Ask John: How Would Suddenly Stopping All Unlicensed Distribution Affect Anime?

Question:
The recent news about Geneon’s shutdown, Funimation’s Cease & Desist letters concerning Gonzo’s Romeo x Juliet, and the Japanese government’s request for help in stopping unauthorized online anime distribution seems to indicate that the anime industry on both sides of the Pacific want fansubbing stopped dead in its tracks. I know this would be pure speculation, but what do you think would happen if fansubbing did stop overnight? In your past columns, you’ve stated that series that have high name recognition in the fan community perform better in sales than series with little or no recognition in that community. Would the end of fansubbing save the industry? Or would it just eliminate the recognition factor, while still leaving other avenues (such as pirated DVDs) for those who refuse to pay for legitimate releases?

Answer:
This is an especially incisive question with an answer that’s especially susceptible to interpretation depending upon the perspective and bias of the person providing the answer. Particularly for that reason I need to state in advance that I believe that unlicensed anime distribution among fans contributes significantly to the foundation of the anime consumer market. However, I do not condone substituting legitimate financial support of the anime industry with video piracy. I do believe that grassroots anime sharing within the hardcore fan community, and diligent, responsible financial support for the professional and commercial anime industry can exist simultaneously. Unlicensed anime distribution created the demand for anime outside of Japan, and I believe that unlicensed distribution continues to sustain non-Japanese demand for anime.

Under present circumstances, anime is a Japanese product, and exposure to it for Americans is limited. Only a small fraction of the anime titles presently available to American consumers is available in English, at no cost. While Japanese consumers have access to roughly a hundred different current anime titles on public television, Americans have no-cost access to a relatively limited number of anime titles, and less than a half-dozen of those titles are still current in Japan. Low cost access to anime through online streaming services and DVD rentals, or purchasing officially licensed DVD releases dramatically increases an American consumer’s access to anime. But even these avenues do not provide legal access to Japan’s most contemporary titles. In the absence of legitimate means of access to contemporary anime, foreign fans resort to illicit methods.

Although I don’t have access to exact statistics, I’m certain that a large percentage of America’s anime consumer market consists of pre-adolescents, teens, and young adults with limit financial resources. I’ve lost count of how many times I’ve heard anime fans say that they will not commit their limited funds to purchase an anime title that they’re not familiar with. Brief previews may encourage consumers to spend $10 on a movie ticket, but I suspect that most American consumers, especially those with limited funds, require more than a brief preview or even a single episode to provide motivation to commit to spending $20, $30, or over $100 to collect a DVD series. A 2007 amateur poll of anime consumer spending habits determined that 48% of the poll’s 776 respondents state that personally watching an anime is the foremost motivating influence on purchasing anime, and 79% of the respondents state that watching fansubs has encouraged them to purchase legitimate DVD copies of the fansubbed shows.

I’m aware that the following assertion may seem shocking, but I think it’s reasonable and accurate to predict that sales volume for anime in America would plummet drastically if all underground anime distribution suddenly ceased and nothing replaced it. American consumers simply do not routinely “blindly” purchase expensive DVDs. And a massive amount of the consumer interest in particular anime titles is generated, not by advertising, but by word of mouth and recommendations from fellow fans that have watched the show. Under present industry conditions, if all forms of unauthorized anime distribution were to suddenly disappear, the vast majority of American anime DVD sales would be sustained entirely on the strength of print advertising, officially released sample footage, and a limited number of formal written reviews from pre-selected critics or individuals committed to purchasing their own discs for review. When American anime fan consumers are already heavily oriented toward delaying their anime purchases to when entire series are available as inexpensive complete sets, significantly reducing consumer opportunities to educate themselves through free initial access to anime could cause a massive further contraction of consumer willingness to invest in premier release DVDs. Circumstances would be tremendously different if the anime industry offered an equivalent alternative to “do it yourself” distribution, but presently there is no official advertising method that compares to the comprehensive opportunity that fansubs offer American consumers to educate themselves about anime series.

I respect the commercial anime industry’s desire to protect its investments and livelihood. However, I also believe that much of the commercial anime industry has adopted a too narrow field of vision and failed to recognize the full impact of unlicensed anime distribution. Recent statistics suggest that the strongest growth in American DVD sales comes from TV programming released on DVD – in other words, DVD sales of programming which consumers have previously had free, unrestricted access to. Although I’m aware that music sales aren’t directly comparable to anime sales, I do think that it’s revealing that a 2004 study by Harvard professor Felix Oberholzer and University of North Carolina at Chapel Hill professor Koleman Strumpf concluded that unauthorized peer-to-peer music sharing had an insignificant harmful impact on commercial sales, and may even encourage legitimate purchases. The study posits the fact that downloading from “money-poor but time-rich” teens and college students who wouldn’t have purchased the material they’ve downloaded anyway cannot be considered lost revenue. The anime industry may realize that countless potential consumers posses anime which they did not legally purchase. But each of these downloaders cannot and should not be classified as lost revenue because many of these owners are not interested in being paying anime consumers. I don’t think that all, or even many of America’s anime fans would suddenly begin purchasing more anime if their ability to know precisely what they’re purchasing decreased. Especially outside of Japan, anime thrives precisely because fans have easy, inexpensive, and immediate access to it. American consumers purchase the titles that they like, and they only know what they like because they’ve previously watched it, or they’ve heard word of mouth from other fans that have watched it.

Once again, I want to emphasize that I’m not proposing unregulated anime distribution in lieu of legitimately purchasing DVDs and financially supporting the anime industry. I’m also not arguing that illegal distribution is vital to the anime industry. I’m arguing that free, widespread access to anime is vital to cultivating a consumer market that’s willing and eager to spend its money on anime. Exposing anime to its most receptive consumers is the lifeblood of the anime industry, and right now nothing serves that end more comprehensively and effectively than grassroots fan distribution. Whether a supply of freely circulated anime is provided by fans themselves through illicit means, or by the commercial anime industry through legitimate means is the primary concern that the anime industry needs to address.