The Problem With Vampires: How estate law and technology are about to impact the entertainment industry.

D.O.A.

So Carrie Fisher died.  (oh, IRL spoiler alert).  People are scratching their heads saying "oh but she was just 60 and people live way longer than that now" which is true, but there are two important factors that come into play in this case; #1 it was a heart attack on a flight from London to LA so the amount of immediate treatment that allows for people to survive heart attacks was most likely extremely limited, and #2, she did have pure cocaine for breakfast 20 years straight so that will probably take some miles off the ole' odometer in the long run.  

Anime-wise, this in and of itself isn't significant until we come to the fallout.  That being, posthumous use of any and all of her images as an actor, whether it be pre-recorded material/archive-footage, or (more importantly) future use created digitally.  There is already a movement to tell Disney to please DON'T use a CGI Carrie Fisher in any more Star Wars movies they plan on making.  See where we're about to go with this?  But hey, as long as the check clears... right?

No... just, no.

Seiyuu Seimee, Sei it together, that's the way it should be.

Fans and casual consumers alike often voice distaste for the idea of using within a film, a CGI version of a deceased actor, or even a very much still living actor (Tron suck-fest anyone?), because of quality issues.  As humans, we are so attuned to looking at other human faces and gaining non-verbal implicit information from them that we can't shut that off. It just never looks right.  This is something that will most likely be surmounted as technology continues to become more capable, but as of now, it's not really there yet

But what about voices?  The voices!  Well, that's not as hard to pull off, and things like that go back pretty far.  Granted, examples like the Thief and the Cobbler have had their principal recording of their own specific lines while the actor was still alive and simply released posthumously, but with sound technology being what it is, as long as you have a large enough phonetic base to work from, you can make almost anything digitally without the actor present, or even aware, that it's being done.

The more astute among you will undoubtedly already be aware that this type of use has already happened to a living actor, one Crispin Glover, who very much did not appreciate it (see Crispin Glover vs Universal Pictures, via Hollywood Reporter).  So much so, that there is existing legal precedent regarding this type of thing and SAG terms covering use of likeness and pre-recorded media.  It is not enough to cover everything out there, but it can at least serve as the cornerstone for an entire body of new legal protections for actors and performers when it comes to synthesized use, posthumous or otherwise.

 Can ya hear me now bitch?

Allowed unless prohibited, or prohibited unless allowed? 

Notice how those two aren't exactly the same... (right now I am sure there's some contract law student going "HOLY FUCK OF COURSE THEY'RE NOT THE SAME YOU JELLO BRAIN!").  But for the rest of us normies, the latter is usually how entertainment and service contracts work, if it's not in there, it's not allowed until it is.  But this doesn't mean that synthesized voice performances aren't a potential reality.  Living actors might jump at the chance to receive 2 paychecks at once while they work on project A and project B simply uses the database to get most of the same work done at the exact same time.  Sure one check might be less than the other but getting both was never an option before so why the hell not?  This might actually be an enticing incentive to currently living voice actors.

Additionally, wills and estates will undoubtedly cover any such likeness or performance use for all posthumous purposes.  If actors actually like their kids, why not keep them on the gravy train by allowing for your voice to be continuously used for future productions, all while generating revenue at the same time?  Hate your kids, hell you can still earn money from your long dead voice and just have it go to some charity, or to pay someone to come around and kick your kids in the baby-maker once a month.  There will even be the oh so humble ones that simply allow for free use, making any future synthesized use, completely public domain.

This is all bad.  The reason is that this industry is competitive enough.  If all of a sudden as an actor, you're competing with dead people, then you might as well just start showing up to your auditions with a hatchet.  Think about it, they are never going to try to renegotiate halfway through a gig, miss a recording session because of a dentist appointment or traffic, age too much, clash over "creative differences," get pregnant, they are never going to get a cold, and they can be in 100 places at once. 

If vampires actually existed, upward mobility in society would be basically impossible.  They'd be around forever, hanging on to what they have and never letting it go, ensuring any future generations had no access to the same opportunities and resources they had (kind of like what the baby boomers are doing but times a million).   Thanks to the abilities of media technology, voice actors are going to be facing such a situation without the causal factors of the un-dead.  This means that 30+ years from now Megumi Hiyashibara might still be voicing new characters for whatever the hell kind of anime that they beam straight into your brain or however they're gonna do that, all the while the new talent sits on the sidelines, trying to get noticed online while their own work is stolen out from under them thanks to terms and conditions that give internet outlets ownership over "acoustic re-purpose rights" or whatever they are going to call it.

Welcome to the future.  It sucks here.

Who's Suin' Who: The "Hideaki Anno sues Gainax" non-story.

There’s a buzz buzz buzz about the recent legal action filed by the firm Khara Inc, filed against Gainax to the tune of 100million yen.  But like the buzzing of a bee, is it causing an unnecessarily overly energetic reaction to those it otherwise doesn’t pose a real danger to.  Are people making this out to be more than it is?  Cries of “Anno sues Gainax!” have already bee echoing through the interweb tubes and people are reacting like it’s the goddam Cuban Missile Crisis.  But let us not forget that 100,000,000 yen is (at the time of publication) the equivalent of US $879,275.06 which could be described the high-end of ass-wipe money in the grand scheme of things.  So even if Gainax can’t pay a single yen, Khara Inc may not necessarily come away with a tremendously significant ownership stake in the company (hell, with the price of wagyu the way it is, they’ll probably just end up getting ownership of a steak).

 Pen-Pineapple-Apple-Lawsuit.

Notice how the legal action does not include outstanding royalties, just the loan principal (doesn’t even mention interest, of which there may not have been any).  Outstanding royalties could easily be more than 100 million yen, depending on how long they’ve been outstanding.  This development could mean anything from the genesis of a real animosity between Khara and Gainax/Anno and Yamaga, to something like a side-step deal where Anno can take control of some of Evangelion IP assets in a way that keeps existing creditors and other debt issues out of the picture.  With Gainax showing very unhealthy income (in the article it is not mentioned if it is gross-adjusted or anything), their past failure to produce significant revenue since Evangelion may indeed invite the crows to pick the eagle sooner rather than later.  Although the beating of a dead horse may yet create gains if tenderized horse meat is what you have to sell, there need to be people willing to buy, and even then that only works once.  What I mean by that is; bringing back Evangelion again and again most likely is not going to be a successful survival strategy, you're going to lose out on the opportunity cost end.  The question then becomes, is there even any potential survival strategy that’s worth implementing?  Sometimes the answer is no.  While I hate to think about something like that for Gainax, when your best friend has to sue you for repayment of a (probably) zero interest loan, it doesn’t send a message of confidence to any other potential sources of financing regarding future projects. 

