So I Learned About Anime Sales in Japan Today...

Just some random pictures to make my boring post look better~

So, I just came upon this as I was browsing 4chan: a former manager of Madhouse (animation studio) comments on how fansubbing and 3D animation is putting anime out of business. (Source: ASCII)

(Aaro Note~ : Pearz says the following summary is copy-pasted. I fixed minor errors. She says, "Google a piece of it and you'll find the original." I say, "You're so lazy." The end.)

Summary of the post:

According to ASCII.jp, Masuda Hiromichi, the former executive director of Madhouse Studios, said that fansubs and the shift of the worldwide trend toward 3D anime have become the major obstacles for Japanese anime producers to establish a business model outside of Japan.

1. Even Naruto cannot make money.
The most successful case of exported anime has been Pocket Monster. It made huge sales in the early 2000s - however, most of the profits were from character goods and games. As for Naruto's case, the main merchandise is video media, but most people are just satisfied with watching free videos and never spend money on the DVDs. The popularity of Japanese anime has continued to rise, but the overseas sales of anime in 2009 dropped by 51% compared to 2006.

2. Small-sized producers are helpless against fansubs.
It's impossible to carry out a thorough legal action against unauthorized streaming and file sharing. The yearly sales of a major Japanese anime company are almost equal to Walt Disney's yearly expenses on anti-piracy measures.

3. Cooperation with Crunchyroll didn't work well.
We did try to go along with fansub groups by making a contract with Crunchyroll. We had expected Crunchyroll to take actions against unauthorized sharing, but they couldn't. They are also a small-sized company like us. Many of the titles are simply incompatible with the simulcast because the production of each TV episode usually completes just before the airing time in Japan.

4. "Fansub as free publicity" is unreal.
There is an idea that Japanese anime producers can treat fansubs as free PR methods and can make money by selling goods instead of DVDs; however, it's not such a simple business to sell official goods overseas. The license contracts and the establishment of the sales channels take more time and energy than the sales of video media do. In the meantime, pirated goods appear and dominate. Moreover, the goods market for the core-fan-oriented anime is way smaller than that of kids' anime. We have to rely on the video media business, which without a doubt conflicts with the free fansubs.

5. 2D anime is becoming obsolete.
Hollywood has fully adopted 3D anime technology. The demand for 2D anime won't grow anymore. The mass-production of 3D anime is no match for the inefficient production of 2D anime.

So, to start off, I don't think this guy understands what they mean about "3D anime". That is just the CG movies (like Shrek, Wall-E, etc). By no means will it "obsolete" the current anime style. It is more like a different way to express your art. That is like saying a TV series will obsolete all movies, because it is more common.

The main thing is that they aren't addressing the real problem: how anime is being sold nowadays in Japan. All the things listed are not the main catalyst to the problem. Disney spending money on anti-piracy is still a percentage of their sales. Clearly, they can still make money in this market with big budget projects. The real main problem with anime in Japan? The price.

I only just learned this from a series of Google searches today, but let's explain with Madoka as the example. For this, the first BD disc at HMV costs 7350Yen. That single disc only contains 2 episodes. So, a 12-episode season is provided in 6 discs. 7350 x 6 = 44,100Yen. This is equivalent to $540USD (based on the exchange rates right now). This is around $45USD per episode. To anyone used to the American market, this is insanity. This is over double the price of your average movie in BD (which would be probably around $30), and a movie has more minutes of a video than the 2 episodes combined. This sums up a major first problem; it is a ridiculous price in comparison to what the American market is used to.

The second problem (still partially linked to the price) is the huge difference in how the TV airings work. A rundown of how the US networks work: the series is bought by the network and that is how the production group makes money (the network uses revenue from commercials to buy shows, in turn). In Japan, the TV networks work like this: the animation studios pay the network to air their anime and rely on things like BD sales for money. You can clearly see where the huge difference is in how money is generated for TV series, which leads to a huge problem. This is linked to the price of BD problem, since that is their main revenue stream rather than just another method of money-making (like it is for the American market).

These two factors combined together create a much bigger problem. Animation studios expect to make their money the same way, but obviously it is a different market and they are not adjusting to it well. The huge price difference is just too big a gap to what the Americans are used to.

Another major problem is the influence of the American market on theirs. As the world slowly becomes more and more intertwined, things will change. A perfect example is that most of our clothes are made in China due to cheaper labour costs that equalized the price of clothing around the world (at least the non-designer kinds). I think something similar is bound to happen with anime, but it is hard to let go of a good thing. Prices for BD discs will become more equalized and there will be a smaller fluctuation in price. That would mean a substantial drop in price that I don't believe any company wants to voluntarily have happen.

Fansubs may contribute to the problem, but I believe this money-making model is the real problem. Things need to change so that these studios can survive in the other markets that they are having trouble expanding in. Slowly, as the world becomes a closer community (which I believe is what we're moving towards), things will have to change regardless for survival.

This is just another random rant of mine, but I believe change will be necessary for this industry to survive. I think it will survive regardless; it's just that the ones that embrace the change will be ahead of the pack rather than left behind in the dust.

On a totally unrelated note: through my poking around to find real prices of BD anime, I came across BDs of Chinese movies. With some work, I finally found a page to find movies, organized by date so I can watch recent Cantonese movies. I can finally watch more Cantonese movies (since I can understand it without subs, after all). Oh, how I missed Chinese humour movies; they excel at those so much. It's so hard to find Cantonese movies nowadays, with Mandarin slowly taking over the industry due to the larger audience...but that is a large rant for another time.

~Pearz