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The online anime revolution has finally ignited in Japan

by Roland Kelts

The first question after a panel I once chaired at an anime convention in the United States sounded innocent enough. “So, what do you guys think about Crunchyroll?”

The response was ferocious.

A veteran staff member of a top U.S. anime distributor seized the microphone. “I don’t even want to hear that word,” she said, glaring at the skinny kid who’d uttered it. “If any of you get your anime fix on those so-called fan sites, you’re destroying the people who make what you love. They’re pirates, they’re illegal, and they’re ruining fandom.”

That was six years ago.

Today the despised former pirates at Crunchyroll.com — a now-legal multilingual Web portal for non-Japanese anime fans — are leading an industry revolution in content delivery and distribution, and Japanese producers are following their lead. Heavyweight veterans such as Toei, Bandai, Sunrise and others are scrambling to preview and offer their titles internationally via streaming sites like YouTube, Hulu, Niconico and Netflix. A new producer-collaborative streaming anime site, Daisuki, sponsored in part by one of the world’s largest advertising agencies, Dentsu, goes live in April. And a Japan-based site for videos about Japanese pop culture called Waoryu debuted last month.

“This is the Japanese industry recognizing that streaming overseas is a serious business now,” says Vince Shortino, General Manager of Crunchyroll’s Japan operations. “(Japanese prime minister Shinzo) Abe is spending money like a drunken sailor, and I think it’s great. It’s encouraging an entrepreneurial spirit, and a new spirit of expansion.”

It has been obvious for several years that global anime fans get their fix online, whether or not U.S. distributors wanted to admit it. What has been less clear is how producers could shift from an analog, DVD-based distribution model to digital delivery, without hemorrhaging profits. Think e-books: They are convenient, consumer-friendly, and cheap — but with severely diminished margins for publishers who have long-relied on higher price-points for hardcovers, and less than peanuts for authors.

Crunchyroll went legit in 2009, abandoning its status as a mega-popular site for pirated anime, to license legal content from Japanese producers and deliver profits back to them. When I interviewed the site’s founders in San Francisco on the eve of their new launch in late 2008, I thought they were a bit mad — idealistic, but blindly barreling toward a cliff. Fans getting freebies would never pay for content.

Happily, I was wrong.

“We have 9 million unique users each month,” says Shortino now, “and we’ve been doubling our revenue and the number of paying users over the last four years.”

Gaiatsu, or foreign pressure, has a long history of instigating change in Japan, especially when it comes from the United States. American Commodore Matthew Perry’s cannoned black ships opened the Tokugawa regime in 1853 to world trade in the 19th century, and the postwar occupation resulted in Japan’s Phoenix-like rise into an economic juggernaut in the mid to late 20th century.

But now, amid a sluggish economy, shrinking domestic demographics and the addictive global fanbase of online sites and social networks, producers of Japanese pop culture are not just building new bridges to fans overseas, they are also reaching out to meet the new needs of fans inside Japan.

Two years ago, Sunrise and Bandai Visual launched the “Gundam Unicorn” series in Japanese movie theaters — an unorthodox move in an established system that for decades saw anime go straight to TV. And last month, Production I.G and Bandai Visual held a bilingual live-streaming press conference on YouTube to introduce the new four-part series, “Ghost in the Shell: Arise,” which will also be released in theaters.

“It was challenging,” says an international sales representative at Bandai Visual Co, Ltd., “but we had great results. We’re really attracted to YouTube and the ways we can use it in the future.” The first 50-minute installment of “Arise” will debut in Japanese theaters on June 22nd.

Promoting anime online enables Japanese producers to reach a global audience with minimal overhead and considerable pizzaz. They look hip to what’s happening by simply showing up where their global fans are seeking them.

The straight-to-cinema model is a refreshing approach to anime’s tired and unprofitable dependency on television — which is a financial sinkhole for producers, with contracts and rights conferrals stuck in the impoverished 60s-era ethos of manga godfather Osamu Tezuka, whose notorious approach to “dumping” his products on TV networks at prohibitively low prices led to the anime-industry headache still known today as “The Curse of Osamu.”

Yasuo Miyawaka, Senior Managing Director of Sunrise, tells me he just wanted to find superior ways of reaching anime fans when he opted to release “Gundam Unicorn” in cinemas. “I realized that I wanted to buy the Blu-ray discs immediately after seeing a film, and I thought that that was what other consumers were wanting, too. I’m just changing the old ways of giving consumers what they want.”

If movie theaters are the new loci of anime fandom in Japan, online environs are where the non-Japanese audience congregates. Waoryu Japan launched in late February to present the global fanbase with free updated videos spanning the spectrum of Japanese popular culture — anime, manga, cosplay and fashion.

“Contemporary Japanese pop culture is also about the essential qualities of traditional Japanese culture,” says Waoryu producer Takeshi Nakajima. “It’s about a heightened sensitivity and respect for craftsmanship. And this is also a popular culture that can entertain and educate the audience, presenting new pop products that can carry and convey the traditions of Japan.”

If that all sounds a tad too rosy, consider this: The biggest new player on the horizon is a streaming-video site called Daisuki, which will go live in late April. Here’s the current team: Toei, Sunrise, TMS, Aniplex, Nihon Ad Systems and Dentsu. That’s a lot of content and a significant investment to build a bridge to anime’s growing international audience.

“We’re not just another streaming site,” Daisuki President Kunihiko Shibata tells me in his Ebisu office. “We’re committed to connecting fans with creators. Daisuki will be a brand that both Japanese artists and overseas fans will recognize as a home for anime and its human creators. We have direct access to the studios and artists, and we have lots of plans to bring them directly into contact with non-Japanese fans. We’re going to offer exclusives — interviews, insider stories, behind the scenes stuff. I think you know how valuable this could be.”

I do. At that anime convention in the U.S. six years ago, I knew change was coming. The anime industry may have been slow to respond, but like the rest of Japan, it responds fast when gaiatsu kicks in. If that skinny kid’s question sparked a fire, its flames are now burning in Japan.

Culture Smash is a new monthly column looking at what’s making a noise in the world of Japanese pop-culture. Roland Kelts is the author of the acclaimed bestseller, “Japanamerica: How Japanese Pop Culture has Invaded the U.S.” He is a Visiting Scholar at the University of Tokyo.

  • http://durf.org/ Peter Durfee

    A nice piece, but one that focuses almost entirely on the availability of content to consumers. If anime is headed toward the same status as e-books, with “severely diminished margins for publishers . . . and less than peanuts for authors,” does that mean even less money headed upstream to the actual creators of these works? They’re on the edge of the cliff already.

    Misguided “drunken sailor” government spending is going to line the pockets of Dentsu, Hakuhodo, and the other usual suspects; it will do nothing to make this industry any healthier where it counts, at its creative base.

    • YourMessageHere

      I agree. There’s a lot here I wasn’t aware of until now, and as a consumer this makes me pretty hopeful. But this only covers one of the things I worry about with anime, the business side. I still worry that the quality of new stuff is not high enough.

      I got into anime originally because it offered remarkable ideas and a stunning way of presenting and exploring them. Now it seems like everything is based on formulae, pandering to pre-existing fan tastes rather than creating new fans and new tastes. For all the increase in visual quality, the actual stories and ideas are almost sidelined, unimportant details. Stretching and taking risks with these things is absolutely vital for making excellent shows that people want to see, that draw in and keep fans. This is just as important as sorting out the business side of things. You don’t sell novels by making the cover pretty and the printing super-sharp, you sell them by writing a great story.