 

Without actually taking a look at the books and other accounting, the situation is very difficult to gauge in terms of the general temperament of the parties involved, as well as being able to know how much Gainax has gone the way of the cicada husk, presenting a rigid exterior while having been hollow inside for a long time now.  Maybe it’s exactly that, or maybe it’s not even close.  Regarding this kind of symptom, and based on how Japanese companies do things in general, I think Gainax may indeed be past the event horizon. 

 

I'm sure there's an easy solution.

So is this some sort of major event?  Well maybe not, since it involves less than $900,000 which for a company like Gainax shouldn’t be too hard to manage.  But it isn’t nothing either, it made the news, since not being able to just “handle it” is the position that Gainax seems to find itself in.  So it’s news. 

This mystery is going to make itself evident in the next year, possibly even before that.  Perhaps Anno really needs that money for his Dragon’s Dentist, or maybe this is a way for his good friend to get the best silverware off Titanic and into the right lifeboat before the thing finally starts going down.  That way Anno can keep his baby before insolvency ties it up and parcels it out.  That might be a good thing, but not for the reason you think.  Anno and Khara Inc might take Evangelion to Hollywood.  No one wants to do the same thing forever, and if a Hollywood Eva movie means that Khara can get financing for other projects as well, we might see something genuinely and creatively new, so why not tap that well...?  Anno is kind of a weirdo though so this could be well outside something he’d be willing to do.  But if a live action shit-stain of an Evangelian movie creates an opportunity for a Portal animated series (it won’t, but something equally awesome might be on the table), then it’s worth it. 

To truly understand what this situation might be, go watch U-571.  Remember that part where they put budget Ralph Maccio in the torpedo tube after that Nazi bastard killed him?  It was so that when his dead body and the rest of the junk floated to the top, the destroyer chasing them would think that they had sunk the thing?  Eventually that plan buys enough time to line up another plan (one that ends in ka-boom), and get out with the objective intact which was actually an Enigma machine and code book.  The bad news?  Despite once being state of the art, the battered U-571 ends up sinking.  Gainax may itself be a sinking ship, but the nexus of creativity can be kept alive and brought to where it can flourish, all by using the dead corpse of Evangelion to buy time (seriously people, stick a fork in it, just come to terms with the fact it was fun while it lasted). 

 You mustn’t run away.

As previously mentioned, the situation is far too vague for me to call that a lock in terms of what is going to happen.  This whole thing could just as easily turn some kind of ugly, and the vultures will pull everything apart in a terrible and damaging gut-splattered frenzy.   But I don’t mind engaging in a bit of wishful or nostalgic thinking every now and then.

20 year old coffee in a can anyone?

These are for sale if anyone wants them, as we try to raise funds to get new software for Pinky Mixology. Only $879,275.06! (Nah, but they are really for sale.  1997 edition, un-opened.  Message me or something).

Either way, one major problem no matter which direction this develops, is that it can be very difficult and quite tricky (some may even say impossible), to appraise or assign an explicit value to intellectual properties.  They are considered intangible assets, and so unlike financial instruments, they can not truly possess a net present value or be factored into the kinds of ratios that go into all that business stuff your roommate studied in college while you were wasting your time with Japanese Language 102.   Creditors and financial entities are going to have a very difficult time valuing Gainax for this reason.  It is not easily foretold how much revenue an entertainment property will produce.  Even companies like Disney and Fox have a hard time actually saying how much their flagships are worth in terms of actual real money on any given day, and they have entire rooms foll of math-people who's job is to do exactly that.  So while equations do exist for putting a monetary figure on entertainment IP (as opposed to patent IP... very different thing but IP none the less), they often aren't really allowed to sit down at the grown-ups table when it comes down to finalizing things, the same way polygraphs are used by law enforcement, but aren't admissible in actual court.  So if insolvency is a real possibility, then assigning a value to assets is going to be a guessing game at best and a cluster-fuck at worst.  Especially if more than one person is holding the leash to Evangelion.  This in and of itself may be an impetus for such a preemptive move to get Eva off the sinking ship sooner rather than later if that is in fact what is happening.  Much like electrons in the dual slit experiment, monetary value in entertainment properties only manifests as real when people look at them.  Finicky things these intangible assets are.  So we may be witnessing a great escape style egress of Evangelion, but pulled off out in the open for everyone to see.

Then again... all this might just be an epic disaster in the making.  Watching the company that fucked you over slowly go down in flames is always satisfying.

Yeah.

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.

-

Tolkien-Temper-Tantrums, Katsucon Catastrophe, & Funimation vs The Congressman’s Daughter: 3 kinds of "Doing it Wrong"

The Streisand Effect is something that can rarely be used as an effective marketing tool. In the times it has had demonstrable positive effects in marketing, 90% of those instances have been due to retroactive strategy changes, where the instigating party simply comes to terms with the extra attention and does what it can to take advantage of the newfound publicity, rather than continue to fight a losing PR battle. Almost never, can a marketing strategist plan and then successfully implement a Streisand Effect from the ground up. Hence;


#1 Tolkien Temper Tantrum:
Recently, there’s been an anime related blip on the Streisand Effect radar in the form of a fan-produced button with the slogan “While you were reading Tolkien, I was watching Evangelion” that was taken off of Zazzle.com at the C&D behest of the Tolkien Estate. This non-infringing product had long since exhausted its life-cycle in terms of pop-culture buzzmetrics and relevancy in general. It was just another microscopic fleck of dead skin on the pile of old-meme that was the internet from 2009 that no one cared about. Suddenly, in steps the Tolkien Estate with a behavior which violates the unwritten social standards of internet pop-culture community, and boom; it’s viral in the blogosphere. The result being that now, someone like me, who never knew about this has; A) found about it, and B) based on the behavior of Tolkien Estate I am now very motivated to make something for myself with this slogan on it and proudly display it at the next convention I go to. I think you should too.

