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March 21, 2009


Japan Fan

Thanks for the interesting article. Even though the focus here is Japanese anime, you can see some of these problems in a lot of different industries.

One of the effects of globalization is that labor prices may drop in rich countries for services that people in poorer countries can do (like creating mid-level animation, or computer programming).

Also, there seems to be a lower and lower "barrier to entry" for many fields of entertainment - video game creation, movie making, record labels, book publishing, etc. This sounds great, and is great as far as everyone being able to create content, but it means that each individual producer makes less money because there are infinitely more choices available in the marketplace.

At the top end, the big companies with strong brands (Ghibli) may do ok, but those in the middle - in all kinds of industries - are going to have to figure out how to deal with the changing world order.

Steve Harrison

But this is not new, the production studio not being paid enough to actually produce a show, so episodes are produced at a loss.

NBC didn't pay Desilu Studios enough to produce Star Trek, so Desilu put their own cash in to make up the difference between the fee and the budgeted cost in anticipation of making it back on rebroadcast fees and syndication. (cite: Inside Star Trek, Solow and Justman), and it's ALWAYS been that way. The income stream has only increased over time with home video, product licensing and all that.

The real problem is, as the series continues, the network cuts what it is willing to pay, while production costs (star saleries mostly) rise. If the show is successful, the network charges higher ad rates, making more money. If the show is lackluster, they're still making base rate on ads. So it's all about 'doing more with less' and increasing profit at the cost of the actual creative people producing the content that MAKES the money.

It's all so complex and I have no answer. Say an animation studio sends out bids for animators, saying "we'll pay x for this work" and NOBODY says yes. What happens? The studio goes out of business and NOBODY gets work.

Say a network says "we'll pay x for your show" and the studio says "no, we need y or even y+" and the network says "no"...studio goes out of business and nobody gets work. Network doesn't care because they can throw x- money out there and put SOMETHING on the air.

Again, I think the core problem is there's just not enough toy companies to sponsor shows anymore. The lack of competition means there's no incentive to 'spend more to make more'and so, we have the state of the industry as it is.

But on that above, there's no mention of the secondary revenue streams- home video, rebroadcast rights,overseas sales..of course all that money goes to the suits, not the grunts in the trenches.


I really don't think the issue is the number of toy companies. When it comes to merchandise, kids don't want toys -- they want games. Card and video games. Why buy a toy of your favorite character when you can actually control them onscreen? The exceptions are big ticket items based on old-school characters, because they target nostalgic adult collectors, and for gashapon (capsule) and shokugan (candy toys), because kids are completely satisfied with those token representations of the characters. This is something I've heard again and again from representatives of a variety of Japanese toy companies.

And as for the other secondary revenue streams: rebroadcast isn't really feasible domestically, and overseas sales have been eaten alive by fansubbing and illegal file sharing. It's a tough situation all around.

The bottom line is that something has to give. I really think that the government is going to seriously consider subsidizing and/or regulating the industry in some form if they continue promoting it as a "cultural ambassador."


Or let the market correct itself. Why prop up a failing system? If the market can't handle 100 new shows, maybe it shouldn't be making that many (and expecting to make $$ on it). It's only postponing the inevitable. If the Japanese want to market real "cool", they should pimp "Let's Beer!"

Steve Harrison

Matt, I have to disagree that the lack of toy companies isn't the problem (and I hear Patrick clucking his tongue at my insanity), and I might even suggest that the folks you've talked to are part of the problem, because they're invested in the status quo.

It's not that kids don't want toys, it's that kids don't want the toys produced for the shows that exist. Strike Witches is not geared to 8 year olds, right?

It's my understanding that Takara's Yattaman line was fairly successful, and Tomy's Thomas the Tank Engine license has been very productive (altho not anime, of course), and I thought Zoids has been a steady seller.

And there's Pokemon. Games and cards, sure, but aren't there plenty of plush and sofubi for that as well?

Of course we've gone thru the "OMG video games are killing our sales!!" thing in the mid '80s and OAVs were part of the response (and many other reasons why OAVs came into being, of course)

But as everything has fragmented and contracted, the 'new apps' of cell phone content and internet only programming will never bring in the money like the ways of old.

It goes to sponsors, it really does. they're the head of the river. Sponsors fund shows in order to sell product. Product is produced in order to make money, and PROMOTION takes place to sell those products.

More sponsors means they compete for limited timeslots, fees go up, more money goes to the studios.

but I'm crazy, I'm not 'in the biz', I can't possibly have any idea that's worthwhile.

Hey, seems like Disney is pulling the plug on Power Rangers...wonder how that's going to affect Bandai and Toei?

