A Response to Justin Sevakis:

Better late than never.

In the infamous words of Rockwell, “I got a feeling somebody’s watching me.” Although the comments may indicate otherwise, it does seem that a number of people do actually read this ongoing muse into anime as an entertainment market, and as such is the case I believe it my duty to make it worth reading.

Not so recently (late November 2007), Justin Sevakis wrote Editorial: An Open Letter to the Industry over at ANN, where he is Director of New Media. In contemplating a response there were a few key points that were very interesting and carried with them many more industry related aspects than they may have appeared on the surface, to an audience on the outside looking in. After mistakenly thinking I had sufficiently addressed the heart of those issues back on a few audio podcasts I may or may not have made it into (I don't check up on these things), I believe that the indelible written word is the only forum for this expression that is truly appropriate.

Justin Sevakis's article is not going to be reproduced here, as doing so would cause this entry to reach a level of tl;dr approaching biblical proportions. Each section of Justin’s piece has a title and it is that title that is listed in red at the head of each section of my response to it.


Editorial: An Open Letter to the Industry
Link to Article

Justin’s opening simply sets the stage of what being in the fandom used to be in terms of obtaining anime. It was a time when anime (and almost all international media for that matter) could only exist in a physical form subject to the same rules that govern any commercial commodity whether it be shoes, bread, MRI machines, or heroin. Those commercial maxims are simply those of production and distribution, and for a long time their effects dictated market growth extending into and past the DIC era of anime exposure and the basic creation of an actual anime specific market.

Then came a market boom. At first it was truly a boom in the traditional sense, that of product sales, and because the only product that could be both easily licensed and easily produced was home video, that’s where those boom sales were to be found. Eventually this made the consumer market grow, and people wanted modern anime and more of it as well. Strong home media sales were the only thing that allowed anime on TV specifically labeled as anime. More shows got on TV, there was still no internet to get to the viewers first, and anime became a more expensive media commodity. When Toonami/Adult Swim and Tokyo Pop combined to create almost the perfect storm of more than doubling the size of the anime market in a single year, the speculation passes an event horizon which can only be seen in hindsight.

Yes the market grew huge, convention attendance soared, and moreover there were tons of cosplayers there. To add to the frenzy, a staggeringly large number of cosplayers were appearing as characters from titles that were not even licensed in America yet. What does that mean? If you are the Japanese, you start thinking that for every attendee, you are going to see DVD sales, and you are thinking this because that’s what history has shown. This is where Justin fails to take into account the very real impact of the market mirage created by this growing fandom, which gave the impression of a safe investment and a strong belief that these immense asking prices for licenses were justifiable. It’s not as if 100% of the license price was simply the Japanese thinking they had the greatest thing since sliced bread or simply wanting to make a big quick buck (though there can be no denying that is as equally responsible) but a signifigant portion was simply a genuine assumption that a very large fan community support a consumer market on a certain level. After all, this is a very solid conclusion to draw and is still something that rings quite true outside the entertainment media industry.

What happened instead was the perfect market killer otaku was born, with a combination of otaku aspects that are individually very good for a market, but in specific combinations absolutely deadly. This new otaku was consumed not only with a simple desire to absorb as much anime as was possible, but a willingness and eventual demand that the anime they watched was as close to its original form as possible. That acceptance of “that which is subtitled” combined with a distorted picture of how markets and licensing work fueled by youth and willful ignorance, and a final notion that watching anime as a basic right and not a consumer good (a notion amplified by aspects of American lifestyle such as car-culture, consumerism, over-eating and a ridiculous belief that Youtube videos are protected by the first amendment) meant that the attitude of wanting anime and wanting it now would be tempered neither by the natural obstacle of needing an English Dub, or an awareness that such activities are damaging to the market. Investors, producers, and media labels walked onto what looked like a very solid foundation of a growing fanbase with large amounts of brand awareness, only to have it turn out to be quicksand. Fool them once shame on one, fool them twice and shame on the other.


HOW DID WE GET HERE?
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Once technology made it possible for video footage to be taken straight off the airwaves, then entirely put into software which allowed for rapid subtitling without the previous need for extra hardware (production), and then made available via the internet in place of needing to have a physical piece of media (distribution). In the previous sentence “made available” is very appropriate while “sent via the internet” would be a tremendous misstatement. To explain, “sending” requires a “sender” and specific recipient, much like VHS fansubbers were contacted by a party whishing to receive something by providing direct or indirect means of fulfilling that request, the fansubber then undertook to allocate specific resources to send which was requested on a media capable of containing it. I am of course describing the days of padded envelopes and Maxell tapes. Days now long past and about as alien to the modern anime fan as a modern person relying on passenger pidgins to send e-mail.