This is news via BoingBoing.

[Added Mar. 7 2011]
Since I wrote this a while back (these posts are usually written a number of days, sometimes weeks before they're posted using Bloggers ability to schedule auto-uploads), there has been a development in this issue. That development seems to be something along the lines of the Tolkien Estate coming out and stating that they have had no involvement in this situation, and leading to the conclusion that it was Zazzle.com which pulled these things of their own accord. Something later confirmed by Zazzle.com via BoingBoing...apparently. However, in Giro.org's post containing the original Zazzle.com emails, the words "We have been contacted by The JRR Tolkien Estate" clearly appear in their correspondence dated Feb. 23 from "Mike" at Zazzle.com. There are only 3 possibilities as things stand:

1) Zazzle is lying. They were never contacted by the Tolkien Estate, and took it down themselves because someone over there has just learned what copyright infringement is and is taking it too far (see Katsucon Catastrophe below).
2) Tolkien Estste is lying, and backing off real fast to avoid a wrath of the internet type incident, either asking or leaving Zazzle to take the PR hit, with the message that it's Zazzle's doing and not Tolkien Estate, and Zazzle is complying since they... who fucking knows.
3) Giro.org is lying and this has all been concocted as some insanely ballsy method of publicity in the hopes of... who fucking knows.
4) My own opinion/desire is a combo of 1 & 2, being that Zazzle.com knows exactly how this works, and was able to explain to the Tolkien Estate how they might just become the Cook's Source of 2011 in terms of internet wrath... and so they both are back-peddling the hell out of this.

Either which way, I'm done caring about it at this point, thought I still will be wearing a home-made version of this thing to the next con I go to.


#2 Katsucon Catastrophe:
Now, when it’s really “Fair Use” like the above, I am always supportive of this kind of thing and fostering all kinds of creativity. This support usually is something I often extend even when it’s technically over the line of the copyright issue. There are many examples where it’s more beneficial to allow the activity to continue rather than to force a confrontation. Case in point; the Katsucon Artist Alley disaster of 2011. Let’s get the technicalities straight; Most artist alley transactions where people buy things from the artists/vendors are in actual violation of copyright since the character rights are clearly being infringed upon. The fact that an artist drew/painted/sculpted an existing character or a combination of original character in an existing profile, by itself isn’t infringement... until that piece is sold for money. In that case the rights holder is entitled to a portion of that sale, and if there is no existing agreement in place, they can take legal action.

That doesn’t mean shutting down the artist alley is a good idea. Unless you’re selling a hundred pieces of Naruto fan art at $10 each, the small transactions of an artist alley are not something that licensees should think are worth the customer alienation that comes with wielding the bludgeon of "enforcement." But like a college undergrad who just learned something new, Katsucon blundered into this big time due to a lack of real-world knowledge. My own notion is that some staffer (who is probably a pre-law student somewhere), realizes that there’s a technical copyright violation going on, and institutes an over-kill policy, demonstrating a serious lack of knowledge of how this works. I could be wrong, but for some reason I don't think I am. Knowledge is information + experience. Guess which part of that was missing from the thought process of this Katsucon genius... Now because this mess’s Streisand Effect brings unnecessary scrutiny to artist alley activities at conventions in general, it can only lead to problems. Best case scenario is that this just goes away by the time convention season gets into full swing.

My Katsucon 1 (1995) con badge.
Katsucon, I love ya, and I was there in the beginning, but you better not fuck this up for everyone.

#3 The Funimation vs The Congressman's Daughter
Then there are the straight up a-holes who are so steeped in gamification behavior within the fan community, that they will actually hurt the anime business to get e-peen points. While the targets of the litigation aren't the worst offenders, Funimation suing the 1337 to set a proper example of “yes, this is stealing, and this is what happens when you do it” is not surprising, and is only unfortunate in that it takes capital away from Funimation's budget that could otherwise be used to get more anime out. Anime as a commercial product has been seriously hurt by attention whores who make terrible translations and post them online before legit streaming sources make them available merely a few hours later. These lawsuits will win (if legal procedure is done properly) because the law and politics are very friendly to copyright and the billions of dollars it pumps into the economy. Here's a bit on that:

The US Government is in love with Copyright. Some relevant background (Napster case study): In 2001, Napster tried the ridiculous failure that was the “Million Fan March” on Washington DC, as a part of their platform for a complete revision of copyright law, the end goal of which was to make p2p media sharing legal under fair use, and thus clearing the way for Napster to operate on a very large scale, immune from civil actions of music labels and artists. This event, combined with the activities of the Napster D.C. lobby team of Manus Cooney and Karen Robb, was called the “Congressman’s Daughter” strategy. It was the idea that if a member of congress just had their kid show them how Napster worked, they would have some kind of awakening and Congress would make sweeping changes to Intellectual Property laws. Napaster actually put off negotiating a deal with music labels in order to further this strategy, thinking it would work, and then they wouldn't have to deal with labels at all. But the problem is, Congress had just changed I.P. laws, and not in the way Napster wanted. This was the 1998 Mickey Mouse Protection Act, extending the period between creation and entry into the public domain to well over a century in most cases. The law was further cemented into an indelible presence in American jurisprudence with the later 2002 case of Eldred v. Ashcroft. Pile on top of that the DMCA getting through the Senate unanimously in1998, and U.S.A. participation in the GATT Treaty on copyright issues, and it should have been painfully obvious to anyone that this hoped-for outcome of Napster's wasn’t going to happen. The U.S. Government has consistently realized that patents and copyrights are among the top 5 contributors to the entire U.S. economy, with the biggest players in intellectual property issues being Pharmaceutical, Agri-business, and Software entitles, along with Entertainment Media. They all have DC lobbies too... really really big ones.

"Bubble? What do you mean Bubble? Nah, this is totally gonna last forever!"

