The Covid-19 Pandemic's Effect on the Anime Industry

The Covid-19 Pandemic’s Effect on the Anime Industry

The Covid-19 Pandemic’s Effect on the Anime Industry

The recent changes in our community and country have forced many anime fans to notice a large number of production delays in the last couple of months.  More anime has been delayed than not as of late, so yes, this is a big deal.

 

We’ll start with Japan’s containment measures first instituted on February 25, 2020. The government requested the suspension of all large-scale gatherings and the closing of all schools. Many Japanese companies are also allowing, encouraging, or requiring their workers to work from home. This minimizes person-to-person contact, which reduces the risk of transmission.

 

Some studios have had close calls with the virus itself. Twin Engine (Petannounced that all their employees are required to work from home after one of their freelancers reported being in close contact with an infected person. Because of the close collaboration between the company’s network of studios, this work-from-home order applies to Geno StudioRevoroot, and Studio Colorido as well.

 

The productions that are hit the hardest are those relying on in-between animation and coloring from studios in China, where many offices had to stop work for weeks.  The real risk comes from ripple effects. The anime industry is a tight web of studios that hire each other for additional production work on each other’s shows. A sick artist or a project getting pushed back can throw studios’ careful schedules and budgets entirely out of whack. Most studios also outsource work to the rest of the industry, meaning that issues with their contractors can delay delivery of in-betweens, backgrounds, or CG animation.

 

Movie premieres have gotten pushed back, live events and concerts have been cancelled, and social distancing measures are reducing traffic to theme cafes and otaku goods stores. Many companies rely heavily on event revenue, so this is potentially disastrous, especially as the pandemic wears on. To make matters worse, Anime Japan was postponed. That’s a blow not just to fans, but to companies who were counting on marketing their new titles and holding essential business meetings at the convention.

 

Voice actors have been proactive by building their own in-home studios in extra bedrooms, closets, dens, basements, and garages.

 

ATS Acoustic Panels backed by blankets and suspended from a PVC frame.

The Origins of ‘Cour’ and What it Means for Anime

Updated February 09, 2016.

What Does Cour Mean?

Cour is a word used to describe a span of anime episodes during their initial Japanese TV broadcast. One cour runs for three months and typically consists of anywhere between 10 to 14 episodes and sometimes will contain a full season if the season is short enough.

How is a Cour Different from a Season?

A cour is essentially one production block of episodes that may or may not have a break in between it and the next block. It’s very similar to what Western TV shows, such as Marvel’s Agents of SHIELD, do when they produce and air one batch of episodes, take a break for several months, and then return with the remainder of the season in a second batch of episodes. There are two production blocks of episodes but all of these episodes make up one season and are released as such on Blu-ray, DVD, and digitally.

An anime cour really isn’t any different than saying, “A batch of anime episodes” or “The first/second half of an anime season.” Each three month cour block in Japanese broadcasting is fairly defined however with each one starting in the months of January, April, July, and October and often named after their starting month or correlating season.

Example: The first cour of the year can be referred to either as 1月クール (Ichigatsu Kuru / January Cour) or 冬クーFuyu Kuru (Winter Cour) or even 1 (Daiichi Kuru / Cour 1).

Why are Anime Series Produced in Cours?

Planning an anime series in a cour rather than a full-blown season provides the production team and the broadcasters with a more flexibility. For instance, if a show airs one twelve-episode cour and has good ratings, the show runners may elect to produce another cour as a follow-up. On the other hand, if the first cour airs and it doesn’t perform well, then the show can be considered concluded (i.e. not renewed), and the production team loses less money by continuing to work on a less-profitable show.

Where Does the Word Cour Come From?

The original Japanese word is クール,which is pronounced, kuru (funnily enough, the same spelling and reading as cool when using the English word in Japanese). It is thought to come from the French word cours which means lecture or course and it can be easy to see how the word could have been reinterpreted in much the same way we have in English when discussing meals. We may eat a two course meal, while in Japan they can enjoy a two course anime series. Sometimes if it’s extra popular, the cooks may even make an extra course!

It’s a bit of a mystery as to why some of the English language anime fandom is using the word cour over kuru. It’s possible they’re referencing the original French origins of the word.

Should I Start Using Cour?

Usage of the word is very niche in anime fandoms and most fans simply use phrases such asSpring Anime or Summer Anime to talk about different anime series airing at different times of the year. The terminology also becomes mostly redundant once an anime series is released as a full season commercially. Any splitting up of an anime series on DVD or Blu-ray outside of Japan is mostly due to budget, marketing, and physical disk space and has no relation to how it originally aired in Japan.

