Japanator Discusses: Bandai and the state of the industry


[Every so often a topic comes up that's important or interesting enough that we all want to weigh in on it and have our say. That's when time for Japanator...to Discuss!

In the wake of Bandai Entertainment's exit of physical distribution in North America, the fans and the rest have taken to alarm and to the internet to express their reaction and concerns. Both regulars and old-timers alike have chimed in with their 2 cents, and here at Japanator we'll be riffing off what Kotaku's Charlie Maib said about anime

While Maib's comments are worth a read, in short Maib purposes that, with various anime companies exiting the physical distribution arena, it all has to do with piracy. Compared to fansubbing of old, now it is easy to fire up your favorite torrent client and pull down all sorts of anime. It makes a strong disincentive to buying the real goods, regardless of how expensive (or inexpensive) the legit release is.

Click on and see what Josh, Elliot, Bob, Kristina, and I have to say, and leave your $0.02 in the comments!

Jeff's take

I think Maib's article is a sobering take. One that I'm leaning towards. Maybe it is my old geezer-otaku soul crying out at the sort of people on the internet criticizing the industry when they spend as much as I do in their annual anime budget as I spend in a month or two. Yeah, we all got bills to pay, but you gotta put your money where your mouth is. What is funny is I've seen people who spend in a month how much I spend in a year! Maybe my opinion doesn't count either.

Truth is, Bandai Entertainment USA top guy Ken Iyadomi should get all the say, and he said all you could know (but sadly not all we want to know) in his interview over at Anime News Network. Maib didn't quote the most relevant part, I think: they are only ceasing physical distro. Killing their store late last year (so long ago now!) makes sense in that you only really need a physical store (or a warehouse at least) to sell physical goods. If you stop, you won't need a store anymore. [And I quote, with links removed and emphasis added:]

But at this point, little is set in stone. Only one thing is clear: the role of a distributor for anime in North America is changing, and some well-equipped licensors can now cut them out of the process entirely, if they choose. Japanese publishers can now create Blu-rays with English subtitles, ready to import to English speakers worldwide. While those won't sell as many copies as American-produced discs, the higher price point and lack of middleman can still result in a decent amount of revenue with little additional cost. Bandai Visual Japan recently discovered this for themselves with their release of Gundam Unicorn. "They found the results pretty good, and that's how I think they would like to move forwards," Iyadomi says.

Which is to say, this Bandai thing is going to keep playing out. All signs point to some other announcement in the near future (especially based on a similar thing that Europe's Beez is going through). 

Anime is a really nerdy hobby, and it has a really nerdy scene. It explains why there may be a perception about piracy among fans. Anime fans pioneered things like the MKV container and the best way to put together your HTPC on the cheap so you can play a bajillion megabits video at 1080p with 5 different sub tracks, karaoke OP/ED and FLAC 5.1 audio. I partly jest, but so much of nerd-dom is invested in anime. After all, the alphabet begins with /a/. So please don't wrong me when I think there is some kind of new media, technological approach to the future of anime, just like it has in the past.

It may be an approach that might transcend the barrier of distance and language--a silver bullet to fansubbing. Even if it begins with something imperfect like Crunchyroll. 

But to be fair, in order to actually listen to Iyadomi is saying, we do have to see what BVJ has done for Gundam Unicorn:

  • PSN and Bandai Channel streaming/rental/etc.
  • World-wide Blu-ray Disc release, 1 SKU for all.
  • The English dub is there along with all that other good stuff.
  • Marketing in English (and possibly in other regions besides Japan, I don't know).
  • Japanese pricing.

Is that "what the consumer wants"? Maybe yes, maybe no. Will it solve the problem about mainstream piracy mentality (if it is indeed a problem)? Time will tell. But if there is one thing I know, it is that I'm loving Gundam Unicorn, and that list of release features looks pretty good, price aside! 

What is lost in all of this is what will happen to all those poor manga licenses that are being dropped. Sadly, it's nothing that English-language manga fans have not been accustomed to in the past 5 years. In contrast to the anime side of things, the digital future of manga is still a very murky picture.