So the F-1337 don’t have the law on their side, and can only hope public opinion becomes strong enough to serve as a motivation for Funimation to back off, or see if they can sidestep on a legal technicality. And for those of us in the business, it’s very painful to see idiot fans supporting thieving activities because of some perceived entitlement - the "right" to watch anime. It’s not really 100% their fault though, there just isn’t enough information getting through to people to dissuade them that; no, your American otaku demand for HD video perfectly translated commercial-free simulcast foreign TV programs at no cost to you is actually unreasonable believe it or not. The problem is, the way we live doesn’t make that easy to realize. For example; when Verizon was advertising high-speed internet access with the tag-line “download thousands of songs,” they were really hurting things. Downloading 1,000 songs from iTunes is kind of pricey, and Verizon knows that people aren't going to be paying for all those downloads, but they are going to perpetuate the entitlement anyway. The entitlement of “well I just bought a big computer and am paying for broadband, so that’s my investment, and that’s all I should have to be out of pocket” seems to be enough to justify not actually paying for the entertainment media they consume. Again, an internet entitlement notion that only is shown to be completely absurd when applied to a real-world example; “Well I got up out of the house and paid for my subway ride here to the movie theater, so that’s enough of a reason for me to get in without a ticket.” Yes, it’s just that stupid. And no court in the land is going to have sympathy for people who buck the system that greases the wheels of politics.

In this last case, the party who’s “doing it wrong” are the fansubbers, the torrent hosts, and the people defending what they do. When you dabble in piracy, there’s a risk that they’ll nail you. The internet-rage from the ignorant otaku masses is creating a pseudo Streisand Effect in the regular channels, which is just a reminder to the rest of you to play by the rules or risk being #1338.

Fools, You Know Not What You Do: How American Otakus are going to use Tanaka's RIETI Report to make themselves look stupid.

As much as I love statistics and business and the like, I can’t go into the veracity of this report as much as I would like to, but rather make the following, zero-sum, blunt, inescapable point to the American Otaku out there because I know what you're thinking:
NO.

Just stop right there.

Headline: Internet Piracy Boosts Anime Sales, Study Concludes. Reality: No. Well maybe, but just in Japan. With American otaku already loading their own petards for a strong self-hoisting with the strength of all the self-righteous uninformed opinion of a birther, one can hardly expect my efforts at damage control to be of any effect. These people who hurt the anime/manga market outside Japan with fansubs and scanlations will see what they want to see, and think they do no wrong. The happily smug reaction that American Otaku (Clarissa at AWO, I'm looking at you) will feel in their misplaced vindication is no doubt to be so thick, that no light of fact or reason shall be able to cut through it, and thusly such illumination shall be felt by only a precious few (Daryl at AWO I'm looking at you). It is in the hopes that I can reach said special precious few who can further illuminate the true meaning of the RIETI report that I am writing this here.

If you don’t know what the Tanaka RIETI report on anime piracy is ... just follow the link to the story I'm not going to recap the thing here. The story itself (not the report) exemplifies the aforementioned problem. It does a great disservice by inaccurately equating this report's findings to the Funimation lawsuits, and simply garners its information from what seems to be only the English description of the report itself:

Whether or not illegal copies circulating on the internet reduce the sales of legal products has been a hot issue in the entertainment industries. Though much empirical research has been conducted on the music industry, research on the movie industry has been very limited. This paper examines the effects of the movie sharing site Youtube and file sharing program Winny on DVD sales and rentals of Japanese TV animation programs. Estimated equations of 105 anime episodes show that (1) Youtube viewing does not negatively affect DVD rentals, and it appears to help raise DVD sales; and (2) although Winny file sharing negatively affects DVD rentals, it does not affect DVD sales. Youtube’s effect of boosting DVD sales can be seen after the TV’s broadcasting of the series has concluded, which suggests that not just a few people learned about the program via a Youtube viewing. In other words YouTube can be interpreted as a promotion tool for DVD sales.

That's all some people are going on. Lots of people commenting on this can’t read the report. This is literally judging a book by its cover, and then writing book reviews as well.

Seeing this, it is easy to be drawn to the conclusion that this somehow applies to English speaking markets. It does not. This study only encompasses sales and after-market piracy within the domestic Japanese market. While it’s nice to think that English speaking markets somehow play any role which can have an effect on the producers of anime/manga in cases like this, it is because of piracy circumventing and preempting licensed distribution that they do not. So let me say this again, the report is not applicable to English speaking markets (or any markets outside Japan). However it is reasonably detailed, rather specific, and looks like this:


It asserts a specific point about anime DVD sales and rentals in Japan. Regardless of veracity, these conclusions cannot be superimposed to the USA or any other market in which the legitimate media delivery channels are preempted by people who steal the work and make it available for free in the form of fansubs and scanlations. In Japan, these properties do not have to worry about online bootlegging BEFORE the episode airs on TV. Because of this, they can make pre-agreed advertising agreements, accurately predict revenue, and start a genuine product lifecycle for a property.

This devaluing effect that anime piracy in the form of fansubs and scanlations in international markets has is very real and I have detailed it before. I have also noted that without the ability to sustain the regular needs of a business, international markets will have no input in the type of anime and manga that are produced, leading to a Galapagos effect in the type of stories that evolve. Some have argued that it is because anime/manga are “different” from American media is the reason they do like it so much, but Turkish Tapdancing is “different”... the South African Vuvuzela Philharmonic Laser Light Show is “different.” The quality of “different” is in no way the exclusive deciding factor in why people in English speaking markets like Japan's anime/manga. It is that, along with a combination of other qualities, which causes the popularity of such material and changes in what the Japanese market likes could easily change that balance to the point where although it remains “different,” fails to resonate with audiences outside Japan. That is a real possibility.

The Japanese DVD market is miniscule compared to the USA. It really is a different universe. Where as in the USA, some labels exist only as home media entities, the Japanese DVD labels don’t go through the licensing and localization dance to get a title out (for their domestic anime obviously, not for Hollywood productions). Additionally, media consumption habits (both legit and pirated) of consumers in general create a very different animal in terms of commercial markets between Japan and the USA. This difference in media consumption created a very different set of metrics and mechanics which going into detail about would simply lead to a post of biblical tl;dr proportions. So let's just call it a case of "apples and oranges."

To conclude; In Japan, anime/manga productions FIRST reach the market through a legitimate media distribution channel (TV broadcast, online/mobile download, direct to DVD, etc.) and are then pirated. In the USA anime/manga productions are pirated FIRST, and then (because of the time it takes to license and localize) released through legitimate media distribution channels. Do we understand?

