The Wrong People for the Job: Keeping CEOs in media and business that are going to sink the boat.

"Failure to learn from past mistakes begins with the belief that what happened was never a mistake in the first place."
      -Me, just now.

"HBO made $6 BILLION net profit the last 3 years, has 43 million subscribers, won 29 Emmy Awards in 2017.  So we need to go in a new direction!"
-AT&T... because, of course.

Although it may seem as if you, dear reader, are in for an art history lesson, it is the actual Medusa event that is the inspiration here.  It is something I have been thinking about as it applies to contemporary matters.  Famous for being immortalized in "The Raft of the Medusa" by French master Théodore Géricault in 1819 currently on display at the Louvre in Paris, The Medusa Affair was  a horrific event involving incompetence, cronyism, class-ism, and not only epic, but consistently poor decision making by "management" you could call it. 

Since Wikipedia exists, the entire story need not be retold here, only that due to the above stated reasons (and maybe a shark or two), the evacuation of most of the people on board met with an 8% success rate, and in case you were wondering, that would be -92% return on living people. The result was mutiny, murder, suicide, and eventual cannibalism.  It is a situation with striking parallels to the result of current business practices in these the times in which we live.  The more things change, the more they stay the same.

Also the boat itself sank.

For more information, visit your local youtube video where a college freshman will blur the lines between explain, extol, and pontificate, while talking about what they read about this in an art history book published in 1992.  It will be followed by a google ad-sense link for where you can find the best deal on a sub-par print you can hang in your tiny apartment to make people who come over think you're smart.  (Which is good because you have really got to stop telling people that "The Scream" is your favorite Van Gogh painting when you point to that old poster of it you got from the campus bookshop that's still up in your kitchen).  ...wow I put so many miles on this joke I could take it to an antique dealer at this point.


Moving on; The recent episodes of corporate death and disease we have been seeing, which range from MGM to Toys R Us, and from G.E. to Toshiba, are not specific to any one industry, but rather the result of a potent mixture of a failure to adapt, generational disconnect, staunch baby boomer self-righteousness, Executive Worship, immense misplacement of corporate social responsibility, politically complicit corporate corruption, and simple greed in the notion that selling the soul of the company to an investment bank so you could have more money to carry out your bullshit was somehow not going to end up like a real life version of Faust (but hey, you're "executive level" so what do you care...). 

As these companies navigate the turbulent seas of global business, success and even survival depends on command decisions with the health of the vessel in mind as paramount.  All too often in the past two to three decades, concern for such welfares  have found themselves replaced by some nebulous commitment to unknowable collectives of financiers, with priorities far too narrow to sustain anything other than the monetary equivalent of theoretical physics that only finance majors could hold so dear.  This has elevated the concept of the all-star CEO to something of value.  An asset of luxuriant necessity who's lack of presence is as inconceivable as the absence of air-conditioning in a car owned by someone living in Arizona.  It is not.

 March 2017 

SONY:  "HA HA NERDS!"

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March 2018

"How do ya like THEM APPLES?"

Such is the function of self aggrandizing smoke and mirrors.  But much like smoking cigarettes, it only looks cool in the movies, and that intangible coolwill* can dangerously overshadow the real irreparable damage to very tangible healthy tissue.  Damage which is obscured from being a cause of concern until the lifeblood of the drained body-corporate pours from a gasping desiccated mouth twisted in the physical pain of necrotic tissue attempting in vein to maintain its life, quivering below eyes widened by the fear of  inevitable mortality, dripping with impotent tears impregnated with the lamentable knowledge of the fact such a fate as final as this death was by their own hand, preventable.  

Basically their way of running a company is very harmful but they don't realize it until it bites them in the ass.  This is because like the Captain of The Medusa, they have gained their position through favoritism and noble title, not by showing an ability to navigate an overloaded military naval vessel in the dangerous shallows off of West Africa.  Being appointed to such responsibilities leaves most executives genuinely questioning how their "brilliant plan" which relies on strategic metrics and business sensibilities which fully petrified in 2002 could have missed the mark by so much.  And why their concerns for rescuing things from their disastrous endeavors are egregious cries of "assets and golden parachutes first!" when filling the few lifeboats who's shortage and inadequacy seems to exist by design.

 Despite how awesome this looks, in reality it is the result of some very poor life choices.

 *What is "coolwill"?  Related to the business concept of goodwill, coolwill is an intangible asset not generated not by deeds which create general feelings of gratis and dependability in consumers, but by deeds which create feelings of envy in competitors.  This can include everything from innocuous flamboyance, to seriously self-destructive behaviors such as the insanity of CEO Dennis Kozlowski. While Tyco is an extreme example, the notion of the "cool kids" having the run of the school despite being anything other than human garbage, is a long and storied one and continues into just about every aspect of society.  So coolwill is when a Company or Executive benefits from such enviable and not rewarding or dependable behavior.

This brings us to today, where a mix of said "coolwill" and baby boomer selfishness have created an invisible monster that is giving corporate sepsis to companies that make the things we love and which employ the people our communities depend on.  Nothing appeals to older executives like being atop a social pyramid and older such people are finding out that the only such pyramids they can stand atop of are ones where they stand on the shoulders of those simply too economically terrified to ever contradict them.  Even if that pyramid is one they are ill equipped to take command of.  While the myth of the CEO being something valuable is well known and documented, they react like the owner of a pit-bull which has already ripped open 2 Yorkies and human toddler's face, oh well that's not ME and MY doggie, I'm totally different.  Yeah, sure you are.  But that's only a small part of the reason these companies are showing signs of ill health.

