2007-03-02, 18:12
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AS Oji-kun
Join Date: Nov 2006
Age: 74
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50 episodes X $25,000 = $1,000,000, so 2x or more means at least $2 million for I.G. Is this just on the DVD deal, or does it include the fees collected from [adult swim]? Either way it's a good deal for I.G. even if they never sell a DVD in Region 1.
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2007-03-02, 19:44
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Link #22 |
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Your local dark deity.
Join Date: Dec 2006
Location: Amatsu Mikaboshi [August Star of Heaven.]
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So.. Forgive me for posting slightly ignorant on the subject first of all. I'm not the most educated in business practices - although I do want to enter college for a business degree. As we speak however.. Well, you get the idea. Feel free to ignore this post or bear with it.
Now I know this thread isn't to talk about the pricing of DVDs, so I'll try to keep that aspect to a minimum. What I'm really interested in is the result of Japanese companies adopting the practice of setting up their own branch company in the states so they can skip the step in selling their anime to a US company. Well, this is assuming I read rooboy's post properly. Forgive me if I didn't. Now, if more companies actually adopt their practice.. Firstly, could this possibly lead to a drop in the price of anime DVDs? Without the extra one million or two million lisencing fee, it seems like it would help. However.. In the bigger picture, that may not be much. So, yes, the question is is a drop in price possibly, or is it not that great of a difference? Moving on.. If, indeed, Japanese companies adopt this practice, what will become of the companies stateside who rely on the ability to actually buy an anime? Will they simply crumble, or is there a chance that they would actually be brought out by Japanese companies to act as their branch? |
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2007-03-02, 20:01
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Not Enough Sleep
Join Date: Nov 2003
Location: R'lyeh
Age: 48
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I really don't a big trend in Japanese companies setting shop in US to sell anime. The japanese companies would assume the entire risk of the setup and distributiion. If it doesn't work out they could lose a lot money. \
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2007-03-02, 20:25
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Join Date: Dec 2005
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2007-03-02, 20:32
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Your local dark deity.
Join Date: Dec 2006
Location: Amatsu Mikaboshi [August Star of Heaven.]
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Anyway. That kind of frustrates me in all honesty. I can't wait for a company to come along and drop the price a little bit. Slightly cheaper would sell more product, and in my mind would make more money in the end. But.. Well. Your average anime fan will buy anything right down to the crappy games.. So at that rate I don't see the price going anywhere now that I think about it. |
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2007-03-02, 20:42
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2007-03-02, 21:13
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Your local dark deity.
Join Date: Dec 2006
Location: Amatsu Mikaboshi [August Star of Heaven.]
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I don't know. As far as mainstream goes it feels like the popularity of anime is actually starting to go down. The majority of US fans are teenagers, and they are fickle. e.e It's really kind of sad, it feels like anime never stays popular for long, and certainly will probably never go mainstream. Although it came close. It was big in Hot Topic for a while, and that's damn close to mainstrea. xD |
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2007-03-03, 01:47
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Umeboshi!
Join Date: Dec 2005
Location: Tejas
Age: 48
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As an aside, this isn't the only reason why anime DVD's are more expensive. One of the reasons why U.S. TV shows are so cheap on DVD (and yes, they are now very cheap - I paid over a hundred dollars for each season of Babylon 5 a couple of years ago) is because the show is already paid for. Anything they make off DVD sales is basically profit. U.S. shows are primarily funded by the advertising when they're aired. Anime doesn't work like that, the primary income is made from selling DVDs, so the DVDs have to be more profitable. Quote:
And actually, you're undercutting the price of anime in Japan somewhat. Here the norm is $30 retail for 4 episodes (you actually spend between 15 and 25 most everywhere), in Japan it's $40 or $50 for usually only two episodes. For example, Shuffle! will probably be 6 DVDs in the US (6 DVDs x 4 episodes each = 24 episodes), but it was 12 in Japan.
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2007-03-04, 21:25
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AS Oji-kun
Join Date: Nov 2006
Age: 74
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After re-reading this thread, I'm still in the dark about the economics of anime.
What kind of money do producers collect from the television networks when the shows are first aired in Japan? My understanding of US television production is that the original network airing more or less covers the cost of production. The real money is made in "syndication," where older shows are re-aired on local television stations or cable networks. Then there's the enormous overseas market. For Hollywood television producers the money from syndication and foreign licensing fees is where the profits lie, though nowadays there's some additional money in the form of DVD sales. Most of the discussions of anime economics I've read on AS suggest that Japanese producers rely on direct DVD sales for revenues as much as, or even more than, the fees they collect from the television networks. Is that true? If Japan looked like Hollywood, those DVD sales (in both R2 and R1) would be mostly profit since the production costs would have been covered by the broadcast deal. Are anime producers not able to wangle a sufficiently good price for their product from the networks? Why? Is there not enough advertising revenue (which seems to be rooboy's point) to allow the networks and producers to both cover their costs? I would have thought the cost per minute to produce anime would be considerably below the per-minute cost of live-action programming. In the absence of sufficient advertising revenues, how would any Japanese commercial television network thrive?