Japan:-----Commercial release --> then --> Pirated.
USA:__----Pirated --> then --> Commercial Release.

That difference is the game changer. In international markets, the fact that the target audience has already consumed an anime/manga before a license can be obtained for that market, means that said license is worthless. Fansubbers and Scanlators are stealing the license that the original producers have every right to sell. The fact that they (fansubbers and scanlators) don’t charge anything means nothing, because the damage done to animators, artists, writers, assistants, and publishers is the same as if they were selling bootleg DVDs at $100 a pop. They are actually worse than for-profit bootlegers because they honestly believe they are doing nothing wrong.

It is true that Japanese production companies have constantly and incorrectly harped that if piracy just went away everything would be sunshine and smiles, which is a very Japanese thing to do. Every Japanese industry and political party does that. Additionally, half of the major entertainment execs in Japan have no idea what youtube really is, but just know it's part of that big scary internet. But in case you weren't paying attention, that's totally beside the point. This publication is going cause a problem in American fandom, by giving a moral ego boost to people who know they are hurting the business that creates the things they love, and they’ll take that boost because they want to think what they are doing is helping. And nothing said or done, will assuage their misplaced self-granted absolution.

This is no "get out of jail free card" for fansubers, scanlators, and the American Otaku that keep them around. No matter how much they want it to be.

ANN also helpfully points out that this is a paper by Tetsuo Tanaka, published by RIETI, and is not specifically all encompasing of RIETI's official platform (which is a political force to be rekoned with at times). It is also important to note that Professor Tanaka had already expressed some views to the same effect as the paper's findings, so this may be a case of some tunnel vision.


[July 17 2011]: Just in case anyone was wondering, I added that little stop-sign graphic because I was sick of the thumbnail on the top 5 posts being almost impossible to make out. This looks a little better.
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Antarctic Press takes a gamble, steps into Sarah Palin's crosshairs?

Repeating History: Antarctic Press once again fails to understand fair use.

So long time manga publisher Antarctic Press, the company that brought us Ninja High School, Gold Digger, and all kinds of furry abominations, came out with this gem:

Can "Furry Sarah Palin" be far behind?
Doing this is a bad idea because Antarctic Press seems to not have been able to learn the harsh lessons of its own past. Way back in 1994, they got nailed for publishing hentai doujinshi of characters they didn’t own the rights to (Dirty Pair) under the name H-Bomb, and like that crazy aunt that keeps betting the kids school lunch money at Bingo, they don’t seem to realize they have a serious problem. The original incident is detailed a bit more in this episode of Anime World Order by none other than MEEEEE, so go take a listen (it's 6min 50seconds in).



I can't find the H-bomb cover out there, but the hypno-butt says you don't mind.

Now it would seem as if AP is making another mistake as to where the line actually is drawn when it comes to protected parody and fair use.

I can already hear the weaboo-tards now going “nuh-uh! That’s totally protected and fair use like an AMV or fanfick and she’s a public figure and blah blah blah!” Shut the crap up. Weaboos know dick about copyright. Here’s why it’s not covered legally:

This whole thing is a for-profit commercial enterprise. You wanna play, you gotta pay.

Yes, you can draw as many pictures of Sarah Palin as you want w/o any licensing, and they can be in subject anywhere from super flattering to downright obscene. Yes you can write and or distribute these to anyone you want to... until you start making and selling merch with her likeness for profit. Then copyright comes into play.

Antarctic is looking at a potential major issue here because:

1) They are charging money for this comic and distributing it as a commercial FOR-PROFIT product. This isn’t some political cartoon in a newspaper. Sara Palin the Person/Brand is the foundation of this product, so unlike something that uses political likenesses, like the long running and painfully unfunny Doonesberry, the use of Palin's image in this isn't protected by Hustler v. Falwell as some have speculated (which was about libel anyway). Palin has no real lible case, but has a really good civil copyright angle and the fallout is just going to be about royalties. Antarctic isn't in criminal danger, but still putting themselves in very real legal danger of injunctions and expensive civil judgements.

2) They mention Sarah Palin by name. Of all the titles in the AP political releases, this is the only one that’s not far enough in the grey area (remember that pr0n changed the spelling just enough). Palin is a person and also more importantly a very powerful BRAND. She’s also a private citizen and not a politician (for the moment). There is NO DIFFERENCE between this comic and making another commercially sold comic like “THE ADVENTURES OF MICHAEL JORDON” and using his likeness and the logo of the Chicago Bulls without getting the rights to do that first. You do that and see how long it takes you to get sued. There is something like that happening now with Lebron James, but in that case, all the licensing has been done properly.

3) Palin is a media whore. The moment she’s sensed she’s been too far out of the spotlight, she’s gonna fire up the legal team and sue the crap out of Ben Dunn and the whole of Antarctic, just for the extra publicity. Win or lose, the legal nightmare alone is gonna hurt Antarctic, and it's a perfect opportunity for Palin to get back in the news withouth having to mention the word ARIZONA.

I can't bring myself to think that Antarctic Press is actually under the impression that fair use and parody are keeping them indemnified on thisk, but as I've stated, they have done this kind of thing before. I would like to think they’re just taking a gamble that the Palin camp is gonna let this one slip by. That’s not gonna happen because; see previous point #3. This thing is already being fed into the 24hr news cycle and in 5 minutes the whole world is gonna know about it. They’re already walking a dangerous line with the commercial Obama stuff, which has already become an issue from previous instances, and this Palin thing is not going to go in AP's favor if it goes to court. Antarctic would have a better chance if they just made a comic out of YOU and your wacky adventures (yes you reading this right now), since you probably have a smaller legal team.

I could be completely wrong if the Palin camp actually signed some sort of deal with Antarctic Press. I haven’t picked up my copy yet but something tells me there isn’t any agreement in place.

I did a lot of comic trading back in the buble and even once mentioned it in a previous post, so my advice is to buy this thing. Buy as many as you can and see what you can do on the short sell (meaning wait for this to get mentioned on CNN and FOX and your local news, then plaster them all up on eBay). Because the C&D letters are probably gonna start flying, and not just to AP, but to Diamond, and some of the larger retailers, which will rip them off the shelves. This thing is going to be worth at least a few bucks over cover for the novelty/controversy (probably not much more though, once the shitstorm dies down). I would actually take one to an inevitable upcoming Palin book signing/campaign stop and ask for a signature. If you do that, be prepared to not only get bounced from the event, but dollars to doughnuts says her private security will try to confiscate the thing from you as well.

