State of the Industry

[Nyxyin]

All you're doing is stating that "Hey, my ideas are stupid, but I have a right to say these stupid ideas, and YOU CAN'T STOP ME OR SAY I'M WRONG!"

No, actually, it's very easy to stop me.  Just because you and Jun only show interest the silly stuff doesn't mean that's all I've been saying.  For example, you two simply skipped Reply #54.  Onimusha showed interest in the original post, so I went back and dealt with that because he provided feedback that that's what he thought was interesting.  I was actually serious about Reply #54.  However, after that, the feedback I got seemed to indicate that you two were more interested in the silly pieces of the conversation, so that's how we ended up reverting again.  ;)

Heh, actually, I don't think Nyxyin's ideas are necessarily stupid. In fact, it maps to a business model used by thousands of legitimate, funded, even public companies today. It can be made viable, though I think it's a bit bubble-ish.

Thanks, Tony.  :)  Honestly, I'm a bit skeptical of the whole per-piece/per-use vs. monthly fee concept too, but it seems to be the way a lot of businesses are going.  I don't know how the ISPs went to flat monthly fees, but now DVD rental places are doing it, and cell phones and VoIP services are doing it too.  It seems to be based on the insurance companies' economic model (health insurance, car insurance, home insurance, etc.): they work out the odds and subscription fees and hope that everything goes according to calculations.  I do still worry that they have their calculations and assumptions all wrong and the monthly fees just don't balance out properly.  Actually, "bubble-ish" is a very good word for it; it sounds likely that the model is one of the factors that led to the earlier tech bust: they calculated only 20% usage on subscription lines, but many people suddenly started going to 100% usage.  But more and more businesses seem to be going in that direction, and much of the financing cycle for businesses seem to count on the subscription model.  I also think it's interesting that cable companies went the other way, starting with a subscription fee and then introducing pay-per-view later.  This flat subscription fee vs. a-la-carte pricing might be another thing that ends up going in circles too.

Maybe partnered Japanese/American companies can present a web site with pictureboards and Japanese audio track or Japanese text while letting fansub groups race to subtitle.

The idea of putting up a series of screenshots as a storyboard and then having fansub groups subtitle audio snippets while also providing critiques, giving Japanese lessons, debating possible localization choices, etc., might possibly have a chance of being covered under "fair use" (in a US court of law with a good enough lawyer).  So, it's possible that it can be done without either the American or Japanese companies' support.  Note that there is no explicit yardstick for "fair use", and it's evaluated on a case-by-case basis, so there's no way to say that something like this will be definitively legal.  However, if fans want to convert to a way of partial fansubbing that might stand a chance of being declared "fair use" in court without having to ask any companies for permission, bringing enough of their own educational, critical, or parodying content to the projects might potentially work.

As a side note, can we stay away from similies and metaphors? They're distracting...

I'll try, but I'm afraid that it's my primary method for translating what I think into words, so it's going to be hard for me...  Please let me know if I start doing it again.

[PyronIkari]

No, actually, it's very easy to stop me.  Just because you and Jun only show interest the silly stuff doesn't mean that's all I've been saying.  For example, you two simply skipped Reply #54.  Onimusha showed interest in the original post, so I went back and dealt with that because he provided feedback that that's what he thought was interesting.  I was actually serious about Reply #54.  However, after that, the feedback I got seemed to indicate that you two were more interested in the silly pieces of the conversation, so that's how we ended up reverting again.  ;)

I wrote the majority of that reply before work, and just finished it up after I got back. Hence the [Back from Work] and me mentioning that I was spending time before work to reply to you. So I didn't reply back.

So, I don't understand why they're blaming the downloaders when they're not counting TV numbers.  The anime on TV has gone up a lot since 2003.  To accuse the 40K downloaders of being responsible for a $50M/year decline, people would have to expect each downloader to buy $1250 of DVDs every year.  I might spend that much personally, but I doubt the people who are downloading can afford it.  It seems more realistic that those 40M households with Anime Network moved an average of less than $2/year to pay per view anime instead of spending it on DVDs.  Besides, there are many other legal ways to get anime without buying DVDs.  I know a friend that rents all his anime from NetFlix and another that uses the local video rental place.  Because they've spent money on rentals, and because renting is completely legal, they completely feel like they've done their part to support the anime industry, and they never actually buy any DVDs, so they don't show up in anime DVD sales figures.  Libraries are carrying quite a lot of anime, anime clubs are building anime lending libraries, and people are coming up with anime DVD trading sites as well.  All this is considered to be fully legal, and things like this are bound to happen more as anime gets more popular.  Until 2003, it's possible that these alternatives weren't widely available yet.  It might've been harder to get anime DVDs on NetFlix or at the local video store because anime just didn't have enough market penetration.  In 2003, there was no AZN TV, no AniMonday, and no Funimation channel.  There are a lot more legal ways to get anime without buying the DVDs now.  I'm not sure I see any proof that the downloaders are responsible for the decline.

