Funimation, Fractale and Fallacies

It started with what I initially thought was a Dilbert comic come tragically to life before quickly shifting into a case of manufactured dorama for publicity before turning into a case of “Anime is Serious Business”. I’m speaking, of course, about the events involving Funimation over the last week-and-a-half; if you’ve missed the story so far, check out here, here, and here from ANN – the most trusted name in anime news (except when they themselves screw something up) – before reading further.

I’m typically too busy actually enjoying anime to bother writing about anime “piracy” by Americans when it’s always the same old arguments anyways. I’d’ve passed this story over without commenting until I read this entry on Funimation’s blog and realized I did have something I can add to this debate.

Mr. Heiskell made the case for the importance of territorial rights in ensuring the efficient delivery of anime around the world. The big problem in this argument is that it relies on an assumption that is so prevalent in America that I can’t really blame Mr. Heiskell in making it. The truth is that North America is not the center of the English-speaking anime fandom population; it’s not even the majority. This truth would have greatly shocked me several years ago when I was just a very casual anime fan. Even when I started visiting anime blogs and forums, I would have still been surprised that what I thought was a sizable minority of fans living outside of North America was actually the majority. I didn’t realize this truth until I started anime blogging myself and decided I was curious about which far-off countries people came from to visit The Null Set.

North America didn’t make up 75% of my audience like I thought it would; that number was consistently in the 35 – 40% range. If I extend it out to all English as the first language countries, I’m still short of a majority. I embedded a second tracker to see if the results I got were in error and the second tracker yielded almost exactly the same results. I found this to be a much cooler result because that meant I got to interact with tons of people living from a diverse set of backgrounds from around the globe without trying to learn a myriad of foreign languages (3 years of Spanish in high school taught me that I suck at learning a foreign language).

Up until now I’ve only used this knowledge when I’m thinking about the audience I’m writing to; for example, it’s easier for me to not write about politics when I know roughly 2 out 3 readers will not care because they live in a different country than me. However, this fact greatly influences the environment surrounding Mr. Heiskell’s argument and the recent events connected to Funimation.

I realize it was possible that my blog was atypical so for this post I decided to examine other anime blogs to see if this pattern would hold up. I found three other blogs that linked to the information I needed – one was a much more popular blog then mine, the second one is about the same size as mine and the third one is a blog that’s gone dormant but still gets a fair amount of traffic. All three blogs displayed a very similar pattern to mine; which I’ve averaged and will summarize now.

The Top 10 Readerships of English Language Anime Blogs by Country:

United States 32.49%
Canada 5.60%
Philippines 4.46%
United Kingdom 4.10%
Germany 3.77%
Brazil 2.87%
Mexico 2.81%
Australia 2.80%
France 2.58%
Malaysia 2.00%

 

The North American share (US and Canada) is only 38.1%, the UK and Australia add another 6.9% for a total of 45.0%. That means 55.0% of the market for English language anime comes from countries that don’t speak English as a first language and it’s not just a few countries that make up that 55% as the next table shows.

Readerships of English Language Anime Blogs

North American Countries 38.1%
Other English First Lang. Countries 6.9%
Rest of the Top 10 Countries 18.5%
Top 11-20 Countries 14.5%
All Other Countries 22.0%

 

If you apply this knowledge to Mr. Heiskell’s argument, it quickly becomes apparent why licensing anime titles by country/territory is never going to work. There are just too many countries to cover and there’s also the question of offering English dubbed/subbed anime in countries like France, Germany, Brazil and Malaysia where there might already be a native language anime publisher that might not take kindly to an outside company poaching fans.

Then again, the nature of the internet makes thinking about problems using physical geography seem very antiquated and doomed to failure. A much better approach would be by language since that’s closer to how the internet is actually split-up. It would be a titanic shift from how it’s done now which means as long as the old ways make money, new methods will not be tested. Which makes it sound like it’s up to the anime “pirates” – once again – to get these obsolete business practices eliminated and get better ones put into place. After all, it was anime “pirates” that have historically driven the advancement and innovation of offering anime/manga from creating the market to pushing publishers into releasing anime by the box set and to offer anime online. (I’ve yet to come across a piracy-hating anime fan that wishes companies would go back offering anime a couple of episodes at time for ~$25 or wanting them to stop streaming anime online.)