So once again the Hong Kong cinema bootleg mentality has reared its head in terms of manga in America (I know it isn’t what fans would call “manga,” but AP is a company that’s done more for manga in America, more than a lot of people would care to acknowledge).

This could be the final screw up for AP though, and their final contribution to pop-culture history could very well be their actually becoming history thanks to this. Ah Antarctic Press, you were always in the room, but still we hardly knew yee.

You thought I was kidding about Furry Sarah Palin didn't you...

You keep on using that word... The JBPA, Apple, and Copyright

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I do not think it means what you think it means.

The JBPA brings up a copyright problem, but do they have a solution? Then again, why the hell should they solve Apple’s incompetence by design?


So in what’s pretty much old news by now, the JBPA and three other groups have slapped Apple with an “angry letter” regarding the apple app store and the sea of illegally available manga that resides therein. Much like in similar situations, the Japanese rights holders are angry and concerned that their commercial IP is being distributed by entities who aren’t licensed to do so, and realistically… that’s a very reasonable way to feel. They are also upset that, while it seems the Apple App Store can instantly take down an app that has fart noises or boobies, they seem to leave the copyright diligence up to the copyright holder. This kind of action of a huge company passing on expenses to smaller content providers is all over the history of the fall of the anime industry in the US, when small home media labels were bombarded by all kinds of chargebacks and “so sue me” kind of contract violations from giant retailers and national distributors. Unlike Craig’s List, or eBay, Apple’s app store is directly selling units of commercial goods to the public, and this situation would be no different from WalMart or Sears simply not checking at all to make sure that the products they sold were real and not counterfeit or stolen, instead leaving it up to the manufacturers to send people in to browse the isles and then raise a red flag if they find something wrong. Businesses just can’t do that.

Apple has a lot of growing up to do, and with Jobs at the wheel, they’re never going to do it. He’s still way too bitter about getting booted from Apple the first time, and he was never ever a nice guy. Sure, both Jobs and Gates dropped out of college and "computer genious" and blah blah blah, but while Gates seems to have left college because it wasn’t moving fast enough for his super-brain, Jobs seems to be the guy who left because he pissed everybody off in record time. Just compare the commencement speeches the two have given (look them up your damn self), and the whole personality difference starts to jump out at you. And while Gates is long gone from Microsoft and busy giving away billions of dollars to charity, Jobs is parking his $130,000 sportster with no license plate in handicapped parking spots whenever he drives down to the office to bitch about the new iWhatever being the wrong shade of off-white. He’s made the mistake of letting his company become his identity, and that never ends well.

Apple is now bigger than Microsoft. But it never learned how to really be that big, and so is still acting as if only a small portion of the market is watching what they do. They’re also still designing products for that small portion of the market, but are always first across the line with the features people never knew they wanted. Apple has the potential to remain a majority stakeholder in the emerging world of mobile devices, or pull a Sega and shrivel up again.

That will depend on many things, including how they deal with this manga issue raised by the JBPA. Apple has plenty of quantitative people who have been able to point out that doing even a minimal amount of copyright diligence on these apps (beyond the major properties like Harry Potter or Beyonce) would end up costing so much, that Jobs would fall behind in the imaginary dick measuring contest he has with the rest of the world to see who has the most money. But in reality, that’s just too f-ing bad. Let’s remember, this isn’t the “app exchange” it’s not some Mac BBS or Macworld cruise where the top of the pyramid get together and trade crap with each other. This is a formal division of Apple, the company, selling digital products made by third parties. And a large company like Apple, who is going to sell these digital products, has to do that diligence whether they like it or not. Microsoft knows stuff like this and would have crunched the numbers beforehand to see if it was worth it. Manga publishers have an existing protection under international copyright law and should not have to use their own limited resources to police another company which violates that protection, especially if it’s a company bigger than Microsoft.

It is also important to note (accordig to the Financial Times article) that the bulk of the as yet uncovered infringements are Chinese translations. American otaku will once again undoubtedly gripe when the obvious is mentioned, but if they’re unhappy about the insignificance of the American market compared to the Japanese one, they’re really not going to be happy about how small the potential Chinese market is going to make the U.S. look. What does a 10% sales figure look like in China? It looks like one third of the entire USA. The high population, close proximity to Japan, and lack of cultural hurdles in product acceptance that manga is up against in other parts of the world, makes the Chinese market the only ripe fruit on the tree at the moment. Combine all of that, with a super strong Yen and a hyper expanding wireless market in China, and you have an environment where the only strategy that’s going to get any attention is that of expansion in the Chinese market. Don’t be surprised if it turns out that the money that Japanese companies are pulling out of the U.S. operations ends up going to Shanghai and Hong Kong.

One could argue that he Japanese side of the equation is part of the problem in that they’re doing what they have always done, just bringing up piracy issues without addressing causes or coming up with a proactive solution. But it's actually not true in this case, in that the solution that they are proposing is that Apple do what any other retailer do responsibly; Make sure the stuff they sell isn’t bootleg, fake, or stolen. Apple is not “putting a buyer and seller together” or simply “providing a service” for people to buy and sell directly. They are straight up running this show, and with that comes certain obligations as a global retailer… And like a French tourist in New York who simply can’t understand why they aren’t allowed to smoke on the subway even though it’s late and it’s their birthday*, Apple can’t seem to figure out why those same obligations that apply to the “other companies” like WalMart, Amazon, Dell, or the pawn shop down the street, should also apply to them. Do I really think there’s some sort of mentality at Apple that holds a “rules don’t apply to me” stance? Sure, in Jobs’s head there’s gotta be, but there are enough smart people at Apple who actually have to run things over there that they know this is just a case of keeping costs down to keep their stock as high as it can be. So combine those two and what we’re going to have is a situation that is going to get bad enough so that the royal bean-counters eventually have to approach the king, who probably won’t want to budge on principle until he can actually see money coming out of his pockets (and then you know he'll blame someone else anyway).