If the American anime companies want to try to capitalize on them, that's great.  Merely saying that downloading is illegal and people shouldn't do it doesn't solve the problem.  There are a lot of still-legal alternatives that will get them access to anime without buying any DVDs.

But... it doesn't change anything. Okay, let's say that they find a way to make billions, the fact that fansubbers still illegally download still exists. The fact that they're pirating media, and sharing it, is still a problem. They are commiting a crime, and taking money from the company.

So they count TV, and they count movies, does that mean fansubbers aren't a problem? Do you know how those numbers are made? Apparently not. The idea is that, people that download are "buying" the media for 0$ when they should be paying x amount for it. So let's say 10 people download Bleach. That's 10 people getting the media, which means those people stole the reflective DVD's. Therefore that is 10 DVD's that were stolen and that costs the company 10xDVD cost. Are the numbers how much these downloaders would actually spend if they didn't download it? No, but that is the projected numbers for the amount of intellectual property that was stolen.

So, even when you're serious, your explainations and theories, as well as your ideas and understanding are still wrong and stupid.

This goes back to my first reply... ignorant people like you post as if they know anything, and instead of attempting to learn, they argue and fight back to prove that "what I said wasn't wrong".

[Nyxyin]

But... it doesn't change anything. Okay, let's say that they find a way to make billions, the fact that fansubbers still illegally download still exists. The fact that they're pirating media, and sharing it, is still a problem. They are commiting a crime

And we are back to the same thing yet again.  Whether you realize it or not, you are again asserting that legality is the be-all and end-all of the discussion and that the illegal is always a problem.  That is the entire basis of all your arguments.  You already said that many times.  I have provided different examples of why legality is only one factor, and a relatively small one at that.  I fundamentally have a moral code that transcends what any legislative body can dictate.  No matter how many names you try to call me or how many times you try to use those names, I'm not going to agree that legality is the only factor in the decision.

taking money from the company. ... The idea is that, people that download are "buying" the media for 0$ when they should be paying x amount for it.

Libraries, rental stores, and friends give people access to anime without paying the anime companies.  eBay will allow you to even get the physical media for an R1 DVD without sending even one cent to the anime companies.  That is arguably as much "taking money from the company" as watching rips.  The only difference is all these ways of watching anime without paying the anime companies are legal.  What's the difference in money to the anime companies between watching a borrowed DVD and watching a rip?  You're using this word "media", which is ambiguous.  Especially if people delete their rips after watching them, the impact to the anime companies is no different from borrowing the DVD from a friend, a library, or a rental store.

So let's say 10 people download Bleach. That's 10 people getting the media, which means those people stole the reflective DVD's.

I'm not sure what you mean by "reflective", but those 10 DVDs are still in the warehouse.  The physical media still belongs to the company.  They can still sell that physical media and still make the same amount of money on that physical copy whether they sold it to the downloader or whether they sold it to someone else.

Therefore that is 10 DVD's that were stolen and that costs the company 10xDVD cost.

No, at worst, those 10 copies only cost the company the amount of revenue they make off the DVDs, not the entire DVD cost.  So, let's say the company charges $25/DVD, but it cost $10 for the physical DVD, the ink and paper for the inserts, the keepsake case, the factory time and energy costs, etc.  The company still has the $10 worth of materials, so at most, each download may have been worth up to $15.  But then, each instance of legal borrowing would also be worth $15.

ignorant people like you post as if they know anything, and instead of attempting to learn, they argue and fight back to prove that "what I said wasn't wrong".

Ad hominem.  (And such irony.)

[PyronIkari]

And we are back to the same thing yet again.  Whether you realize it or not, you are again asserting that legality is the be-all and end-all of the discussion and that the illegal is always a problem.  That is the entire basis of all your arguments.  You already said that many times.  I have provided different examples of why legality is only one factor, and a relatively small one at that.  I fundamentally have a moral code that transcends what any legislative body can dictate.  No matter how many names you try to call me or how many times you try to use those names, I'm not going to agree that legality is the only factor in the decision.