The more important part is that the solution to these problems is going to have to include the strategy of filling positions based on ability and competency, not experience and seniority.  Nothing makes a baby boomer start worrying more than the realization that their skill-set of telling other people what to do and their "experience" of working with dot matrix printers is not an asset.  We see these people paid more for doing less.  The notion of "not being able to set up your own email" was cute in 1998, but 20 years on that's like proudly admitting you don't know how to dial a phone or order a pizza.  Why does the VP of marketing need someone to explain to them what tent-poling is, or how to analyze new market data?  The notion that the keeping of their positions might get tied to their demonstrable abilities and not simply the fact that they just have been there forever will make them dangerous wounded animals.  Anyone who says "I've been in the business a long time" needs to be told "yeah, and look what you've done to it."  But of course that's always someone else's fault.

Social issues are also very important, especially in creative and entertainment media.  No one wants to work for a generation that denies civil rights to Americans, and calls video games (a multi-billion dollar industry that pays enough taxes to keep their precious Medicare, bailouts, and unending wars going) as dangerous as lead-poisoning, unless they get paid enough to ...pay off their student loans I guess.
 (oh, 2016... See what I did there?).

Although this argument could fill pages upon pages, I will simply conclude that this economic environment of terrible terribleness is only going to bring us more bad decision making by a management with inherited and artificially portable power, and unearned reputations of competence value, and a desperate need to stay relevant despite sucking at their CEO jobs.   (Jeff Immelt I'm talking about you... You can only sell NBC once).

So what does this mean for media creation and consumption for Otaku?  Well I think it means this:


For the USA:
This means that media companies will finance irrelevant projects, use outdated strategies, and fail to give the necessary importance to emergent technology ("disruptive technology" is the wrong term, it is just something the old world execs use for new inventions that they can't figure out how to turn on or off).  Companies will make crap, and eventually we will see a decline in creativity and content.  Just look what FOX did to every single good show they had... yeah, we really need that Tim Allen reboot of whatever it is.  Look how well Rosanne did ammiright?

You just know Fox is gonna bring this one back in such a socially tone-def manner, the lack of self-awareness is going to create a vacuum which rivals a black hole.

For Japan:
The risk for Japan comes from a direct threat to financing.  In terms of content and licensing "keep doing what you're doing" is not only a prudent idea but it's such a Japanese way of doing things that it's gonna happen that way no matter what. Sure there are in-studio changes that should happen which won't, but that's just going to make life continue to suck there.  What keeps most anime actually happening, is financing from massive corporations and banking networks which are too frequently starting to fall like diseased trees and take out whatever happens to be in their way as they plummet into dysfunction.

Is the Shining top of an Oji-san's head the new face of Japanese Global Industry?  

It's getting there, but recent events indicate that Japan is still playing more of a long-game, which seems like a good idea since we're now in a current climate where the only way to win is almost not to play (at least for the moment).

Link to Article.

As The Medusa triggered the fall of the Bourbon Restoration and eventually lead to the July Revolution of 1830 in France (actual photograph of the event below), perhaps we shall see one of these disasters spur on the recognition that the balance of power, opportunity, and long term national preservation, so desperately in need adjusting.

Toys "Я" Fucked: Why this should be a surprise to no one.

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Fatal blows.  Rarely are they instantaneous.  Oh sure, there's the pink-mist and the head-shot, but most of the time it's a seemingly agonizingly slow process (like when that lady got stabbed by her boyfriend then rolled around and died in front of Taco Madre on Montague Street... that shit took a few minutes.  After seeing that I decided I didn't want tacos after all).  So it's no surprise that large companies can keep going along as if everything is fine, until finally, the merely potentially fatal wound they've been ignoring for years becomes an inescapable reality.

To what should be the surprise of no one, but somehow I am sure it is to someone,  Toys "Я" Us finds itself all Kobayashi Maru and is raising the white flag. 

He's gonna be sucking dicks for fidget spinners by the end of the year.

While the concept of Toys "Я" Us could have been brought into the modern day by smart people, the outdated CEO mentality of "cut cut cut" was firmly in place and has pretty much spelled doom for the place.  See, you could have a company that makes rotary telephones at 1000% efficiency from any other company at any time in history, and you will still go down in flames because you forgot what year this is.  This is called "doing it wrong" in business.  Trying to be more efficient doing something that is no longer viable as a business strategy in and of itself is how CEOs and Corporate Boards run companies slowly, but surely, into the ground. 

What Toys "Я" Us failed to realize is that they didn't sell toys.  Other places sell toys.  Toys "Я" Us sells fun.  Now of course that means different things to different people, and Toys "Я" Us was never going to be able to sell every kind of fun out there (Six Flags sells fun, but it's not the same, that's destination-fun, not portable-fun).  Toys "Я" Us had the chance to learn this early on, when they were the largest video-game retailer in the entire country.  Video games are not toys and never were.  All they had to do was realize that.  Whoopsie.  They stayed so long in the waters of traditional retail that their fingers became so pruney they couldn't climb out. 

 

And once again, The NY Times shows it's about as in touch with reality as your grandmother who forwards you emails about Obama's birth certificate from an AOL account. 

 So the media narrative is going to be that Toys "Я" Us was murdered and not the victim of its own incompetence and ignorance-fueled inertia keeping them in Sargasso until they ran out of provisions.  I am sure the Wall Street Journal will try to blame this on "those darn millennials" because we don't drive out to a shopping center to look for out of stock Transformer reboot hunks of plastic made by slave-labor in China, and instead just buy shit on Amazon because our bosses made us stay 2 extra hours to make a spreadsheet/power-point that they are going to take your name of off and put their name on tomorrow at the company retreat (twice a year I had to teach the CFO of a giant multinational education company what "cut+paste" was in Excel so he could stop printing out pages and literally re-typing them). 

So, who are our Giraffe murderers?  Well the finger is most likely going to get pointed at the three biggest kids on the block:

They just finished burying Sears Holdings and Radio Shack out in the desert just down from where Netflix left Blockbuster.

