Monday, April 11, 2011

The Prefect Drug: Why the iTunes model will not work in curtailing online manga theft.

Looking at some of the data available for the Japanese domestic market, it’s easy to be drawn to the conclusion that manga will soon see a significant portion of general revenue generated through distribution to customers via mobile network sales, through a combination of subscription service and pay-per-download sales. A little further down the line, and that mix will reach a 50/50 split when stacked against printed distribution and digital distribution. There is a significant upward trend when you look at traditionally printed media (manga and non-manga) from 2007-2010. The data is proprietary so I’m not going to repost the original here and my own infographics are part of an ongoing project, so no freebies, sorry.

There will be trade-offs of course, there will have to be a bigger revenue split between publishers and telecom networks, but through that new relationship the cost of physical printing will be jettisoned, so revenue actually goes up. The implied decrease in WTP for a digital version of a manga vs a print version that would be present in the USA, would be much more muted in Japan; a combination of the trust that Japanese consumers can have in their mobile technology and service providers actually working better (they totally do), and the fact that manga itself has always been seen as much more disposable even when it was physical media, and so the “fear of loss” that keeps people buying actual albums instead of downloading music from online services, rears not its ugly head. The transition from printed media to a medium of both printed and mobile distribution, and finally a dominance of mobile distribution with high end printings still being sold, will happen relatively smoothly for the Japanese market. Who knows, we might even see streamlined preview and download stations in the corners of all the convenience stores that dot the Japanese landscape.

So much like iTunes, and the later proliferation of many other commercial music services has made music piracy a less viable option for many consumer groups, keeping it profitable enough to continue as an industry, can a similar distribution channel for manga be far behind, and stop the theft of manga and make it a more viable business to be in?

The problem is, this isn’t going to change very much in terms of what’s happening with manga in the USA. That’s because of a perfect storm of factors which all must be adequately addressed in order to stop people stealing manga from Japan. Let’s apply the old consultant standby of the two by two matrix:

(I don't give it away for free people).

This isn’t a standard 2x2, where the factors are counter-related, but rather a larger look at a macro whole, each segment of which is in and of itself an entire business universe of operation. Looking at these factors (hopefully) can highlight the lopsided strategy that’s being employed to combat the situation. However from the vantage point of those employing such strategies, the tactics are not lopsided... and they are correct. The tactics are not lopsided, the market or “field of battle” is itself very lopsided, and the vacuous dark abyss that seems to consume all efforts and show no progressive change. A singularity, black hole, capable of sucking off and compressing the skin of all the efforts done not only directly against it, but to other sectors thought separate from its influence. Bonus points if you already know which factor I speak of.

Mindset, has been and will always be the greatest asset and liability to the success of Japanese entertainment media in America. This quadrant, being labeled as such, wears a deceiving veil of simplicity and smallness of form, but in fact, it is an area as vast as an entire market itself, taking into account aspects of sociology, economics, cluster-demography, politics, access to wealth, and age based psychology. Try to take that all in, and you realize the immense undertaking that the strategy and follow through of public relations, is something that would require a division led by a Chief Engagement Officer. Something no company is prepared to do logistically, financially, or ideologically. It is in fact the barrier of ideology, which will prevent any company from undertaking such measures, since any positive progress in abating manga theft is beneficial to their competitors as well, making those competitors “free riders” in the eyes of management.

There is no current independent body inside America that is going to undertake this, and unless the manga and anime market increase in size by about 10,000%, there may not be one any time soon. The type of problems they are up against can be seen in the case study of the Son May music label and the grassroots anti bootleg marketing of the 1990’s. Being on the front lines of that operation, it was amazing to see emerging otaku demand anime music as cheap as it could get, and then swing to a high willingness to pay for legitimate releases once they were successfully educated as to what SM actually was and how it did actual damage to the anime industry as a whole.

The “Mindset” quadrant in and of itself can actually be understood as an operational triangle, with the 3 angular nexuses of (Cluster) Demography Economy – and Psychology, connected by the three communication mediums of Communal Exclusivity Gamification Behavior – and Consumer Behavior. These are in tern all operational maxims that have been established by business analysts and strategic consultants form here to Kalamazoo, with their unique operational variances. Additionally, the hard data and direct knowledge needed to correctly interpret and apply that data are all very necessary in not only understanding this previously “unwinnable” quadrant of the above Manga Matrix up there, and they are all here behind the curtain that is my hard drive. You out there in cyberspace get the simplified version, because the real deal is going somewhere important where it will be seen by important people.

Like DaVinci would mix up his designs to prevent copying, so too have some components been moved around... or have they?

Unlike the S.W.O.T. analysis which is intended to condense broad expanses or the F.O.M.I. analysis (a derivative of M.E.C.E.) designed to narrow down sources of negative cash flow (something the English language manga industry is grappling with), this method of looking at things is designed to allow us to effectively get a grasp of the size and shape of a strategy that’s going to be needed to approach the problem. To get all metaphor-like; doing this is like doing an exercise to properly know not only the size of a container needed to carry a certain volume of water, but also the proper shape it’s going to have to be to fit into a very particularly shaped spot. This is very much a “measure twice, cut once” approach to the daunting task of American otaku customer engagement. This is very important, because the world is full of examples of how much damage can be caused in failed approaches to customer engagement.

It’s also a pipe dream of sorts. For reasons that we have covered here and for other obvious factors out there, some change in the way things operate isn’t going to be happening any time soon. ...or is it? Well, I am working on something for someone regarding this after all.


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