1 Cour (11-14 episode / season show) Examples

2 Cour (23-26 episode / season show) Examples

4 Cour (50-54 episodes, continuous, or year-long series) Examples

Edited by Brad Stephenson

This is an artilce taken from about.com
anime-avengers_attack_on_titan_lupin_bleach_naruto_one_piece

Why Anime Has Been Getting Shorter And There Are Fewer Second Seasons

GoBoiano reader Fanni Fanfan took to Facebook to ask:

Goboiano, can you make an analysis as to why old-time anime have 50+ or 100+ episodes (Yu Yu Hakusho, Saint Seiya, Naruto, Bleach, One Piece, Full Metal Alchemist, etc).  Whereas nowadays anime only have 11-13 episodes or 24-26 episodes?  Can you analyze as to why anime industry in Japan had changed and shifted to producing short episodes today? Thanks ^^

It is an interesting question. Are there any reasons for the shortening of anime series? Yes! There are a few reasons for this, including money.

Fist of the North Star

Fist of the North Star © Toei Animation / Shueisha

 

Economic recession


I know, economics can be boring, so I’ll keep this brief. A recession basically means that the market is shrinking. People aren’t buying things as often and businesses aren’t investing in new products and services. If money isn’t being circulated in the economy, businesses don’t have as much reason to create new products, people lose their jobs, and people cut back on unnecessary spending.

Japan

Chart via Zero Hedge

Certain economists have argued that Japan has been in a recession since the 1990s and are just now crawling out of it.

 

Declining birth rate


Japan is in the middle of a population crisis. As of June, 2015, the birth rate was at a record low of 1.26 children per woman. The Japanese government estimates that the birth rate must be at 2.07 to maintain the current population level as it is.

Kokoro Connect

Kokoro Connect © Silver Link / Enterbrain

Not a lot of these spreading joy

 

What this means is that Japan is an aging country. The work force is rapidly aging and will be retiring soon. As people age, they tend to have less disposable income or their tastes in entertainment change.

Japan has tried to some odd things to get people to make babies, but it’s not working. Some countries can offset this by encouraging immigration, but Japan doesn’t really like that idea, preferring to have a homogenous society.

 

How does this affect anime?


Okay, so I got the groundwork out of the way. Let’s talk about how this affects the anime industry.

Shirobako

Shirobako © P.A. Works

Committees are the gatekeepers of anime

The recession and declining birthrate affects anime in two ways.

  1. Anime production committees and studios are reluctant to invest in a long term series
  2. Most long term series were aimed at children and teenagers.

 

Long term or short term?


Studios need money to make anime. Pretty obvious, right? So, when a production committee gets together to produce an anime they ask a couple of questions:

  1. Who is the target audience?
  2. How popular is the source material / how popular can this new IP* become?
  3. How much will the anime cost?
  4. How will we make a profit?

*IP = Intellectual Property: these are creations of the mind, like art, design, inventions, names and images used in commerce.

Now, keep in mind that anime was generally cheaper to make in the 1980s to the early 1990s since Japan’s economy was booming.

The Castle of Cagliostro

The Castle of Cagliostro © TMS Entertainment

It is cheaper and less risky to invest in a shorter running anime. If you are budgeting for a 100 episode series and already worked out the business deals, then you are stuck making a 100 episode series, unless you cut your losses and cancel the project. If the series doesn’t catch on, or it isn’t making money on merchandise (more on this in a minute), then you could end up in the red.

What about series popularity? Adapting a hit manga gives you an advantage over creating an original series.

Yu Yu Hakusho

Yu Yu Hakusho © Studio Pierrot / Shueisha

Let’s go back to peak at those 100+ episode epics. Yu Yu HakushoRanma 1/2Sailor Moon, and Dragon Ball Z all were insanely popular manga series before getting adapted. For example, Yu Yu Hakusho was one of Shueisha’s best selling manga before the anime was made. Having a large, built in audience makes it easier to risk a long form series.

Modern examples include NarutoOne PieceAce of Diamond, and Fairy Tail. Their manga are popular, so committees are comfortable with investing in the large episode counts.

Ace of Diamond

Ace of Diamond © Madhouse / Production I.G. / Kodansha

Ace of Diamond season 1 is 75 episodes. The ongoing second season is at 20 episodes.

It is worth noting that Weekly Shonen Jump, which is the most popular manga magazine in Japan, has been losing subscribers since the early 2000s.

 

A shift in demographics


Take a look at a group of long form series and you’ll find that they are either shonen or shojo series. These shows are aimed at pre-teen and young adult boys and girls. Why? Because they have more free time and disposable income than adults.