Looking at the breakdown of where the fans actually live that would be interested in English language anime also shows why streaming anime (by territory) will only have a limited impact on anime “piracy”. That’s not to say streaming anime hasn’t cut down on anime “piracy” but there is just so much Funimation can do when they only control 38.1% of the market. Proof of this, I believe, appears in the documents that Funimation filed to sue 1337 downloaders of episode 481 of One Piece subbed by yibis.

The number 1337 is not just a random number to internet users which lead me, and just about everyone else, to believe Funimation picked that number of people to sue on purpose. I initially assumed that Funimation could have sued many, many more but stopped at that number but a funny thing happened when I looked over the people Funimation was suing. I saw a great number of obvious duplicates. For example, the very first person, “Doe 1”, was identified as using Verizon Internet Services to download the episode in question at 1/9/11 3:27 AM with the IP of 71.172.24.89. The second person on the list, “Doe 2”, was identified using Verizon Internet Services to download the episode in question at 1/9/11 3:33 AM with the IP of 71.172.24.89. This is obviously the same person which got me curious, how many duplicates where there?

To answer that question took much more work then I initially thought. I attempted to copy the information in the 32 page PDF into a text document so I could import that into MS Excel but that proved impossible; even though the text was selectable and copyable in the PDF, I just got gibberish when I pasted it in WordPad, MS Word and Excel. I ended up having to turn each page of the PDF into a picture file and then use Acrobat’s ability to convert the picture file back into a document with selectable text, copying that into Excel and checking that no errors were made in this circuitous method.

Now that I had an Excel spreadsheet, the answer was very quick to find; I found 255 “Does” that appear to be duplicates. A quick check of the torrent in question, since Funimation doesn’t seem to want to take down the actual torrent file, shows that it’s been downloaded nearly 23,000 times. Why have 255 duplicates if there were plenty of people to sue?

The only answer that makes sense to me is that there aren’t 1337 people living in North America that illegally downloaded this episode of One Piece for Funimation to sue. This thought allows for a few interesting calculations. If the 255 duplicates are subtracted from the initial 1337 people, that leaves only 1082 people who had access to the Funimation stream that choose to download a fansub instead (which was a 720p fansub btw). Next, I don’t know the exact number of people out of the 23,000 that downloaded the episode in the first four days (which is the length of time covered by the 1337 names) but I’m going to assume the number was probably around 20,000 – based on how frontloaded torrents are. This means that just 5.4% of the people downloading this episode of One Piece lived in an area where they had access to Funimation’s free stream.

If we use the North American share of the English anime market that I calculated above, 38.1%, then seeing the share of North American downloaders at only 5.4% says to me that free streaming anime has significantly decreased the amount of “piracy” by North American anime fans. If Funimation would include some sort of download-to-own option for those that don’t like streaming or have computers that don’t do streaming well and throw 720p into the mix then they could shrink that number down even more. (Off the cuff, maybe offer streaming 720p for a small price and downloads at 360p for $1 per episode or 12 episodes for $10 dollars and 720p at $2 – $3 per episode or 12 episodes for $20 – $30 dollars.)

Looking at this list of “Does” was interesting in other ways. The top ISP’s of the offenders looked like this:

Comcast Cable 260
SBC Internet Services 179
Road Runner 172
Verizon Internet Services 141
Cox Communications 79
Optimum Online 36
Charter Communications 34
Qwest Communications 25
BellSouth.net 18

 

College students didn’t appear to be a problem at all; out of the 1082 actual “Does”, only 2 each came from The Pennsylvania State University and the Rose-Hulman Institute of Technology with 1 each coming from Ohio State University, Northeastern University and the California Institute of Technology. For a total of 7 “Does” or 0.6% of the total.

At this point, it’s pretty obvious where my sympathies lie but I can’t find myself mustering much anger towards Funimation like I have in the past for the MPAA and RIAA. I think it’s because Funimation is getting ground up between the incompatible wishes of the Japanese licensers and those of the anime fans from around the world and yet Funimation is still trying their absolute best. (Hence the picture at the top.) As such, I think this lawsuit that Funimation brought forth was the price they had to pay to get the stream of Fractale back – saying sorry and promising to do better next time wasn’t going to cut it a second time.

I say “price to pay” because I think Funimation knows this lawsuit is a bad idea all around. The RIAA gave up on their large-scale suing of normal consumers a couple of years ago because the lawsuits cost the record industry millions of dollars, were very bad publicity and galvanized people into continuing to download music illegally (no one likes a bully). No matter the thinking behind it, every dollar spent by Funimation on this lawsuit is a dollar that will now go to a lawyer and his/her quest for another new sports car/yacht/mansion instead of helping “support the industry” as the consumers buying a Funimation item most likely wanted.