Elliot's take

No longer living in America, I'm in a relatively different situation than a lot of my readers. I find myself increasingly frustrated with the Japanese market, to the point where I've come to believe that it's broken. Media consumption here is done in such a way as to drain the consumer of every last dime, with the primary issue being that consumers here are so used to it that they no longer see anything wrong with the outlandish pricing. One volume (2 episodes) of Madoka was over $80. That's absolutely unacceptable to me. Only recently have live action BDs gotten cheaper, and even then I'm paying $50 for Thor.

Bandai Entertainment going under surprises me not in the least, because they were trying to market their products to the west in an increasingly Japanese fashion. There were good ideas there for sure. Gundam Unicorn having English subs even in the initial Japanese BD release was incredibly cool. The problem is that their MSRP for those releases were $49.99 and up. Sure, the product itself was pretty fantastic. But when you have access to entire seasons of great TV shows for the same price or less, you'd be a fool to not think you were being ripped off.

Not to mention Bandai Entertainment's other licenses. Single volume releases? I don't think ANYONE wants to buy multiple $30 BDs or DVDs to own an entire series. It's absolutely foolish and should have been done away with years ago. Sets are the only way to go at this point. This is a different world we live in. Streaming (for film and American TV as well) is rapidly gaining ground. If Japanese companies want to survive in the current climate, they have to start looking into ways to make this work for them.

Living in Japan makes me increasingly jealous of the streaming options people in the west have. Sure, I've found ways to get round CR's region blocks, but at the end of the day that's probably just as illegal as simply pirating an episode. The difference? To me, Crunchyroll is an awesome service that makes it easy for me, as someone always on the go, to have access to some of my favorite forms of entertainment. It's like Steam. I'd much rather pay a price for a great service that makes things easy for me, instead of pirating. I've all but given up on streaming becoming a legitimate thing here in Japan anytime soon. Sad, but true. 

Though who knows. Maybe seeing the pricing here has just made me a cynical person.



Bob's take

With about a quarter of the US paying for broadband internet, we've finally hit the point where streaming entertainment has taken off. Netflix, Hulu Plus, and similar services offer us movies and TV shows on our terms, whenever we want to watch them, and in pretty decent quality too. Sure, it might not be the highest quality --watching my roommate's Blu-ray copies of Sherlock and Breaking Bad is far better than the Netflix alternative -- but for the average, non-videophile consumer, this is good enough. And more importantly, it's incredibly affordable.

Don't get me wrong, I'd love to build a collection of physical media, and intend to one day. (It's a desire I've inherited from my father, whose small house is swamped in DVDs, Blu-rays, CDs, and good old-fashioned vinyl albums.) But due to my limited income, I choose to fill my shelves with videogames, an equivalent form of collection with more annoying barriers to piracy and no comprehensive streaming service, save for upstarts like OnLive.

So with the importance of quality depending on the viewer, it all comes down to two things: convenience and pricing. In my examples, buying legit videogames is an expensive hobby, but I find the alternative to not be an easily navigable minefield, both in terms of legality and user-friendliness. On the other hand, I'm happy to pay for an all-in-one streaming service like Netflix because the price is right and they have a fairly good selection, even if there is plenty missing from their library. Do I appreciate the high-definition glory of a Blu-ray? Certainly, but in lieu of paying out the ass for stuff I'll likely only watch once, maybe twice, Netflix fits my choices perfectly.

And that's what's missing in the world of anime. Crunchyroll is a good start, but they're trying to serve a community that has had a better alternative for years. They might not be as official, but fansubs deliver in terms of timeliness (often the next day), image quality (thanks to MKV, as Jeff pointed out), and price ("free" is a big selling point for anyone not looking to turn a profit). Crunchyroll can be more timely than fansubbers by releasing episodes shortly after a broadcast, but that's only if you're paying for a premium account. Their HD streams have improved, but again, you need a premium account, and streaming video can't beat a file. The company has their work cut out for them, trying to think of ways to overcome these problems and still turn a profit.

Would becoming more like Netflix or Hulu Plus help Crunchyroll? Maybe, maybe not. As someone who doesn't like watching things on his computer, I know I would certainly pay a reasonable monthly fee to see recent anime streamed on my TV, like what Hulu Plus offers. Ads during commercial breaks to help subsidize a cheaper monthly fee would be fine in my book, as it's something we're accustomed to from TV. The question would be if Japanese companies would be willing to accept lower returns in order to capture some of the "convenience" audience that I believe exists. In addition, continuing to collect a season's worth of episodes on DVD or Blu-ray, printed in small quantities and at reasonable prices (pay attention, Bandai Visual), would satisfy the hardcore fans who care enough about quality to pay extra, just as such strategies work for American TV shows.

