State of the Anime Industry

It's been awhile since I did a blog focusing on the anime industry itself. And given that the incident involving the President of Bang Zoom! Entertainment declaring that anime is going to die occurred while I was on my hiatus from anime watching or blogging, I missed most of the discussion surrounding that.

However, after taking some time to collect my thoughts on the modern anime industry, and looking into the recent happenings within the industry itself, I've decided to do a write-up on the current State of the Anime Industry.


In recent weeks and months (and perhaps even years) there's been a lot of talk of anime being in a state of decline, at least at a commercial level. DVD sales, for a great number of anime series, are not that good, even in the domestic Japanese market. Digital distribution is very much on the rise, but as many ANNcasts have pointed out, ad revenue streams for free or highly inexpensive digital distribution tends to offer very limited revenue for the anime industry. Crunchy Roll helps, as does official digital distribution in general, but it is not the perfect panacea that a lot of anime fans seem to think that it is. Digital distribution alone is a long, long way away from being a satisfactory principle source of commercial profit for animation companies. And the likelihood of digital distribution ever achieving that is dubious at best. Like it or not, DVD and Blu-Ray sales will remain the principal source of commercial profit for animation companies for the foreseeable future.


Beyond this, I also personally don't get the sense or vibe that anime is still a "hot ticket item" like it was in the days of Cowboy Bebop, Ghost in the Shell, and the original Full Metal Alchemist.

That's not to say that the actual quality of anime has necessarily declined. Visually, anime is as good as ever, if not better than ever. Many compelling anime characters and intriguing new anime series come to the fore each and ever year, if not each and every season. A case can be made that certain types of animes may be missing, but what's there right now isn't necessarily bad at all. Some of it isn't that good, of course, but there have always been some bad animes as long as anime as existed.

So, why is the anime industry in a sate of decline? Why does the President of Bang Zoom! think that anime is going to die, at least in foreign markets? Is it just a matter of the global recession bringing everything down? Does the problem lie with online piracy? Is the anime industry failing to adapt to new market conditions? Is it some combination thereof? Is it something else entirely?

That's what I'm going to try to address in this blog.


First, I'm going to focus on what the industry probably should do to try to turn things around for anime at a commercial level.

The first thing that the anime industry needs to come to grips with is that the old model of people buying VHS tapes, DVDs, or Blu-Rays simply for content access (i.e. simply to get to watch the anime episodes or the anime movie itself) are almost entirely over. The only exceptions may be exported DVD copies of domestic theatrical releases, and straight-to-DVD content.

There are essentially four possible reasons, or motivating factors, behind why a person would buy anime on DVD or Blu-Ray:

1. Content Access (the actual anime material itself)
   
2. DVD or Blu-Ray Extras
3. Collector's Item
4. A Gift for a Friend or Family Member
   

In most cases, 4 is one or more of the first three, only through proxy. So our focus here is on the first three.

Whether or not one agrees with anime fans downloading or streaming free fansubs of all of their favorite anime shows, the fact remains that a large part of the potential market for anime DVDs and Blu-Rays are going to do this, and will continue to do this. The only way that anime companies could get completely around this would be with Direct-To-DVD animes, but the anime industry has rarely if ever tried this option to the best of my knowledge.

So, long story short, much of the potential market for anime DVDs and Blu-Rays have already seen the actual anime content before the DVD or Blu-Ray is ever released. Hence, the anime industry is not going to get many people buying anime DVDs or Blu-Rays for content access alone. Period.

The days of a significant number of consumers walking into the electronics section of Wal-Mart, or into any kind of store selling DVDs, and then proceeding to make completely blind purchases of animes that they've never watched an episode of, are pretty much over.

Basic content access can no longer be the main sales pitch of an anime DVD or Blu-Ray. The anime industry needs to forget about trying to crush fansubs, or even trying to compete with them. They should embrace a business model that makes them irrelevant aside from them constituting free advertising. The anime industry needs to focus on the remaining options for the main sales pitch for anime DVDs or Blu-Rays.

Those two remaining options are the DVD extras, and the Collector's Item appeal.


