So, in some of the commentary on the Jumpcast, a few listeners had asked that we comment upon the state of the industry - studios shutting down translations to the States, some of the legislation which has been passed over in Japan, and other stories like that. This fell somewhat outside of the scope of what we’d planned for the podcast, but it occurred to me that I might be able to write something up which might help summarize some of these recent events and how they’re influencing the market as a whole.
I should preface this by noting that I’m nowhere near an expert in this field - I only understand a tiny bit of Japanese, can’t write or read it at all, and most of my information is thus somewhat delayed and gathered through filters. It’s not based upon any actual enlightened opinion from within the market - it’s just my own personal take on the situation as a fan. So please take anything which I say with the appropriate amount of seasoning.
Recently, Bandai Entertainment announced that they would stop translating series and bringing them to America. 60% of the company’s workforce on the American side is being laid off (which sounds a lot more impressive than laying off 3 of 5 employees). While this is a single company, it’s only the latest of what has been a rather impressive string of closures on either side of the Pacific, both due to the downturn of the economy and due to the general shrinking of the anime market. Bandai’s response to this has been opposite that of many companies (Funimation comes to mind), and is instead adhering firmly to the quite-expensive 2-episodes-per-release-for-$60 model, which American companies are not apt to agree with. Other companies have been drifting more in the “drive down the price point for box sets” direction, with one of the primary examples I can think of being the One Piece compilations which Funimation has been releasing - $40 (typically down to almost $20 at release on Amazon) for 13 episodes, which is more than reasonable. However, one of the primary indicators which investors often look at is the margin at which products are sold for, as it’s traditionally considered to be a sign of health to have a steady, and high margin. However, that’s assuming that there is not competition from someone else who can provide the same product for free - which is why Bandai’s decision will likely end up backfiring, driving more people to piracy.
Really, I doubt that this is going to be changing things up as drastically for people in the states due to one other major recent change - the shift from DVD to Blu-ray. In DVD, the United States and Japan were different “regions,” so most players couldn’t play releases from the other region. With Blu-ray, the States and Japan are both part of the same region, so all Bandai will have to do (and is likely to do) is put English subtitles on their Japanese releases and allow purchase of those same products in America. (FAKE EDIT: This was totally announced as I was writing this article.)
This, in turn, brings us to the next point of discussion - why is the market shrinking? Well, aside from the global downturn, we’re facing the shift from traditional media to digital downloads and streaming becoming more accepted by the public, with services like Netflix and Hulu both providing a substantial amount of animated content. But I think that this is a smaller piece of the picture compared to two other major points of consideration. First, the barrier of entry to the subbing market has been reduced drastically - in the days back around VHS tapes, getting bootleg subs was actually quite difficult, and reserved mostly for titles which weren’t being brought over anyway. As computing power and Internet penetration increased, the barrier of entry dropped drastically, and continues to do so today. However, with the advent of dual and quad core processors, coupled with sites like youtube getting more people interested and capable of performing video editing, the only real barrier of entry to making your own subbed version of a title is knowledge of the language in question - and frankly, it’s a good way to practice while you’re learning. So more and more people who previously might have been purchasing anime are shifting to fansubs or creating their own, which is draining away the existing market.
But this is still a minor point compared to the other reason for the shrinking market - there is no true vehicle for advertising new shows to new markets. Most of the people who will read this article grew up during the golden era of anime on television. For a fair bit, a few shows were shown in America (Dragonball Z on UPN and then later WB, for example), but they didn’t really break into the mainstream outside of a few hits - Voltron, for example. Then along comes Cartoon Network, specifically Toonami. Initially getting that vaunted afternoon timeslot, and filled with nostalgia-inducing anime from when we were wee tykes and couldn’t tell the difference between various forms of animation. A smattering of non-Japanese (in fact, some new ones!) shows were there early on - The Real Adventures of Johnny Quest, Reboot, and The Superfriends, to name a few. But before long, Dragonball Z and Sailor Moon hit the stage, and then there was no looking back.