Then again, these suggestions aren't too far from what anime companies are attempting to move towards anyway. Crunchyroll has potential, but even if it evolves along the lines I propose here, there's no telling if it will make a difference. In the end, the power is in the hands of the fans. Convenience is important, but as I mentioned before, it's really hard to compete against "free," especially when fans are so used to jumping through the hoops that they can convince themselves they don't need convenience. (See also: PC gamers and pirates.)


Kristina's Take

As others have mentioned above, it's difficult to compete with "free" and "good enough." I don't really have too much of an opinion one way or another because I don't think there's a "right answer." I have to agree with Jeff in that, we'll just have to wait and see.

With the ridiculous gap in our US to JPY exchange rate, I feel like to begin with prices are unfair. Elliot already mentioned that things are overpriced in Japan, but think of boxed sets that translate to $450 State-side. Is it really worth that much to have a limited boxed set of a series that you'll watch just... once or twice? How many hours of enjoyment are you going to get out of that for the money you paid? This is my philosophy with games and I also apply it to all other physical media.

All the points about streaming that have been made, I agree with. We're at a point where companies should try to figure out how they could improve the quality and make it a marketable effort to stream things online, although again, as Elliot pointed out, Japan isn't into the streaming thing. So this is the part where I get stuck. What to do? Pirating has never really been a big problem around the folks I nerd out with. For the most part, the pirating leads to proper purchases: something that was mentioned by Maib, except that not that many people do it after all.

Crunchy and Hulu are cool, but I would prefer a file. Buying DVDs and BDs is cool, but it boggles my mind that a community (the Japanese people as a whole) that is so focused on compartmentalizing their lives, living in smaller spaces and avoiding clutter would be alright with having to blow so much dough on separate volumes/installments of a series rather than one neat package with the entire thing in one place. Then again, I might be wrong. The Japanese have everyone beat when it comes to following through with their obsessions or enjoying their fandoms (and I don't mean this as a pejorative at all - I love it).

What has been said somewhere in the comments section of that Kotaku post in question is also true: there are plenty of fans out there who just buy all the merchandise under the sun that pertains to their fandom. Maybe instead of selling licenses to watch shows at a premium, they should focus instead on producing the right kind of merchandise at the right price. But then again, there's that catch-22 again, you're involving other designers and manufacturers in that endeavor and costing everyone even more money. This is where I come full circle in my dumb rant to say: I don't feel like there really is a right answer here.



Josh's Take

Those who follow my tweets (thank you, you are all superior humans) might have noted several somewhat rage-fueled broadcasts I made in reaction to Maib's article. To summarize, I basically accused Maib of blaming the fans for the impending doom (DOOOOOOOOO-) of the entertainment industry, and that his solution more or less amounted to customers being obligated to simply accept and pay for inferior products and services, purely out of good faith.

I stand by that argument to an extent, but with upon further reflection I will concede his points, if not his proposition. Fans certainly did "create the beast", as Maib asserts, though largely out of necessity. We did establish a "culture of piracy" where obtaining high-quality product for next to nothing was the expected (and ultimately unsustainable) norm. And Maib is correct in noting that there's really no going back at this point. This is the norm, for better or worse (mostly worse if you're a publisher). But Maib's "solution" flies in the face of this reality, trying to turn the clock back in time to some idealized golden age of anime profitability.

How exactly this became the norm in the first place would require many more features in itself (try reading this to get an illuminating perspective on the cultural aspects of that shift), so I'll hold off on going down that path. I will say, though, that the current status quo is simply stacked against the consumer, both in Japan and overseas, in part due to the current business model of the Japanese industry being largely incompatible with the way the majority of overseas anime enthusiasts enjoy their anime. 

Y'see, the Japanese anime industry these days is largely based around selling DVDs and Blu-ray discs to otaku at an obscene premium The money made by the likes of K-ON!! or Madoka come from nerds buying two episodes at a Benjamin (or Yukichi in this case) per disc, and from sales of merchandise.