But the focus is fansubbers and their actions. The whole point of this thread was fansubbers, and their actions, and their impact. The focus on whether or not companies make money, how else they make money was secondary to the fact that "Fansubbers are stealing money from companies". The legallity is a major issue, and that's because...

Libraries, rental stores, and friends give people access to anime without paying the anime companies.  eBay will allow you to even get the physical media for an R1 DVD without sending even one cent to the anime companies.  That is arguably as much "taking money from the company" as watching rips.  The only difference is all these ways of watching anime without paying the anime companies are legal.  What's the difference in money to the anime companies between watching a borrowed DVD and watching a rip?  You're using this word "media", which is ambiguous.  Especially if people delete their rips after watching them, the impact to the anime companies is no different from borrowing the DVD from a friend, a library, or a rental store.

... Ownership of the physical media. Libraries, borrowing it from friends, second hand stores. You are giving up the rights and usages of the media, and giving ownership to someone else. What's the difference? Libraries paid for it, or it was donated to them by someone that paid for it, and is given permission to do so. That purchase was still made and made legitimately. Second hand stores, e-bay etc. one person is giving up ownership of the DVD, so someone else can have it. But that initial purchase was still made and only one person has access to that media at any one time. You're missing the huge picture. It's not that "people watch it without paying for it", so much that they have to go through the process of ownership. Hell, you can "WATCH IT ON TV FOR FREE!" that's basicall what you're equating it to. And again, that's wrong, because the processes are still there. Advertisements on TV paid for it which is why you're allowed to watch it. Economical rotation. Downloading it off the internet, isn't the same, because you're cutting out the economical middle man, and watching something without the money revolution to reflect it. That is money lost in rotation, the the companies would have seen. If people delete their rips, that's no different still. They still possessed ownership of the DVD without purchase.

I don't get how you're still trying to justify fansubs. People don't deserve things just because they want to. You're stating "libraries exist, so people should get books for free too!" Then why the hell do college kids have to pay 100-200$ for a single text book in school?

I'm not sure what you mean by "reflective", but those 10 DVDs are still in the warehouse.  The physical media still belongs to the company.  They can still sell that physical media and still make the same amount of money on that physical copy whether they sold it to the downloader or whether they sold it to someone else.

Do you not understand "Intellectual property"?

No, at worst, those 10 copies only cost the company the amount of revenue they make off the DVDs, not the entire DVD cost.  So, let's say the company charges $25/DVD, but it cost $10 for the physical DVD, the ink and paper for the inserts, the keepsake case, the factory time and energy costs, etc.  The company still has the $10 worth of materials, so at most, each download may have been worth up to $15.  But then, each instance of legal borrowing would also be worth $15.

It matters how distribution is done, but that's besides the point. It costs the company money. THe exact amount isn't the issue and I didn't want to bother writing that all up. They still lose money, why are you trying to point out insignificant details that go no where.

Ad hominem.  (And such irony.)

Actually, it wasn't. It was a direct statement. Ad hominems are used to sidestep arguement and attack the person instead so that they seem wrong without having a point. I have a point, and more than support it, I'm just telling you that in addition.

[Tony]

Heh, actually, I don't think Nyxyin's ideas are necessarily stupid. In fact, it maps to a business model used by thousands of legitimate, funded, even public companies today. It can be made viable, though I think it's a bit bubble-ish.

Thanks, Tony.  :)  Honestly, I'm a bit skeptical of the whole per-piece/per-use vs. monthly fee concept too, but it seems to be the way a lot of businesses are going.

Actually I wasn't referring to that ^^; But those are good points nonetheless.

The model I was talking basically boils down to this: giving away the product for free in order to make revenue elsewhere.

- Linux vendors work this way. You can download linux for free, but if you want a physical DVD - or help installing/maintaining it - you have to pay.
- TV. The money comes from advertisers.
- A LOT of internet companies work this way. Even google: they create search software, but make their money selling advertisements to show people using their software.

This could work for anime as well. If the video market really does tank, and tanks globally, then this could be the new model to use. Give away the anime for free, and make the profit off of merchandise, collectors items, advertisements, etc.

I don't know how the ISPs went to flat monthly fees, but now DVD rental places are doing it, and cell phones and VoIP services are doing it too.  It seems to be based on the insurance companies' economic model (health insurance, car insurance, home insurance, etc.): they work out the odds and subscription fees and hope that everything goes according to calculations.  I do still worry that they have their calculations and assumptions all wrong and the monthly fees just don't balance out properly.