Now if you really think about it, Target and Walmart just beat Toys "Я" Us at the only game they chose to stay in (traditional retail), and Amazon beat them in a game they didn't even know existed until it was too late.  Oh but wait, they are going to charge a few other companies with accessory to commit murder:

Not as easy to find these things as I thought they would be.

And so this just becomes a story about how things aren't what they used to be and isn't that just too bad.  That's like feeling sorry for manufacturers of iron lungs and crutches because a polio vaccine was invented.  Toys "Я" Us had the chance to make sure they could stay relevant by not only having a website that didn't suck in terms of being able to order things, but they could have found other forms of fun to sell, even moving into exclusive or licensed media content available in non-packaged form.  You think that's too hard to do?  Oh then why just you go ask LEGO if that's a thing you can do.  Yeah, shut up; Toys "Я" Us could have done enough of that to stay relevant.  Yes it would have taken some serious restructuring, but it's not gonna happen now.

LEGO is a great example of how a company can "stand up on a surfboard after 14 pints of stout" as it were.  Meaning that as things move forward in time (as they are like to do), if you read the momentum of your supporting environment, then use your own skill and resources to move forward with that momentum, rather than ignoring it  (or worse, fighting it) you can stay afloat and maybe even surpass some other surfers out there on the same ocean.  Even Amazon is realizing that it's important to sell what you own, not just own what you sell.

You think in 2002 LEGO thought they'd be doing anything like this?

Chapter 11 ≠ 7
Yeah I know Mr. Commenty McComment-face, I literally have a graduate degree in this stuff.  Chapter 7 is a liquidation event with creditors then shareholders getting to be first in line at the buffet of what comes in.  Chapter 11 assumes that the entity will reemerge after a bit of a corporate "time out" so to speak.  Here's the thing, Blockbuster filed Chapter 11, so did Radio Shack, Circuit City, and Borders Books.  Lots of examples end up with vultures picking the bones clean anyway, and Toys "Я" Us is going to be added to that list, Sears is gonna try but the court probably won't let them because they're that far gone, and then Best Buy somewhere around October/November 2018 .  A company you don't expect to do so in a few years is Fresh Direct, but you watch what Amazon does to it with their new toy, Whole Foods.  So Toys "Я" Us is going to file Chapter 11 and during that time, under the guise of restructuring, things are going to be monetized, surreptitiously liquidated, and funneled into executive retirement packages and dividends (the X-mas holiday season is gonna be the big juicy one they just suck everything out of while they sell things "at cost").  Then they'll just toss up their hands, blame "the market" or "that there internet," local news will run paid-for stories about the lowest level workers losing their jobs and how sad is this turn of events that couldn't be helped because "new economy" or some shit, and the top level execs will have it on in the background while they are sucking down champagne on Barbados or something.  You won't care because you'll be waiting for your Amazon.com or LootCrate delivery from UPS and wondering when was that fucking time you were even in a Toys "Я" Us?


Also never do a search for "giraffe" and "sucking dicks"  You are gonna find a whole world of something you don't need to know exists.

Seriously it's like a train wreck; you want to look away but you can't.  ...fucking giraffe pron.

Bee Stings vs Bullet Wounds: Toshiba continues to sponsor Sazae-san

When Smoke & Mirrors Are Just What the Doctor Ordered.

Toshiba.  The only brand of laptop computer I ever consider, is in a boatload of trouble.  What kind of trouble?  You might say it's of the Enron variety (AKA forgetting how GAAP / IFRS works and hoping nobody notices.  Someone will always notice, by the way). 

 This is totally what every accountant in Japan looks like, I am an expert.

While this proved fatal for Enron, it is unlikely that Toshiba will cease to exist any time soon.  Sure this is a hit to Toshiba and to Japan itself, but not a fatal one. Japan has already had a revolving door of Prime Ministers ever since Japanese Tony Blair left office (yeah I said it) and that didn't bring the place down. It's probably not going to come to Abe stepping down early, though he ain't gonna be around after the next election.  But Japan is still relatively healthy compared to the rest of the region, and these developments are bee stings rather than bullet wounds.

This is totally what every bee in Japan looks like, I am an expert

Like any bee sting, getting one or two is something you can shrug off, however, once they start adding up, things get really serious really fast.  Right now, Japan has so much egg on its face that it's 50% sentient omelette at this point, and it has found itself having to choose between a frying pan and a fire. There is a serious government scandal going on stemming from the Ultra-Nationalist School land deal in Osaka Pref., there's another serious government scandal going on regarding GSDF activities in South Sudan (both with Defense Minister Tomomi Inada in the middle of the mess), yet she is continuously supported by the very unpopular PM Shinzo Abe.  This all floats atop a barge of private sector embarrassment made up of everything from the airbag safety recalls to radioactive pigs. All the while; the Norkos have declared war on the ocean again and have decided that Assassin's Creed IRL is just super-fun, South Korea is under attack from its own appliances and just removed its president from office for being terrible, China just unfriended everyone because they won't stop hanging out with their hated ex (Taiwan), The Philippines is encouraging its law enforcement to shoot people in the street, it wasn't really that long ago when cities in Thailand were mostly on fire, and a walking used condom full of melted creamsicle and ADHD just pulled the USA out of the TPP (which had its shortcomings, but just pulling out is like choosing to stay stranded in Death Valley because the rescue vehicle is a Ford F-450 and you're a die hard Chevy fan).  So... yeah, things are going just peachy-keen.

 This is the correct response.