Toonami became the method by which people were introduced to new anime. Gundam broke into mainstream consciousness (relatively) with the release of Gundam Wing, followed by a large number of the rest of the series. Big O, Yu Yu Hakasho, .hack//SIGN, Ruroni Kenshin, Naruto, and a wide variety of other shows all came and went in the lineup at various points. I guarantee that more people are familiar with Ronin Warriors than are familiar with Haruhi, despite the relative quality gap between them. The Midnight Run spawned Adult Swim, which in turn pushed some more nuanced anime - Cowboy Bebop, Trigun, Bleach, Fullmetal Alchemist (and Brotherhood), Ghost in the Shell, FLCL, Death Note, Code Geass, Samurai Champloo...the list just goes on. But as time has gone on, fewer and fewer new shows are introduced to the lineup. I believe Bleach is the only one still getting new episodes (although I will note that hitting up wikipedia did surprise me in that they picked up and aired Durarara!!, so there’s still some newer shows trickling in). But Toonami is no more, and Adult Swim has primarily become a comedy block - the anime shows have been relegated to later and later timeslots, with the primary focus being on the comedy. Which brings us back around to the original point: the fanbase for anime is not growing, because there’s not really any means of exposure to the medium. So what we’re facing is a fixed (or diminishing as people move on) market with no immediate prospects for growth, consuming a product which has traditionally been VASTLY overpriced, finding new alternatives which are much cheaper and moving in that direction. This has caused insolvency in a number of companies, resulting in their shutting down, and in order to survive we’re either seeing responses like Bandai - pulling out and attempting to reinforce the gouged prices, and Funimation - a race to the bottom with their means of income coming more from advertising on their website (where they stream pretty much all of their shows) and their television channel (yes, there is a Funimation Channel). This process is accelerated because the demographics which tend to enjoy anime are the same demographics which tend to be more familiar with computing and the Internet, and are among the first individuals to find these new alternative means of consumption.
Which brings me to my final point without any real segue other than commenting on the shrinking market. During the hey-day in the late 90s and early nauts, there was a constant stream of high quality shows. Sure, there was a bunch of crap, too, but really, the signal to noise ratio was exemplary. This was mostly due to the fact that there was a few decades of quality programming available to translate, and we were getting (in genreal) the cream of the crop. This is no longer the case, so instead we’re seeing only the new releases each season. And here is where the final problem crops up - the American and Japanese audiences are diverging in what they would like to watch, and the producers are listening to the Japanese audiences. Season, after season, after season, more and more shows are falling into the slice-of-life “moe” category focusing on young girls in school. While there’s always a variety, even the shows where this isn’t the focus seem to be incorporating it more to appeal to that base in Japan. And while the shows are actually often of quality (at least to those who are interested in these sorts of genres), those genres don’t have the general appeal in the States, so the fanbase is dwindling and seeking their entertainment elsewhere.
So on one side we have shifting demographics, on another we have no means for attracting new fans, and with the onset of digital media and streaming the funding for the shows is getting undercut right from the start, both from shrinking profit margins and an increasing shift towards piracy. How do we get out of this? Not easily. Japanese companies will need to swallow their pride and follow the example set by Funimation, seeking larger audiences by reduced price points. Some sort of deal needs to be struck - whether with Cartoon Network or some other network - to better promote new shows. In its own way, the new genres in favor in Japan could be used to break into demographics which were largely ignored previously - specifically the female demographics - because those shows are more likely to appeal to them when compared to the shonen fighting-fests which were what traditionally succeeded in America. Seek success by specializing in what you’re designing - mass appeal is playing it safe, but by taking some risks and focusing on specific market segments, you get a passionate, involved, and loyal fanbase which will help to carry the show to completion, could attract new fans, and help to break up the potential stagnation of the industry as a whole.
But, as noted, I’m just a single fan - behind the scenes, the situation may prove to be much more complex than I could begin to understand.