There's a few things at play. In general, the first wave of customers pay for the underlying infrastructure. Once that's over with, the margins get big - but that also makes it easier for prices to drop. By this time, though, you should have enough data about usage to figure out how much you can offer and for what price. Eventually prices work their way down to what companies can sustain.

There's all kinds of benefits of a subscription service, too. People forget to turn it off, don't use it as much as they could, etc. A lot of companies use these kinds of trends to make a lot of money. And, there are almost always use clauses that prevent people from abusing the subscription.

I also think it's interesting that cable companies went the other way, starting with a subscription fee and then introducing pay-per-view later.  This flat subscription fee vs. a-la-carte pricing might be another thing that ends up going in circles too.

I think that might be a different story; I think it's just ad hoc reaction to subscribers complaining that they've got 300 channels and nothing to watch. Offer VOD and the subscribers are happier. Of course, you're still getting charged a subscription fee to get VOD, so the companies are still happily making a buck - even if they're going back to the old pay-per-view model.

As a side note, can we stay away from similies and metaphors? They're distracting...

I'll try, but I'm afraid that it's my primary method for translating what I think into words, so it's going to be hard for me...  Please let me know if I start doing it again.

I do it all the time! I have to really force myself not to, mostly because readers get distracted or hung up on the metaphor, but also because it helps clarify my own thoughts. (That is, the process of figuring out how to say it without metaphor helps me get a better grip on what I'm talking about. Something a learned from and old English teacher.)

[Nyxyin]

Actually I wasn't referring to that ^^;

Oops. ^^;

The model I was talking basically boils down to this: giving away the product for free in order to make revenue elsewhere.

Ah, OK.

- Linux vendors work this way. You can download linux for free, but if you want a physical DVD - or help installing/maintaining it - you have to pay.

Not related to the fansubbing conversation, but I found it interesting that Ubuntu seems to even have found a way to offer to ship physical CDs for free:

Ubuntu is available free of charge and we can send you CDs of the latest version (7.10 (Gutsy Gibbon)) with no extra cost, but the delivery may take up to ten weeks, so you should consider downloading the CD images if you have a fast Internet connection."

I don't know if anybody has ever taken them up on the offer, but it definitely surprised me to see them offer physical CD images.  I think people value the project enough and the demand for physical media is low enough that they make enough in donations to support it.

- TV. The money comes from advertisers.
- A LOT of internet companies work this way. Even google: they create search software, but make their money selling advertisements to show people using their software.

This could work for anime as well. If the video market really does tank, and tanks globally, then this could be the new model to use. Give away the anime for free, and make the profit off of merchandise, collectors items, advertisements, etc.

I agree with all that, but I'm not sure how any of it is "bubble-ish"?  To me, ads seem even more important during a recession because consumers are psychologically discouraged from spending due to the economic conditions, and ads are valuable because they tweak consumer psychology.  Anime itself (as well as all entertainment) is fundamentally "bubble-ish" because they're luxury goods, and demand for luxury goods is elastic and tends to become very unstable during recessions.  Selling ads instead of anime would basically be converting the very elastic demand into more inelastic demand.  (Actually, come to think of it, maybe I don't understand what you meant by "bubble-ish" either.  ^^;; )

There's also the Baen Free Library model of "the first hit is free".  I think that's what fansubbing should've settled down into: subtitle several episodes to get fans addicted, and then the fans can get the rest from the companies when they come over.  Unfortunately, fansub time has sped up drastically, and between the license negotiations and the commercial production time, the R1 release takes so long that all the fansub demand has evaporated by the time the R1s can be purchased, and all the people who were downloading fansubs had forgotten about the series.  If American anime companies can firmly commit to a release date before announcing a license, maybe they can take pre-orders before the fansub demand evaporates.  Unfortunately, I believe that, if the American companies have the distribution rights and don't enforce them, there's a risk that the Japanese companies lose their copyrights.

