for that to hire 3 people and an $50,000 office and overhead. They could also offshore this to another company who specialize in this kind of thing for a fee of $200,000 a year.

[Kamui4356]

Originally Posted by bigsocce

Huh? I used the completed download number. Which add up to be 88,000. This is just from the Eclipse site alone.

The problem is you have some people downloading the same series from multiple groups, and multiple formats from each group. Clannad for instance is originally broadcast in a normal 4:3 ration, then later in a 16:9.

What is the population of Singapore?

Wikipedia is your friend.

For every 200,000 English fansubs download, 70% of that are from the USA.
How is that clearly wrong when the USA has a population of over 300 million?

Because a lot of people from non english speaking countries download english fansubs. There are even people in Japan who download english fansubs. Even if we assume the same percentage of the population in each country download fansubs, the number is more like 40-50% of the downloaders being american and canadian at most. Of course someone running an anime related tracker could probably give a more accurate number based on ip addresses.

The other English speaking territories has to make up 30% (UK, Canada, Australia, NZ, Singapore, Hong Kong).

As was pointed out, people from non english speaking countries download english fansubs. The rights for canada usually come with the rights for the US, so they should be included there.

Originally Posted by bigsocce

Not greater numbers for less. Greater numbers for more.
You don't seem to get that 2 cent per ad per viewer with 100,000 viewers would get 10 times as much as 2 cent per ad per viewer with only 10,000 viewers.

Also, I revised it to 1.5 cent per viewer per ad. This is less than the typical 2 cent per viewer per ad for TV show.

Anime with 100,000 viewer: $1,500
TV show with 100,000 viewer: $2,000
TV show with 1,000,000 viewer: $20,000

You don't seem to have a clue what I'm saying. Let me try explaining this again.

Internet based distribution of media is relatively new. Advertisers will need an incentive to get involved.

The potential market for this based on fansub numbers is very small. This means the ads wont' reach that many people.

These two factors means you need to convince the advertisers. The way to do this is to give them a discount.

DVD sales is not relevant. This is just replacing fansubs with prosubs.

This will have no effect on DVD sales. Might have a positive effect even.

Imagine the current DVD sales with fansubs around. Imagine DVD sales with prosubs and no fansubs. I am willing to bet that DVD sales might even increase because some people don't like the ads and thus they would buy the DVD to collect/own. Right now, they can do that with fansubs.

Under this system most of the income is still coming from dvd sales. Dv sales are currently dropping. This does nothing to offset their decline. Therefore it isn't feasible.

Originally Posted by bigsocce

That's a dumb argument.

Only because you dont' like it.

Because the NA distributors don't have pay for translation cost, the Japanese studios can charge more for the anime license. Basically, translation cost is FREE. Because sooner or later, they or their NA distributors have to do it anyway for the anime DVD.

Who do you think pays for translation now? Someone has to pay the translators. I can tell you, it's not the Japanese studios. Why would they take on a new cost, which under this system they can't pass along to the american distributors since they're doing the release themselves? They can make more money doing things the way they're going now. Unless that changes it's the american distributors who will be doing this.

For a website that could generate $25 mil a year, bandwidth and website expense would be relative small in comparision to the total revenue. Fine, let's assume $1 mil in expense for it.

4 mil fansubs a week x $0.12 cent per download x 52 weeks = $25 mil revenue.

The thing is it won't off set the cost of licensing. The japanese companies won't be the ones doing this. If we assume $20,000 an episode just as a licensing fee, you get what about $5000 this way? This means you'll still need dvd sales to pay the bills. It might help, and like I said I'd use it, but it isn't the solution the companies need.

Correct. Let's assume $200,000 for that to hire 3 people and an $50,000 office and overhead. They could also offshore this to another company who specialize in this kind of thing for a fee of $200,000 a year.

true they can outsource it, but either way we're talking about another upfront cost. The japanese companies won't like that, and will see no reason to worry about the US market when they can just license their series to american companies.

Let's look at things realisticly. It's the american distributors who'll be doing this. They have similiar services now, but with dubs. Most of those fansub downloads are from Naruto and Bleach. Both of those series are on tv in the US, so it's counter productive to put them on this. Big series like that are what will make or break this system.

No matter how you look at it, this isn't the answer to solve the problems facing the anime industry.

[Quzor]

I think I'd have to politely decline the idea of watching an anime with ads injected into it. Advertising has gotten completely out of control as it is. It's in movie theaters, television, magazines, comic books, websites, certain computer programs and more. You see it walking down the street, driving in your car, flying in an airplane, sailing on a ship, so on and so forth. Being able to enjoy a nice episode of a show I like without the irritation of someone trying to sell me something is one of the few "sweet releases" I have from the grip of consumer culture (of which I am a big part, don't get me wrong).

I'm not against companies that fansub these works getting paid, not at all. I simply choose to donate to their cause of my own will. I recognize that one person donating five dollars isn't much, but if everyone did that once a month (equaling roughly the same price of which you speak, at $0.24 per episode), then these companies would still make enough money to pay their staff and offset their costs. And maybe, because the money is appearing in the form of donations, they'd feel slightly obligated to show some gratitude by investing a portion of their profits into tangible, appreciable features for the anime community at large, something that a traditional corporate advertising might not be willing to do; or might find completely unnecessary.