Forum - View topicEffects of economic downturn on anime industry?
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Wu Ming
Posts: 113 |
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Kind of says it all - has anyone heard of any negative effects on the major studios? Or are they weathering the financial storm well enough?
I mean, the last thing i'd want to see is a popular/profitable series going into another season, only to have its plug pulled due to a financial domino effect. Oh and pardon if this is in the wrong forum. |
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Blackpeppir
Posts: 234 |
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Anime is effected just the same as every consumer based product. The downturn caused everyone to tighten their belts. This question has actually come up a few times in the "Hey Answerman!" column on this site. However quite a few of the countries effected by the downturn are coming out of recession, Canada and Japan included. While I can't say the same thing about the states, I really don't think it'll cause the industry to fall the way so many people would imply.
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DomFortress
 Posts: 751 Location: Richmond BC, Canada |
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I actually have a different view on the Japanese anime industry, and it's not about the economic. Because I'm starting to think that the recession isn't the biggest, if not the only reason why the Japanese anime market is doing so bad.
The most simple and fundamental nature of any business is the delegation of supplies and demands of goods and services. So it's no surprise to me when their bubble economy of a Japanese anime market just couldn't sustain itself, while all they did is spending money to make money, not quality. The qualitative values of an art good lies in its creativity, originality, and authenticity. It is the only substance with its value cannot be measured by quantitative values such as popularity nor fame. IMO. For a piece of crap is still crap, regardless of how many of them can be made, how quickly are they being made, and how monumental they are. It's just a boatload of craps to me. The actual Japanese anime market size was never that big to sustain the production of high quality animations to begin with, thus resulting in low quality lame sequels and ripped off shows in large quantity. Like the many mainstream anime TV series based on existing original manga titles, that are numbered 200+ or so in episodes. But what about none-mainstream titles that usually finish in 2 seasons or less? Well those are the ones that the Japanese anime production companies are being forced to pay themselves to make, when their Japanese mono-media and interactive media sponsors(book publishers, toy manufacturers, and game companies) subcontracted their original intellectual properties as image labels to the anime production companies. In order to make animated advertisements with story elements adopted from those image labels, that will promote character-related merchandises sales. Sales that the anime production companies won't be profiting from, because they weren't the legal distributors of the image labels that their anime series(which the Japanese anime production companies paid themselves to make, thus they and only they have the copyrights of just their anime series and nothing more) were based upon. And the Japanese anime production companies can only hope that the pre-existing fan base of the original intellectual properties, will buy the subsequent animated advertisements that's only a partial of the whole story. But let's be honest here, who would want to buy cheap animated knockoffs of their favorite mangas, light novels, toys, and/or games? In HD format where they've got no business to be there because they were so cheaply made, while the Japanese BD and R2 DVD medias all came with ridiculous premiums and overcharges. And that's only the problems with their productivity in their business models, while their problem with creativity in their artistic skills can be summed into this: the Japanese anime production companies had to pay their own animators to make cheap animation based on other people's ideas, when they can't break even with their domestic anime media sales on not just a saturated, but continuously shrinking Japanese anime media market. If I was an animator in Japan, I'll be thinking about abandon ship because I'm more than worrying about my future job prospect, never mind being creative with my animation. Perhaps after the Japanese anime industry figure out who should be earning what in a Japanese animation production company, before they ran-out of talent pools with a US$760 per month based salary. These all compile into a very unsustainable Japanese anime industry, when the survival of the industry is based on inflated fans' demands, of overcharged art goods filled with cheaply made adult fan service contents as premiums. And it came down like a stack of cards due to the anime that they made had next to nothing as in real artistic values. I think what first came down in Japan was the TV viewership in the early 90's, when the industry felt the first blow of their low birthrate, with less Japanese children watching TV. Next came the content problem, when the industry started to target the older anime TV audiences. By making mature animen TV series with more sexual and violent contents. And last came multimedia licensing, with one intellectual property crossing multiple medias, via anime TV series productions as ads on TV. Therefore unless the Japanese populace become once again sustainable, which won't happen on their own anytime soon. I think the ultimate distribution format for the Japanese anime production companies is direct-to-home releases. When their current TV production model just isn't sustainable, while the only reason for them to put their anime on TV is so that their sponsors can promote their anime character related merchandises on TV, using anime as multimedia advertisements. Besides, it's not like there are many Japanese kids watching anime on TV. So why even bother putting cheaply made mature anime TV series on cable networks that's NSFW, when Japanese TV station like NHK only want quality children anime TV program that they would pay for like Erinon their stations anyway? |
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Zalis116
Moderator
 Posts: 6900 Location: Kazune City |
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PetrifiedJello
Posts: 3782 |
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I'm going to have to agree with DomFortress on this one, as well as add additional reasons which do relate to economics.