Tamako Market

Tamako Market © Kyoto Animation

It is no secret that Japan has a brutal work culture, so it is tough for a working adult to stay up to date with an anime series while juggling their responsibilities. It is not impossible, but it is a challenge.

The popular shows, like Yu Yu Hakusho and Sailor Moon aired during after school hours or on Sundays (the only day off school in Japan except for holidays). Bam, airing during those hours gives you the maximum number of viewers. Check out the air times of series sometime, you’ll get a sense of who the audience is.

Kannagi: Crazy Shrine Maidens

Kannagi: Crazy Shrine Maidens © A-1 Pictures / Ichijinsha

The working population isn’t as predictable. People have different work hours and off days. So what do you do? You can’t bet that people have DVRs, it’s too risky.

Since Japan has a declining birth rate, there are less young people to target every year. It is no secret that the modern industry has became “otaku focused.” Personal opinions aside, shows that rely on excessive moe and fanservice tend to get slapped with the otaku label.

 

Himouto! Umaru-chan

Himouto! Umaru-chan © Dogakobo / Shueisha

These shows air during the late night weekday hours known as “Otaku O’clock.” The target audience is small, but it is more reliable than the working adult demographic and has been more lucrative than the pre-teen to young adult demographic in recent years.

 

Merchandise


Kids are easy to entertain. This is not a bad thing. Buy a kid a cheap action figure or doll, a backpack of their favorite character, or a lunchbox and they will be happy. These cheap to make products are a great revenue stream for many franchises. Why else do you think Dragon Ball teams up with KFC for themed food?

Dragon Ball Food

No guarantee that Shenron will bring you back from this

The problem is that older audiences don’t want backpacks and lunch boxes. Instead of a cheaply made action figure, the otaku crowd wants a detailed PVC figure. These cost more to produce, and it is reflected in the price.

Other products are hyper limited in appeal. Dakimakuras and oppai mouse pads aren’t going to be carried by chain retailers. Also, not every member of the committee wants to have a sexy dakimakura made of their characters.

Monster Musume

This is the clean Monster Musume stuff

Producers offset this limited market appeal by raising the price. Instead of having thousands of kids buying cheap t-shirts and lunch boxes, companies are relying on a few hundred otaku buying overpriced PVC figures and dakimakuras.

This is not good monetization for the production committees, but it’s all they have to work with. In the end, no one wins with this business model.

 

Different source material


The success of The Melancholy of Haruhi Suzumiya in 2006 proved that light novel adaptations could be successful in the industry if done right.

The Melancholy of Haruhi Suzumiya

The Melancholy of Haruhi Suzumiya © Kyoto Animation / Kadokawa Shoten

Unfortunately, light novels are not like manga. These books tend to have way more exposition and scene setting than manga does. Since it is a less visual medium than manga, studios adapting light novels have to slog through the writing to see what is necessary for the anime. Keep in mind that most studios are used to adapting manga, so it is a challenge for them.

 

The reason for the anime being made


The majority of anime is an adaptation of sorts. Depending on the production committee, they might treat the anime as a glorified commercial for the source material.

Katekyo HItman Reborn!

Katekyo Hitman Reborn! © Artland / Shueisha

Even long running series aren’t free of being treated like a commercial. Katekyo Hitman Reborn! was canceled after 203 episodes and an OVA since Shueisha didn’t see too much of an increase in the manga sales to justify continuing the anime. Due to this, the anime ends at the start of the time skip.

Many committees have a practice that is similar to what American studios call the front 13, back 9. Basically, 13 episodes of a series are ordered. If it is successful, the last 9 that is needed for a full season will be ordered. If not, there tends to be an ending point in the 13th episode to tie up most of the loose ends.

Chihayafuru

Chihayafuru © Madhouse / Kodansha

Chihayafuru is a rare example of a low selling anime getting a second season due to the increase in manga sales. A total of 50 episodes plus 1 OVA were made.

For anime, one cour (about 10-14 episodes depending on premier date) will be ordered. A combination of viewers, early Blu-Ray and DVD sales, and an increase in source material sales will determine if another cour will be ordered.

Hidamari Sketch

Hidamari Sketch © Shaft / Houbansha

Hidamari Sketch is a good modern example. Essentially there are four cours that have been ordered over the course of five years to produce 49 episodes and 12 OVAs. 61 episodes in total, but they were all produced in a more cautious, piecemeal environment instead of ordering them all at once. This is the production model that the industry has moved towards.

If you seen an adaptation that ends between 10 to 26 episodes, odds are either it did not meet sales goals or there is not enough source material.

