Split from Dealer's Room thread - Anime market and distribution

[MichaelEvans]

I got Full Metal Panic 1-24 for $50.  That's a little over $2 per episode;  The only real reason I broke down and paid that is because I'd really spent a pathetic quantity of cash otherwise.

I'd seen the first episode before, and liked it, and was willing to risk buying what would probably be seen as a premium series at what was the -absolute upper max- of what I'd ever willingly pay.

However it's clear that these marketing executives have utterly FAILED to understand basic supply/demand/production cost/profit result curves and deployment options.

[Edit by JeffT, Moderator: Changed subject line of split thread]

[murder_of_raven]

However it's clear that these marketing executives have utterly FAILED to understand basic supply/demand/production cost/profit result curves and deployment options.

Actually, I think the real problem is that Americans fail to remember the cost of making anime. We're talking literally Millions of dollars, sometimes per episode depending on the series. In America we get stuff for (on average) $2-4/episode, in Japan they often pay $20-25/episode. Per episode!

But that astronomical cost is what it takes to float the anime industry. I think that rather than complaining about how much it costs we should make a big effort to support legal streaming/simulcasts, like those on crunchyroll, funimation, youtube (ugh, ignore that one plz), and hulu. If enough people support this and, better yet, purchase legal high-quality files we could subsidize the DVD sales and be able to get everything cheaper.

My apologies for anyone who has already heard this speech before, I know that I have. XD

[Meganekko]

However it's clear that these marketing executives have utterly FAILED to understand basic supply/demand/production cost/profit result curves and deployment options.

When I was in Japan, I paid about $60(US) for each of my Full Metal Alchemist dvds...
$50 for 24 episodes is not bad considering I paid $120 for maybe 8 (I haven't watched the in a while so there might be less, but no more than episodes.
Manga on the other hand was much cheaper in Japan, each FMA volume was 390 yen, less than 4 dollars US, where the same manga here is twice the price.

[@random]

However it's clear that these marketing executives have utterly FAILED to understand basic supply/demand/production cost/profit result curves and deployment options.

Actually, I think the real problem is that Americans fail to remember the cost of making anime. We're talking literally Millions of dollars, sometimes per episode depending on the series. In America we get stuff for (on average) $2-4/episode, in Japan they often pay $20-25/episode. Per episode!

But that astronomical cost is what it takes to float the anime industry. I think that rather than complaining about how much it costs we should make a big effort to support legal streaming/simulcasts, like those on crunchyroll, funimation, youtube (ugh, ignore that one plz), and hulu. If enough people support this and, better yet, purchase legal high-quality files we could subsidize the DVD sales and be able to get everything cheaper.

My apologies for anyone who has already heard this speech before, I know that I have. XD

Excellent points, and I almost entirely agree with you. Those estimates for series production costs seem overstated, but that doesn't diminish the truth of what you're getting at.

Anyone ever heard of the Commodore 64? Really good computer for its time, and well-beloved. But because the ratio of software copiers to purchasers was too high, eventually they could no longer support production. Now they're just nostalgic paperweights.

Anime/manga won't suffer that kind of fate, but there'll be more companies like ADV shutting down in the future. I've even heard rumors that Tokyopop is in trouble.

[MichaelEvans]

Let me quote this in abridged mode.

Marketing executives have utterly FAILED to understand basic supply/demand/production cost/profit result curves and deployment options.

... Americans fail to remember the cost of making anime ... Millions of dollars, ... per episode ...

... purchase legal high-quality files we could subsidize the DVD sales and be able to get everything cheaper.

Your solution to high production costs is to continue to push physical units containing data, which are expensive to produce (more so for smaller volumes!) impossible to update, require physical transport and storage, and which cannot readily be scaled to demand?

That is an extremely old-media old-world solution.  There are better ways.  Give your customers -value-, do not treat your customers like criminals.  Cut costs, not quality.

I can see buying licenses, simple pieces of notarized paper that authorize personal copies of a work, and which contain a login and password to obtain or repair the local copy.

Distribution would be over the Internet, at vastly less cost than a DVD, and with easy potential for updates like approved fansubs, or support for storing extras like un-official fansubs that offer extended value.

That would of course be the entry level package, and I think it COULD compete with free but not legal/legal gray area.

If you want limited edition extras then you have to buy that (or the manga) and the upgrade package.

[murder_of_raven]

Those estimates for series production costs seem overstated, but that doesn't diminish the truth of what you're getting at.