The anime industry is cutting its own throats by relying on business models that are now dead thanks to digital distribution. Since all parties involved rely on sales to survive, I'm very curious to know why such models are being held onto so tightly. Is it due to fear of change? Expectations of controlling a market? The global recession may be to blame for a loss of sales in merchandising, but I hardly believe it's the primary reason. Advertisers are starting to realize the potential for the internet and are questioning why they're spending money on targeted media, such as television. The television channel, as we know it, is dying. On Demand programming and instant access online is driving the force behind the death. The industry is doing all it can to retain the old way of doing things, but consumers are having no part of it. What makes the even more difficult is the way it presented itself. These events seemed to happen overnight, giving little time for all involved to adapt quickly enough to make change which can capitalize. Admittedly, though, I do blame distributors for this solely for the idiocy of keeping things the way they are. It's 2009, and it's inexcusable to see how long it took anime to get online under legal distribution. By the time the industry caught up, fan sub sites dominated the market to fill the gap. The very first thing the anime industry needs to do is drop the licensing restrictions on content. These fees are extraordinary to all involved and every aspect of their use is failing in terms of revenue. Advertisers aren't spending for television what they used to, so that's a hit. The DVD market is shrinking, adding insult to injury. Then comes the global recession. It's no wonder the anime industry is worried about falling revenue. As some of you are aware, I'm in favor of the "freeconomics" world in which content is $0 but models are used to get customers to buy. Admittedly, this is going to be very tough to do in the anime market locally, because it's asking companies like FUNimation to derive ideas to get us to buy. If all FUNimation offers us is DVDs, that's a problem. The anime industry, as a whole, will level itself out. By my accounts from gathering information online, there are about 250 anime studios in Japan. I seriously doubt most of these studios will survive much longer, especially those who license for direct-to-video only. I've read news that economic experts agree our recession seems to be over and growth is now occurring. I tend to agree with this, but I've a feeling people's spending habits have forced a change in such that buying "frivolous" DVDs won't be returning to the same levels of 2 years ago. Anime isn't the only industry feeling this hit, so it makes sense. For us who do buy DVDs, our offerings may start to dwindle in the future, or worse, costs will remain high but services will be cut (no more dubbed DVDs). It's a trying time, that's for sure, but until this industry changes itself (and quickly), all their woes will be so at their own doing. Consumers have voiced their opinion, but these seem to be falling on deaf ears. With that, and as much as it'll hurt, I can't have sympathy for a company which can not, or will not, adapt to a market I've already adapted to. It's my money. If they want it, they'll have to give me a damn good reason to give it to them. My DVD purchases aren't done to save the anime industry, because I buy them at very low cost. They're done because history has shown that once a license is expired in this country, the legal availability of said anime is lost forever. If that doesn't give a clear representation of the issues with anime, along with what DomFortress said, then nothing will and failure will result. Economics doesn't lie. |
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HyugaHinata
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I think that'd be a great idea. I'd certainly purchase the DVDs if they were willing to make any. 
That, and stagnation always leads to a rapid death in any industry. As technologies change and the human element changes, so too must the business model. |
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LordRedhand
 Posts: 1472 Location: Middle of Nowhere, Indiana |
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I don't know what distributors you are referring to as the R1 distributors have been fighting for digital distribution for some time, and when finally achieving it, "fans" are trying there hardest to kill it.
