Roland Kelts    VOL.15:

  Will fan sites save anime in 2009?

by Roland Kelts                     

As the Chinese celebrate the lunar new year, the news across the anime industry looks persistently bleak: spiraling overseas DVD sales coupled with decreasing profits at home, a shrinking domestic labor force combined with an ever-expanding menu of file share freebies - and, of course, an anemic global economy for all.

But there is a silver lining on the horizon, and you can test its brightness and durability right now.

On January 2, California-based Crunchyroll.com, one of the largest and most popular of the so-called "fan sites," Internet portals for free anime uploaded exclusively by and for fans, went legit: legal and fully licensed for producer profit.

This may not be the first you've heard of Crunchyroll's foray into unchartered bandwidth. In September of 2008, I conducted a phone interview with Vu Nguyen, the site's co-founder and Vice President of Business and Development and strategy. Nguyen recounted for me his team's trips to Japan at the start of 2008 to obtain digital strategies directly from the front offices of Japan's anime producers.

The result? They had none.

"So we decided to give them strategies," Nguyen told me. "Because they're frustrated, too."

I was impressed by Crunchyroll's proactive approach to an industry whose upper management tends towards intransigence. In many of my interviews with anime executives, mere mention of hemorrhaging profits via the Internet inspired winces at best, and at worse, outright antagonism - as a if I'd inserted an obscenity into the conversation.

No doubt, Nguyen and his colleagues have benefited from their timing. While DVD sales figures have been slipping in all media, for anime, global numbers have dropped precipitously, by an estimated $300 to $400 million from their peak roughly six years ago.

The news isn't much better inside Japan. Years of declining birthrates have produced a shrinking youth consumer demographic, one that can hardly pick up the slack of their otaku elders. Young Japanese, distracted and enthralled by their ubiquitous high-tech cell phones, are just as web savvy as their overseas counterparts, and eager to download free content. And recent changes to Japan's employment and corporate structures mean that many of them are working longer hours for less money than their parents did--if they are working at all. Why pay for what's free?

Which is exactly the question I put to Nguyen last month. If it was difficult convincing Japanese producers to provide official content to a foreign-based fan site, how hard will it be to persuade foreign consumers to pay for that content - when it was nothing more than a mouse click away days earlier?

Crunchyroll's approach is firm, if not outright draconian. "By early 2009, we are disabling user uploads for anime and dramas and removing any content from those sections for which we have not obtained rights. We are transitioning the site from a user upload model to a licensed model, working directly with the producers in Japan."

The site's content rollout began in earnest: "We are airing several new simulcasts every week," Nguyen continues, "with titles including Naruto Shippuden, Gintama, Shugo Chara, Skip Beat, and more. We are also launching our subscription plan that gives members earlier access to the shows, great video quality, and no advertisements. The episodes are available the same day with English subtitles an hour after Japan broadcast exclusively on Crunchyroll for subscribers. Episodes will also be available for free with advertising support for everyone up to a week after."

The gamble is obvious: fans will value quality content and immediate access over the contents of their wallets. Crunchyroll also plans to offer various social networking opportunities to entice subscribers.

But here's the rub: "The fans genuinely want to support creators and the industry," Nguyen claims. "They just haven't been educated on how the industry works. We're doing our best to inform them."

Later this year, the Crunchyroll story could prove a fascinating test of the Internet's capacity for self-monitoring behavior, whatever the content: Can human beings in a virtual world put group survival and sustainability ahead of self-gratification? And can Japanese Pop Culture effectively leapfrog the failed strategies of its past to become newly viable, via the U.S.?

I am about to fly to New York for my latest US book tour.

See you in Japanamerica.


By Roland Kelts, Author of Japanamerica: How Japanese Pop Culture has Invaded the US, Lecturer at The University of Tokyo and Contributing Editor of A Public Space


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