The DVD extras would include such things as art cards of major characters in the anime, audio tracks of key people behind the production of the anime talking at length about the anime, additional anime content that goes straight to DVD, cosplay items, and perhaps video footage of interviews with the seiyu or voice actors behind the characters. Another aspect of "DVD extras" is simply how the DVD is packaged. Cover art is important. The product looking professional is important. All of these things can contribute to a consumer's decision to purchase the product.

Some animes do DVD extras well (The Melancholy of Haruhi Suzumiya did them very well, imo), but other animes can feel very lacking here. Given that content access in and of itself can no longer be the chief sales pitch of an anime DVD or Blu-Ray, it is important for the DVD to offer something that goes a bit beyond that. Such extras don't need to be expensive. Getting the voice cast and artists and production team together for a day of interviews to be put on the DVDs surely can't be that expensive.


Now, there's also the Collector's Item appeal. This appeal is, of course, increased by having good DVD extras. But even without such extras, there are ways to effectively market an anime DVD or Blu-Ray as a good addition to "every fan's" anime collection. Try to make it seem cool or impressive to own a full DVD/Blu-Ray collection of a particular anime. In fairness, the anime industry is already pretty shrewd here by throwing terms like "limited edition" or "special edition" on just about every DVD or Blu-Ray volume that it puts out. This is a direct play to the collector's spirit, and to some extent it works.

But here is also where the broader social context comes into play.

Ask yourself this: Why do people collect things?

Well, for some people, they collect things because they have a quirky or unusual interest in a particular item. Something just catches their fancy. This is often what is behind people who like to collect bottle caps, or a varied array of rare coins or foreign currency. It's just a fun and usually private hobby for such a person.

However, for most people, they collect things in order to proudly display their collections to their friends and even sometimes just to people who happen to drop in to visit them. Let's be honest, there is often a definite streak of vanity to building up large collections. Like the rapper bragging about all of his money, merchandise, and bling, the collector similarly wants to show off what he owns.

Now, the thing with "showing off" is that its effectiveness lies in the perception of the audience moreso than the perception of the presenter. In other words, a collector's collection only has the desired effect if the audience thinks highly of it. With this in mind, this is why collecting sports cards is so huge in North America, and why collecting hockey cards in particular is huge in my native land of Canada.

Hockey is hugely popular in Canada, and incredibly mainstream, so if you hold a vast collection of hockey cards, then that's something that you can safely assume any audience that you happen to be hosting at your house in Canada will be impressed by.

But suppose you hold a vast collection of material that most people don't care about. Or worse yet, suppose you hold a vast collection of material that has a strong negative stigma attached to it. For example, the pedophile is not likely to proudly display his collection of pedophilia to Joe and Jane Average from next door paying him a welcoming visit. That's an extreme example of course, but I'm sure you get my point.


And here is where any strong negative stigma attached to anime can greatly undermine attempts to sell anime DVDs or Blu-Rays as collector's items. And here is where we get to what I feel is the actual largest problem facing the modern anime industry.

And that problem is simple marketing. The anime industry needs to do more to make its product simply look cool. What comes across as cool can vary from culture to culture of course, but some things can come across as cool in many cultures.


For example, Spike Spiegel of Cowboy Bebop generally comes off as one cool guy. You don't really need to be an anime fan to get that.

I mean, just look at the guy:


Spike looks so colossally coolly cool here that even Coolio's name seems uncool in comparison. The guy practically perspires pools of refreshingly cool water. He's like a action hero from a Hollywood blockbuster, only in the form of an anime character.

Now, somebody like Spike is a gift to the anime industry. You need practically no marketing expertise whatsoever to make him look cool. It's also pretty easy to sell the sex appeal of these characters without raising too many eyebrows:




But then, there's something special about these three characters, isn't there?

That's right, good reader: They're actual women. They're not girls; they're fully grown and developed adults.

I don't disagree that sex appeal can help sell a product, almost any product. But when that sex appeal lies in underage characters, you run the risk of alienating a lot of people. Now, I'm not saying that you can't play up the sex appeal of, say, Haruhi Suzumiya, but it sometimes helps to be subtle with it, and that kind of sex appeal probably isn't what we want to be the most prominent image of all of anime in the west. I'm not saying that I myself don't appreciate that sex appeal (I do like Haruhi a lot, after all), just that it's not necessarily what the image of anime should be in the west.


So again, we come to marketing.

