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Has the increasing availability of streaming anime on the web from providers like YouTube, CrunchyRoll, and NicoNico Douga affected how big label anime studios and publishers, both domestic and foreign, market and distribute content (e.g., how publishers can gauge which series to pick up or renew, find new original content, test the waters)?

I'd be curious to know about both the impacts from both official and unofficial streaming sources.

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    I think you should clarify in your description whether you mean legal or illegal streaming (or both even). It's a great question either way, but I think I came to this page expecting something else. – atlantiza Mar 20 '13 at 14:58
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There's a really interesting article on Anime News Network that's part of a 3 part feature about the anime economy written in March 2012. There's some interesting notes about streaming in it.

There was a drop-off in DVD/BD sales because in most places outside of Japan, buying the physical media is the only way to watch something for the first time, since the majority of these shows don't air on TV like they do in Japan. Most people who buy physical media usually don't re-watch shows, so once on-demand options started popping up (in the U.S. ADV's Anime Network, which still runs as "The Anime Network"). Fewer people were buying physical media, even in Japan:

The people buying anime DVDs are now mostly the ones looking to buy a specific show. Now that the logjam of liquidated stuff from 2007 has cleared and several shows from the past have gone out of print, fans are reminded that there's value in having a permanent copy of your own. Publishers are finding ways to boost this collector's value, with books and nice packaging, and ever so slightly bump their prices up. Most people watch the show for free, but the few thousand people who love it enough to collect make the whole venture profitable.

So the trend is leaning away from DVDs and BDs. It's something that's helped by services which provide streaming and on-demand access to anime. As far as the industry changes to make this happen:

When it came to the actual logistics of delivering the final product, things worked pretty much the same way in 2006 as it did in 1986: the lab assembled the final show onto a broadcast quality videotape. That went to the TV network, and then the lab cut out all the commercial breaks and sent it the duplication plant for home video. And then, when all that was done, the licensor made up some presentation materials and a crappy looking VHS screener copy for overseas publishers to peruse. If they wanted it, the licensor negotiated a deal with them, signed a contract, and then called up the lab again. The lab made a copy of the masters and FedEx-ed them to the publisher. The end.

This system was reliable, but extremely expensive and slow -- two things that online streaming, with its razor thin margins and gotta-have-it-now delivery schedule, make completely unacceptable. With episodes sometimes being finished only hours before they air, the only way to do a simulcast is to send the finished video to the streaming service digitally, as a file. But adjusting to a new, all-digital way of doing things has been a steep learning curve for licensors... and an expensive one.

So these shows are being licensed and streamed with ads. The ad money wasn't enough for the licensors so they demaneded a "minimum guarantee"

And so, licensors have asked those companies to put their money where their mouth is. Now, each anime costs a licensing fee (or "Minimum Guarantee") of $1-2,000 per episode for simulcast internet streaming rights. Which is still not much, but at least it's enough to ensure that the whole endeavor will contribute SOMETHING to the show's profitability.

Some licensors are still not convinced simulcasting is worth it. Some don't want to split up ownership of rights -- they don't want to have to deal with Crunchyroll AND Section23 AND Hulu, they want a single company to act as custodian for every line of business for a show, and if that means they miss their chance to simulcast, well, it's clearly not that big of a loss. Other licensors just aren't prepared for the mountain of approvals and other work that suddenly has to be done WHILE the show airs.

In comes subscriptions:

The $6 or $7 per month that sites like Crunchyroll charge each user every month is way, way more than any viewer can earn for the site by sitting through ads. TV Tokyo recently announced that Crunchyroll had nearly 70,000 paid subscribers. If that number is accurate, that means, at $6.95 per user, that comes to $486,500 in revenue a month -- more than enough to keep the lights on and pay for the less popular shows. Clearly they're not getting rich on that kind of revenue, but if that's truly the sort of numbers they're doing (they wouldn't confirm for us), they're doing OK.

Crunchyroll isn't alone in going this route. Hulu is trying to push more of their user base towards their $7-per-month Hulu Plus service, which adds access to shows on game consoles, networked Blu-ray players and smartphones. In Europe, France's Kaze Anime has slowly been developing their subscription service.

As far as how publishers gauge which shows to pick up, it's a little different than before:

There are a few big problems yet to be sorted out. The first is with discovery: how do you get the non-obsessive fans, the ones who aren't up on each new anime season, to watch these shows? With a dedicated anime-only site like Crunchyroll or Funimation.com, it's pretty hard. The only people going to those sites are the ones who already know what anime is, and are actively seeking it out. Hulu and Netflix are great storefronts to entice new fans, but they're still not ideal marketing tools.

