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The Anime Economy - Part 3: Digital Pennies


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Stark700



Joined: 30 Jan 2012
Posts: 11762
Location: Earth
PostPosted: Fri Mar 09, 2012 3:52 pm Reply with quote
Quote:
TV Tokyo recently announced that Crunchyroll had nearly 70,000 paid subscribers.


Well, that is some interesting information there.
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Guardsman Bass



Joined: 05 Jun 2009
Posts: 158
PostPosted: Fri Mar 09, 2012 5:05 pm Reply with quote
I wonder if you could get a version of the Japanese anime business set-up here, with the simulcast services standing in for the late-night television broadcasts that usually convey the show in Japan.
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agila61



Joined: 22 Feb 2009
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Location: NE Ohio
PostPosted: Fri Mar 09, 2012 5:10 pm Reply with quote
Saffire wrote:
Thank you for this fantastic series.
agila61 wrote:
As a side note, $6.95 is the per month rate ~ Crunchyroll also has $19.95/3mth and $59.95/12mth, and has had $50/12mth Premium (anime+drama) memberships the last two Cyber Mondays.
Although true, a lot of the "lost revenue" is covered by the fewer transactions; credit card transactions are surprisingly expensive. So it shouldn't make a lot of difference overall except for the sales.

Which is why I pick the $5/month ~ assuming that the extra price for paying monthly are mostly the extra transaction costs. There could be some discounting in that, since longer term subscriptions have a lower churn rate, but I figured it to be mostly transaction costs. Its not just credit card charges but account servicing work, since subscriptions are most likely to require support work when a new charge is made.

Guardsman Bass wrote:
I wonder if you could get a version of the Japanese anime business set-up here, with the simulcast services standing in for the late-night television broadcasts that usually convey the show in Japan.

That's the hope ~ ad-based streaming as self-funding advertisements, subscriber streaming to generate some revenue, cover the costs of the subtitling, and generate demographics to decide which titles merit further localization, which in a full fledged model would have a range of digital download to own options ~ and as DVD's are replaced by BD's with the shared-region-code problem, some form of digital downloads could bridge the ex-Japan BD release delay, with the distributor giving full credit on the amount paid for the digital download toward the purchase of the BD when it is finally released.

Whether the subscription streaming can ever make a substantial contribution toward dubbing costs depends on how large a subscriber base dubs can attract ~ if physical media fade so they can only cover 40% of the cost of a dub, and streaming subscriptions would have to grow by several multiples to even be able to cover 20% of the cost, that would leave a gap of 40% or more for the various types of digital downloads to cover.


Last edited by agila61 on Fri Mar 09, 2012 5:19 pm; edited 1 time in total
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BigOnAnime
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Joined: 01 Jul 2010
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PostPosted: Fri Mar 09, 2012 5:16 pm Reply with quote
Part 3 like I expected wasn't all that interesting (I don't really find the economics of streaming all that interesting.), but it definitely was informative. I learned just how much everyone can make off me when I watch legal streams.

While legal streams may not generate a ton of money, at least they do something, especially for those without jobs to buy anime/a ton of anime. Most anime I watch is through legal streams due to the fact I still don't have an actual job (I'm so frustrated with not having one-long story.), so my anime buying is more limited than many people.
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RyanSaotome



Joined: 29 Mar 2011
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PostPosted: Fri Mar 09, 2012 5:20 pm Reply with quote
The big thing that I feel the legal streamers have to do is find a way to give quality equal to a fansub. I pay for Crunchyroll, but I'm often finding myself not using it unless nobody fansubs a show fast because fansubs offer much better quality video feeds with higher bitrates. Just look at something like Steins;Gate on Crunchyroll as an example of what a badly bitrate starved anime looks like.

If they can figure out a way to up the bitrate to acceptable levels (like 3k instead of the 1700 or so that Crunchy uses now), I'm sure it would draw a lot more of the anime fans to it. Right now though, its tough for people to justify paying for worse quality.
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dragonmastr



Joined: 09 Feb 2012
Posts: 208
PostPosted: Fri Mar 09, 2012 5:48 pm Reply with quote
Thanks for the great articles! They've definitely been very informative and enlightening.

