Is the Anime Industry Looking at Piracy the Right Way?

Before I start, I just want you all to know that I am not approving piracy, nor am I condemning anyone for it.

People have strong feelings about piracy and its effects on the anime and manga industry. Whenever someone mentions the shrinking anime market, or the bankruptcy of a studio, people are quick to point towards piracy.

Usually, the piracy narrative is: it’s a crime and you shouldn’t do it. You are stealing from the content creators, and you should feel bad.

Yet, I want to take a different look at this issue. Like everything in life, I want to explore the why. Once again, not approving or condemning – just wanting to take a deeper look and share sentiments I’ve seen echoed online for years.

“Piracy is almost always a service problem and not a pricing problem” – Gabe Newell


Gabe Newell

This man changed the way we buy PC video games.

Gabe Newell is the CEO and Co-founder of Valve. Before they launched Steam, many video game insiders were critical of PC gaming because of the high level of piracy.

When giving a retrospective interview in 2011, Gabe had this to say, “If a pirate offers a product anywhere in the world, 24×7, purchasable from the convenience of your personal computer, and the legal provider says the product is region-locked, will come to your country 3 months after the US release, and can only be purchased at a brick and mortar store, then the pirate’s service is more valuable”

I don’t know about you, but Gabe’s example sounds like the current anime industry. Usually, we are lucky to see an anime series released in the U.S. one year after Japan.

That model may have worked during the 1990s to the early 2000s, but it is outdated now. Sure, blame it on instant gratification if you want, but people want simultaneous releases. Legal online streaming services are a good start. They often times have an episode subbed one hour after the Japanese premier.

However, the home video version needs to be released at a faster rate. I understand that Japan is afraid that reverse imports will hurt their home market. But maybe that could be a sign that they need to change their system back home to explore alternate ways to monetize their customers all across the globe.

Piracy means stealing fallacy.


K-On!

K-On! © Houbunsha / Kyoto Animation

One mistake people make is that they assume that one pirate represents one lost sale. That is not always true. And here is why; there have been studies done by independent organizations, and they have discovered that pirates spend more money than non-pirates.

In 2012, the American Assembly discovered that music pirates spend 30% more on music than non-pirates. A United Kingdom benchmark study arrived at the same conclusion.

What about the anime industry? In a 2012 there was study done by the Research Institute of Economy, Trade and Industry. They looked at 105 anime episodes that were illegally uploaded to YouTube, and discovered that the series that those episodes belonged to had an increase in sales. Here is a quote “…YouTube can be interpreted as a promotion tool for DVD sales.”

It seems like fans are obligated to buy everything.


Beyond the Boundary

Beyond the Boundary © Kyoto Animation

Don’t misunderstand me. I think people should buy the anime that they love and use legal streaming services when they can.

The anime community is one of the few communities that I have seen where consumers are almost guilted into buying. In some places on social media you’ll find fans and industry professionals almost demanding that people buy every show that is released.

I understand that people need to get paid for their jobs, but that is not how the market works. The consumer is the one who decides if a show is worth buying. Sure, in a perfect world, fans have an infinite amount of cash and would be able to buy every single anime. But in reality, fans can only afford a to buy a few shows or products a year.

You have to give consumers a reason to buy


YuruYuri

YuruYuri © Ichijinsha / Dogakobo (seasons 1-2) / TYO Animations (season 3)

I might be beating a dead horse, but entertainment markets operate by giving people a reason to buy your product. Crazy, I know.

Anime is expensive. In Japan, a 2 episode volume can retail anywhere between $60 to $120. That is about $360 to $720 for an entire 12 episode series. Ouch.

Prices in the U.S. are better. You can find most series for about $50 for 12 episodes, and some even go for less than $20.

But the price is just one part of the puzzle. Consumers are going to buy things that they love and want to re-watch. Some of the community at large doesn’t feel that most series that are out now are worth the asking price since they don’t hold great re-watch value or fans already own shows that are really similar. Could it be that the anime industry needs to take a step back to re-evaluate some of the shows that are being made for re-watch and originality?

The industry disregards everyone outside of Japan and the U.S.


Sword Art Online

Sword Art Online © ASCII Media Works / A-1 Pictures

“Why do people pirate when there are legal streaming options? You can watch almost every show legally now, people are so entitled!”

You’ll find a comment like that floating around on social media and forums. For the most part, they are right…if they are talking about the U.S. market.

Get this, One Piece is one of the most well known and popular anime series in the world. But did you know that there is no way to legally stream the series if you are living in Scandinavia, Latin America, Africa, and portions of Asia?

It seems that some people don’t realize that there are many ignored markets. How can someone legally support anime if they have no legal option in their home country? For example, Funimation’s streaming service is not available in Europe, and Canada has restrictions on Hulu.

