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News & For Sale “Onward & Upward: The Future of Anime in American Markets” by m1cnBot

 
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m1cnBot 9 years ago on 07/13/07

Story Originally Posted By: John Booty

Article PictureForum stalwart and poster extraordinaire Joshua "Fievel" Kaplowitz brings us his report from Anime Expo 2007's industry panel on the future of anime.

The next few years are going to be pivotal ones for the anime industry. The entertainment industry in general is moving away from physical media such as DVDs and CDs and towards digital forms of distribution, something anime fans have been on the cutting edge of since the earliest days of affordable broadband and peer-to-peer file sharing.

Read on to find out what industry figures such as Tony Oliver of Bang Zoom! and Anime TV, Peter Heumiller of Comcast Select OnDemand, Justin Sevakis of ImaginAsian TV, Leo Chu of MTV and SpikeTV, and Eric Calderon of Gonzo Entertainment think about emerging issues as digital downloads, the future of anime on cable television, joint American-Japanese productions, and everybody's favorite topic - piracy.

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Pudduh 9 years ago on 07/13/07
Equipped: Sigil From Ed Elric's Coat
Glad somewhere in the West is developing their anime market at pace. Things are still very tough for the industry in the UK. Very tough, especially when retailers insist at selling Anime DVDs at £15 - £20 ($30 - $40) each.
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Fievel 9 years ago on 07/13/07
Equipped: Embarassing Yaoi Fanfiction by Bonk named "Cat Scratch Fever"
The thing is, Pudduh, that all that is likely to change somewhat soon. I didn't really emphasize it in the article, but a big thing they're looking towards in the U.S., is the shift from the typical American style of DVD release--4 or 5 episodes per DVD with limited extras--to a more Japanese style--1 or 2 episodes per DVD with a ton of extras.

I don't think it'll work quite the same, they'll still have to put at least 2-3 episodes per DVD, but because sales are declining so dramatically, companies are looking to shake up the market.

Look at what's going on right now. ADV and Bandai are releasing full series slim packs for $20-$30 each. Gonzo released a super-ultimate set of Samurai 7 DVDs at $40-50 a set that have special boxes with original artwork and include the entire storyboards for each episode.

You should take into account the fact that the UK is about 2 steps behind the US in terms of the anime sales market. About 5-6 years ago, when VHS was only just beginning to phase out, tapes and DVDs of anime were $30-40 each with maybe 2-3 episodes per set.

Shit's going to go down in a big way soon. The question is, will it be good or bad? I like the idea of collector's sets and putting series' out near-immediately after being acquired, but if you phase out low-cost sets for high-priced collector's editions and then put dubbing on the back burner in lieu of quick-release subs, you're going to alienate a sizable chunk of the current market.

The things a lot of companies are looking into right now, are which demographic is bigger and which demographic would be more hurt by getting brushed under the carpet for a few months while they cater to the other.
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TheDPQ 9 years ago on 07/13/07
Equipped: Kiss from Hiwatari-kun
With Internet TV / Downloadable Media being pushed around, i wouldn't be surprised if it goes online rather then focusing more on the offline aspects. Media in general is taking steps so that your TV and your Computer won't really be two different machines anymore. When that happens you won't have to rely on having OnDemand TV.. or even JUST a TV.. You could go to places like NetFlix'Watch' and download your anime. Its just quality isn't there yet. Its still better (and faster for new content) to just go rip it off.

Places like NarutoFan.com are easily getting money that could be going towards the distributors themselves. There is a market for people who want downloadable content that and will pay for the service (ie: faster downloads) rather then try and torrent it.

I haven't messed with Joost yet. And Netflix didn't have any anime i wanted to watch that i hadn't already seen. I've tried some of their movies but the quality was horrrrirble. CinemaNow had a decent setup and good quality it was only the selection that was poor. Should be interesting to see what this all leads to in the next few years.
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Pudduh 9 years ago on 07/13/07
Equipped: Sigil From Ed Elric's Coat
I remember having a chat with a member of ADV's UK staff. Well when I say "have a chat" I mean "sitting down to lunch with him and 15 other people in a Japanese Restaurant in London's China town", just to dispel any illusions of grandeur I might have. Some of the many questions that he was asked were mainly based around "why are DVDs so expensive in the UK?", "why are some ADV DVDs that are licensed and ready to sell in the States not making it to the UK?", "why does Europe have a high level of penetration with Anime & Manga when compared to the very low levels exhibited in the UK?" Stuff like that generally.

The first thing he said when answering questions on this theme was "there is a scale from 1 to 12 that we use to determine the state of the market in any one country. 1 being excellent and 12 being awful. The USA & Canada rate at about 2 to 3, Continental Europe rate at anywhere between 3 and 7 depending on where you are and the UK rates at 12. The conditions for trading in the UK are that bad."