In a way, the actual week-to-week broadcast of Being Meguca Is Suffering is, to the average Japanese fan, merely a sampler. He'll buy the disc not just because he's a nerd and nerds work that way, but because Shaft and Aniplex have promised that those QUALITY frames that spawned the "Meguca" meme in the first place will be fixed up, and posters, hug pillows and telephone cards will be included in the packaging. It's a similar situation with boobs-anime, except the incentive in those cases is to actually see what's behind all that white censorship fog. Y'know, the boobs.

Compare this to the way that your average fansub consumer wants to experience his or her dose of Japanese cartoons. Certain exceptions aside, most folks just want to get their anime fast and for cheap, ideally at high quality. That all dovetails perfectly with the way fansubs work. Digital files are convenient, fansubbers are fast and can at least be trusted to translate comprehensibly, and, of course, they're free.

Now, compare that to the way Bandai, Funimation, and VIZ work. Like Japan, they make their money off DVDs and BDs as well, except the US distributors suffer under additional restrictions: the cost of licensing and the costs of localization often produce delays that most fans find intolerable. Add to that the fact that Japanese license-holders are terrified of reverse-importation (where Japanese fans import the cheaper US versions of their shows), and it's a no-win situation. Japanese fans still get gouged, Japanese companies fail to make money overseas, US fans get everything so late that they don't care anymore, and US companies struggle because US fans don't buy stuff they don't care about anymore because everything was so late. 

Where does that leave us? What's the solution? I'm no businessman, and everything I've just explained here is based on second- and third-hand knowledge. For all I know I could be completely wrong, and the truth is that the underground-living mole people who truly rule the anime industry just want to be jerks.

What I do know, though, is that streaming and simulcasting services, as imperfect as they are at this time, are the closest anyone has ever come to legally allowing foreign fans to watch in the manner that they prefer. What manner is that, you ask? Mainly we like it fast and for cheap, if not free. We want to watch our anime in a way similar to the way Japanese fans do, which means to watch it broadcasting on TV. They don't have to wait for someone to license, localize and distribute the shows, and often get their first taste of the stuff for free (or cheap), because these shows broadcast on TV or satellite services. No one in Japan has to "buy blind", and risk a significant amount of money buying a show, based on marketing campaigns and written reviews. Streaming and simulcasts allow people to actually sample the show before committing to buy a disc, in the same way that Japanese fans do. 

The problem left in this case is trying to make such services more profitable, so that the US industry need not rely solely on disc-based sales models. Subscriptions are a good start. While I lived in the US the $7-odd dollars I spent monthly on a premium Crunchyroll subscription were well worth the cash, and to be frank I'd have paid more if they asked. The convenience of watching shows on my computer or even from my mobile device far outweighed the occasional issues with video quality. I could watch my shows at the time they came out, and thanks to archiving I could even watch back episodes without ever downloading a torrent.

Even now we're seeing signs of change. US companies snap up the vast majority of streaming licenses, and rare is the season where a major show goes unbroadcast. Japanese companies are realizing that the way they gouge their domestic consumers doesn't fly across the pond, and have begun allowing licenses to go out for more realistic prices. Hell, they're simulcasting Nisemonogatari now, when its predecessor's asking price was obscenely high (allegedly). Further, companies like Aniplex have begun dipping their toes in, selling Japanese discs at Japanese prices directly to the niche audiences they know will snap them up upon mere mention that the originals include English subtitles.

Now, where am I going with this and what does Bandai have to do with it? My point is, that, in the words of Valve's Gabe Newell, piracy is more of a "service problem". Until recently pirates and fansubbers have provided the better service, or at least the service that most meets the needs of the market. 

Now we're seeing companies serve customers in ways that at least rival the convenience and quality they would get from pirates. There's still a ways to go until things can even out (not least because "free" is the toughest barrier), but it's coming to the point where we can support the industry because the industry makes it truly worthwhile to do so, and not because of some drummed-up "moral imperative."

You could argue that fans do what I just proposed already, via fansubs. Keep in mind, though, that we're trying to "solve" piracy. As any savvy user would know, the most effective solution is not a crackdown (as the likes of SOPA might want), but to address demand, and make the legal, industry-beneficial options more attractive than the illegal, industry-harming ones. 

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Jeff Chuang
Jeff ChuangAssociate Editor   gamer profile

Yet to be the oldest kid on the block, this East Coast implant writes cryptic things about JP folklore, the industry or dirty moe. Attend cons and lives the "I can buy Aniplex releases" life. ... more + disclosures



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