As a hardcore collector, I suppose I'm part of a dying breed. The future of the anime industry looks to be challenging, but hopefully the creative minds in the industry will still continue to find ways to make a profit and keep it from collapsing.
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agila61



Joined: 22 Feb 2009
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PostPosted: Fri Mar 09, 2012 6:17 pm Reply with quote
RyanSaotome wrote:
The big thing that I feel the legal streamers have to do is find a way to give quality equal to a fansub. I pay for Crunchyroll, but I'm often finding myself not using it unless nobody fansubs a show fast because fansubs offer much better quality video feeds with higher bitrates. Just look at something like Steins;Gate on Crunchyroll as an example of what a badly bitrate starved anime looks like.

You use a fansub leech streaming site that offers 3Kbps streaming?

Or are you comparing legit streaming to bootleg downloads?
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RyanSaotome



Joined: 29 Mar 2011
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PostPosted: Fri Mar 09, 2012 6:21 pm Reply with quote
agila61 wrote:
RyanSaotome wrote:
The big thing that I feel the legal streamers have to do is find a way to give quality equal to a fansub. I pay for Crunchyroll, but I'm often finding myself not using it unless nobody fansubs a show fast because fansubs offer much better quality video feeds with higher bitrates. Just look at something like Steins;Gate on Crunchyroll as an example of what a badly bitrate starved anime looks like.

You use a fansub leech streaming site that offers 3Kbps streaming?

Or are you comparing legit streaming to bootleg downloads?


Downloads.

Those leech sites are terrible, and I'd take Crunchy or any other legit streaming site any day over those.
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configspace



Joined: 16 Aug 2008
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PostPosted: Fri Mar 09, 2012 6:27 pm Reply with quote
RyanSaotome wrote:
The big thing that I feel the legal streamers have to do is find a way to give quality equal to a fansub. I pay for Crunchyroll, but I'm often finding myself not using it unless nobody fansubs a show fast because fansubs offer much better quality video feeds with higher bitrates. Just look at something like Steins;Gate on Crunchyroll as an example of what a badly bitrate starved anime looks like.

If they can figure out a way to up the bitrate to acceptable levels (like 3k instead of the 1700 or so that Crunchy uses now), I'm sure it would draw a lot more of the anime fans to it. Right now though, its tough for people to justify paying for worse quality.

The banding issues in Steins;Gate is from the original TV transport stream. CR's encode only exacerbates it some. Some groups have tried to filter it out. Look at CR's Fate/Zero for much better quality.

Anyways, one doesn't preclude the other. You can subcribe AND still download it.
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agila61



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PostPosted: Fri Mar 09, 2012 6:33 pm Reply with quote
RyanSaotome wrote:
Quote:
Or are you comparing legit streaming to bootleg downloads?

Downloads.

Kind of an Apples to Oranges comparison there. What kind of video quality do the XBox, PS3 and iTunes downloads offer? I don't have any of the three, so I haven't seen a sneak preview of what things will look like if downloads start to catch up with streaming.
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RyanSaotome



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PostPosted: Fri Mar 09, 2012 6:45 pm Reply with quote
agila61 wrote:
RyanSaotome wrote:
Quote:
Or are you comparing legit streaming to bootleg downloads?

Downloads.

Kind of an Apples to Oranges comparison there. What kind of video quality do the XBox, PS3 and iTunes downloads offer? I don't have any of the three, so I haven't seen a sneak preview of what things will look like if downloads start to catch up with streaming.


Not really, since you can get the exact same episodes either way... just one costs money and is generally lesser quality, while the other one is free and is generally better quality.

It might not matter to many of the more casual watchers, or people who aren't videophiles (I admit I am one, and can't watch anything under BD quality if its available), but I do believe if they want to give people a reason to pay for legal streaming instead of just downloading, they should at the very least give an equal product.

They should do like Netflix does where they have various "levels" of quality based on your connection. If you want the highest quality, which takes up a lot of bandwidth, you can choose to do that.

This is all assuming the model which Crunchyroll uses for 720p streams. Those companies that seem determined to stay in the 90s with their 360p streams shouldn't even be considered vs. fansub downloads. Supporting those half-assed streams would be telling them I'm okay with that quality, which I'm obviously not.
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Asterisk-CGY



Joined: 09 Mar 2007
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PostPosted: Fri Mar 09, 2012 7:06 pm Reply with quote
And last I checked Hulu has been profitable since 2010.

Though Youtube hasn't.