One solution to the fansub problem is to do what the fansubbers have been asking for all along: If they're going to license a series for gaijin distribution anyways, why not just go for a simultaneous worldwide release?  I remember hearing of a few titles that were supposed to do that.  What happened to them?  The Internet has made the market global.  Trying to keep overseas licenses separate from domestic releases keeps the gray market open.  Sony has already acknowledged this.  R2 Ghibli titles already have gaijin subtitles on them, and when we go to Blu-ray, Ghibli titles should be ready for worldwide distribution.  And, with the new technology, companies should be able to reset price expectations.  Why not bring Japanese and gaijin prices in line with each other?  If anime companies are saying that they can't drop prices until they sell more copies, then shouldn't having one master for all BR-R1 countries allow them to drop prices?  So, maybe any fansub problems will simply expire when Blu-ray comes anyways.  If the Japanese companies recognize the market as global and don't want to incorporate the American anime companies into the process (although I don't see why not -- the American companies have the sub and dub resources ready for them), then the American anime companies might also expire when Blu-ray comes, but I don't think that hurts anime itself.

Come to think of it, can that be the real reason why Geneon USA is gone?  Maybe it isn't that they ran into financial difficulties as the original post suggestioned.  Maybe Geneon.jp is taking back those resources and positioning itself to go global...?  That'd be really interesting.

There's a few things at play. In general, the first wave of customers pay for the underlying infrastructure. Once that's over with, the margins get big - but that also makes it easier for prices to drop. By this time, though, you should have enough data about usage to figure out how much you can offer and for what price. Eventually prices work their way down to what companies can sustain.

In theory, that should be true.  I hope you don't mind the digression, but...

Part of the problem with ISP services is that there were a few very big companies that can run the ISP side at a loss and use profits (not to mention existing infrastructure) from some other part of the company (such as phone and cable) to cover the expenses.  This strategy pretty much drove most of the previous ISPs out of business and makes it almost impossible for new competition to start.  I think we'll see prices go up to what the companies want to sustain.  Furthermore, I think we'll also see a drop in the speed at which upgrades happen.  We should have higher speeds for cheaper prices in large metropolitan areas by now.  Most other countries do.  Japan is better than most countries, but I found http://bbpromo.yahoo.co.jp/adsl/regular/index.html to be interesting (scroll down a bit to the table).  Their DSL downloads faster than a DS3, uploads faster than a T1, and costs much less than a fractional frame relay line.  The technology exists, but we can't buy it here no matter how much we're willing to pay.  I don't know how good the service actually is or what restrictions they put on the use, but those advertised speeds are impressive (and the prices are good too).

I think it's just ad hoc reaction to subscribers complaining that they've got 300 channels and nothing to watch. Offer VOD and the subscribers are happier. Of course, you're still getting charged a subscription fee to get VOD, so the companies are still happily making a buck - even if they're going back to the old pay-per-view model.

Well...  I think cables TV tends to work because they have a bit of a monopoly.  Everybody needs TV, even if it's just for emergency broadcasts.  The broadcast airwaves just can't be picked up very well from many places these days.  So, many people pretty much have to have cable, and in many places, there just isn't a choice of cable companies.  It's great that the cable companies are nice and continuing to innovate, but maybe it's also partly because they're greedy and they're looking around to see what other industries they can entice consumers away from, and they decided to try to get into the phone market and the video rental market.

I have to really force myself not to, mostly because readers get distracted or hung up on the metaphor, but also because it helps clarify my own thoughts. (That is, the process of figuring out how to say it without metaphor helps me get a better grip on what I'm talking about. Something a learned from and old English teacher.)

^^;  Well... I'll try.  English was one of my least favorite subjects.  It takes a lot of concentration for me to form coherent sentences at all.  I've been told that a lot of people think in words or pictures, but I don't normally do that.  In my head, when I debate, I have all these simultaneous thoughts from many points of view on all sides of the conversation, but when I try to narrow it down into one sequential line of reasoning and put words to it, it's very limiting, and the points get all muddied together, and I tend to lose my grasp on the thought structure.  A trick I learned from an English teacher is "a picture is worth a thousand words", and I found that most people tend to understand faster if I use fewer words and make them into pictures than if I use all the direct words I need to get my point across.

Ad hominems are used to sidestep argument and attack the person instead so that they seem wrong without having a point. I have a point, and more than support it, I'm just telling you that in addition.

So, if a post has some other content somewhere, it's suddenly OK to riddle it with random ad hominem words throughout and dedicate a paragraph to ad hominem at the end?  Sure, OK.  Frankly, Pyron, you haven't said anything that Big Media hasn't been brainwashing into the masses for decades now.  You keep coming back to "it's illegal" (and "it's stupid/crap/ignorant", and frankly, words like "stupid", "crap", "ignorant" have no real content other than as ad hominem attacks and simply show a limited vocabulary, lack of original thought, an inability to write proper closing and transitions, and an interest more in malicious intent then the actual content of the conversation -- use of words such as "stupid" and "crap" about the content of a conversation become self-fulfilling prophesies).