We know how it's going to affect Toei, they're gonna pander to the Pedobear crowd with Toei Robot Girls....


>>Why prop up a failing system?

Well, for one thing, because the Japanese government seems to be touting it.

But for another, a bailout wouldn't be anything like that of the American financial industry. The anime industry didn't get where it is by gambling others' money on questionable investments or wacky accounting schemes. It's been a mess almost since day one.

And an intervention doesn't need to take the form of a massive handout. Even something as simple as what the Chinese are already doing, which is offering a tax subsidy to domestic studios, could help ease the burden.

Tim Eldred

Nobody thinks the crazy part is TV networks charging animation studios to broadcast their show? Here that's called an infomercial. With the studio expected to put up the production AND broadcast fees, it's completely unsustainable. I guess if you're gonna be in the TV biz at all, it only pays to be a network. Do they keep all the ad revenue, too?

Steve Harrison

Well, Tim, I'm shocked to see you appear shocked. We all know that in the end, ALL programming content is just filler between the all important ads. Here in the US, over in Japan, it's all the same. Just put SOMETHING on the air, it doesn't really matter except that hopefully it's engaging enough to keep those eyeballs in their seats (and that's about a clumsy metaphor as i can make of it).

AFAIR, studios have long had paid timeslots on the various Japanese TV networks. I know Toei was paying Fuji TV for some of the slots some shows ran in, I suspect the company that merged with Shogakukan and became ShoPro, the company that was running Dr. Slump, was paying Fuji for that slot, which then ran Dragonball, then Dragonball Z.

I would assume they keep the ad revenue, but some ads might be barter to the company paying for the timeslot.

But I don't know for sure. All I know is, when you had a number of toy companies competing to sponsor a show, get their ads on the air and get their toys on the shelves, we had some amazing programs created, things that have stood the test of time. Now that all there is, really,is Bandai and a tiny bit of Takara, we have years of utterly forgettable and interchangeable shows.

Tim Eldred

Let's not get hung on who's shocked or who knew what first. That's immaterial. Having to buy a timeslot equals advertising. If you're going to advertise you have to have a product to sell or you're wasting money. If you make a show that can't spin off products people want you're sunk.

That to me is where the unsustainable part comes in. 100 shows a year all trying to spin off products to make their money back hits the bottleneck of shelf space in stores that can't possibly carry everything regardless of its quality. If a studio can't sell enough products and can't get a break from the network the only cost they can cut back on is production (i.e. quality).

A lot of people would be having an easier time of it if the network picked up some of the tab. They would then have the onus to get the ratings up. As of now, there's no incentive at all.

Nobody has a right to be shocked about anything. This model is doomed.

Steve Harrison

I agree. Aside from the sponsor issue, it seems that for too long the networks have profited from an unsustainable business model, and the studios have seemingly been satisfied with micro-licensing (the hug pillows, the other printed goods, and the endless PVC statues) because, surprise, they can get those otaku to shell out 7000 Yen for what should be a 200 Yen PVC statue.

In many of the (MOE) cases, the show is seemingly SECONDARY to the micro-licensed merchandise. Pimp the songs, pimp the hug pillows, maybe Gilco or Lawsons can be talked to come on board but, oh yeah, there's this show too.

It's a really ugly circle.

What's needed is a culling. Maybe only 20 or shows get timeslots. There's a hella lot of recent shows that SHOULD have been OAV series and not clutter up the airwaves, but in that I'm sure opinions vary.

Tim Eldred

New question: in the US, if a show starts some controversy, the network takes the heat. They own the show, so they take responsibility for it. Who takes that responsibility in Japan? Are networks immune to public outcry?

And a related question--if a studio is paying a network for airtime, does that also become "shut the fuck up" money? In other words, does a network surrender its rights to control content? Seems like "pay me for time on my network AND do what I say" is a bit over the line.

Paying a broadcast fee ought to buy you some slack if you're making the show. That's the one upside I could see in this arrangement.

Steve Harrison

I'm guessing not, due to various episodes of various series not airing (Cowboy Bebop) or airing in a different manner (Gurren Lagaan) than what is done for the home video release.

but then again, that's late night Sat channels, not the broadcast prime time.

I think in the end, Japanese TV is as mysterious as the retail foodchain, and facts are few and far between to gaijin like us, because nobody does the interviews, nobody asks the questions, nobody living in Japan thinks to look into these things.

We can know the gross info but not the fine details.

Todd Ciolek

The networks usually have final say over what they air. A studio could always refuse to change something and force the issue, but that's not good business when you need the network more than the network needs you.