Nagi no Asukara

Nagi no Asukara © P.A. Works

Original series will be within the 10 to 26 range, but since they were written for that allotment, their stories fit it better.

 

Wrap up


The big take away is that the combination of Japan’s economic recession and declining birth rate has changed how companies produce anime. Anime is not as cheap to make and there are not many kids around to buy cheaply produced merchandise.

This has made the industry cautious when it comes to the length of producing a series.

Original by Aaron Magulick – Aug 31st, 2015

anime-avengers_attack_on_titan_lupin_bleach_naruto_one_piece

Why Would A Licensor Require a Dub?

Ryan asks:

I have never thought of this until I read about the Skip Beat! kickstarter. Why would a Japanese company require a english dub for an American company to license a property? Wouldn’t they be just as happy with a sub only release as long as its getting released here. Its money in their pocket either way.

Full disclosure: I am slated to work on Skip Beat! if its Kickstarter campaign is successful.

To be sure, requiring there to be an English dub is not a normal condition for the release of a show. The vast majority of the time such decisions are left entirely to the American publisher of a show. Most licensors would prefer that a dub get made — having an English version potentially unlocks a more mainstream segment of the fanbase that requires one to watch it. But they know that this isn’t 2002, and that not every show has the sales potential to be able to support the cost of a dub. Deciding which is which is something they prefer to leave to the Western publishers, who know the market better than they do.

I can think of a few scenarios where a licensor would require that a dub be made as a stipulation of overseas release. Most of those scenarios include either the show’s producer, original creator, or both, dreaming of some international credibility for their work, simply wanting there to be an English version. Both of these people are incredibly powerful when it comes to anime licensing, and it could very well be their own desire to see the show dubbed in English that would make it a condition of release.

It’s not without precedent, however. In years past, licensors would commission English dubs themselves when such an occasion came up. Take, for example, Sunrise‘s recent production of their own dubs of recent Gundam series. Previously, Tezuka Productions considered the English version to be so important that they commissioned their own dub of the Black Jack OAVs and movie before even soliciting the rights to an overseas distributor. (Central Park Media only took charge of dubbing the final four episodes of the series, which followed years later.) In that case, Black Jack was something of a prestige title that had a distinctly international feel. Shows like Macross Plus and Kite both got special English-with-Japanese-subtitles releases (even if the last episode of Macross Plus had to be re-dubbed with a different cast due to a materials-related squabble with Manga Video). If we go back even earlier, we have the “International version” of Megazone 23 Part II that was commissioned for Japanese release.

English dubbed versions of anime were never all that common in Japan. Some hardcore Japanese otaku do import the US releases of their favorite shows and check out what their favorite characters sound like in English, but that’s not all that common. When an English dub is released on a Japanese disc, it’s usually a prestige thing: the producers are extremely proud that the show made a mark overseas and want to showcase its success. I don’t know whether Skip Beat!‘s English dub will get a Japanese release or not, but just the fact that a dub might get made could mean something to the show’s creators.

The other reason I could see for this happening is as something of a test. Kickstarting anime releases, particularly for previously unlicensed niche shows, is still a new thing. Most of the successful campaigns from the past few years were for short movies or OVAs, most of which already had a dub and several old releases behind them. And while Pied Piper had phenomenal success with their Time of Eve Kickstarter, it’s not yet clear if they can replicate that success for a somewhat long TV series.

I don’t see stipulations like this ever being a common thing, but I can definitely understand why, from the licensor’s point of view, it would make sense in this case.

by Justin Sevakis, Apr 6th 2016 via animenewsnetwork

The Origins of ‘Cour’ and What it Means for Anime

Is Cour Different From Regular TV Seasons and Series?

What Does Cour Mean?

Cour is a word used to describe a span of anime episodes during their initial Japanese TV broadcast. One cour runs for three months and typically consists of anywhere between 10 to 14 episodes and sometimes will contain a full season if the season is short enough.

How is a Cour Different from a Season?

A cour is essentially one production block of episodes that may or may not have a break in between it and the next block. It’s very similar to what Western TV shows, such as Marvel’s Agents of SHIELD, do when they produce and air one batch of episodes, take a break for several months, and then return with the remainder of the season in a second batch of episodes. There are two production blocks of episodes but all of these episodes make up one season and are released as such on Blu-ray, DVD, and digitally.

An anime cour really isn’t any different than saying, “A batch of anime episodes” or “The first/second half of an anime season.” Each three month cour block in Japanese broadcasting is fairly defined however with each one starting in the months of January, April, July, and October and often named after their starting month or correlating season.

Why are Anime Series Produced in Cours?

