Ask John: Will the Japanese Anime Industry Innovate to Address Future Challenges?

Question:
With Justin Sevakis’ recent Open Letter to the Industry, he claims that the Japanese anime industry needs to change its methods to embrace technology to work to its advantage and combat fansubs. Do you see the Japanese doing anything about this, or do you think they’ll continue to do things as they do now?

Answer:
Speaking as an employee of America’s anime industry, someone whose livelihood depends upon healthy anime DVD sales, I can say from personal observation that anime DVD sales and revenue are significantly down from where they were several years ago. I don’t personally subscribe to the blanket condemnation of fansubs because my own observation of retail trends reveals that anime titles which are heavily fansubbed and therefore have a lot of word of mouth advertisement and a loyal audience sell better than anime titles that haven’t been fansubbed and don’t have significant name recognition or consumer exposure. But I must concede that illegal anime distribution is one of many factors also contributing to the downturn in anime sales and revenue. Other factors contributing to declines in the anime market include a devaluation of anime instigated by the American anime industry’s practice of multiple, increasingly discounted DVD re-releases; a drastic increase of anime product released in America that ignores an apparent lack of growth in the size of the American consumer market for anime; decreasing spendable income in average American households; increasing competition from other entertainment products including console video games; and decreased consumer support for the DVD medium itself. I agree with Mr. Sevakis’ argument that the anime industry needs to devise a method of exposing international consumers to anime through free or inexpensive screenings. In fact, I made the same argument several weeks before Mr. Sevakis published his editorial.

However, despite all of the public condemnation of fansubs and illegal distribution from Japanese industry representatives including anime director Shinichi Watanabe and Gonzo president Arthur Smith, there’s been very little acknowledgment of the Japanese root of anime video piracy, or apparent effort to stop video piracy in Japan. In his public statements about anime piracy, Mr. Watanabe never acknowledged any Japanese culpability in contributing to international video piracy. In his lengthy interview blaming American fansubs for cutbacks in the Japanese anime production industry, Mr. Smith offered only a two sentence explanation of what Japan is doing to combat its own contribution to anime piracy. Smith stated that “certain commercial software [are] being looked into” by the Japanese anime industry and Japanese government to “impede piracy” and Japan’s industry is beginning to “condemn the process of uploading raw files” and prosecute Japanese “raw” uploaders. I find it particularly ironic that Mr. Smith felt the need to connect anime video piracy in Japan to organized crime, as if to downplay the fact that everyday Japanese anime fans are just as guilty as American fansubbers of contributing to anime video piracy. Full anime episodes and countless complete anime series are even more common and prolific on Japanese video hosting site Nico Nico Douga than they are on YouTube. And the overwhelming majority of international anime video piracy originates with “raw” files uploaded to the internet by Japanese residents.

While I’m not trying to defend or excuse American video piracy – regardless of its principles, illegal is illegal – I see a lot of condemnation of American fan distribution, but very little willingness from Japan’s anime community to acknowledge its own contribution to international video piracy. There seems to be a lot of insistence that America solve a problem that begins in Japan. Regrettably, I honestly don’t know if Japan’s anime industry will take significant measures to actually curb international video piracy because doing so would require the Japanese anime industry to attack its own Japanese consumer market. Legitimate alternatives to unauthorized anime distribution, like on-demand free and low cost anime streaming do exist in Japan through services like the Bandai Channel, Biglobe, and Gyao websites, but these sites actively block most or all international access, forcing international viewers to find alternate methods of accessing anime. New, start-up Japanese commercial endeavors like BOST TV have launched to provide legal alternatives to fansubs and video piracy, but their impact is small, and so far there seems to be little inclination from Japan’s most influential and prominent anime publishers to support or encourage these new marketing tactics.

I don’t believe that anime will become extinct. Music piracy is a massive worldwide phenomenon, but commercial music still gets produced and released because there will always be a market for it, and there will always be artists eager to create. Likewise, anime may constrict, but I think that there will always be enough interest in anime in Japan to sustain an industry. However, that says nothing about how much of an international anime distribution industry will be able to survive. Logically Japan’s anime industry will and must take steps to remain viable in an evolving commercial atmosphere, but Mr. Sevakis’ open letter was published specifically because the Japanese industry is showing little to no sign of eagerness to adapt to changing marketplace conditions. Seemingly, it’s much easier for Japan’s anime industry to blame American fansubs and wait for the American anime market to rebound than actually develop an innovative international strategy to eliminate the attractiveness of video piracy.

American anime distributors are making efforts to compete with unlicensed anime distribution by creating anime exclusive TV networks and offering anime for free or low cost via online rentals and streaming, through traditional web channels, and new avenues like the Xbox Live Marketplace service and cel phone broadcast. But America’s ability to be innovative with anime distribution is limited by what Japanese copyright owners will allow. While I’d like to believe that Japan’s anime industry will take the necessary measures to combat video piracy – namely offering international consumers a legitimate alternative to unauthorized downloading, and eliminating the steady stream of unauthorized anime episodes that flow out from Japan’s fan community into the global market – I honestly have a fearful suspicion that the Japanese anime industry powers that be – which usually aren’t production studio heads or actual anime artists – are too bureaucratic, traditionalist, and simply too obstinate to impose genuine innovation in the industry, or engage in a determined effort to stamp out anime video piracy within the Japanese fan community. The result of that, if my suspicion turns out to be accurate, will be a Japanese and international anime distribution model that continues to act as two independent, sometimes antagonistic entities, an American anime industry that returns to its roots as a small, cultish industry that markets to hardcore fans, and a Japanese industry that continues to concentrate on producing anime targeted at niche Japanese markets.