I don't get how you're still trying to justify fansubs.

I'm not trying to justify fansubs per se.  I'm just trying to skip past the justification or lack of justification of fansubs and start from "other industries haven't been able to get downloaders to stop" and "fansubbers are something the other industries haven't looked at, and they probably don't intend to be malicious, so is there something more we can do about that?"  You keep bringing the conversation back to "downloaders should stop" and "fansubs are illegal", which closes the conversation.  Every time you do that, I have to open it back up again.  For decades or longer (audio tapes), Big Media has been bogging down their industries by stubbornly returning to "it's illegal" and "they're stealing money from us", but dwelling on that doesn't stop the downloaders.  If they dedicated all the energy that they wasted on "it's illegal" and instead contemplated "How can we get that money back?", then they might've been able to make more money and gain more fans.  Instead, they alienated a large portion of their talent in addition to their consumers.  Even though consumers knew it was illegal and that the RIAA wouldn't hesitate to bring legal action, they started feeling morally justified in downloading because they decided that Big Media was overcharging, Big Media was malicious, Big Media was "The Enemy", and Big Media was cheating their beloved idols, so they decided it was not morally bad to do things to hurt Big Media.

Frankly, I don't blame Big Media for what they did.  I think they had every right to do it, and I can understand why they didn't feel like they had a choice.  I also think Big Media actually earned the money it's charging both sides.  I don't think their "talent" is actually very talented.  I think Big Media does bring millions of dollars worth of publicity to the so-called "talent" and pretty much buys fans for the talent by brainwashing the masses with lots of "free" exposure (which Big Media pays for).  I think Big Media spent a lot of money making fans for those idols.  Besides, if Big Media didn't put up a fuss in enforcing their copyrights, they could've lost those rights.  Still, no matter how justified they were in doing what they did, Big Media showed that such a tactic simply doesn't work, and they alienated both their consumers and their "talent" by trying.  So, other industries are trying to learn from this and trying to figure out alternatives.  The attitude in the first post is problematic because it's just regurgitating the Big Media attitude that has already failed, no matter how morally justified that attitude might have been.

One way to make more money is to cut costs.  An article in the original link blames the Japanese companies for keeping licensing costs high even if they're not warranted.  From the consumer point of view, there's been an avalanche of R1 releases, and most of them just aren't very interesting.  Even if it were interesting, anime fans only have so much budget.  If they're not making money, maybe the American companies are just getting too many titles and tapping out the fans that can pay.  It doesn't seem like the American anime companies are being very selective about what they get, and they seem to copy the attitude of the ego subbers: let's race all the other groups to see who can get titles.  This puts the American anime companies in a bidding war against each other, and that drives up the price of the licenses.  So, as localizers drop out, the costs should fall for the remaining companies.

Another way to make more money is to convince people who previously were not interested to become consumers.  If they can drop prices, it's more likely that they can dip into people who were previously not buying anime because of the extra cost.

Also, maybe they're tapping out the disposable incomes of their fans.  The economy hasn't been doing that well in general, and anime is a luxury good.  Some fans used to collect every last R1 anime title just to support the industry, especially during the tech boom (since many anime fans are also geeks).  Back then, it did make sense for the companies to license whatever they can because those fans would buy it, no matter how bad it was.  Now that the industry is releasing over 700 titles per year, no fan can afford that.  They've licensed so many series that they've exhausted the incomes of their most avid fans.  These days, some buyers form groups in which each person gets a different title and share whereas, during the tech boom, each person in the entire group would've gotten their own copy.  Consumers had to become more selective, and shouldn't companies reflect that with their licensing decisions?  As American anime companies become more selective about what they license, then the Japanese companies will feel the decrease in demand and probably lower the licensing prices as well.  On the other hand, if the American anime companies already locked themselves into certain commits or something, then that's a problem.  If fans hear about things like that, however, maybe it would help people sympathize more with their plight.  Sympathy -- and goodwill in general -- can translate to dollars, and we have a lot of "green" companies that are taking advantage of this phenomenon.

In any case, with the Blu-ray announcement, it think it'd be interesting to see how BR-R1 impacts fansubbing.

[Tony]

I don't know if anybody has ever taken them up on the offer, but it definitely surprised me to see them offer physical CD images.  I think people value the project enough and the demand for physical media is low enough that they make enough in donations to support it.

