No Face Puppet – Click for Movie!
Panelists:
Adam Sheehan, Senior Events Manager, Funimation
Kevin McKeever, Marketing Coordinator, Harmony Gold
Ken Iyadomi, Bandai Entertainment President and CEO
Chris MacDonald, Anime News Network Editor and Chief
Roland Kelts, Moderator and author of Japanamerica
The panel opens with this joke: What’s the difference between the state of anime and state of finance? $700 billion dollars.
Moderator Roland Kelts describes the drop off of DVD and CD sales in recent years, but points out that in anime the DVD sales drop has been “precipitant” even as interest continues to spike. The events held nearly every weekend in the U.S continue to break attendance records. However, the product and the question of monetizing continues to be an enormous challenge.
Kelts asks the panelists: “What is your response to the industry dropping from being worth $600 million to about $250 million in the last few years? What proactive measures are you taking?”
Bandai rep Ken Iyadomi responds that 10 years ago Bandai had a challenge shipping to retailers and getting retailers to understand a single volume release. Nowadays, American TV DVD sets have really killed Bandai’s price point. “We’ve been fighting to grow in a digital age and find a price point where we can still do business in the U.S.” Iyadomi says. Bandai also sells DVDs in Japan. Bandai has changed to selling two-volume sets, but licensing issues prevent them from shipping entire sets of some series.
Chris from Anime News Network says: “It’s not exclusively a DVD industry… DVD sales of Naruto are inconsequential. Viz doesn’t give a damn,” he says, “They only care about licensing. Boxed Home media is never going to be as big as it was in the ’90’s again.”
ANN is becoming an internet broadcaster, very slowly. They announced some their plans to become a content provider over the NYAF weekend. ANN will eventually begin to release anime in an ad sponsored format as it is in Japan. “We want to allow them to make money off stuff that doesn’t cost you money” It will be a free online streaming system. [Note: Since the convention, I have not had much success verifying ANN’s plans or finding what titles they plan to stream.]
Funimation rep Adam Sheehan says, “Our sales have gone up in the last couple of years. We’ve been lucky to get quality shows.” Funimation has been doing 13-episode sets of One Piece for hardcore fans. “One Piece is the most illegally downloaded series in the world” Sheehan says. “If just 1% of those people bought a DVD it would increase our sales tenfold.”
In order to expose fans to shows, Funimation is providing samples of their shows online, before the DVD comes out. Despite McDonald’s comments about Viz, Funimation’s bread and butter is still DVD.
The moderator asks for a show of hands from the audiecne: Who watches anime online regularly? About half the room raises their hands. Who buys anime DVDs regularly? The same group raise their hands. I also raise my hand, but I’m lying, I haven’t had that kind of disposable income in years.
The discussion turns to the music industry for metaphors. The moderator reminisces – back in the day, a 13 or 14 year old kid could buy a $2 record single, and it taught them how to shop for records in stores. When they had more cash they’d get an LP.
MacDonald says Japanese consumers see the product first on ad-sponsored TV and love the shows enough to pay for very expensive DVDs. “I don’t want free online [content] to be a loss leader.”
Bandai recently started showing anime on SciFi channel. “Our bottom line is not to make money, but to break even,” Iyadomi says. In the ’70’s the business model was to sell merchandise because there was no home video market. Now the model is to recoup production costs via broadcast – although I’m not clear on the end of Iyadomi’s sentence.
The moderator asks how to monetize free content.
Funimation is a publicly traded company and they like profit. “We’re in your house in places you don’t even know yet,” Sheehan says, citing youtube, hulu, Playstation, mobile phones, iTunes etc. They provide the first couple episodes cheap or free.
“We’re hoping Cartoon Network wants to continue showing anime,” Sheehan says, alluding to the death of Toonami and some recent shifts in the Adult Swim schedule.
Harmony Gold rep Kevin McKeever says, “We’re in a transformative phase right now when it comes to revenue.” Even major studios are in the same position. McKeever is in favor of putting anime in film festivals or other unexpected places. “People will pay to go see anime, but we need to find ways to give them an experience they won’t get from a download”.
Kelts jumps in – he’s part of a program that takes Anime Classics to universities and art galleries with a team of experts including Susan Napier and Frederick Schodt. Kelts watched Grave of the Fireflies at UC Berkeley yesterday at the launch of the program. With the added value of seeing an expert speak, more fans are willing to pay the ticket price. Kelts compares it to seeing a live concert.
“Box Media is declining across the board, but in anime the decline is worse,” MacDonald says. “No one has found a solution yet, but unfortunately the anime industry can’t wait for [people] to try different things.”
MacDonald continues, “I don’t think many fans understand this, and some never will. Contracts are a huge hurdle when trying to clear rights, especially for simultaneous broadcast.” Anime is made by consortium – not just one company, but 15 companies own a series and each have different contracts. Getting worldwide exclusive for 90 days can be an enormous hurdle.
The moderator asks about the diversity of anime fans as a group.
Sheehan says, “Our marketing is mostly to fans and experts in home video. They look very closely at the type of person who’s going to buy a title and make a one sheet describing the demographic.” They then take the sheet to the graphic department, the trailer department, and every department to help appeal to the correct demographic.
“ADV is still around” the panelist seems to agree. “Reports of their death have been greatly exaggerated.”
Iyadomi says of Bandai, “We really have to be careful about how we do business… It’s become very difficult just to break even… We used to be able to sell 2,000-5,000 copies but now it either sells or it doesn’t sell.”
MacDonalnd adds, “Toonami hasn’t been an anime block for a long time. It’s been a demographic block… over time, CN realized the anime wasn’t bringing in the most viewers.” Their own shows were bringing in more money. “Unfortunately for all of us,” MacDonald says, it’s a better business decision for Cartoon Network.
Sheehan is hopeful that someone will eventually put anime on in the afternoon again, deciding they can make a buck off of it.
An audience member asks about amateur podcast: “…The Podcast Generation… is there one?”
Sheehan says Funimation likes to work with podcasters. Harmony Gold also likes to work with podcasts as “A low cost way to reach anime fans”.
MacDonald interjects, “I’ve been waiting all weekend to call bull. I think the keywords are, ‘There are a lot of amateur podcasts’ they kind of left out that ‘it’s just not the time and effort to deal with thousands of people.’ It takes the same amount of time to give materials to podcasts with 10 viewers as it does [to give material to podcasts with] thousands of viewers. Instead of the podcast generation I’d rather call it ‘the modern online world.’ It’s the same as the wikipedia generation.”
Kelts attempts to sum up the panel, saying there are a lot of proactive measures stepping forward into the breach. “At least there is activity… Activity focused on what’s going on online.” He then introduces panelists again for like the fifth time.
After the convention the economy continued to tank in a very serious way.
Read the rest of Erin’s New York Anime Festival 2008 coverage:
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