Now there are some otaku and Mac fanboys (notice I didn’t say Apple there) who are so religiously into this "Apple as a whole can simply do no wrong" idea, there will be no reasoning with these people. But lots of Mac fans out there might simply notice that this is a case of Apple entering an industry and not playing by the rules which naturally help the smaller players. To see Apple shit on smaller businesses out there, in a kind of cliché Captain Planet sort of way is a sad thing to see indeed. If nothing else, to see that Apple is acting like a real life OCP, should snap a lot of people out of any idealogical daze they're in. The “…have a scale problem but not a willingness problem” (FT article) is such a non-excuse and is patently rediculous if held up to legaql standards of other businesses; “McDonalds wants to make sure the food they sell is up to federal standards, but we just don’t have the man-power, so the customers can look out for that ecoli on their own” or “Foot Locker wants to make sure that all the Nikes we sell are actually made by Nike, but that’s up to Nike to send their people in here and check, we don’t have the resources to do that” …and so on.

Perhaps I’ve been a bit redundant here, but Apple seems to get a pass all too often when it comes to entering an industry and doing it “their way.” But this is actually just the way of “I’m big and tell you what to do haha” and because this M.O. has an Apple logo on the front of it, people seem to reign in their otherwise hostile reaction. This time I am hoping that most otaku out there see that the JPBA is an organization that represents lots of publishers, small companies that all put together aren’t worth as much money as Apple farts in a day. The JBPA is the little guy in this story, and Apple is damaging their business by selling stolen goods, plain and simple.


"The Japanese have hit the shores like dead fish.
They’re just like dead fish washing up on the shores."

-Steve Jobs, 1985.

Way to see the future Stevie, those Japanese never got a foothold in the computer business did they…? Think his opinion has changed much?

Watch how many mac-boys start crying foul at that one. But at least they can have a place to go in Tokyo to pray 5 times a day to the mighty Apple.



*That French thing is based on a true story which happened at Jay St.

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But Honestly Monica... What the Cook’s Source Magazine theft of intellectual property can tell us about Schwarzenegger v. EMA

Once again, Gen X and beyond is getting screwed by the Baby Boomers. No, I’m not talking about the recent midterm elections, in which for whatever reason, over 65 voters turned out to vote almost 2 to 1 over the under 30 crowd. Once again it looks like younger people in America have (rightfully so) given up any inkling that their voice genuinely counts in any kind of open arena or community in which the baby boomers have entrenched themselves. Some of this comes down to life-style, with younger people tending to have jobs that are much less forgiving in terms of scheduling flexibility, and tend to be in sectors that have “election day sales” where entitled boomers argue about paying too much for a 90% off made-in-China thing they don’t need on their way to vote for “family values” while muttering about how the youth of the country don’t give the boomers enough credit for the “revolution” of the 60’s or the inflation-fest of the 80’s.

This subject is something I’ve talked about before, and anyone who likes anime or goes to a convention is used to the uber-wide social gap of understanding which is why your mother never understands your jokes or why she gets confused by the “I’m on a horse” ad and it’s various parodies. Case in point #2, the “because I say so” self-important opinion gambit, where boomers often believe that because of their age and experience, their all too often ill-informed opinions are not only valid, but can somehow trump arguments that are in the right, just because that factually correct opposition comes from a gen-x or gen-y source. It is an insane trap of self delusion whose apex seems to be the notion that the “government is going to get involved in your Medicare.” ...yeah.

There’s a point... wait for it.

Take a recent real world example of this in media; Cook’s Source Magazine totally cluster-fucks it’s way into internet famous-ness (that’s totally a real word). Apparently, it’s not plagiarism if you and your old-media take it off that wacky internet that the kids use. TL;DR version of all that is; a food blogger Monica Gaudio posted a recipe/article for an apple pie or something on her own website. This was later found, slightly altered, and re-published by Cook’s Source Magazine with Gaudio’s name on the byline, however Gaudio was never informed or compensated. When confronted, Cook’s Source Magazine Editor Judith Griggs notes she’s got “30 years experience” in the publishing business, and then acknowledges the situation. Finally she follows it up with one of the most obtuse notions ever, that being that everything on the internet is Public Domain and perfectly usable as content in a for-profit publication. It’s a textbook example of both the baby boomer gap of understanding how new media and technology work while at the same time playing the “my opinion carries more weight than your argument simply because you’re too young to understand” or more accurately the “because I said so, child” maneuver. The belittling of importance of media, simply because it’s in a form that uses new technology that one can not understand, often leads the boomers to violate codes of behavior, and explicit laws out of a sense of self righteous ignorance, which almost always leads to the detriment to younger generations.

Another footnote in the making of “Making 'Generation Screwed;' a Baby Boomer Production” ...I just made that up.

Why is this important for an anime / Japanese pop-culture blog?

No this didn’t happen to me, my posts are simply too crunktaculatastic to be reprinted in old media. But recently, the issue of “violent video games” the replacement boogey-man that replaces Twisted Sister and the Tipper Sticker, has in fact made it to the Supreme Court of The United States of America. Scared by a medium of creativity they can’t possibly comprehend but believe they can adequately judge, the boomer generation is trying to regulate free speech by using scare tactics. Now, banning a violent game sounds as ridiculous as banning a violent book to those who can understand both of these mediums, but you have to be born after 1975 to be able to know that.

Schwarzenegger v. EMA

What should scare the crap out of everyone reading this, is that the panel of SCOTUS judges in this case has consistently demonstrated their inability to notice that it’s not the year 1970 anymore. Moronic questions demonstrating the lack of even the most basic knowledge of how email and cell phones work, the inability to correctly spell or pronounce Nunchuck, and a notion of under 18 year olds as non-citizens which do not have first amendment protection, are all things I except someone’s angry grandmother to spew forth, not something to come from the soo-preem-fuking-kort! Yet it is this untouchable cabal of culturally and technologically illiterate bunch of boomer-mentality superiority of opinion judges, which will either strike down, or support a law which clearly violates the U.S. Constitution but for the fact it’s being applied to a medium which these people can not understand. Change out “video game” with “book” in this case, and we wouldn’t even be here. Kotaku has put up a piece that gives a hopeful picture that the outcome won’t be retarded, but let’s not forget, if you're reading this here, you are coming into this with our own superior understanding of how this technology actually works, and how it is not bound by specific age groups (the “video games are for kids” notion). Conversly, the SCOTUS is fumbling around in the dark, putting their hands on inventions that they’ve never seen before, all while looking for the oil lamp to shed some light on the situation. On the bright side, it seems that Kagan knew what Mortal Kombat was, although she relegated it to “something her clerks did,” thereby demoting it to a plebeian activity of the younger generation in her mind I'm sure. This one could go either way. -

The Great Divide:

You're dong it wrong.