So if blame lies somewhere (if you want) don't look at our companies, look at Japan's.. But when you think about it it doesn't sound very surprising. Not only are they focusing on the niche otaku in Japan but they are focusing on them to the exclusion over any other group. Thus some of the problems that DomFortress mentions in terms of story-telling and creativity, which I agree with not a lot has been creative, nor had a well-constructed story. When reflecting back when has Japan been a strong agent of change? Only once and that was with cars as it changed how production standards in every other industry has happened, which actually maybe a negative impact on anime production. But internet only takes one so far while it might remove the costs of TV it adds the costs in other ways, both in staff to manage web distribution and actual server costs, so while yes a way forward it mght not be on the face an attractive or even feasible option for smaller companies to try, only the largest could possibly take on the burden (Toei, Madhouse or Studio I.G. with their dedicated legal departments, being able to help cut through international law and local laws to make the distribution net a little bigger.) But in and of itself it doesn't solve the issues of animator pay and driving away the next generation of creative talent that needs to be solved. As it needs to pretty much be as Dom is suggesting an affair where the studio owns all of the creative rights to the show (so things like toys, manga, and so on can actually profit from them) as opposed to basing it on an existing manga (so bought a Shana toy, well the anime studio that made the show didn't see the profits from it. And well one company tried that (Gonzo) and see where they are now. Even more understandable why other companies maybe a little hesitant to follow Gonzo's path, they are struggling and perhaps even failing. And when we get to those suggesting radical change to the model the interesting thing for me at least is that none of them are willing to risk anything to make that distribution system a legal, profit-making, beneficial reality. So at least with Crunchy Roll it gains some respect from me, they put their money where their mouths where. How many people would trust someone with a great new business idea if they weren't willing to put any effort or money behind it? You'd probably laugh them out of your office, because if their idea was so great, why aren't they supporting it? And PJ what Funimation are you seeing as they offer not only DVD but Blu-Ray but also offer online distribution and have been fighting for it for longer than you might think, with not only there online player and youtube but also offer download to own on Itunes, XboxLive or even the Sony Network. See this what confuses me the company moving to what you want is the one you put down the most, thus a confusion as they are doing what the "fans" want yet seem dedicated to stopping it. Not a good incentive to change eh? If that's the response. But if you are asking why they couldn't do it sooner, they have to do this little thing that makes it legitimate that treats the creators and rights holders with respect, they've been asking and negotiating for the legal digital distribution rights, so unlike say someone like yourself who has been posting about your great ideas but hasn't taken them to anyone, Funimation's been struggling trying to sell the idea of digital distribution to Japan. You should now about change and how hard it can be to implement as while it can be "Easy" in comparison for an individual to change a group is harder. Your asking for a world to change, that request takes some time, so exercise something you should have learned, patience, as the change you are wanting is coming, although I'm not sure you will like the results. Last edited by LordRedhand on Thu Sep 17, 2009 9:43 am; edited 1 time in total |
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Ktimene's Lover
 Posts: 2242 Location: Glendale, AZ (Proudly living in the desert) |
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How about how some companies have been releasing sub-only lately?
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PetrifiedJello
Posts: 3782 |
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Why? They adapted the licensing model from America (which adapted it from Europe). Their faults are our faults.
Both are negligible when compared to the current system, LRH. Ad supported websites can most certainly handle these costs. But look at Crunchyroll, who has to pay out even more money for the rights to distribute. It's backward thinking. These sites advertise the show which should help in both DVD and merchandising purchases. Based on this logic, it should be the license holder who pays because content is advertising.
Believe it or not, LRH, this is called innovation and it happens all the time. Without this, investors wouldn't exist. Crunchyroll turned because someone did trust another with a new business idea. And look how it's paying off. Granted, it's not raking in millions, but it's growing and that means there's potential to market to these growing users, or rather, consumers.