The result of all of this can be a real and tangible detriment to many sociological and economic facets of a population.  Outlook, consumer spending, stress, overall health, cost of living, investment strategies, isolationism, and an overall feeling of anxiety that can permeate daily life are all areas in which regular people are effected. Stability in global trade, politics, and technology aren't things that are easily accomplished, but cultural stability is something that can be delivered and often helps keep people grounded, if only just a little, and improves overall quality of life even if it is just by drawing appreciation to the little things.

 Sometimes tea just can't do it alone.

Joy in the little things is not only the theme of the world's longest running animated series, and Japanese cultural institution, Sazae-san, but also the source of its great importance and relevance to people today.   Sazae-san is the type of anime that Japanese audiences love and international audiences don't pay attention to because it's like the most boringest one when compared to something like Attack on Titan.  The thing is it trounces just about every other anime title out there in ratings every week because it's very relatable if you live in Japan. It's something your grandparents watched, it's something your parents watched, and it's something you grew up watching.  It can't go away.  Having it around is important and helpful for keeping people within some modicum of the life-patterns they are accustomed to.  After my first few months living in Tokyo I was watching it on a regular basis.  Side note; it's a great way to practice Japanese because the dialogue isn't that intensely complex, and contains less slang than something like Shinchan.  Whether it is because of a profound sense of national duty, or they are just trying not to look weak, Toshiba is doing a public service for Japan by continuing to sponsor Sazae-san.

Keeping Japan from losing it's shit, one episode at a time.

I have noted before that anime as an industry is inexorably tied to other economic sectors, and here is a major example of that.  A shakeup in the bond issuance of a technology company came close enough to killing Sazae-san that it became major news.

This is not an example of putting on blinders to the realities of the world, or a tool in some sort of propaganda fueled denial of factualities that grow dangerous if ignored.  This is staying grounded in the face of uncertainty.  It is a needed mental supplement to prevent the kind of bad news burn-out that can have detrimental effects. Anime has almost always been that, no matter what the genre or setting.  It's a fun thing to do, and the healthy escapism it provides makes you realize, such is life.

Not bad for a 94 year old.

Lost at Sea: When you build a house of cards on a tippy canoe, it falls down.

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For Producers.

That's not my department.

There's no business like show business.  But there are many businesses that, well ...do business.   One of the repeating themes written about here, is that manga, anime, games, and the like, are indeed products of businesses, and as such, those businesses require certain business functions to occur and to be sustainable.  Another aspect that is equally important is Business Architecture, Supply Chain Management, and how it fits into Corporate Governance.

The large publishers and studios are part of much larger companies which are sometimes part of sizeable Keiretsu.  From the obviously diverse such as SONY or Fujisanke, to the 'you probably didn't realize one of their biggest divisions is food-products' Bandai, or the 'you think they're just publishers but guess where their assets are' Kadokawa and Shogakukan Inc.  Just because a large company doesn't  have any divisions or subsidiaries outside their core industry, doesn't mean that all their assets are in that industry too, that's what investment banks are for (even you Kosdansha).

So they have their chips spread out a bit, that's good for a big company right?  It certainly can be, but every once in a while something can come along and actually truly mess that right the hell up. The collapse of global shipping is one of those "somethings" I just mentioned.

What, Me worry?

If you aren't already, you really should be aware of the giant mess that's still going on because of the insolvency of Hanjin.  You know, those shipping containers on those trucks you have to drive past on your way to work at the mall.  See, that's a big company and the stuff you're selling at your job at the mall is in that truck right there heading to the mall right next to you.  Hanjin was one of the largest global shipping companies in the world.  Don't think for a moment that this won't mess up all of global trade and the entire economy on some level.  There are still ships stranded at sea right now because ports won't accept Hanjin ships without payment up front (oh yeah, you didn't know? Parking isn't free at these places), and deadlines are way out the window at this point.  Second to a $20/hr minimum wage, this is Walmart's worst nightmare.

Pictured: Not a viable option.

Another thing you shouldn't go thinking to yourself, is that this won't effect the Japanese economy as a whole -just exporters or whoever- and thus anime, manga, media entertainment will stay immune.  That's like thinking just because Hanjin was a Korean company it's only going to effect Korean interests and like, your Samsung Galaxy is gonna be 2 weeks late.  One of the biggest sectors hurt by this (shipping in general, not just Hanjin) is German banking.  Large companies lean on each other more than they themselves even realize and a supply chain fiasco for 7-11 Holdings could easily end up causing another company to spin off their animation or manga division to focus on their core (the core is never anime and manga).  SONY starts missing its rare earth element shipments for whatever and all of a sudden selling Aniplex seems like an easy choice to make.  I'm using SONY as an example because it's an easy simple one, but I am sure there are all kinds of interwoven relationships that connect just about every company to this.  So that's just a direct example.  Investment banks losing out means they can drag other unrelated companies down with them and all of a sudden there's no one around to finance a non-Miyazaki Gibli film (what, you thought they paid for those things 100% out of pocket?).

I will gladly pay you Tuesday for a docking slip today.

This is the kind of thing that most areas outside the core industry (global shipping) don't feel the effects of until the better part of a year later.  Like a Brown Recluse Spider bite, the poison is in, but the damage has yet to manifest.  It's a domino effect that can either go on for a long time or stop short, depending on who does what, and none of the answers for what to do are easy ones.

So will this have an effect on the producers themselves?  Most certainly, but that effect could be everything from a minor hiccup in which a project or two gets delayed, to a full on mass-extinction event where only small studios and independent producers or entities with more of an international footprint come out of it mostly unscathed.   But what kind of consumer environment will they emerge into?

For Consumers.
But what about the rioting?

Howdy, Neighbor!