I am unfortunately unable to verify my estimate with actual numbers, as I am not able to find the production costs for any specific series. However, I cite the budgets of two Ghibli films: Spirited Away $19 million and Ponyo On a Cliff $34 million. Of course these cost significantly more than an average anime series, but I had previously heard that Invader Zim (which was produced in Korea several years back) cost Nickelodeon $3-4 million dollars per episode so I assumed given inflation and the similar production quality of some recent anime (ie Death Note) that $1-2 million wasn't a bad estimate. If someone could find actual show prices it would of course solve this question entirely.

Your solution to high production costs is to continue to push physical units containing data, which are expensive to produce (more so for smaller volumes!) impossible to update, require physical transport and storage, and which cannot readily be scaled to demand?

Umm, I think that one of us isn't understanding the other. I was suggesting people purchase legal high-quality computer files of anime, such as those Funimation is currently selling. They cost nothing to produce, are possible to update, and require no physical transport. Aren't we talking about the same thing?

To Moderator: Thank you for splitting us to a new thread, I felt guilty going off-topic like that! :3

[MichaelEvans]

Umm, I think that one of us isn't understanding the other. I was suggesting people purchase legal high-quality computer files of anime, such as those Funimation is currently selling. They cost nothing to produce, are possible to update, and require no physical transport. Aren't we talking about the same thing?

To Moderator: Thank you for splitting us to a new thread, I felt guilty going off-topic like that! :3

Yes thank you, we had gone off on a tangent and lacked the power to fork without starting from scratch.

I think you might mean http://www4.funimation.com/video/?page=welcome, which at a glance seems to break the spirit of several requirements.

1) It seems to play within a Flash window inside a browser.
2) It isn't a license to have an open/clear copy of the stream for your own personal use (with such a stream it would also be possible to use external directions to play your content in abridged, AMV, and other modes).
3) I see no technical information about the codec, resolution or local storage requirements (is this streamed media only?  That is -not- a valid solution, it must still work while offline in areas that do not have reasonable Internet access; like our current hotel X.x)
4) It is -only- for Windows or OS X; it is not an OS independent solution (IE will work on current operating systems and operating systems of user choice in to the future; possibly including Linux, BSD, or anything else that may exist within our lifetimes which supports the given media formats).

[murder_of_raven]

Ouch! I think that I must've seen something else or that (more likely) they have changed it after some of the licensing troubles they were having. The one I saw allowed you to purchase a file of either the raw or the official sub (the raw was cheaper, there was also the option of buying both for a few dollars more) and the FAQ said something silly like "although we are not allowed to say you can use these for fan creations (like AMVs) we will not be pressing charges". It even specifically mentioned AMVs. Perhaps this was a different company? Idk. But I agree that funimation's current setup needs a lot of work.

And Flash window inside a browser? Ew! Why would you buy that if the free stream was already available?

[Kurohime]

A million per episode seems really high- a lot of high-budget American shows only cost that much (effects-heavy shows like Stargate and Lost might be up to $2 million by now, maybe), and Cartoon Network said a few years ago that they liked shows that only cost about 100,000 per episode (which would explain why they're crappy, I guess).  But I don't know how much labor costs the Japanese.  I know it's low-volume in this country, but it boggles my mind that a show that only needs to be dubbed costs twice as much as one of the most popular shows on television (for the interested, Lost), and is sold in boxes that only have four episodes each.  I haven't run into any anime, regardless of what it's production cost is, that's worth that much money to me.  (Fullmetal Alchemist came close though).  If I'm going to pay for something nice, I want real DVDs and shiny box art and stuff, not just a computer file that can be corrupted or accidentally deleted. 

What I want isn't so much high-quality streams or downloads as standard television quality that's simply there when I want it, like Naruto's doing with Hulu (and the other sites).  Stuff that plays well on my computer (I have SOOOOO much trouble with most streaming it's not worth the bother most of the time), and that's free (with a couple of ads).  So everybody, go to Hulu!!:D

[MichaelEvans]

And Flash window inside a browser? Ew! Why would you buy that if the free stream was already available?

Exactly, like it or not they are /competing/ with the 'free, if not technically legal' resources that are not likely to go away or die.

The quality needs to be at least as high (DVD rip quality at minimum, often 1280xwhatever, even 'Full HD' 1900xwhatever in some cases).
The file containers need to be 'modern' (.mp4 and/or ogg/mkv) and should support being re-merged in to other containers.
Any kind of DRM (In cryptographic terms trying to treat Alice as Eve) will only hurt legitimate consumers, not those who aren't customers anyway.
The codecs should be some kind of standard, as mentioned elsewhere good royalty free ones include Dirac and Theora for video, and Vorbis or even Flac for audio. (Yeah, flac doesn't compress much; you can always transport the stream in a compressed format like 7z or xz (mostly the same thing).)