Heh, funny you mention this, because what I've come across, is this scenario by people who think the current business model will never die. These same people head the music, television, book, and newspaper industry and do so while whining about "piracy" (loss in revenue because everything online is "free").
I'm going to have to challenge this remark, because I never saw fighting as much as I saw adaptation. But I will give in to the benefit of the doubt that FUNimation pushed Japan to finally enclose online distribution within the licensing system. It's inescapable to see how FUNimation's offering content online, at $0 to the user, while watching DVD revenues drop. The old saying "Live by the sword, die by the sword." is ironically evident here. The economy, incidentally, has no affect on this business model. Licensing fees still must be paid, regardless if DVDs are sold or not. That's the scope I wanted to keep on point with my reply, not targeting any one specific company. In the future, I'll stop trying to reference companies by name. |
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LordRedhand
Posts: 1472 Location: Middle of Nowhere, Indiana |
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Believe it or not, LRH, this is called innovation and it happens all the time. Without this, investors wouldn't exist. Crunchyroll turned because someone did trust another with a new business idea. And look how it's paying off. Granted, it's not raking in millions, but it's growing and that means there's potential to market to these growing users, or rather, consumers.[/quote] Investors exist because they believe in the product, however there is an element of risk in both the investor and the company involved. Why should I trust your idea when you won't even invest in it or support efforts to go that way? CR and it's founders invested in their ideas for distribution and are putting themselves to a great risk, what have you done besides offer suggestions from the sidelines and offer ideas but won't invest in them? If your ideas are so great why haven't you done them, why haven't you tried to implement them, why haven't you started your own company to prove your theory right? I think deep down you still want the same companies around where I'm the one asking why? If they failed so much and you have a great idea to distribute it, why haven't you done so yet, legally.
Everything dies, in the end, even your new distribution method will die sometime. You laugh not because of that though, how many inventors, how many innovators made money by doing nothing? To achieve their dreams by investing nothing? It takes time, money and a lot work to achieve a dream, to make a new method of doing things. So if person comes up to you and says "I have a new way of doing things and I want you to do it, but I won't invest in it, I won't help you set it up, if you don't meet my exact specifications I will abandon your efforts" Would you trust such a person? Do you think it would be worth the effort to please someone like that? Someone that won't put any risk at all? I think not. |
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PetrifiedJello
Posts: 3782 |
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I felt I had to address your concerns through PM, LRH. Please check there for my responses. I didn't want this conversation to get off topic. |
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Ktimene's Lover
Posts: 2242 Location: Glendale, AZ (Proudly living in the desert) |
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PetrifiedJello, I know you are involved with the industry. But how are you involved?
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PetrifiedJello
Posts: 3782 |
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I'm not involved with the industry, but experience in distribution contracts gives me an upper edge on how things work. The rest is, admittedly, speculation given the anime industry is incredibly tight-lipped about finances. |
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DomFortress
Posts: 751 Location: Richmond BC, Canada |
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And I think the problem with Gonzo is they overinflated their productivity by them growing too big, to a point that they can't sustain themselves. When the actual market size just can't support with that many series that they did own as the original creators, in such a short time. In a sense, they saturated their own market by them overestimated the actual market size being bigger than what it actually was. Personally, I like how Gainax as a production company are constantly adapting with the Japanese anime market. They are very efficient in the sense that they control their own growth and productivity in reaction with the actual Japanese market size. If only they can have the same opportunity as BONES and Production I.G. with their international sponsorships, I can only imagine the possibility behind that venture.
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LordRedhand
Posts: 1472 Location: Middle of Nowhere, Indiana |
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Hmm interesting.... regardless I'll give you and others following this thread something to meditate upon, "Technology and Science is power, power corrupts and absolute power corrupts absolutely. And with great power must come a great responsibility." So PJ you have a great power at your fingertips, I suggest you learn how to use it properly before it consumes you. I'd make a stand for freedom vs. being chained by the tyranny that seems to be occurring (in both groups) and try to value stories and hope as opposed to banishing it to a black hole of our own making. |
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