What I mentioned above is just one part of the situation.  The other part is the potential devastation on a socioeconomic and political level that another big collapse can have for Japan itself.  Japan has already got some serious problems despite the rosy picture those employment statistics are portraying, and an economic cluster-fuck that involves something like global shipping (that thing Japan really needs), could make those problems seriously worse.  People often think certain places are simply immune to civil unrest, but the actual reality is that those places just need a different recipe for it than what we commonly see.  Japan itself is no stranger to such things, from good old fashioned riots, to the inevitable police overreaction, political assassinations on live TV, and even a whole entire attempted coup in 1970 (spoiler alert, it did not work. But the fact that they still give tours of the building -still an active part of the JSDF Boesho Complex- and the room where Mishima bit it makes you wonder...).

Remember that diversity thing I mentioned in the last post?  Well that also has the potential to turn ugly if the economic and social climate deteriorate enough.  If you can imagine things getting just tense and bad enough, then one day in Tokyo these guys are gonna run into these guys on the street and it will go beyond dirty looks and simple posturing.  When things turn to recession as the norm, the first groups to receive negative attention are the ones that weren't there before.  Instead of being something that strengthens Japan, a certain climate exacerbated by this global crisis could make it a flashpoint for injury.  If that happens, this kind of thing is going to make it hard to keep up business as usual for manga because it's kind of impossible to do said business as usual when the book store is on fire.  That's an extreme.  What is more likely is that it will simply effect domestic tastes in entertainment media as well as purchasing power of consumers as a whole. Times of fluctuation like this are hard but usually met in the long term with a greater overall strength (just look at the UK or US in the 1960s).  It is during that time that there is also a genuine surge in the progression of popular and contempora-nanity (that's contemporary + inane) culture, where new things which were barely conceptually thought of become reality in record time.  So this is going to be one hell of a ride either way.

But I luvz mah Bubble... Luvz mah Bubble

Don't fart.

I know there are still some people out there who think that because they read their manga digitally and that anime isn't something that gets on a container ship and goes through the Straights of Malacca, that Hanjin going down like the Titanic won't change anything regarding the entertainment media they love (yeah you love it so much you devalue the license by reading and watching bootlegs you monsters).  There's nothing I can really show you here that's going to change your mind, because it's all over the horizon outside a direct field of vision.  But don't worry you'll know when it gets here.

What, You worry?

Who Let You in Here? ...Japan's diversity and what it may mean.

Something I was a while back but wanted to bring up; there have been a few news stories regarding the level of geopolitical and racial/ethnic diversity of people who are living and mostly working in Japan.  The basic message to take away is that amount people who are not Japanese come to live, work, fart, eat ice cream, whatever, in Japan, as legal resident foreign workers has increased.

 

It is important to point out that this group of course does not include tourists, students, or people coming over on working holidays, but applications for a permanent residency.  These segments may still be in danger of declining, due to some serious stubbornness of the JPY to at least wave to reality from shore. The JPY to anything else exchange rate has been a bit of a hindrance to Japanese business in international theaters, from exports to tourism, and until the rest of the world gets richer or Japan devalues the Yen, it's gonna stay an issue.
 

  Exchange Rate is too damn high!
...almost no one is gonna get this reference.
Not like I haven't mentioned it before.

 
There are also more people overstaying their visas as well.  The article seems to not go into a high amount of detail regarding the type of overstay, such as a student or tourist that takes an extra day or two, versus someone who decides that this decade they are totally gonna get around to that immigration status thing they're sure of if, or even the "you're not really Japanese" surprise deportation. 


However, the news is basically that Japan has more foreign born residents living and working there than ever before, and that is significant, not only because of the numbers themselves, but the fact that this phenomenon is credited to government efforts to make it so.  While the country's economy is huge, what most people (including economists) would consider "diversity" has been close to nonexistent when compared to North America or Europe... even China is difficult to compare because within China there is a profound cleavage of different ethnic groups which comes from the massive geographical footprint the country has.  It's big... China is a big place is what I am saying. 

The question that really matters is, will they stay in enough quantities to be significant?  That's hard to tell.  If the past two Miss Japan pageants are any indication, then the answer not only seems to be yes, but also seems to be that social acceptance of such things will also increase as well.  But no don't pop the cork on the Champagne just yet... actually, put it back in the cellar, it's going to be a while.

 

To the surprise of nobody.

It's actually progress considering what happened in 2015 when you think about it. 

Assholes not withstanding, the fact that this has happened is a big deal.  Foreign workers have been in Japan for decades,and often have found that unless you're some sort of finance hot-shot (read: white male), you can often get treated like total crap.  Remember this poor bastard from 17 years ago?  Well he ended up staying and now Japanese High School boys are dating his "hafu" daughter. 

Very No!

But the difference now there is now an official position from Japanese government institutions on the matter and that position is explicit.  You know how often Japanese institutions do things explicitly, yeah it starts with "almost" and ends with "never" genius.  A government realization that the place isn't going to stick around if Japan runs out of people is finally being accepted in certain areas, so they're going to have to import a bunch of humans who aren't over 70 years old (and you people thought robots were gonna happen).  While racism and classicist ideologies will continue to be entrenched in Japan just like everywhere else and not go away just because, with this action by the government itself is a step in the opposite direction of such ideals, and now a necessity due to Japan's serious aging problem... Remember when I brought this up before...  of course you don't.

Now you may ask yourself "so the fuck what, what does this have to do with the next issue of Shonen Jump or whatever the crap I am gonna illegally download a scanlation of and not just buy like a normal customer" or something to that effect.  Well, guess who now is going to make up a portion of actual paying customers.  Them there fah-rin-ars livin' over in that J-pan.  So what we will see is a slow, gradual acceptance of themes that have a bit of a wider appeal, but are still inherently Japanese.  Remember that Galapagos Effect that I was...oh fuck it I know you don't. Well this has the serious potential to push it in the other direction.  Where does human migration/immigration/people showing up places manifest more quickly or integrate more thoroughly than popular culture?  The correct answer is food, but popular culture comes in a strong second.  So this trend, if continued, is actually going to make a difference in the the typed of entertainment products that companies are willing to invest in. 