Also remember to let the consumer extend the official streams with extras; Fansubs/Jokesubs (including textual through full-frame overlay styles and even video-merging; yeah I can hope... I don't even know of a container that supports that yet.), cutlists for abridged/AMV modes.

You can even work it out so that someone buys a license for a fully dubbed work, but gets the raw on the day it's released, and then the subtitle and dub tracks later as extras.  Or someone could buy 'backups sent in the mail' on DVD/whatever as an upgrade to the base package.

Not to mention all the other upgrades/upsells that could occur later.  Limited/plus editions including posters, and all kinds of other things.

[@random]

It's quite possible their hands are tied; I've heard Funi's people say at con panels that they run into some insane restrictions on file and stream security. Probably what happened was that there were incidents where identifiably-Funi files ended up on Youtube or a torrent site, and they had to go to the current setup to assuage someone with their panties in a twist.

The simplest way to keep someone from uploading it would be to never give people the complete file, and instead give them files that won't work without a thin stream of data from the Funi site to complete them. That would be my guess as to why they have the hoops like needing an active Net connection to play it, and why they're using a crash-happy security-hole-ridden piece of... excuse me, I mean "Flash"... player.

Regardless, with a restriction like "You have to get our permission every time you play it," purchasers aren't even being allowed to "own" it. If Funi's under these kind of constraints, they'd do better to junk the system and go for rental / ad revenue - this kind of nonsense only hurts their good name.

[MichaelEvans]

... Probably what happened was that there were incidents where identifiably-Funi files ended up on Youtube or a torrent site, and they had to go to the current setup to assuage someone with their panties in a twist.

...

Regardless, with a restriction like "You have to get our permission every time you play it," purchasers aren't even being allowed to "own" it. If Funi's under these kind of constraints, they'd do better to junk the system and go for rental / ad revenue - this kind of nonsense only hurts their good name.

They are already competing with free; it only takes -one- person leaking it for the digital (and hence effectively ZERO duplication cost) nature of the content to be realized.  They're only wasting everyone's time and making it harder on those who would be customers.

The solution is to take what fans area already doing; find a way of doing it /better/ and charing a fair VALUE price for it.  If customers were offered a solution that they saw as a value they would gladly remain or become customers.  If someone can't or won't pay then they'd not have been a customer in the first place.

(edit, minor grammar fixes)

[@random]

... Probably what happened was that there were incidents where identifiably-Funi files ended up on Youtube or a torrent site, and they had to go to the current setup to assuage someone with their panties in a twist.

...

Regardless, with a restriction like "You have to get our permission every time you play it," purchasers aren't even being allowed to "own" it. If Funi's under these kind of constraints, they'd do better to junk the system and go for rental / ad revenue - this kind of nonsense only hurts their good name.

They are already competing with free; it only takes -one- person leaking it for the digital (and hence effectively ZERO duplication cost) nature of the content to be realized.  They're only wasting everyone's time and making it harder on those who would be customers.

The solution is to take what fans area already doing; find a way of doing it /better/ and charing a fair VALUE price for it.  If customers were offered a solution that they saw as a value they would gladly remain or become customers.  If someone can't or won't pay then they'd not have been a customer in the first place.

(edit, minor grammar fixes)

You know that's true, I know that's true, and probably more than a few Funimites know it's true. And they do have a big advantage - their streaming resolution/quality is better than virtually anything you can get for free, and tons better than the majority of what you can get for free. But as long as they're being told what they can and can't do by people who have their heads stuck in a box, it doesn't matter. :-(

It could always be worse, though... imagine if they were as DRM-happy as the software industry. You'd have to type in the first seven letters of the eighth word on the third page of the jacket insert every time you want to play the disc. Or your DVD player is acting up and you decide to use your PS2 instead... oops, sorry! You're no longer allowed to play that disc anywhere.

[MichaelEvans]

If they did things like that at least the average consumers would vote properly with their wallets and end the pain.

[murder_of_raven]

If they did things like that at least the average consumers would vote properly with their wallets and end the pain.

Yeah, I think we're really waiting for the Japanese industry's online distribution to improve. Once the companies that actually own the anime have a precedent for it, they'll probably be much more permissive with their American distributors. And even if they aren't there's a chance we can at least buy raws directly from them.