Actually, it's almost impossible to do any sort of marketing for a simulcast at all. Since the agreements to simulcast a show aren't hammered out until the week the show starts -- or later -- how does a company start to generate hype for their new product? Unless an anime fan is REALLY engaged -- the sort of fan that reads ANN every day and stays on top of every new release -- a show can slip by completely undetected.

The old way of licensing, there's a time to see how well a show does in Japan, the ratings, some demographic information, and even more recently, a publisher can look at hype within its market about a show that's currently airing in Japan. But when it comes to simulcasting and streaming, you don't have that luxury, so it's a lot harder to pick properties to attempt to license. Different U.S. publishers treat this differently, between Crunchyroll, Sentai, Funimation, etc.

Crunchyroll doesn't have means to distribute and produce physical media like Funimation does, while Funimation often relies on other streaming services to handle it's licenses for streaming. The major change here is that it's harder to gauge which shows to license because it's done before the show even airs in Japan. The upside is that the Japanese property holders don't have the ratings to hold over the heads of potential licenses.

The other thing that article notes is that this is all a work in progress and it's still a very new paradigm for the Japanese studios and rights holders.

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I won't pretend to quote statistics or claim I'm anything other than a viewer of anime... but I will say this:

For all forms of media (books, software, music, movies, etc.) you can historically see (and again, it's anecdotal) an upward trend of popularity as things shift from fringe-trend to main-trend.

If you need evidence, look at music. Every hipster will tell you that as soon as mainstream gets a hold of that hidden gem band, it's as though it grew a tumor and they want nothing to do with it anymore. However, the masses will consume it as quick as they can get it - why? Because it's the 'now thing'.

Growing up, (now about to enter my 30's /sigh/) getting anime was hard! I had a handful of amazing 'modern animes' that I cycled through (Akira, Ronin Warriors, a few Studio Ghibli, , Ghost in the Shell, and Ninja Scroll - my mom didn't know what she got me until it was too late ha!). Growing up in the 80's it was hard to find anime as a kid! Ronin Warriors was only on in the EARLY mornings (like 5-6AM) and the other stuff I had to get on gold ol' VHS. As soon as stations started to realize that the drawing styles of our Eastern friends was popular among youth (1990's) we saw an EXPLOSION of anime in the US (and since Western media has a pretty decent influence in the World, we can also say we witnessed global change). With shows like Pokemon (yes, that's an anime by MOST standards, not all!), and Digimon, and DragonballZ, etc. stations like Cartoon Network started to beam this once hidden cartoon style into the heads of children around the world.

To go even further with this... as an owner and operator of a website you generally don't want to build and maintain something that people don't want to visit/watch. As such, someone mentioned "do you mean legal or illegal?" Hell! They go hand-in-hand... Sure there was always an illicit 'underground' to the anime world - buying bootleg will always be there. But the sheer growth of websites (both illegal and legal) that stream content is directly positively correlated to the fan-base growth we've seen over the last 20 or so years.

As ANY market grows, so do the players, and the resources available to those players. If no one want's bananas, then banana farmers go away. If no one wants to watch anime, you'll see a decline in illegal and legal websites go down. Since anime is on the rise, everyone wants to be part of the "gold rush". Don't believe me? Do a quick review of the number of animes produced each decade here. Look at the 1960's, vs 70's, 80's, 90's, 2000's, and 2010's... it's crazy! The turnover rate is insane. It seems labels pick up manga randomly off the shelf, make a season of it, then if they don't become billionaires they drop it and move on to the next one.

So, yes. You change how the masses get their anime and the studios would be crazy not to change their approaches to meet the demands of their market.

affected how big label anime studios and publishers, both domestic and foreign, market and distribute content

They may be losing money from the networks that would have picked them up (or the US studios, like Disney, that might have picked them up [talking about Disney/Studio Ghibli relationship here, certainly not VampireHunderD and Disney! ha!]). But what they lose to the bootleg/underground they gain in merchandise/royalty sales. My best guess is that the idea is to get people into the series, collect royalties off reruns/networks/merchandise and just rinse and repeat this process. Otherwise, you end up a slave to your fan base like Dragonball, Naruto, or Bleach where they have "Fantom" screenings of movies where they don't make a lot of money. For those anime's, the fan base isn't growing proportionally to the cost of development/deployment (I'm assuming here!!). Whereas, those series with 12 episodes have a fan base that's probably significantly smaller, but still buy merchandise for years to come. It's turned into a factory ~ spoken like a true hipster, right?

Q.E.D.

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