I’m tempted at this point to launch into a discussion about how to fix anime but I’m already 2000 words into this post and I don’t want to muddle the central point – North America is not the center of English language anime fandom and thus any decision about anime distribution that doesn’t take this into account is practically doomed to failure from the very beginning.

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7 thoughts on “Funimation, Fractale and Fallacies”

  1. Nice post. Funimation obviously picked that number for a lot of reasons, not the least of which is to show the world subtly that they were forced to do it.

    Like

  2. The Japanese themselves can’t stop anime downloads on the internet.

    It’s like Fractale licensers trying to stop doujinshi from being made in Japan.

    Instead of Funanimation investing money in lawyers via a lawsuit, they should have hired better lawyers to go over their contract with Fractale license holder.

    My solution is very simple.

    People in America needs to cut out the middle men and actively go out and get the original creators of Japan and license from them directly. Meaning light novels, manga, and so forth. Stay away from big companies involved in current anime tv productions.

    They have different interests than the fan production base of Japan.

    Anime studios like IG has often been hired to produce animation for US licenses, such as Halo or Kill Bill.

    If American companies can cut out the Japanese hierarchy at the top, and intercede at the bottom with the people who come up with the core creative talent that makes anime in demand, then they will have a much stronger position to negotiate on with any other “committee” in existence.

    The fact of negotiations is, if you don’t have power or influence, nobody listens to you. Regardless of how reasonable your case is.

    So long as American companies are working under somebody else’s license in a foreign country, rather than owning their own licenses under Japanese and American law, American companies are seen by Japanese corporate execs as being subordinate to the Japanese hierarchy. That means you’re not going to have as much freedom as you think you do, in an American setting.

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  3. In terms of quality, the best and original stuff are the doujinshi. As an aggregate, they are mostly equivalent to fan fiction. Which means, most of it is bad or just plain silly. But the good ones are exceptional. And you can get them for pretty cheap if you negotiate with them directly, rather than attempting to do so after it has become “mainstreamed”. Doujinshi, because they don’t have a market demographic statistic like mangas or light novels, are usually developed by the fans themselves. Several smaller, starter, companies produce such things. Look up Utawarerumono (PC) and Eien no Aselia (PC). Both have top notch stories and plot. The first went into anime due to the popularity and the second one didn’t, probably because there was a manga for Uta while no manga for Eien.

    If you can license original material from Japan, produce an anime using a Japanese company, and the anime becomes in demand in Japan and the world, then you have a horse to stand on. Then you’ll be seen as an equal distributor, rather than someone who does whatever they are told to by the subordinates of the big groups.

    http://www.animenewsnetwork.com/encyclopedia/anime.php?id=5746

    The manga started first, then you saw an anime. Normal production cycle. The anime companies are risk averse and will only invest in things that they know will sell. And they base most of their predictions based upon manga or light novel sales.

    The easiest way to avoid license issues is to bypass it entirely and own your own licenses. Without paying the big corps big money for it, once it becomes “in demand”. Get it while it is still “small” or “fan based”. The price is much cheaper, due to the risk being much higher. But if you hit jackpot, the benefits are extraordinary. All you have to have is an “eye for quality” and an ability to translate the story into an attractive anime show.

    Companies like FunAnimation are at a disadvantage competing in the market in Japan.

    1. They don’t know Japanese the way we know Japanese, cultural or language wise.

    2. They don’t have the connections or knowledge base to get to the people they need to get to in Japan, not because they lack money and resources, but because they lack even the knowledge that they exist.

    3. There is no clear data on exactly what is or isn’t marketable in America and all the marketing data for Japan is from Japanese sources. A virgin market is very high risk value, since anything you do can crash or alternatively, anything you create in the market can create demand magically on the spot.

    4. Business is about mutual interests, alliances, and that requires getting the right people together, at the right time. Since most of these “people” are in Japan, more or less, Funanimation, being in America, has a logistical issue to surmount that local Japanese companies do not.

    Much of these dynamics are similar to counter-insurgency vs insurgency issues in various guerilla style wars. Although that’s a rather different topic.

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  4. Indeed, if you look at the Aniblog tourney last year, the top 2 blogs aren’t written by Americans. One is from Netherlands and the other from Malaysia.

    I still remember the tourney because it was how I discovered your blog 😉

    Like

  5. The truth is that North America is not the center of the English-speaking anime fandom population; it’s not even the majority.
    Thank you. That fact is too often forgotten.

    Like

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