He said that because getting Anime past film censors like the BBFC (British Board of Film Classification) costs about £20,000 ($40,000) a go. Even then, you will have a long wait because the system of film classification is clogged up with the sheer number of extreme pornographic movies submitted with the sole intention of being rejected so that they can get the "too hot for the UK" or "banned in the UK" label and be sold on the web. That is just one of the many costs, it simply isn't a case of taking a US ADV DVD and selling it in the UK, they virtually have to start all over again when planning the release of an ADV anime. With Manga it is much easier as there is little or no regulatory approval. That might be why Manga sells much better than Anime in the UK & Europe.

Also, the big stores like Virgin & HMV are not exactly clamoring for the stuff, so like likes of ADV and Manga entertainment have to settle with whatever price the retailers declare that they are "comfortable" with.

I'm not really in a position to "demand" anything really and it isn't all bad. Online retailers like play.com and even Amazon.co.uk offer stuff much more cheaply (like £9.99 instead of £19.99 for Anime and £4.99 instead of £10.99 for example) and because sterling is strong against the pussy dollar, as well as sites which now offer us Brits temporary US addresses so you can buy from American retailers who don't ship overseas, we can always take our money and go elsewhere.

I could see ADV and Manga Entertainment getting their own Joost channels or signing deals with Apple for Apple TV goodness. I heard that ADV is even considering their own on demand site similar to the BBCs iPlayer where you can pay to download episodes of an anime for a certain period of time.
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TheDPQ 9 years ago on 07/13/07
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we can always take our money and go elsewhere.

A good example of the marketplace looking to meet the demand of the consumers. It probably hurts the UK even more with all these restrictions. If it cost more and more to buy local people will just go elsewhere, and that hurts the UK sales which means they probably won't bring as much over there.

I could see ADV and Manga Entertainment getting their own Joost channels or signing deals with Apple for Apple TV goodness. I heard that ADV is even considering their own on demand site similar to the BBCs iPlayer where you can pay to download episodes of an anime for a certain period of time.

Hopefully. Its really the next step in getting media to the users. It may take some time. Not everyone feels releasing their shows in digital format is safe... and most of the DRM hurts rather then helps moving forward in that direction.
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Fievel 9 years ago on 07/13/07
Equipped: Embarassing Yaoi Fanfiction by Bonk named "Cat Scratch Fever"
Peter Heumiller from Comcast OnDemand was actually talking about eventual streaming video of their blocks of anime from the AnimeTV and Anime Network OnDemand. They would be up for about a week or two and then the next chunk of the series would go up.

The problem is the volume. It was mentioned at the panel that for about a week their servers went down because almost immediately after the launch of the Anime OnDemand networks, they were so inundated that everything crashed. This is great, but it's also bad. This means that it had a great response, which means it'll definitely get more attention in the future, but it's bad because it means that at present, they're still underestimating the market and what needs to be done to please the consumer.

If Eric Calderon and Leo Chu were the big-time proponents of the "Get that shit out there now! strategy. If you remember at all from last year's panel/article, Eric's the guy who spearheaded Afro Samurai and was primarily responsible for it being released simultaneously in the US and Japan. Tack on the fact that the DVDs with extra footage and goodies was released about a month or two after the series finished at a reasonable price (I think it's $25-30), and you have what I hope is the future of anime DVDs.
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Pudduh 9 years ago on 07/13/07
Equipped: Sigil From Ed Elric's Coat
Now when we start talking about on demand and possibly various ways of delivering IPTV services, this is where it starts to get interesting. Especially as the cost of delivering channels via an OD/IPTV service provided by your telephone company or your ISP should be much cheaper than it would be running your own standard television station. The premise being much similar to how they are distributing on demand content now only that they just have to initially invest in some hefty hosting and a good connection to whoever is offering the service (lets say for the sake of argument, AT&T) who does the main legwork of distributing content to the consumer. This is slightly different in the way that you do not have huge server and connection overheads.

As the method of delivering content is cheaper, the concept of having a huge library of any on demand content becomes a reality and those running IPTV/OD services as an add on to existing broadband packages will be eager to accumulate as much content as they can. British Telecom in the UK is already doing this with their quasi IPTV offering complemented by a gradually growing OD library. Will it be only a matter of time until ADV or Manga Entertainment get signed up in such a deal I think.
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Nikorasu 9 years ago on 07/13/07
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John Booty said:


Yeah, Bandai's one subdivision is already doing this with their exorbitantly-priced Gunbuster 2 releases at $30 an episode, which is a price that even a fanatic like I won't pay.