Planning an anime series in a cour rather than a full-blown season provides the production team and the broadcasters with a more flexibility. For instance, if a show airs one twelve-episode cour and has good ratings, the show runners may elect to produce another cour as a follow-up. On the other hand, if the first cour airs and it doesn’t perform well, then the show can be considered concluded (i.e. not renewed), and the production team loses less money by continuing to work on a less-profitable show.

Where Does the Word Cour Come From?

The original Japanese word is クール,which is pronounced, kuru (funnily enough, the same spelling and reading as cool when using the English word in Japanese). It is thought to come from the French word cours which means lecture or course and it can be easy to see how the word could have been reinterpreted in much the same way we have in English when discussing meals. We may eat a two course meal, while in Japan they can enjoy a two course anime series. Sometimes if it’s extra popular, the cooks may even make an extra course!

It’s a bit of a mystery as to why some of the English language anime fandom is using the word cour over kuru. It’s possible they’re referencing the original French origins of the word.

Should I Start Using Cour?

Usage of the word is very niche in anime fandoms and most fans simply use phrases such asSpring Anime or Summer Anime to talk about different anime series airing at different times of the year. The terminology also becomes mostly redundant once an anime series is released as a full season commercially. Any splitting up of an anime series on DVD or Blu-ray outside of Japan is mostly due to budget, marketing, and physical disk space and has no relation to how it originally aired in Japan.

1 Cour (11-14 episode / season show) Examples

2 Cour (23-26 episode / season show) Examples

4 Cour (50-54 episodes, continuous, or year-long series) Examples

Edited by Brad Stephenson

To view the accompaning video or to view the original aarticle from about.com

73672

Anime Expert

anime-video-blog-the-dub-king

The Dub King

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Top Ten Saddest Dubbed Anime

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Permission was granted by The Dub King to post links to his video blogs.

 

How Much Money You Cost the Anime Industry When You Illegally Stream

From an article courtesy of GoBoiano

People calling themselves “fans” are watching anime then they complain about low quality, shows not getting second seasons or wondering why moe or idol trash shows keep getting made. Can you tell the money being lost when people illegally watch anime?!

 

Hi Anonymous, I can’t say exactly how much is being lost but we can do some math to try and guesstimate.

For the sake of clarity, I’m going to assume that torrenting is the same as streaming online and does not equate with DVD/Blu-Ray sales (since illegal watchers could feasibly buy a physical copy if they like the show.) I’ll just focus on the revenue lost for the anime industry when international viewers illegally streams shows.

Licensing numbers aren’t officially published anywhere online. This is mainly so studios and distributors can’t say “Naruto was $1 per stream and my show is the new Naruto!” It gives the Netflix, Crunchyroll, Hulu and Anime Networks of the world a chance to negotiate for better rates (or worse, if they have a bad negotiator).

 

Here’s a data point for Netflix from someone doing a rough estimate using published data online. Let’s assume all services use a similar pay per view model and not a flat rate or other model.

“A typical 40 minute episode of TV is about $0.07 and a 2 hour movie is about $0.20.”

We’ll say an anime episode is like a TV episode (but cut in half since anime episodes are around 20 minutes so each episode is about $0.035). We don’t know if Netflix pays the average or more or less for anime and we don’t know if anime-specific sites pay better or worse for anime. So we’ll make a low estimate, a mid estimate and a high estimate to ballpark the revenue range that anime creators are losing out on.

Low estimate: Half of the Netflix 20 minute episode = $0.0175

Mid estimate: A typical Netflix 20 minute episode = $0.035. 

High estimate: Double the Netflix 20 minute episode = $0.07

 

Now let’s look at some site’s views and estimate that revenue!

There have been about 4.4 million views of ERASED thus far through this illegal anime streaming site. If we apply the revenue per viewer, the Japanese creators of ERASEDwould have earned somewhere between $77,500 – $310,000 if the viewers of this site had legally streamed the show.

 

ERASED is a newer show. Let’s look at one of the most popular shows: One Piece.

There have been about 62.4 million views of One Piece. If we apply the revenue per viewer, the creators of One Piece would have earned between $1,091,000 – $4,365,000 from the viewers.

 

Those are both attractive shows so let’s look at a show that is ranked a little lower. Sakura Trick is a yuri that certain people LOVE, but many people haven’t explored.

There have been about 1.07 million views of Sakura Trick. If we apply the revenue per viewer, the creators of Sakura Trick would have earned between $19,000 – $75,000 from the viewers.