"but then again, that's late night Sat channels, not the broadcast prime time."

Gurren Lagann was aired on Sunday mornings in the children's-programming hours (opposite the latest Pretty Cure), and it was censored at the network's request. One of the producers complains here about how the network didn't object to the show's hot-springs episode until Gainax actually finished it.



>>but then again, that's late night Sat channels, not the broadcast prime time.

Bebop had episodes cut on its TV Tokyo run. When it ran late night on WOWOW, it ran totally uncut.

Just throwing that in there, don't mind me.

Steve Harrison

Both good points, and I thank both Todd and Wah for the discussion.

I didn't know there WAS a sunday morning children's time in Japan, but since it's been about 13 years since I've bought any of the Japanese anime mags with their schedules and charts,it's a glaring error on my part.

And I had forgotten the part that Bebop had a broadcast run before it moved to Satellite. But that does raise a seperate yet linked issue.

Bandai owns WOWOW, Bandai owns Sunrise. So putting a Sunrise show on WOWOW is moving money from one pocket to another. Does it even MATTER at that point?


Steve, it was going to happen. All one asks from those that have seen the industry rise and fall is for Japan is to take care of its own. It's has always been in Japans hands. Wether or not it comes their own industry again or apart of the whole Asian (or ASEAN in the political milieu) industry its up to them. It will never be up to us.

My worry and my focus has always been on the states. The comments stated a lot. In my honest opinion the focus for the states should be sports anime/manga. It is the last market left untouched. The problem is that too many idiots will want the piece of the pie if it catches fire (and it will, Pro Sports brings a whole new fanbase with LOTS of money and fantasy players and while I am a artist first... money walks and bullshit talks.)

The Crunchyroll fanbase (as I like to call them) will never have any say in the industry (the studies prove it - one is at a site i work on) and as much as they BITCH - who is winning, who is on the air? The same anime they dislike.

It pisses them off and gets them madder and madder and they make ponzi scheme deals with already corrupted (Yakuza Influenced - trust me, i played the game) Japanese TV networks who don't do anything but yea - play race games (the Jero interview and the horrendous question one "interviewer" said) and want to be so much like the American shows like ET or Oprah on crack...

Jeff Harris complains so the fuck much about the Entertainment industry here, he should be thankful that there is a Lost, there is a 24, a House and Dollhouse. The reason why as a writer - I will never work in live action because the utter corruption the Big Six Have. Its just innate in their structures, and I would age much faster than I have (i'm only 27)

However, I came to comment about the state of the industry. I thank goodness (if thats the word) about the economic situation right now (i'm the only one saying this) because its going to make things fair again.

We have people looking for works such as the past Gekgia works of the 60's and 70's - (repeated in America in the late 1970s and 80's via Heavy Metal) because they realize that they have been lied to again and again. And no - they don't want that pussyfooted bs Disney (via its Hanna Montana or its High School Musical which I talked about at length) or Nick or now even CN with its ITV-Wannabe Adult Swim airs every week in and out and with movies that think it was the good old 90's (better yet disco era) again. No - buddy.

You wanna know why Family Guy succeeds much to the chagrin of Amid Amidi and Jerry Beck (who both I respect their opinions more than anyone) who hate Seth MacFarlane with a passion (or at least his show) Because Family Guy OFFENDS. IT DOESNT GIVE A FUCK. House does the same thing. It OFFENDS. It gets ratings because it OFFENDS. And until the anime dubbers get it and figure out why it used shoddy math when they started to push anime to the moon when Disney, Nick and CN just had to make ONE phone call to best buy and they were done in a flash - they will never see another jump in business ever again.

Its a take it or leave it offer. They (the networks) take anime for what it is (with the editing of names and certain situations to fit american audiences) or leave it and move on. That doesn't mean quit on TV, NO. That means it not ready. Small tweaking on some shows, to we can do this on others.

Its life - why can the weeboos deal with it like the rest of the anime fandoms did? This particular era of the fanbase were never (and may never be) successful in life, how are they going to successful in anything else.

The dubbers have got to get things that are going to speak to american audiences otherwise there done. Remember Carl Masak? How ADV destroyed him? Anime didn't go anywhere UNTIL Fred Ladd and DiC worked what was going to be the Dub of Sailor Moon. That lead into DBZ and then Pokemon. And Mr Ladd is from the days of Speed Racer and Astro Boy's dub. We took the down times. These weboos in this era will destroy any semblance of an Industry if they had their way.