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2007-03-04, 23:11
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Umeboshi!
Join Date: Dec 2005
Location: Tejas
Age: 48
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 Only one US anime licensing company is publically owned (Funi) and only since they were purchased by Navarre, so they're the only open books. Everything else is anecdotal.Quote:
Ah, I think I've found the thread you're interested in. It's this one. EDIT: I'll freely admit that I don't really understand the Japanese end of the market either. According to everything I've heard, they pay for the time slot when they air it. So, essentially, their revenue stream comes down entirely to DVD sales and licensing. Even at the cost of the DVDs I'm not sure how they make any money at it at all.
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2007-03-04, 23:26
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One PUNCH!
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Join Date: Dec 2005
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If the company's executives are too stupid to properly release a good product, of course they're going to lose money. <I'm also looking at you Illumitoon!> |
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2007-03-05, 00:27
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Not Enough Sleep
Join Date: Nov 2003
Location: R'lyeh
Age: 48
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2007-03-05, 01:21
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Link #33 | |
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Umeboshi!
Join Date: Dec 2005
Location: Tejas
Age: 48
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However, the ratings have less to do with the money that goes into the show than most people assume. Since it's a bargaining process, both sides go into it with different talking points to negotiate the price they want. If the ratings are good or bad, one side or the other will mention it, but other factors ultimately also end up determining the price. What SeijiSensei actually meant is that the price negotiated with the network forms the budget of the show (meaning it paid for itself). Anything after that is pure profit. This is somewhat obvious if you think about it - no show loses money and continues to air. Besides, part of the production cost is the salary of the CEO of the production company, etc, etc. So while it's nice to think that the profit on US shows comes from syndication, etc, it's pretty much a lie. The show probably turned a profit in its initial airing - the money was hidden as "capital" and "bonuses" and other expenses that aren't determined until afterwards. From this point on we have speculation. With the facts I have at my disposal, I think this is likely to be the way it works (more or less), but again, I don't really understand the Japanese end of it. To be honest, the business on the Japanese side interests me less than the business on the U.S. side. On the Japanese side, I always think of it as art rather than a business. No one asks how Picasso managed to live while painting, it's the painting that's remembered. On the U.S. side, however, what happens is mostly business decisions (aside from dubbing decisions, and there would be little point in discussing those here anyway). Also, the business decisions come from a culture that I'm familiar with so I can draw parallels with how it works in other industries. Some of what happens in the anime industry I assume has to do with the difference between how Japanese and U.S. businesses operate. In a lot of ways it's easier to think of most anime shows as infomercials for the DVD versions of the show (credit to relentlessflame for the first use of that analogy). While it's true that they have to pay for the air time, it's important to realize that this is late night air time that the network has to fill with something. Just like advertisers are not paying a premium for this time, neither are the anime studios - as a matter of fact, the reason it's usually aired late at night is because the air time is so cheap. The network has to put something out there, and whatever it is the advertising money will still be low. This is one of the reasons why informercials in the states air at these times. Some networks would lose money on those hours unless whatever is being aired then is helping to pay for itself. Some still do lose money, they're just using this to offset the loss. I doubt either side of the equation (the network or the anime company) is really making lots of money from anime. Basically, the anime company is hoping for a hit, they keep treading water until they can get one (kind of a throw-it-against-the-wall-and-see-if-it-sticks approach). One big hit can pay for a lot of failures (this is the same way US movie studios work, incidentally). Well, and obviously the people who work there must love anime. The network has to have programming to fill it's programming hours, and also is picking up a trickle of revenue for the dead spots in it's programming time. Of course, this entire chain of reasoning gets thrown out when you're talking about something like Doraemon or Naruto or whatever. My assumption is that prime-time anime works like any other TV show, but it's important to note those are a minority of anime (and an even smaller minority of the anime western fans are talking about when they use the word "anime").
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2007-03-05, 22:34
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Link #34 |
Administrator
Join Date: Dec 2003
Age: 41
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Just to add one more factor to what rooboy said, a key way you can understand "the game" is to trace the money. For the most part, animated works are commissioned pieces. The studios are in constant negotiation with publishers and other animation studios to find work to keep all their employees busy. As a studio moves up the reputation ranks, they eventually gain enough clout to become production coordinators for a show, which means they're now taking the lead, coordinating all the outsourcing, and pulling it all together. But even the coordinating company isn't typically footing the bill (although they may put in a share). So, if most studios are just doing commissioned work, who's paying for it all?