So apparently it took a few years for Constantin Films to realize they were the source material for a popular meme, but only a few moments for them to react in a way that would have only seemed logical over a decade ago. If you’re reading this, chances are the only reason you know of the existence of “Downfall” is because of this meme. The parodies had not escaped the attention of the actual makers of the film, and director Oliver Hirschbiegel has even been quoted as supporting such parody creations. Although this kind of parody is not protected under fair use laws, the fact that value for the film is generated from these activities should be obvious. Apparently, the people who work at Constantin are such marketing geniuses, they can not understand the source of value for their film in the English speaking market and why having such a thing is not only valuable, but often so very unlikely in the first place and should feel quite fortunate. This kind of thing has happened for so long now, that there are business school cases written about how companies like Constantin have fucked up a great source of publicity because it goes against the grain of “old media” thinking.

(see, all he needed was some "re-branding")

Of course, most of everyone reading knows that it’s not only a dick move, but unprofitable as well. However the crux of the matter is that while fans and people in the know are aware of this kind of thing, they have still been unable to articulate exactly what is happening in terms of this meme helping the film’s sales, and why it is important. The fact is that these companies simply have not been illuminated to the actual principle as it operates, that once a piece of media has passed into the level of public meme, not only can it not be stopped, but should be taken advantage of. So lets look at the situation:

This thing shows up on the internet and eventually becomes an anticipated regular to most major news developments from the death of Michael Jackson to the victory of BluRay over Microsoft in the battle for Hi-Def DVD industry standard. Before too long, hundreds nay, thousands, of people who otherwise would have never heard of this film were looking it up on IMDB and sure enough I am sure that someone somewhere bought a DVD of this movie because of seeing the meme. But that kind of purchase is the exception, not the rule. In reality, this kind of meme awareness high speed take-off rarely means that there is any increase in actual packaged media sales beyond a fraction of a percent. The Academy Award™©® nomination would have a stronger effect on sales, since it broadly reaches a narrow cluster. This kind of thing is not something that increases sales with a narrow reaching of broad clusters. But it's also not about sales.

It's not the increase or decrease in sales that is the real source of value here. Although intangible and abstractly qualitative, it is the awareness and commonality across very different segments that can be taken advantage of and felt in terms of other areas such as new IP development, or (in the short term) getting the thing into some rental accounts. In the end, it's not about protecting "good" brand awareness by pulling the video, but avoiding "bad" brand awareness by making sure your company's actions do not come off as seemingly as douche-tastic as possible. In a singly publicized move, Constantin Films has gone from having a fairly innocuous brand status of "the company that made that Hitler movie that get remixed on the internet" and brought it straight to "that evil company that doesn't know how to relate to how people interact with media."

Now I am pretty sure that Constantin Films is not so retarded that they actually think they are losing sales or really being financially hurt because of this, so that only leaves two other options, both of which lead to the same conclusion of absolute douchebagery and dickishness. Option one; some cock producer (obviously not the director since we’ve established he is happy about this kind of thing) thinks that the “art” of the film is somehow being corrupted and like George Lucas they want to control everything that happens with their “baby” of a film. Second possibility is that people at Constantin are Hitler fans and don’t want him made fun of. I’ll go with option #2 since this blog has yet to pull a Godwin. So I will say right here that I firmly believe that Constantin Films are Nazis and love Hitler, and that's why they filed the take-down notices.

If there were ever a textbook case of what not to do in terms of marketing and brand management in the digital age, it would be Constantin Films and Downfall. Hopefully, this episode will lead to the actual downfall of this sadly uneducated and misguided company. But as an individual incident with individual players, this is just another short term flash in the pan of the universe that is internet shenanigans, and in 6 weeks no one will care, let alone 6 months.

(You know who else invented the first non-smoking campaign?)

Now the thing is, this is actually indicative of how far behind the media industries of other countries are in terms of where they should be, and Japan is no exception. It’s strange to come from an American generation that has to groan and roll their eyes when told to do such ancient clichés like “think outside the box” or “give 110%” in what we do. The fact is, that in countries like Germany, China, and Japan, “think outside the box” is actually still considered groundbreaking and using that phrase in a sentence in a non-ironic way can still have people take you seriously.

So what do we do when the mindsets and operational expectations of consumers are so far advanced from the old world media that produces the entertainment content they are keen to purchase? Aside from what Shogakukan has done with Viz (at least in part), the basic Japanese strategy has been to simply ignore those segments that are more advanced in their thinking than you can be. Companies simply go on to make what they make, and neither take advantage of, nor pay much attention to viral awareness indicators like internet activity or meme status. That’s not to say these companies don’t realize something should be done. I just spent a month-long consulting gig at a Japanese media company that wanted to “activated” their viewers in some sort of “new community” but had no intention of changing what they were doing in the slightest. The sad fact is that most of these companies still believe that they can take advantage of internet-born marketing phenomena, while retaining pre-internet strategies and business models.

People have accused the recent Shogakukan request to take off the scanned manga out there to be part of this misunderstanding, but that is in all honestly bullshit. Shogakukan properties have just as much right to as much protection as novels or other commercial media have. Raw scans lead to scanlations, which don't necessarily take away sales, but ruin the value of a license. This is something I talked about before way back when, in response to Justin Sevakis and fansubs, so we won't rehash that here.


Welcome to the future, you’re the only one here.


Speaking of tackling people that are "out of touch", the recent post by Miss Dynamite creator has, on his blog, posted an example of the kind of level of head-up-ass syndrome that I thought was only relegated to urban legend at this point. But then again, it involves a government agency, which might explain why they're so behind the curve of understanding.



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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
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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.