 

Looking at a show individually is helpful to estimate how it impacts the creators of each show, but I know people are interested in how it affects the entire anime industry. I can’t get accurate data on each streaming site/torrent but I can look at the user data of the site we’ve been looking at to get a rough estimate.

With the help of a data scientist, I was able to find the estimated number of people visiting that site in January 2016.

If we assume each person on that site is watching 2 shows that month and watching 6 episodes per show then (2,183,177 people * 2 shows * 6 episodes per show) that equals 26,198,124 views per month which is about $458,00 to 1,834,000.

That’s just January so if we assume that the site has similar traffic all year that’s $5,501,606 to $22,006,424. If we assume that there are at least 6 other streaming outlets (possibly in a language other than English, could be torrents or just a different site) then in a year the anime industry loses $33,009,636 to $132,038,544 due to viewers not watching legal streaming options.

Over 5 years, that’s $165,048,180 to $660,192,720.

 

The average anime budget per episode is $153,846 per episode. If half the viewers switched from illegal to legal streaming then there’d be $16,504,818 to $66,019,272 in just one year which could fund 107 to 429 episodes or 9 to 36 more anime seasons.

Over 5 years, that’s $82,524,090 to $330,096,360.

So basically, there would likely be more shows, higher quality, and possibly the pay for animators would be higher above the poverty line.

 

Now these are just very general guesstimates (it could be much higher or lower) but hopefully this helps the anonymous person who asked and everyone else out there see that one viewer might not seem like they’d make a difference to the industry but viewers add up over time and can be a lot of money.

 

Of course, if there are no legal options in your country, then you can’t help contribute to the industry. Although with global streaming sites like Daisuke and Netflix’s new anime, that’s slowly changing for the better.

Also if anyone feels like trying to legally stream when you can, here’s a list. (And you can totally just keep replaying the same episodes on mute when you’re on your computer, no one will ever know but an animator somewhere will thank you)

 

5 Misconceptions About Voice Acting

How Long Does a Company Keep the License of a Certain Show

Taken from an article by The Answer Man courtesy of The Anime News Network.

answerman

Stan asks:

I heard the news of Funimation losing their license to Darker than Black. People speculate (or is it confirmed?) that the license was taken away by Aniplex of America. So I was wondering, is this one of those rare circumstances where Funimation lost the license by accident? Or is this a case of the Japanese withdrawing their license and taking back the rights for the show by force? My real concern relates to the implications of this event. Is this the fate of any licensed anime in the West? Will other older shows that have been licensed for a decade or more start disappearing too in the next few years? I am really at a loss and worried since there are some shows I have yet to purchase.

Answerman:

The relationship between the American distributors and the Japanese licensors is constantly changing, and while some trends can be seen from time to time, every licensor has their own personality and own agenda.

In the case of Aniplex, the company has clearly had a long term strategy to move into the North American distribution in a major way. That move was successful. Now that they’re a publisher themselves, why would they keep their shows in the hands of their competitors? They already own the dub and subtitles Funimation made. Now that their agreement is over, Aniplex can make far more money by distributing their shows by themselves. What we can glean from this is not thatFunimation is in trouble, but that Darker than Black sold well and remains a valuable license.

Nobody is “taking back” anything by force. Funimation doesn’t own any anime (except, partly, forDimension W and that Mass Effect OVA from a few years back, among a few coproductions). A license is a limited-time loan of publishing rights. While many shows hang their hat at a certain publisher for many years, and in some ways becomes synonymous with that publisher, the truth of the matter is that there is no gigantic obligation on the part of the licensor to keep renewing that agreement every time it ends. If the licensor doesn’t think it’s worthwhile to keep that show available to that company, they’re not going to sign an extension. And so it appears, at least, thatAniplex has decided to take their toys and go home.

When a license expires, the publisher usually has six months to sell off their remaining inventory, and that’s that. Aniplex hasn’t done much to keep their older back catalog shows in print, but they do seem aware that these shows — particularly hit shows — have value. I expect they will be out of print for a few years to let demand build up, and then perhaps there will be a reissue. It’s hard to say. In the mean time, fans who missed out on its availability before will only have remaining inventory at retailers, and used copies on eBay and Amazon to choose from.

While I definitely expect this to happen with other Aniplex titles, I currently don’t see situations like this being a trend. Pony Canyon is a major Japanese publisher in Japan that now has a US label, but they are very seldom a licensor. TMS and Toei Animation both have a US rights management office, but neither seem to be interested in publishing their own discs.