Low demand, low prices, and a chance to take more market share. I wonder how much

I agree with all that, but I'm not sure how any of it is "bubble-ish"?

See: the web ca. 2001. ;D A lot of people formed start-ups on these kinds of ideas. People are still forming businesses on these kinds of ideas. Take Facebook, whose revenue is entirely from ads. Microsoft bought a 1.6% stake for $240 million, making Facebook's valuation $15 billion. Yet their revenues are estimated at only 1% of that - about $100-$150 million per year. There's a big discrepancy there - a bubble waiting to burst.

What I'm saying is, speculators might see 40,000 people gobbling up releases and think that sounds like a market ready to be exploited. But, as we've discussed, that's not necessarily true. If industry decides to go this route, it'll be hard to go back (who pays for something if tradition is that it is free?) and if it fails, there's not much where else to go.

To me, ads seem even more important during a recession because consumers are psychologically discouraged from spending due to the economic conditions, and ads are valuable because they tweak consumer psychology.  Anime itself (as well as all entertainment) is fundamentally "bubble-ish" because they're luxury goods, and demand for luxury goods is elastic and tends to become very unstable during recessions.  Selling ads instead of anime would basically be converting the very elastic demand into more inelastic demand.  (Actually, come to think of it, maybe I don't understand what you meant by "bubble-ish" either.  ^^;; )

I don't disagree, it's just that these nth-order/abstract markets - ones where you don't make money off of the things you create - get messy quick, and die in strange ways.

There's also the Baen Free Library model of "the first hit is free".  I think that's what fansubbing should've settled down into: subtitle several episodes to get fans addicted, and then the fans can get the rest from the companies when they come over.  Unfortunately, fansub time has sped up drastically, and between the license negotiations and the commercial production time, the R1 release takes so long that all the fansub demand has evaporated by the time the R1s can be purchased, and all the people who were downloading fansubs had forgotten about the series.

I'd say that's a pretty good diagnosis of the situation; fansubs got faster, easier, cheaper whereas industry got slower and more complicated.

If American anime companies can firmly commit to a release date before announcing a license, maybe they can take pre-orders before the fansub demand evaporates.  Unfortunately, I believe that, if the American companies have the distribution rights and don't enforce them, there's a risk that the Japanese companies lose their copyrights.

I'm not sure it's possible, but speed may be the key. I could see that working for a huge series/franchise, but most series aren't buzz-worthy enough for pre-order status.

One solution to the fansub problem is to do what the fansubbers have been asking for all along: If they're going to license a series for gaijin distribution anyways, why not just go for a simultaneous worldwide release?

I think it's too tricky. Even blockbuster hollywood movies don't all have simultaneous, world-wide releases - even in the same language, even if they are simply subtitled. There's a lot of risk and a lot of work in translating/subbing/dubbing something before it's officially released.

Besides, these are mostly TV shows, that won't go to video for some time. If they don't get out in a week or less, there's no hope - fansubbers will have beat them.

R2 Ghibli titles already have gaijin subtitles on them, and when we go to Blu-ray, Ghibli titles should be ready for worldwide distribution.

Yeah, but... they're Ghibli.  :P And these tend to be the traditional movie model of theatrical release to DVD.

And, with the new technology, companies should be able to reset price expectations.  Why not bring Japanese and gaijin prices in line with each other?

I thought Japanese prices were more expensive...? Anyway, the prices will have to drop to the lowest value, or be very close to it, or you self-compete. (Don't by the $30 US version; buy the UK version for $10+shipping!)

Come to think of it, can that be the real reason why Geneon USA is gone?  Maybe it isn't that they ran into financial difficulties as the original post suggestioned.  Maybe Geneon.jp is taking back those resources and positioning itself to go global...?  That'd be really interesting.

Sorry, but I'd say that's wishful thinking. ^^;

Part of the problem with ISP services...[snip]

Yes and no... it's really complicated. Large companies often use their size as leverage to kill competition in emerging/growth markets (see xbox) but just about every market hates to pay more. The overall trend is always lower prices and/or better service. With regard to ISPs, there are a bunch of historical factors with telcos that may have stunted growth here compared to Japan, but that doesn't imply that prices are going to get higher. Of course, as you said, companies will do just about anything they can to make sure the prices are what THEY want-including slowing growth and competition, as much as is legal.

It's great that the cable companies are nice and continuing to innovate, but maybe it's also partly because they're greedy and they're looking around to see what other industries they can entice consumers away from, and they decided to try to get into the phone market and the video rental market.