When everything changed in the world of fansubs and moved away from the need for physical media, these very real rules of production and distribution were effectively taken out of the fandom equation. Their absence completely rewrote the laws of physics for the universe of American fandom on a scale so vast the only analogy I can possibly think of is one in which biology ceased to be a factor in human existence and we never again needed to eat, sleep, breathe, age, and so on. For the first time, an anime fan could find a fansubber, get the anime episodes they wanted, watch them, and then throw them away (delete) them, all while the fansubber themselves slept through the entire process.

To summarize, “how we got here”: An expanding market brought in loads of people, but almost no consumers, and nobody figured it out until it was too late (“consumers” in the traditional sense, meaning people who buy things).

Now because of this, I must take extreme issue with the almost complete absolution that Saint Sevakis gives to these modern fans, suggesting that their activities are something as natural as hurricanes in the Caribbean and those in the industry and something a well run industry should be able to deal with without batting an eye. He completely dismisses the fact that this development is known to be detrimental on all levels of the media production and licensing business and is simply a manifestation of the otaku public’s inability to control itself. The counter analogy Justin gives to Arthur Smith’s i-phone comparison is wrong in every respect, even by the standards he sets up in his own article. I will try to explain why I feel this way as succinctly as possible since this is already getting a tad long:
Earlier the article states that Anime was a consumer good, provided by fansubbers using a traditional set of maxims which govern all consumer goods while otaku watched anime via tapes that required storage space and money, and this was done out of pure necessity as there was no alternative. Enter digital fansubs and the market explosion in America, and all of a sudden the rules and limitations no longer apply for better or for worse, all the while otaku keep doing what they do best, watch anime. What’s wrong with this picture? The technology making getting fansubs as easy as checking e-mail is beyond any industry’s control. This is not the industry putting a box of i-phones on the street unattended and then being surprised they’re gone. It is a radical change in what it means for anime to be a consumer product, all brought about by that external force. The more correct analogy would be the Apple store being smashed into by a truck and chronic grand-scale looting commencing; all the while the owners, managers, investors, third party manufacturers, A&TT, and the police all look on, powerless to stop it from happening. Or perhaps a better analogy would be one that uses actual technology as the external factor, such as if all of a sudden Star-Trek transporters became a reality and all you had to do was push a button and an i-phone appeared in your house, never mind that it was beamed out from the store that you didn’t break into.

From a media perspective, it would be like someone leeching the satellite feed of the final episode of an immensely TV series (MASH, Seinfeld, Sopranos, whatever), then airing that episode before it was scheduled to go on TV, on a pirate station or the internet or both, without commercials. Well that’s stealing, because the company that made that episode, (that paid the editors, office workers, gaffers bla bla bla) , needs to make the investment back by selling advertising based on a guarantee. A guarantee to advertisers that a a relatively certain approximate number of households will watch the program with that advertising, and that guarantee is legally protected and has been the source of fierce contention since the days Gilbert & Sullivan wrote HMS Pinafore. If you actually think advertising isn’t an important part of every piece of consumer media that gets made, then after watching “Good Night and Good Luck” come find me and I’ll punch you in the face just to make sure you got the point.

As is correctly pointed out Justin’s opening, getting the anime to the market first, effectively makes a license worthless, and from an anime company’s perspective (yes anime comes from companies, not from farms where it’s grown on trees) if what you make is going to be made worthless by people you can’t stop, then why bother… since the domestic TV ad sales and merchandising isn’t going to support your efforts alone?

It is important to note, that one download of an anime is not one lost DVD sale but there was a ratio for X amount of fansubs there were going to be Y amount of home media sales. But this external factor changed that and while convention attendance and anime fandom grew larger, that ratio shrank and DVD sales didn’t even stay level while more and more people entered into the anime market. Media giants like Viacom and Warner are still struggling with this and have no real solution, and a tiny anime company with 21 employees is supposed to be able to deal with this global phenomenon?