One thing to remember with any content you love — be it movies, TV shows, OVAs, anime, live action, web content, music or whatever — it does not stick around all the time. While many things you love will be around indefinitely, things go out of print all the time. Masters get lost, rights expire, business have fallings-out, and all sorts of other issues crop up that can make it impossible to keep offering that media. If you really love something, and you need to have it available to you, you HAVE TO BUY IT. Given how available and inexpensive it is to be an anime fan these days, t’s easy to get lazy or complacent with the belief that it’ll always be around, and you have unlimited amount of time in which to buy a show, but you really never know.

I certainly don’t maintain a 1,200 disc and terrabytes-large media server collection for my health. Convenient though streaming services may be, you can’t count on them always having a certain show. And discs go in and out of print all the time. The chances to buy an anime series tend to last a very long time these days, but they will never last forever.

Here’s How Money Is Actually Made In Anime

 

Here’s How Money Is Actually Made In Anime

The anime industry can seem like a confusing place at first. Why is there a fixation on moe and harems? What’s with the unsatisfying endings? What the hell is a waifu?

Gintama

Gintama © Shueisha / Sunrise / Bandai Namco Pictures

And what the hell is Shinpachi doing?

But the one question that stumps even long time fans is how is money made? We’ve seen time and time again how industry insiders are saying anime is declining or how piracy is killing the industry.

Let’s examine how money is made, and where anime fits in the equation. Think of this as a crash course that will give you the basics, and hopefully help you understand why anime does the things they do.

Anime for kids and families make bank.


This may come as a shock, but the anime you watch is not mainstream, unless you watch shows made for kids and families.

Sazae-san

Sazae-san © Fuji Television

7,181 episodes and still ongoingSazae-san routinely pulls in 14% to 20% of TV viewers when it airs.

The truly successful anime air between 8 am to 9 pm. Shows like DoraemonDetective Conan, Pretty CureOne Piece, and Sazae-san have a broad appeal among Japanese children and parents. Not only do people tune in to watch them on TV, but people buy their merchandise and source material in droves. This constant demand and fans buying pays for the 100+ episodes that the series produce.

Franchises like Sword Art Online and Attack on Titan help prop up the anime industry as well, even though they are not as kid friendly. The key is merchandising. Other than PVC figures and dakimakura, the popular shows will sell fashion items, action figures and dolls for kids, folders, binders, inspired jewelry, and limited edition food packaging.

Late night anime is extremely niche.


Most anime that the international community consumes are “late night anime.” These shows air between 11 pm to 4 am in Japan. They also get laughably low TV ratings and the average Japanese person has never seen them.

Rokka no Yuusha

Rokka: Braves of the Six Flowers © Shueisha / Passione

I’m willing to bet that International fans of the Rokka anime outnumber Japanese fans.

Since their TV ratings are low, these anime make money from Blu-ray and DVD sales. Merchandise helps too.

The low ratings are explained with Japanese work culture and school hours. The average employee works 12 hour shifts, which doesn’t leave a lot of free time to watch every anime, even with a DVR.

Then there are the school hours and the massive workload Japanese students have. Except for certain holidays, Japanese students only get Sunday off (which is why the weekends are packed with anime). However, the workload for students, club commitments, and general teenage life can get in the way of late night anime viewing.

That leaves the otaku crowd, who are willing to stay up late to tune in to watch these shows. Basically, your favorite anime isn’t making money from TV, but that was the plan from the beginning.

Most anime are infomercials.


This is an open secret for Japanese fans. Late night anime, unless it’s aired on the Noitamina program on Fuji TV, will always be an infomercial.

Spice & Wolf

Spice & Wolf © ASCII Media Works / Madhouse

The average late night anime budget is small (about $2 million to $4 million for the entire series), and that is by design. If you look at the production committee of late night anime, you’ll find the TV station is a committee member.

That is because they use anime as a low budget way to fill in the late night time slot so they can get a low viewership. At that time of day, a low viewership is better than no viewership.

Also sitting in on the production committee are manga and light novel publishers, music production companies, and general advertisers (like Pizza Hut in Code Geass). These members couldn’t care less about low TV viewers or low DVD sales, because they are not trying to sell you the anime.

Gintama

Gintama © Shueisha / Sunrise / Bandai Namco Pictures

The business world calls this “synergy.”

Manga and light novel publishers are using the anime to promote the source material. If people aren’t watching the anime, but sales of the source material are increasing during the run of the anime, they will be happy. Music companies are concerned with selling image song CDs or promoting their idols (think Love Live!).

If a manga or light novel finishes, the possibility of another anime season becomesnonexistent. That’s one of the reasons a third season to A Certain Magical Index has not been made; the light novel ended in 2010. Unless ASCII Media Works wants to celebrate an anniversary for the series or remake it several years down the line to introduce new fans to the light novels, you’ll be forever waiting.