I think you're maybe reading morality into my explanation. They continue to innovate BECAUSE they're greedy. If it helps the customers, it's usually only a hook to charge more. Like you said, they probably got into it so they could branch out and get as much money from the stream as possible. Is it good for the customer? Sure - but it's even BETTER for the companies.

[Nyxyin]

What I'm saying is, speculators might see 40,000 people gobbling up releases and think that sounds like a market ready to be exploited. But, as we've discussed, that's not necessarily true.

Ah, OK.  Good point.  In general, I think all of your points were good, so I'm just going to say that here once instead of repeating "good point" throughout the post.

If industry decides to go this route, it'll be hard to go back (who pays for something if tradition is that it is free?) and if it fails, there's not much where else to go.

Besides, these are mostly TV shows, that won't go to video for some time.

Oh!  Having both of those in the same post is interesting.  Are the anime companies competing against tradition to begin with?  From certain points of view, the anime looks like it's "free" on TV to begin with, so "who pays for something if tradition is that it is free"?

Even blockbuster hollywood movies don't all have simultaneous, world-wide releases - even in the same language, even if they are simply subtitled.

That's true, but we had NTSC vs PAL, Region 1 vs Region 2, and lots of physical and technical challenges to global distribution.  Now, we have Region A for Blu-Ray, and we have a global Internet.  It's not going to solve the problem any time in the near future, but Region A should have some sort of impact as people start adopting Blu-Ray.  (BTW, I'm sorry about using the incorrect term before, and I was also wrong before: Region A doesn't seem to cover Europe, so they'd still be separate.)

And, with the new technology, companies should be able to reset price expectations.  Why not bring Japanese and gaijin prices in line with each other?

I thought Japanese prices were more expensive...? Anyway, the prices will have to drop to the lowest value, or be very close to it, or you self-compete. (Don't by the $30 US version; buy the UK version for $10+shipping!)

I meant that people should be willing to pay more for Blu-Ray because it's new and improved technology.  So, even if Americans used to paying $20/DVD and the Japanese used to pay $40/DVD, maybe we'd all be willing to pay $50/disk for Blu-Ray if it's marketed well.  Basically, Blu-Ray might offer a chance to get the American consumers used to paying Japanese prices for anime.  Also, since we have the same Region A across the US and Japan, maybe the blockbuster movie companies and the US TV companies would also raise their prices to include dubbing and subbing costs for the Japanese market.  Apparently, some of our US TV shows become quite popular over in Japan too.  Shouldn't companies localizing US TV shows for Japan have just as many difficulties with downloaders than those localizing Japanese shows for the US?  (The downloaders in Japan should have more bandwidth.)  Wasn't doing something like this part of the companies' goals when they were creating Region A?

Come to think of it, can that be the real reason why Geneon USA is gone?  Maybe it isn't that they ran into financial difficulties as the original post suggestioned.  Maybe Geneon.jp is taking back those resources and positioning itself to go global...?  That'd be really interesting.

Sorry, but I'd say that's wishful thinking. ^^;

Yes, probably.  But asking downloaders to start buying DVDs because they're being told that downloading is illegal seems like wishful thinking to me too, so I think this whole thread was based on wishful thinking to begin with.  ;)

Without wishful thinking, the state of the world is that downloading is illegal, but some people do it anyways, and there probably aren't enough of them that it's worth putting in the extra money required to actually do anything about them, so why bother thinking about them at all?  Realistically, people have already thought about the problem, and they've already set into motion some changes that should have an interesting impact in the future.  But, well, if we left it at that, then we wouldn't have explored a lot of other things in the process.

One idea that might be worth keeping is trying to encourage fansubbers to use methods that might more readily fall under fair use.  Maybe school and library anime clubs should be encouraged to do that too.  If they critique the series and discuss the series as an educational activity instead of just watching episodes with strangers, it might not be so illegal.  Maybe Fanime should do that as well.  Maybe schedule an extra 10 minutes between series in the viewing rooms to have a discussion, ask people for critiques, etc.  Anime Videos already has a lot of interesting things going on, but maybe they can have something like a Tezuka block in which two drastically different Tezuka series are shown, and then they can hold a discussion about what Tezuka's philosophical and political views might've been and contrast them to those of Greek philosophers and such.  Or something like that.  Come to think of it, it'd be somewhat like doing for anime what Ric Meyers does for Kung Fu.