The mistake people reading this might make, is that I am insinuating is that such an influence will create new works at the expense of others, and that somehow Naruto or Sazae-san is going to go away forever in favor of "Brazil Philippine Soccer Buster Wars, the French Edition" or something like that.  While it could be argued that something like shelf-space or artists are a finite resource, what this means is more likely that something new will be created where there was nothing like it before.  Is this a marker for that possibility?  Could be.


Stay tuned for Part 2.  The other side of the coin.

Where do we go from here: Manga consumption in a paperless world.

Omens, Portents, Forewarnings. Never are they understood objectively until after the fact. Such are the oddities and anomalies that are being observed in the development of the evolution of paperless media products. From novels to fine art, technology makes physical distribution a nonexistent entity in a market where consumption occurs via network service. As pointed out in a recent article in Forbes Magazine, the constraints of capital are now quick to lose almost all stature as barriers to entry into “publishing” as we know it. As with many historical examples, resistance to change by the large incumbents force younger more nimble companies to spearhead their own initiatives, making little progress in terms of effecting macro changes. A small label like Media Blasters could never hope to spearhead a new format such as Blu-Ray but could reap the benefits of such an option being available.

While a fan at the NBA Finals may feel very connected to the game as they sit in their ring-side seats, the reality is that their presence makes no difference to the outcome, because if it did, they themselves would be on the court, directly participating. Such is the case with manga in the USA. All the whining and bellyaching about how the “industry” is run by “old men” being the problem, fail to take this into account.

These new formats, as emergent technology, are currently generating dictionaries worth of new contract law terminology and changing the very structure of binding agreements in licensing. To expect Manga to take the lead in such efforts is seriously overestimating the ability of licensors and publishers like Vertical to literally lead a multi billion dollar industry by the nose with their initiatives. Impossible and foolish come to mind when thinking of it that way. Small airlines don't build their own airports, pro-golfers don't build golf courses, tire companies don't build roads. Publishing companies (smaller ones at least ) cant be expected to create dominant proprietary formats for digital media consumption... do they have a whole lab in the back that we didn't notice until now? Nor can these companies be reasonably expected to take what is a substantial risk in paying for a license of a digital format which may or may not generate revenue, while at the same time taking time and money away from their current print format (people can't work on 2 things at once).

The effect on revenue that scanlations have is devastating, and if you think it’s not, you don’t know how this works. The cost of the license itself or even (proper) localization is huge, and that license being stolen by the scanlators, who take that property and put it into the market means that recouping the staggeringly expensive process of putting out a printed manga and distributing it for sell-through revenue at net terms, becomes impossible.

Enter the Kindle or some iPad/Droid app or whatever is going to become dominant, and you have the magical cure for sell-through for struggling publishers. Retailers hate this, because they take advantage of returns to the point where they would gladly put a label out of business if it means they can gain any points in the next quarter. The accounting difference between inventory and in-process inventory is huge for a retailer. So, if publishers never had to print another page again and continue business as usual, they would see it as the best thing since Gutenberg.

There’s a snag there. Did you catch it? “Business as usual.” These formats require new legal contract terminology, half of which doesn’t exist yet, channels and accepted formats that have yet to materialize, and a new set of barriers to entry. That last one is important, since all you have to do is look at youtube, podcasts, or deviantart to realize what would happen to publishing if there were no barriers to entry. Look how hard it is to wade through the seas of truly terrible productions to find ones that have not only genuine talent behind them, but (more importantly) the resources to be consistent, on-time, and well presented. A publishing marketplace where there is no macro-flow of customers towards legitimate works means that the shittiest fanfic abominations would stand at equal level with professional works by professional writers in terms of market presence and availability. Barriers to entry in the media entertainment business keep out a vast amount of crap that would otherwise choke the channels of product awareness and necessary marketing. There's a reason FurNation Press never got it's SKUs into Barnes & Noble (or Diamond for that matter)... so do you really want to have to look at 5 deranged versions of Halo where everyone is a gay ocelot before you get to something by the next Neil Gaiman? With no financial risk what so ever, anyone can publish anything, which is not really a good thing.

In order to jump the last chasm of adoption, these new products and formats must be one thing over all else. More convenient than any alternative, including whatever is happening now. Look at the electric car: Even if electricity was free and the range was the same, the 30 minute charge time vs/ a 90 second fill-up time for a gas engine creates such a Reverse Value Ratio (yes RVR is a real formula), that people still would not adopt electric cars because... seriously, fuck 30 minutes.

There are always multiple ways around this issue. If you can’t speed up the time, electric cars could partner with every free commercial parking space around, so that the 30 min charge now happens when you’re at Wal-Mart or wherever and so you don’t notice that 30 min because it’s no longer a dedicated use of time (ie “they were gonna be parked there anyway” so no big deal). We’re close to finding the necessary “anyway” for manga.

This is a good sign:

From the Sandvine Global Internet Phenomena Report for Spring 2011 (p 6), you can see that Netflix (a single media company) is producing a bigger footprint than torrenting anything. Although the true total average difference is 1%, the fact that this even is happening is a pinhole snapshot of this tenant of Consumer Behavior ringing true. The path of least resistance is going to be a legit commercial one, and that’s going to win the day if it can continue increasing the convenience factor. Netflix is dependable, faster, easier, and an acceptable cost (they have higher than break even WTP). That’s not true for every consumer in America, but it’s true for enough people to get that company into the positive side of market equilibrium.