This is a part of piracy that people tend to ignore. We assume people are just downloading or streaming for free just because they can. But markets outside of Japan and the U.S. honestly have no other option. These fans can’t buy anime because no one is releasing it there.

One big step forward is that manga publishers Kodansha, Kadakowa Shoten, Shueisha, and Shogakukan have teamed up to form a joint venture called Japan Manga Alliance. Their goal is to combat manga piracy by introducing legal manga copies to previously ignored markets. They are currently focusing on Thailand, so we’ll have to wait to see if this project is a success and what it means going into the future.

On the anime side, you have Daisuki. It is a Japanese streaming site that is part of Japan’s Cool Japan Fund program. Toei Animation, Bandai Namco Pictures, Sunrise, and Aniplex are some of the studios supporting the project The best part is that it is region free, unless there is an exclusive licensing right.

It’s a young site, but it shows that some anime studios are taking a serious look at the streaming market and hungry anime markets out that have been ignored.

Why are people pirating?


One Piece

Piracy is not a clear cut problem that some people think it is. Yes, it does hurt the industry, but you have to look at the reason why piracy is prevalent.

Go on, ask people why they pirate, and you will get a wide range of answers. There are people who “try before they buy.” If they like the show, they’ll buy the home video release. If not, well, they weren’t going to buy it anyway.

You have people who would buy, but they live in an ignored market. Theoretically, you could import the Japanese or U.S.. version, but currency exchange rates and shipping may make that a near impossible option.

There are also people who like anime, but don’t have the finances to currently buy a series. When given the choice between putting food on the table or buying Love, Chunibyo & Other Delusions, I think most people would choose the food. That doesn’t mean they won’t buy the series once they get money in the future.

And then there are some people who don’t like buying shows but will buy boatloads of merchandise. The music and film industry does make a large portion of their revenue from merchandise and it’s an ongoing revenue stream where you can release new products for decades. More merchandise and buying options could be the future of entertainment.

The international market doesn’t matter fallacy


Shirobako

Shirobako © P.A. Works

“Oh sure, but Japan doesn’t care about the international market. What happens here doesn’t affect Japan, so it doesn’t matter if I pirate all the time.”

When you buy a domestic release of an anime or use a legal streaming service, you are helping out the market in Japan. It’s just more subtle.

Licensing companies pay the production committee some money so they can localize a series. This fee is usually paid upfront, and can help towards producing at least one episode.

The reason you never hear about licensing fee numbers is that it’s done in a way like a closed auction. Each company is bidding on a show, but they don’t know what their competitors are offering. Now, some studios and Japanese channels do give certain companies a first offer treatment. Some contracts state that after a show sells a certain amount of copies, the licensor has to send the Japanese studio residual checks

Here is a super simple example: I pay $500,000 for a certain series. That money goes to committee to do what they want with it. After I sell 10,000 copies of the show, I’ll send 5% of whatever I make off future copies back to the anime studio.

You have certain companies that are owned by a Japanese parent company. For example, Aniplex of America is part of the Japanese Aniplex. More of your money would go back to Japan if you buy their products.

So, no, the international market is not useless.

Not a permission to pirate


Tamako Market

Tamako Market © Kyoto Animation

Look, I’m not saying piracy is a harmless activity. According to the Manga-Anime Guardians (M.A.G), piracy hurts the Japanese economy by 2 trillion yen ($20 billion USD). They also claim that just over 50% of the U.S. market pirates anime and manga, and 12% of the Japanese are pirates.

Of course, just how inflated those numbers are will never be revealed. But it does hurt the industry, there is no question about it. As I said throughout this piece, piracy is just one aspect that needs to be looked at since saying “it’s wrong, you should stop doing it” hasn’t seemed to stop piracy at all.

What should you do?


Clannad

Clannad © Key Visual / Kyoto Animation

Look, I’m not going to tell you what to do with your money. I also won’t sit on a moral high horse and thumb my nose at people who don’t support the industry.

Instead, I would just recommend two things.

1) When looking to watch the latest anime episode, try to find it on a legal streaming service. If you can’t spare $7 for a subscription, you can sometimes still watch the series for free with ads. Trust me, a 30 second commercial break won’t kill you.

2) Buy the series if you love it. If you are planning on re-watching a series, or you want to show it to a friend, think about buying. You can also wait for the series to go on sale. Patience will save you money. The same goes for manga and merchandise.

That’s about all I have to say about piracy. It’s complex and we should have a deeper conversation as a community about it.

SHARE
Aaron Magulick has been a fan of anime ever since being exposed to it in the late '90s. A fan of nearly all genres, he is not afraid to explore the creepier side of the industry.
Loading Disqus Comments ...

LEAVE A REPLY

Please enter your comment!
Please enter your name here