And really I feel with piracy its more productive to engage pirates with your content rather than attempting to stomp them out. Cause while their existence may be irritating to some, it is better to deal with an enemy you know rather than chasing one you don't.

Basically fold them into what crunchyroll did.
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Shiroi Hane
Encyclopedia Editor


Joined: 25 Oct 2003
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PostPosted: Fri Mar 09, 2012 7:15 pm Reply with quote
Asterisk-CGY wrote:
And really I feel with piracy its more productive to engage pirates with your content rather than attempting to stomp them out.

Problem is the playing field is nowhere level.. "come get the episodes a week later with added adverts for that warm fuzzy feeling of doing the right thing" isn't the greatest marketing pitch and there is little in the way of extras they can add other than competitions to win goodies.
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wandering-dreamer



Joined: 21 Jan 2008
Posts: 1733
PostPosted: Fri Mar 09, 2012 7:50 pm Reply with quote
Another really great and interesting article, thank you for going to the trouble to create all of these.
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Cutiebunny



Joined: 18 Apr 2010
Posts: 1767
PostPosted: Fri Mar 09, 2012 8:00 pm Reply with quote
agila61 wrote:

"Not paying" and "refusing to pay" are two quite different things. Every time there is a disruption in the bootleg anime supply chain, Crunchyroll forums are flooded by those that have had their viewing habits disrupted, and many of them state quite categorically that the site is legit, series "X" that has been available free streaming for several years and is coming out on DVD "is not available in the US", etc.


..Until these same users find an alternative site.

I think it's highly unrealistic to expect that the majority of anime fans will only buy manga, anime or both especially when there are free alternatives out there that are easily viewed. Most anime fans are limited to the funds in their bank account and yet are bombarded by an infinite amount of products to buy. Economically speaking, the average person, in a similar situation, would enjoy whatever was available for free, and spend their money on other merchandise. It harks back to the "Why buy the cow...?" phrase.

Quote:
... in the US at least, we would have to exclude those who are still in the process of becoming educated from this "vast majority" ~ a quite substantial share of US teenagers are less than well educated in every state of the US.


Assuming they're just as impatient as American anime fans are when it comes to wanting anime/manga almost simultaneously to Japanese releases, they're probably fluent in English. While it's true that there are many fansub groups that do release anime in Spanish, French, etc., many times these groups translate it from the English fansub. Assuming that they're watching it in English and are not living in a predominantly English speaking country, that means that they have a decent level of education or come from families that are well educated and multilingual.

Quote:

Andy many of them are the same fans that do not spend on dollar of their money in a way that sees any funds flow to the industry creating the media that they enjoy.

The various surveys that report that 5% to 25% of consumers of bootleg media also buy that media implies (1) that 75% to 95% don't, and (2) that appreciably less than 5% to 25% spend money on everything they consume as a bootleg. Watching 8 series a season and buying one of them a year would count in the 5% to 25% "who also buy that media", but being the production committees for those 32 cours with a 3.125% to 6.5% chance of being the lucky production committee that got that sale is not a very lucrative proposition.


Has there ever been a survey to the effect of "If you stream/torrent anime on a weekly basis, do you buy any authentic anime merchandise, and, if so, how much do you spend on it per year?". I can't recall ever seeing any survey done. I assure you, if this were asked, you would find that the majority of people who stream/torrent purchase at least 1 authentic good per year.

The industry needs to come to the realization that, with limited funds, people will choose to make the most of it...meaning that, if anime/manga is readily available and free, they're going to go that route and spend their money on something else. Merchandise is probably the best bet for the industry - I can watch/read whatever I want online, but I can't print out a Tiger & Bunny nendoroid or an oppai mousepoad.

Quote:

Oh, no, give them an award, as long as its a "retirement from US distribution" award, because any incremental benefit that they might have arguably provided in the past, for the majority of series each season that are licensed for streaming, at present they're just parasites in the gut of the industry.


I've read, several times on these forums that various users have said that they have viewed an anime via stream/torrent and, when released in the US, bought the licensed DVDs. The industry would lose these sales if these fans did not watch the anime via free stream/torrent.

You can argue that they'll buy the series if they watch it first on CR, but that's a stupid argument. Why would you pay twice for the same good? If I pay to watch a series online, why would I spend more money to have a hard copy of it? I would *really* have to love a series for me to spend $50+ to own the full series. And I really doubt that the average fan would be willing to do that with a lot of series, especially when there are free alternatives.
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