It shows that it's not all about getting it "for free" ...rather it's about getting it "easy" - which is not (always) the same. Additionally, with the high amount of intense social gamification behavior indicative of the manga/anime market, it's also about getting it "first." This "path of least resistance" in marketing goes for any kind of business, and the different degrees on the scale of decision making are unique to each market. The American manga market is indeed a unique mix of ingredients that make up these "tipping point" degrees between consumption via torrent or consumption via service. Those specifics will have to wait for another time.

And before anyone wants to get technical about “BitTorrent” nomenclature:

That’s on p. 12

Mobile access is another big indicator. I like to look at the Baltic States and Scandinavia for wireless usage info, but I don’t have that handy so here is South America:

Sandvine p 12

That bump in Sept 2010 is probably a result of the ruckus over the Chilean miners, but real-time entertainment and web-browsing can get mashed together when you think about marketing factors that have to do with the possibility of consuming manga (legally) via wireless device. This means that as a dominant format emerges, and non-paper manga is available at a reasonable cost to access, digital device manga will be a viable product, even if the rate of piracy through scanlation remains the same as it is now. The disappearance of physical media will drop the costs of doing business to a level where publishers will actually be able to operate properly, despite the damage done by piracy. This is currently how big publishers and big Hollywood have been able to stay around despite piracy (and terrible titles); make enough successful properties to carry the others. But that type of arbitrage activity in today’s media markets which still require manufacture and distribution of physical products (books, DVDs) requires levels of capital well out of reach for the few remaining US manga publishers.

This means the charge for digital media is going to be led by bigger players like Comcast, NCAA, WSJ, AOL-HUFFPO, Fox News, NY Times, and other companies that fart more money in a day than a company like Funimation sees in a decade. So until these channels solidify, being in the manga business in the USA isn’t exactly a peachy place to be. Despite a rosy looking future in terms of generalities, we’re still a ways away from being able to pop the cork on the Champaign. Right now, the publishing industry is about to enter a state where it will look like a lava-lamp in a paint mixer. Things are going to get shaken up and it will take a while for elements to separate and form the shapes of this segment of the new media horizon. Manga will be there. Paper won’t.

Make no mistake, from otaku demographics to creative tastes, there are still many factors that I have not addressed, but they aren't here because we're looking at the big picture of publishing as a business, to which manga is only a small part of... and you've had to read too many words already.


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I for one, welcome our new Chinese overlords.

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Welcome to the century of American decline.

It's not what you think... ok maybe it is.

As I have mentioned before, what little impact that the American market has on anime and manga productions in terms of creative influence has more or less evaporated with the market bubble bursting a few years ago. Now it seems that China’s emergence as a substantial market force will ensure that such influence never returns (at least not easily), by expanding its own gravitational field into the minds of the key decision makers at studios and publishers who tell the artists and writers what to do.

Case in point, Sanrio’s Hello Kitty theme park is expanding in to China, not the USA. If you think that it’s geographic proximity that is the reason for this, then you seriously need to go back to 8th grade economics. I haven’t seen the actual data and analytics that no doubt took place in abundance before an investment of this magnitude got made, but I am quite sure that I can imagine what they looked like. The (very simplified) end results being something like:

Do this equation in the USA and the answer is more of a “meh” with a higher risk assessment based on lower brand awareness, higher costs for labor and what I am sure are more stringent safety regulations. This kind of business migration has been going on for a very long time in certain segments like manufacturing and agri-business (where Brazil is making a killing). Things progressing as they are, this is going to start happening in the entertainment industry as well and that includes manga and anime, as well as games, and stuff that has yet to be invented.

Many of the responses that came in from the Galapagos Article, seemed to miss the point it made, and argued that the absence of input from the American market was a good thing. That it created a unique difference in the type of entertainment media that manga and anime develop into, and it was exclusively because of that difference that manga and anime were “good.” However, that’s a flawed argument which seemed to be lost on those readers, despite it being highlighted in the same piece with the “mayonnaise on pizza” example. The Japanese put mayo on pizza as a standard, it developed because of lack of input from the American market, and it’s very different from American commercial pizza. Yet, most Americans don’t find it particularly appealing, and that’s because this quality of “difference” by itself is no guarantee of success in other markets. There has to be more than that in the equation.

It is the “more-than-that” which is in danger of being turned in a direction wherein manga and anime may become more appealing to other markets and less appealing to Americans. This is where China will play a large role. While still regarded as the “wild west” in terms of copyright there are two major factors that will continue to make it an emerging force in commercial media: 1) The government is still trying to crack down on copyright violations because as they enter a global economy, not being able to stop IP and brand piracy makes them look bad, and 2) Size Matters; Even if your property suffers 50% piracy, that’s still the other 50% of the Chinese market that didn’t pirate it, and 50% of China is 200% of the entire USA. That’s a profitable gambit no matter how you look at it. This means that when faced with the decision of story-lines, music, translations, release schedules, operations, and marketing input, China is going get a seat at the table.

It’s no guarantee that just because there is more of a minding of Chinese market and cultural sensibilities that it will result in an evolution of manga and anime into something that becomes unwatchable by American otaku standards... but there’s no guarantee that won’t happen either. The Chinese entertainment market is still under the choke-hold of a totalitarian government, hellbent on making sure that even the most abstract negative representations of itself or anything close to it, are ruthlessly stamped out. Creative freedom does not live in China, despite the PR blitz. Many of the citizens in the PRC are ok with that, and are drinking the kool aid. When I was living in Tokyo, the PRC Chinese students I was with actually made statements like “China has never violated human rights” with a straight face. When confronted by the below photo, they actually called it a fake, as they had never seen it before and had no idea what it was, when or why it happened.

FAKE!!!!!!!!

So here you have a huge market, wearing blinders to their own government’s imposed artistic limitations, who want to see certain story lines and character archetypes that are quite unique and mostly dissimilar to the ones that the manga and anime market currently produce. Producers are actively including native Chinese speakers in development planning sessions, while native English is nowhere to be found. Size and logistics are really working against the USA in this situation, and with the American economy fucked every which way, it’s not an attractive place to be. If you don’t believe me just ask Tokyo Pop.