GETTING OUT OF THE RUT
Link to Article

This “rut” came from the surrounding market growing up around a traditional industry which up until that time had worked well. I think that what’s happening with anime is a very good barometer for where general media is headed in the near future. This is where Justin Sevakis proves he most certainly does know just about everything there is to know about the mechanics of the media industry as a whole. Though I have to say the reason fansubbers fansub anime doesn’t come from some selfless proletariatism (that dies with VHS), no it’s the internet points.

Regardless of who is to blame and what is to be said, Justin’s piece nails it on the head that two tings remain constant. First, the anime fan will satisfy their craving (or simple curious interest) via the path of least resistance. Even though downloaders offer up the most sanctimonious self-excusing dribble such as the “well I wouldn’t buy the DVD anyway and it’s just replacing the function of what TV would do” line (even though no ad revenue can be realized by the production company so they can't make more anime) and these same people completely obliterate any validity to that notion by showing up to conventions dressed as characters from that very same show, or review that show on a blog, or recommend that show in a podcast, etc, completely feeding into that false inflation of the market, all the while eroding the viability of the show as a viable license. This will most certainly continue as long as there is a mechanism which allows it to operate. Secondly, the only way for the industry to continue in a way that will allow for sustained productions and further growth, is to make fansubs and their downloaging, obsolete and unnecessary. Correctly noted is the fact that no matter how many carriers an anime channel can get on, if the only offerings are an existing home media library or mostly acquisitions from a single production studio which are not up to date, the channel will have little viability in sustaining sales, or advert sales.

Coming up with the magic pill is not an easy task seeing as how no other aspect of consumer media has been posed with the same life or death situation, nor have they come up with an existing solution. Anime companies make anime, not trail-blaze the technology of media delivery.

DRAGGING THEIR FEET
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Nobody’s dragging anything really, it’s just that this could not have come at a worse time. The entire American home media business is in decline, and that’s partly because the entire American economy is crap thanks to another 8 years of a Bush Whitehouse. Japan’s economy isn’t that great either, making it a time to tighten belts and refrain from investments with questionable ROI. A few entries ago I extolled to the public that the ICv2 Panel at NYAF simply gave the Japanese the impression that if the “big bad internet” went away, this giant market would support those geysers of DVD sales that the licensing agents out in LA assured them were a slam dunk (hey they got their commission so what does it matter now amiright?).

Yes making a co-pro is almost impossible. I have been involved with two (One with the Shiden production and Micronauts with Mego, Takara, and Geneon Japan though we approached Aniplex first but SONY couldn't play nice with Takara because of Mego's bad blood... long story. It’s always one side arguing that they know what the market wants more than the other), and so far it hasn’t happened in the true sense of the word. Appropriately noted is the more practical solution to minimize the time between a TV licensed anime’s airdates between the Japan and America, and to find a delivery system that can get subtitled anime to American audiences that can somehow be monetized. The problem is that aside from embryonic concepts from the start-ups Node Science, and RayV TV, (which both seem great), there’s nothing out there that the anime companies wouldn’t have to invent and then maintain themselves, making the overhead of such a system prohibitive.

As far as what we’ll see in the future, after checking out some of the announcements and sneak peaks at the NYAF, I am happy to say that I don’t think we’re in for a Soujitz sponsored moé flood. It really does look like in general things are getting darker and more action oriented like Death Note and Ninja Scroll. But since what I am responding to was written before the NYAF, it’s fair to assume that such a moé flood has been a genuine fear since the TAF of 2006.

LAST CHANCE
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We are looking at a last chance of sorts. Something needs to come along and prove that investing ten or twenty million dollars making an anime series is still worth it, or that perhaps smaller investments for shorter productions will be a bankable commodity in the future.

Perhaps what we are living in is nothing but the aftereffect of a kind of vampire byte from the evolutionary force of entertainment culture. Perhaps east is east and west is west, and although the twain have met in both the best of times and the worst of times, no matter how bad or good those meetings are they are destined never to last. Anime may well have no choice but to go back to the rollercoaster of American interest ups and downs, as this latest influx of anime simply serves to change our own domestic American entertainment product into something that this and future generations will respond to, but more importantly, that domestic media companies can control. If this is true, then things like Teen Titans were the primordial walking fish that would later evolve into Avatar, an early hominid of what may become a new anime-born, uniquely American entertainment era.

There’s a fork in the road, and it seems like no one is at the wheel.

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T.A.O.