Original anime works are not free from this either, since they tend to be adapted into manga and light novels. However, they do have more leeway in terms of story.

The crazy thing is that this business model works. In 2014, the manga industry made 282 billion yen (2.3 billion USD) in Japan alone. The anime industry brought in 242 billion yen (1.9 billion USD) in 2013 from the Japanese and international markets combined.

 

What about the studios?


Anime studios are contractors. Once the production committee forms and decides on an anime to make, they’ll scout out anime studios and offer them the chance to work on the series. The studios are given the budget money to work on the show, and they start their magic.

Shirobako

Shirobako © P.A. Works

But how do they make their money? This is where things get tricky. Studios like Madhouse will split the Blu-ray and DVD profits with the distributor who is on the committee (like Pony Canyon). They may split profits with merchandisers too, if a PVC figure uses the anime design created by Madhouse. The amount of profit is low, which is why studios try to save money by hiring freelancers and working on multiple series a season.

Studios like Kyoto Animation and Sunrise are powerful enough to sit in on production committees. They can essentially invest their own money in the shows they are working on, so they keep a bigger chunk of the profits.

Kyoto Animation also does more than anime; they are a manga and light novel publisher and they run their own store in Kyoto. However, it is worth noting that they are the exception.

 

A complex web of money making.


The last way for a studio to make money is that they are owned by members of the committee. Take A-1 Pictures as an example. A-1 Pictures is animating this season’s The Asterisk War and Perfect Insider, but they don’t necessarily have to worry about sales or viewers because they are owned by Aniplex.

The Asterisk War

The Asterisk War © Media Factory / A-1 Pictures

Aniplex, in turn, is a powerful committee member for many anime. They sit on the production committee of GintamaDurarara!!, and Naruto Shippuden as a Blu-ray and DVD distributor. They also produce soundtracks, merchandise, work with food companies for packaging, and video game companies. Aniplex takes that money and puts it into A-1 Pictures, which is essentially themselves. As a final twist, Aniplex themselves are owned by Sony Music Entertainment Japan.

Sony Music Entertainment Japan is the biggest music label in Japan, making 162 billion yen (1.3 billion USD) this past year in revenue. If you have a favorite anime opening or closing song, odds are it was sung by a Sony artist.

Music produced by Sony Music, distributed by Aniplex, and was in a show animated by A-1 Pictures. They are three parts of a whole. No matter how successful an A-1 Pictures series is, they won’t go under anytime soon due to the business structure.

This structure is fairly common in American and European business. It allows you to make money from different segments without being too specialized. At any given time, Sony can make money from 10+ anime series without taking the big financial risks.

 

International licensing


The international market helps bring in money through licensing. When a studio wants to localize a series, it pays a licensing fee up front. That money goes to the committee, and is usually distributed to the anime studio as part of their production budget.

Fullmetal Alchemist

Fullmetal Alchemist © Square Enix / Bones

For example, if I see an anime that I think would be successful here in the United States. I would offer to pay $10,000 per episode to create a dubbed, Blu-ray release. That would give the studio $120,000 USD upfront for a 12 episode series.

If the anime becomes a major hit in the States and it surpasses a certain threshold (like it sells a specified amount of copies or we earned above half a million dollars), the anime studio receives residual checks that can range anywhere between 20% to 30% of future copies sold.

 

Anime makes money…several years later.


It is estimated that an anime series needs to sell around 5,000 copies per volume to break even. Only 20% of anime will reach that goal in the first year they are released.

Serial Experiments Lain

Serial Experiments Lain © Triangle Staff

Keep in mind that the people who rely on Blu-ray and DVD sales are the anime studios and distribution companies (sometimes they are linked together). However, that doesn’t mean there is an 80% failure rate. Anime is a medium that has long legs, and it’s not uncommon for older shows to break even several years later.

Anime sets are re-released and remastered, series are re-aired on TV on different channels, and long term sales numbers from the international market all contribute to a series breaking even down the line. Remember how Serial Experiments Lain was a flop in Japan? It’s one of the more respected series in the States, and you can bet that the studio has made their money back thanks to Funimation selling it on DVD, Blu-ray, and a re-released Blu-ray set.

The thing to keep in mind is that anime is not a short term money maker.

 

Conclusion


Yes, anime does make money, and as long as the manga and light novel industries are around, anime won’t be going away anytime soon. While we’d love to see more complete adaptations, we have to remember that the main goal of Japanese anime is to sell us manga and light novels.

This article is shared courtesy of GoBoiano.com

Original article by Aaron Magulick – Nov 5th, 2015