And Viz and Funi with Naruto and One Piece are living in a godforsaken maya strand dream world. Dudes, Im not a big fan of these two shows, but buddy - when Disney has a LOCK down on Best Buy and Walmart they aint going NOWHERE FAST. You need the BIG lights, and the sounds of HD TV. Your aint working hard enough and your next to go just like Steamline Pictures and ADV almost.

The only way Japan gets a little better in the interim, despite fact anime (or should I say DOGA since we want to use chan and san and kun and other such honorific in sub work these days) is to lessen the number of shows. 100 a year to 35. 10 of which will be long range (many year series) and 10 will be major franchises that will be ponied up somewhat by TV networks over there. That means 15 - 25 shows have got to be really good or they are done.

Thats all that needs to be said.



Did you know that the reason for those heavy editings in shows such as Naruto and One Piece was at the request of the Japanese? The Japanese wanted the broadest audiance so they requested the changes as part of the agreement to dub the show. Did you also know that the US and Canada bailled out the anime industry in Japan during the 90's? Really, if the industry dies here in the West, it'll die in Japan as well.

The main reason why the anime industry is slowly dying is because of bootleggers, fan subbers, and those who download anime. Here's a link to a series of videos about the industry and why it's dying: http://www.youtube.com/view_play_list?p=6AF4C4CE78782137


If so many anime are niche goods that rely on product tie ins to make money, then why even put them on the networks? Given that 90% of aniume comes out of the manga scene, and thus already has a built-in following before it ever hits the screen, then why not simply broadcast the anime from the production company site, cover the page in question with adds for the tie-in products and links to where they can be bought, and by-pass the networks entirely? Anime with wider appeal could stay on the networks and, if a niche product becomes a big hit, the networks will likely take notice and be the one's bidding to show it. The main drawbacks to such an approach that I can think of would be piracy (which is already a pain for anime producers), bandwidth costs (which, due to Japan's superior infrastructure and the niche-nature of the shows wouldn't be as high as those covered by a internet tv service like Hulu), and a greater need for web staff.

What might be the drawbacks of such an approach?


TEKI: I see this as something of a specious argument. To begin with, I've never met an anime fan who didn't eventually buy the dvd sets of their favorite series, and few who didn't also show an interest in other related products, like figurine tie-ins or related manga. Admittedly my experience is limited, but cash flow seems to be the only real barrier to anime product purchasing, even when a fan mostly watches the series online from fan-subbers, which happens to be my second point.

In the U.S., we only get easy exposure to maybe 10% of the anime produced in Japan, and so that which is "professionally" subbed, dubbed, and distributed in the U.S. is a rather restricted set of programs which Japanese and U.S. execs decide U.S. viewers would like. Would many U.S. viewers like Lucky Star or Spice and Wolf? Who knows; no national network will touch either, so they waste away in dvd hell. Consumers can't demand what isn't supplied and so anime remains largely niche in the U.S. due to programming prejudices. Since the U.S. life of most anime is spent entirely in the dvd, anime fans must rely on the existing dvd distribution network to provide the series they enjoy, and the majority of anime fans don't live in big cities with easy access to stores carrying those series. Due to these limitations, the internet has become in the U.S. both the most reliable way to get to the anime you want to watch, and the best forum for finding new series that you might like. After all, you have to watch a series first before you can like it enough to buy it, and fansubbers are, for many fans, the best, fastest, and perhaps only way to see most anime series.

The way I see it, the fan subbers are filling a need that the current U.S. networks refuse to and the U.S. translation and distribution companies lack the ability to. It isn't their fault that Funimation is wedded to brick-and-mortar distribution and the convention scene (or that it's extremely nervous about venturing outside of its fighting-series safe zone), nor that U.S. networks are loath to carry anime products. The need exists, and if it isn't met by established systems, others will arise to meet it. The reason fan subbers succeed and piracy persists is not the perfidy of fans, but the Funimation near-monopoly, the persistent bias against anime within the U.S. television community, and the general slowness with which content providers have embraced the internet as a distribution media. Current business models practically force fans to rely on fansubbers.


"why not simply broadcast the anime from the production company site, cover the page in question with adds for the tie-in products and links to where they can be bought, and by-pass the networks entirely?"

Who do you envision paying for the creation of these webisodes, just out of curiosity?

Michelle Pendlelton

I agree with MattAlt.

Why not broadcast your own production? After all, most theater troupes have their own stage. Independent films are also produced at a much cheaper cost, but their quality sometimes even exceeds that of costly movies.

What I'm getting at is the fact that there are a lot of alternative ways (cheaper, too!) to broadcast your own animation/movies, and one of those is through different media (the internet is free, btw).

Anyway, let's all hope that the anime industry gets a turnaround and gets back what it truly deserves. =)

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