Probably the easiest way of explaining it would be... you know those cartoons/anime shows they have that are obviously designed primarily to sell merchandise? Like Pokemon with its Gameboy games and trading cards, or Beyblade and its tops (just random examples -- pick your own). Late night anime is exactly like that. The people paying for the production are typically publishing firms, music labels, and the like, and the shows are designed to sell DVDs, CDs, Novels, Manga, Magazines, Video Games, Figures, and more. They're taking a gamble that between all the merchandise sold (plus any licensing fees they may get selling the show to overseas distributors), they'll make their money back and more. In this way the risk of a flop doesn't weigh on the animation studios, but rather on the publishers and music labels, who have way more than enough weight to absorb the losses (so long as they're not constant and sustained, of course). In a lot of ways, you can think of the late-night anime TV airing as a sort of loss leader, and the franchise itself as "the store". The TV airing is inconvenient to get at (many otaku have one or more PVRs), but it's still a bargain compared to the DVDs. The TV airing brings people "in the door" and gets them talking about it, but they're hoping you'll buy the "step-up" model (the DVDs), and buy other stuff while you're at it (all the other merchandise). It's a bit of a risky strategy, but that's why it's typically part of a large chain of "stores" (shows) funded by a given "owner" (publisher). All in all, the model is completely different than American primetime TV and, as rooboy pointed out, that's because most anime is by no means "primetime" material. (And, incidentally, any analogies and explanations I use certainly don't originate from me in the grand scheme of things. I doubt I was the first to call late-night TV airings of anime "commercials for the DVD". It's just a result of the things I've read and learned over the years, and is always subject to correction and further learning.  )
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2007-03-06, 00:27
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Umeboshi!
Join Date: Dec 2005
Location: Tejas
Age: 48
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Though now that I think about it, it's really obvious. Every fansub leaves in the "This program was brought to you by" sponsor bit in the beginning. Duh, I feel so retarded now.
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2007-03-07, 01:30
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Link #36 | |
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Administrator
Join Date: Dec 2003
Age: 41
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 But yeah, the "sponsored by" slides are a huge hint in that regard.You could look at it from either angle, but it's really a matter of how "big" the company is. Some of the larger animation companies get into financing and production (the Toeis and Pierrots of the world), but they deal mostly in the absolute mainstream stuff that pulls in the primetime ratings. Some other studios are part of mega-conglomorates (studios like Sunrise), so they bankroll a lot of original concepts and bring them straight to market too. Well-known studios, like J.C. Staff, GONZO, and the like do mostly commissioned work, but sometimes come up with their own concepts too. But the bulk of the late night stuff is from "the little guys" who rose up through ranks over the years, and yeah -- they're the ones negotiating for contract work. This keeps scaling down to the even smaller shops, who are negotiating with the other studios for key, tween, and other work. In other words (and this is actually incredibly obvious too, now that I think about it... duh...), the more money you have, the more risk you can absorb. The smaller guys need to be funded by larger groups, since they can't take the risk on their own -- this also means that they're less likely to get the "big hit" shows until they gain enough experience, clout, and funds. ...The fact that I had to write all the above paragraph just to come to such an obvious conclusion that I should have thought of in the first place makes me feel retarded. So don't feel bad!
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2007-03-07, 14:42
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Link #37 | |
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Not Enough Sleep
Join Date: Nov 2003
Location: R'lyeh
Age: 48
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 These series are not exactly made for merchandising. Except Gainax, who has been exploiting Rei and Asuka like a pimp.
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2007-03-07, 15:27
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Link #38 | |
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Umeboshi!
Join Date: Dec 2005
Location: Tejas
Age: 48
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I believe the answer is easy enough. Generally speaking they're created in the hopes of creating a marketing phenomenon that the studios can then claim the revenues from. Also it's important to divorce the design of the series itself (the artistic elements, like the animation and the writing, etc) from the business design. It's not relevant if we think a series would do well at merchandising (a more contemporary, and I believe better, example of what you're trying to illustrate would be Noein), all series have an equal chance at doing well in merchandise. The more important part of the equation is not the design of the characters but the success of the anime. For example, Noein is not really a series that seems like it should do well merchandising-wise. It's not tied into a manga or anything, but, on the other hand, it has a nice soundtrack and if it had become the next "big thing" there would have been merchandise for it all over the place (similar to FLCL). Really what the bigger company is banking on is not that the studio will design a series to sell merchandise but that the anime company will design a series that is succesful enough to generate merchandise sales. Because if it's succesful, there will be merchandise and people will buy it. Is there more risk involved in this approach? Definitely. But if someone does come up with the next Evangelion, that's going to be an incredible revenue stream for that company. Merchandise for Evangelion still sells (every month my Previews catalogue shows more of it - and that's in America), and it was produced more than ten years ago. Heck, there were figures for Excel Saga (and wall scrolls) a couple of months ago, and that was also produced ten years ago (though the manga is still being released in the US).
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2007-03-07, 15:34
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Link #39 |
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Μ ε r c ü r υ
Join Date: Jun 2004
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I have always considered the production costs to be pretty expensive. But, if a typical series cost around 2.5 million $ to produce, then considering the amount the company can earn from the licensing and distribution rights (in many different countries and languages - although the amount should change from country to country, I believe), in addition to the TV deals in Japan, and later on DVD and other related commercial products, it seems to be a really good business choice.
If anyone is interested in more detailed information on the anime business in Japan, you can check this article (the first article that shows up in google search results on that issue). Although it analyzes till the year 2004, it still includes quite useful information. |
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2007-05-23, 18:47
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