I think the rest of the industry is waiting to see h...


Are you serious? How on earth are companies in North America supposed to compete with fansubs? I was always under the impression that anime was so 'expensive' (and I'm hesitant to call it that) is because of the costs associated with it (licensing and translation mostly). How is a legit company supposed to compete with something free? How can you beat free?!

That said, I think that declining sales is more due to market where fans feel they are entitled to anime, that it is a right and not a privilege to see anime.
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Fievel 9 years ago on 07/14/07
Equipped: Embarassing Yaoi Fanfiction by Bonk named "Cat Scratch Fever"
John - They did mention iTunes, but it was a "Look to the future, ho ho ho!" brief mention that they didn't even seem that serious. I think the problem with iTunes is that it would be too cheap and the profit they would pull in off of it would be far too minimal to warrant the process.

US companies can sell individual TV episodes on iTunes, because they've already recouped most of their cost on advertisements and Nielson ratings. The $2/episode they make on iTunes is all profit.

With anime, on the other hand, their revenues are recouped primarily through sales of DVDs, merchandise and TV licensing. These companies are paying 2-3 times the budget of a normal US TV show's season to bring it over. Depending on the series, about 1/2 of that is recouped through TV licensing, then another 1/4 from merchandising. That leaves 1/4 for DVD sales and other miscellaneous sales. I don't think the money saved on pressing DVDs and printing cover art is quite equally to what they'd make if somebody bought the physical DVD.

Then again, I'm not exactly the most savvy on this field. I almost want to see if I can get in touch with Eric Calderon and have an "official" sit down with him on the subject of anime merchandising (he is the head of Creative Development, after all). He's actually the one who brought up some of the more creative methods of DVD and episode merchandising at the panel.

Nikorasu said:
How is a legit company supposed to compete with something free? How can you beat free?!


You'd be surprised. There is always a market for paying for something that you could own, though in a lesser format, for free. Think about it: Why would you want a poorly subtitled, low-quality fansub on your computer that you'd have to pay money to not only burn onto a DVD, but also buy a DVD player that's specially formatted to play the codecs, when you can have a nicely packaged DVD with special art from the series on the insert, professionally translated and edited subtitles, maybe a cute little pencil card (like the released with ROD TV and Requim For The Darkness), and a set of extras on the DVD (maybe some concept art, interviews with staff, etc.)? Hell, I know some people on OB that specifically buy the DVDs for the dubs, because they don't want to have to read subtitles when they watch the show.
 
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Sub 9 years ago on 07/31/07
I'm an armchair industry observer at best, but man, I wouldn't want to be in the position the US anime licensors are in. The way I see it, TV anime's a pretty disposable commodity: the majority of the market is going to be satisfied with seeing it once or twice, cheaply. Fansubs are doing this right now, and without inside help from the Japanese creators it'd be damn tough to outdo them. Even if you did, that core market that wants it rightnowrightnowrightnow would see a price tag and decide, all of a sudden, that a day doesn't sound too bad. Viz could have had a coup when they made that Death Note announcement, but the series is already over, and their online release is rendered irrelevant. It would have been interesting to see the results. Ultimately, though, I think a lot of the market just watches the shows cheaply and puts their money elsewhere in the subculture. Personally, I Netflix most of my stuff nowadays, buying only in the case of an extreme discount, deep love for the anime in question, or both.

CLEARLY, then, the only way to be truly successful in the US anime market is to sell yaoi paddles, Pocky, and Naruto headbands. Seriously! I was reading a post over at Patrick Macias' blog: a con vendor's post is best summed up with "Yeah, anime stuff doesn't really sell, it's about LIFESTYLE ACCESSORIES." And I think that's where the cash is.

http://...blogs.com/...terview-with-.html#comment-74813512
That post is here, by the way.

Oh, and Gunbuster 2 is $20 an episode at retail. That's still insane; hell, it's worse than the $15-an-episode VHS days. I've almost brought it to the counter at the comic shop three times now.
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Nikorasu 9 years ago on 08/01/07
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Sub said:
I'm an armchair industry observer at best, but man, I wouldn't want to be in the position the US anime licensors are in. The way I see it, TV anime's a pretty disposable commodity: the majority of the market is going to be satisfied with seeing it o...


Gunbuster 2 is the exception rather than the rule though.
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spyrral 8 years ago on 07/03/08
Equipped: Foreigner Belt... ROCK! named "Loverboy wil always suck!"
Bumping this because the title is hilarious given the current state of the anime industry.
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Donitsu 8 years ago on 07/03/08
Equipped: JEDI DICK
John Booty said:
it's the worst of all possible worlds


Somebody did his required voltaire readings in college

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