The anime industry never really needed to market Cowboy Bebop, Full Metal Alchemist, or Ghost in the Shell. They all essentially marketed themselves. But you need a bit more skill to market modern otaku fare to a broader audience, but that too can be marketed in such a way.


The key is to make anime look cool, and not squicky. To make anime look dramatic, but not angst-driven. To make anime look thought-provoking, but not excessively weird. To make anime look charmingly different, but not inaccessible. Play up the strengths that even Joe and Jane Average can get. Its often not the content that determines if something sells, but rather how the content is framed by its marketers.

Think of the movie trailers for most modern Hollywood movies. They're short, quick, often fast paced, and they play on a longing for excitement or allurement. They make sales pitches that simply sound cool and create broad interest.

And speaking of animes that create broad interest...



Those sales figures are astronomically awesome. They're out of this world. They suggest that the potential market for anime in Japan remains huge.

But they also pose a pressing question: Just who are these people buying up all the Evangelion Rebuild DVDs and Blu-Rays? Presumably many of these people are buying little, if anything, else that's available in the realm of modern anime.

As good as Bakemonogatari and K-On! did, the sales of these two look positively paltry compared to the Michael Jackson-esque success of Evangelion. And Michael Jackson was hugely popular in Japan (as he was in most places, of course).


A smart businessman in the anime industry should look at the sales of Evangelion, and compare them to the rest of the anime industry, and try to figure out how to get these consumers to buy into more modern anime. One (or both) of two things must be at play here:

1. Evangelion has something that no other anime has, and other animes need to get that before they can reach NGE levels of success.
2. Other animes have something that Evangelion doesn't have, and that something is turning off potential audiences.

Whichever it is, it would be great if the anime industry could figure it out. I have some vague ideas and theories that I'm currently running through my mind, but I'll get into most of them another day.

One thing Evangelion definitely has, though, is great marketing.

Calling yourself "The Best Anime of All Time" may rub some people the wrong way, and I personally don't really agree that NGE is that good, but its also eye-catching marketing. It's the sort of bodaciously bold, brash marketing that can draw in a lot of fans.

Perhaps anime needs more marketing like that.

Imagine the following anime sales pitch slogans, for example:

• Not your father's shonen
  
• The most delicious Slice of Life of all
  
• A Harem Anime done the way YOU want it done. For a Change.
  
• You haven't even seen a tear-jerking romance anime until you see ____________.

People are intrinsically attracted to confidence. It's part of the reason for Haruhi Suzumiya's popularity I would argue. The same is true of Light Yagami and Lelouch Lamperouge. An anime that shows confidence in itself will inspire confidence in potential fans.


But, anyway, let's bring this back full circle.


DVDs and Blu-Rays will remain the chief source of revenue for the anime industry for the foreseeable future. However, sheer content access is no longer a feasible main sales pitch for these DVDs and Blu-Rays, with the exception of direct-to-DVD content or domestic theatrical releases transferred directly to DVD and Blu-Ray exports.

As such, anime DVDs and Blu-Rays need good DVD extras and/or a vibrant collector's market in order to sell well. It would help mightily for anime to market itself better in order to facilitate stronger collector's markets, as such marketing can also improve the image of anime itself, making collections of anime DVDs and Blu-Rays be something that the holders thereof feel more comfortable and eager in putting on display.

Content-wise, anime is largely fine... but it could use more characters like Spike Spiegel and Faye Valentine. Cool dudes and attractive women. That doesn't mean that other prominent anime character types should go away. Not at all. It's just that characters like Spike and Faye make for a good "face of anime", at least for adult audiences in some foreign (and perhaps even domestic) markets.


By and large, this post just includes some ideas that I'm bouncing around in my head.

I'm certainly open to debate on all of them, and I may throw some more ideas out there later.

But I would like to shift the self-defeating debate of blaming fansubs vs. blaming "distribution models". Its self-defeating because fansubs do not make it impossible to sell anime DVDs or Blu-Rays. Its self-defeating because digital distribution is not a profitable enough venture, at this time, to cure what ails the modern anime industry.

And while the global economy is bad, it certainly didn't stop Evangelion from selling like a Smooth Criminal. ;)

Perhaps the rest of the anime industry needs to master the confident Ikari moonwalk as well.