The reason this is a serious concern, is that this is a “pull” and not a “push” situation, and that makes for a deeper and more long-lasting set of changes. China is an attractive market and the motivation to do business there is coming from a genuine desire within foreign companies, not from China demanding this, that, or the other. There is no shortage of precedence when it comes to companies agreeing to play by Chinese rules to enter Chinese markets, but in the case of art & entertainment in particular, there have been no high-contrast external examples, until March of 2011. MGM (now Touchstone) announced that they would be changing the “bad guys” in the Red Dawn remake from the PRC to the DPRK (the DPRK is North Korea btw), and make this change retroactively all in post-production. This is the most glaring example of artistic story being bent to the will of industry executives, because those executives do not want to offend Chinese sensibilities. No Chinese bad guy for you!

The reason for this goes far beyond worrying about the Chinese box office for this one particular film. The reason this is happening is because this property is now over at Touchstone, and The Mouse wants in on China bad, and he's already plenty tied up in Chinese investments even now. To make Chinese investors angry is never a good idea, especially in his situation. With this change, he can claim he’s done something of value for the great People’s Republic by swapping them out for the Norkos (even though that makes the film itself seem pretty retarded... ok more retarded). An extreme example to be sure, but it proves the possibility of this happening not only exists, but can be brought to fruition. In order not to offend PRC investors and Government (because you can't separate those two), an American movie playing to an American audience is being significantly altered. Think about that for a minute.

This is from the movie.

I can't really get too angry about that though, as this change wasn't brought by the hand of a government agency, but rather the forces within the private sector, a field in which I operate in. Complaining about it is one thing, but condemning it is a bit too hippie for me. Since I don't own any Disney or MGM shares, the only influence I can exert is that I could either go see it or not go see it, buy the DVD or not buy it. One could also legitimately argue that other films (particularly ones form the UK) have had to make changes to be better adapted to an American audience because the studio wants in on the US Market, and this kind of thing isn't new. But this is a case of a film aimed at it's own domestic market being changed in its own domestic market for the sake of other business interests, not to make the film itself more competitive. That adds another dimension.

Back to the topic at hand; If it wasn’t already clear a few years ago, it should be very clear now, that manga and anime are drifting away from the need to even participate in the US Market. All you undergrad kiddies taking Japanese 101 and thinking you’ll be getting a job in the industry are just setting yourself up for a world of disappointment worse than the one Harold Camping is living in right now (Camping may be upset, but he’s still sitting on a pile of money, you'll have student loans to deal with).

The worst part about this situation, is that the only way the US market can increase its viability (outside of stopping scanlation and fansub piracy), is by getting Big Hollywood back into the picture. These players can shell out for massive theatrical licenses and marketing to the point where they are still the biggest kids on the block. This in turn, creates a market for a great many smaller licenses and spin-off productions which generate enough revenue to stay relevant. Unfortunately, that has been tried, and the result was...

Worse than going to the dentist.

The final curve-ball in this mess which is working against American otaku, is that the USA is still dealing with the near-fatal cultural damage caused by the CCA and the MPAA. Their many years of bully pulpit blathering, and acts of financial terrorism had firmly entrenched any works based on comic illustration (that includes all graphic novels and all animation) were viewed strictly as for kids or the “Family Segment” as modern marketing likes to call it. While it’s true that modern audiences are leaving those notions behind, and movie ratings have been exposed for the scam that they are, this mode of thinking is still much more firmly entrenched where it counts; the investment community. The lines that many audience members no longer see which restrict comics and animation to kiddy-land, are still very indelibly fixed when it comes to project funding. I once worked on a huge pitch for a *Big Toy Company that isn’t Mattel*, with a martial arts anime geared for the 8-14 boys segment. I put a lot of hours into it and was just starting when I was cut off by one of the suits, who said it wasn’t appropriate for boys because (get this) there was a female supporting character in it. Yep, the exec took a look at the crowd-shot with all the characters, noticed that one of them was a chick, and flat out stopped everything right there. When I pointed out that there were less female characters in my property than the multi billion dollar property that was Pokemon, the exec retorted that Pokemon was a “fluke” property. Not caring to ever do business with *Big Toy Company that isn’t Mattel* again (whoopsie me) I responded with “You don’t know what you’re talking about, it isn’t the 1980’s any more,” turned, and left. The mentality of firmly drawn demographic lines and age-exclusive mediums is still very much alive where it counts, and doing as much damage as it possibly can. With that mode of thinking still posing a significant barrier to audience development and engagement, China wins again, because that problem doesn’t exist there. They've got other problems to be sure, but that's not one of them.

This isn’t going to be instant, and the PRC does a great job at putting its foot in its mouth when it comes to trying to sustain an image of something other than Stalinism for the 21st Century. But business has to go where the money is, and people don’t care. If you cared, you wouldn’t have “made in China” stamped on all the crap in your house and probably the stuff your wearing right now.

To conclude, this is not a political observation. I am not Becking about some impending takeover a-la Red Dawn (it's a movie dude... empty calories for wasting the mind's time). I'm talking about rather pedestrian market forces here. These forces make certain facts a likely reality. The fact that in the future (not instantly, but within 10 years), the Chinese market will be a significant source of influence in Japan's manga and anime industry, is something that I think is quite likely. Additionally, it could mean some very good things for the industry and the type of productions that will be made, or it could mean not so good things and manga & anime it will have less of an appeal to American audiences and shrink its American footprint. It's a coin-toss. So prepare to gradually be exposed to manga and anime that are still “different,” but not the same "different" as we're used to.

I'm still gonna go see it.
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