Japanese Government Study Shows Anime 'Piracy' Could Boosts Sales

from the but-but-but-piracy! dept

Mon, Feb 7th 2011 4:24am — Mike Masnick

Just as a whole bunch of folks have been sued in one of these mass copyright infringement shakedown lawsuits over sharing of Funimation anime, it seems worth pointing out that a new Japanese government study on the impact of unauthorized file sharing of anime has concluded that unauthorized copies of anime often appear to increase DVD sales. The study looked at both videos showing up on YouTube as well as those that appeared on Winny, the super popular file sharing platform in Japan. The study found a very strong impact from YouTube -- even saying that it appears many people learn about potential anime DVDs by watching the videos on YouTube first. With Winny, the impact wasn't as strong, and could decrease rental income, but did not decrease DVD sales. Of course, the study only looks at the correlation of videos appearing online and sales, rather than proving any causal link, so it's possible that other variables are involved. At the very least, though, this study (which is similar to other studies we've seen) certainly suggests that having the video widely available doesn't kill off sales, as many industry folks insist.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: anime, japan, sales

42 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

KC, 7 Feb 2011 @ 4:54am

Try Before You Buy
Which is why, where possible, I try to include a link to the official DVD release in my video descriptions at YouTube. It would be a LOT easier to do if they weren't region encoded or "only available in [X] country" (or deleted for that matter!) - If people like something enough, they usually buy it! I've got a small legion of fans of one show dying for a DVD release so they can buy it.
[ link to this | view in thread ]
Chronno S. Trigger (profile), 7 Feb 2011 @ 4:55am

Japan != US
That's Japan. This is the US, the home of 1 download = 3 lost sales. Won't someone think of the damn corn farmers?
[ link to this | view in thread ]
RikuoAmero (profile), 7 Feb 2011 @ 5:00am

I don't really buy this
At least in my case...I've never really bought anime dvds. When I first started working, I was like "Gee, I've got money now", so the first thing I did was pop round to Forbidden Planet and buy the Platinum DVDs of Evangelion. They weren't good value, FP was selling a 3 episode disc for 30 euro. Ended up spending over 240 euro to get the entire series. After that, I got my first internet connection and discovered the joys of torrenting and cyberlockers.
I did watch one thing on Youtube a couple years ago that actually sounded like a great idea to make money from downloaded shows. I can't find the link, otherwise I'd post it, but what the guy said was, just put an advertisement logo in the corner. Something small and unobtrusive, but it would work. He put in the Nike swoosh logo on an episode of a popular tv show. Get the advertisers to pay for the show: the more popular it is, the more it is downloaded, the more the show's producers could then charge for advertising. And all of that without the end users worrying about litigation or their conscience getting in the way.
[ link to this | view in thread ]
Prashanth (profile), 7 Feb 2011 @ 5:02am

I feel like Lawrence Lessig covered this in "Free Culture"...or was that manga, not anime?
[ link to this | view in thread ]
RikuoAmero (profile), 7 Feb 2011 @ 5:05am

And let us not forget
That is was piracy that started the anime craze in the US in the first place. People were bringing in bootlegged VHS tapes of anime from Japan, someone saw there was an emerging market and decided to convert these goddawful evil bloodsucking pirates into customers, thus spawning the age of the English dubbed Anime. Strange, how an idea like this is never tried these days...must be against the copyright religion's Commandments or something.
[ link to this | view in thread ]
Call me Al, 7 Feb 2011 @ 5:22am

I've spent quite a lot of money on Anime in the last few years. With one exception it was all on shows that I discovered through piracy, I would never have found them otherwise.

I am careful where I buy it from though, Forbidden Planet has the best selection of any High Street shop but the prices are frankly ridiculous.
[ link to this | view in thread ]
Anonymous Coward, 7 Feb 2011 @ 5:29am

With Winny, the impact wasn't as strong, and could decrease rental income, but did not decrease DVD sales

this study (which is similar to other studies we've seen) certainly suggests that having the video widely available doesn't kill off sales, as many industry folks insist.

One of these things, is not like the other. One of these things...

Mike, don't you think if rental income drops that it won't lead to diminished sales and income? Let's say it's the old plastic disk rental thing. If they make less income, perhaps they buy less copies, right? If it's the more futuristic "PPV", would it not decrease the licensing fees?

If money is moving away from a business model because of piracy, is that not decreased sales?

Yes, there is some upside for the companies on youtube from out of market buyers, as they have no other way to be aware of the content. But the same results could be obtained with trailers, teasers, or other content hosting by the anime companies themselves. No need to put tons of full episodes out there, right? After all, as RikuoAmero mentions, as soon as he was able to download and not pay, there was little reason to pay the high price for imported discs.
[ link to this | view in thread ]
Anonymous Coward, 7 Feb 2011 @ 5:36am

Re:
Manga is a comic book.
[ link to this | view in thread ]
Anonymous Coward, 7 Feb 2011 @ 5:37am

>The study found a very strong impact from YouTube -- even >saying that it appears many people learn about potential >anime DVDs by watching the videos on YouTube first. With >Winny, the impact wasn't as strong, and could decrease >rental income, but did not decrease DVD sales.

im probably not a reference but that makes sense to me, i still buy DVDs as a matter of fact id rather buy than download (if its a good movie and available for sale in my country).
[ link to this | view in thread ]
RikuoAmero (profile), 7 Feb 2011 @ 5:39am

Re:
The high price was the only reason I don't buy anime dvds: if I downloaded the show, I got exactly what was on the DVD for no cost: hell, I even downloaded ISO DVD rips of Haruhi Suzumiya, that were a complete recreation of the actual DVD.

But don't think I'm a cheapskate by any reason. I buy tons of other content legally. I buy books, dvds, movies, games. I torrented Dragon Age Origins as soon as it came out, then went ahead and bought it once the expansion Awakening was released.
The point I was trying to make is that the goods are priced so high that no one wants to buy them. For example, I was at a computer store yesterday, and I saw copies of Adobe Flash and Photoshop CS5 going for literally ONE THOUSAND ONE HUNDRED AND NINETY NINE EURO. I paid 1100 for my entire computer. Here, I saw a product that is in high demand (when was the last time you were on a website that didn't make use of Flash in some way?) and basically infinite supply (its 1's and 0's, easy to reproduce), and yet, they're charging 1199? A clear case of not understanding the most basic principles of supply and demand.
[ link to this | view in thread ]
Anonymous Coward, 7 Feb 2011 @ 5:55am

Re:
If you read it again, it was not saying a complete decrease in sales or income, it simply stated "DVD sales" does nto decrease which is only a part of the entire income schema.

Please read before you slam Mike :)
[ link to this | view in thread ]
Anonymous Coward, 7 Feb 2011 @ 6:01am

Re:
Like president Bush Jr. said "I'm not going to lie to you, those jobs are gone, they are not coming back"

If money is moving away from a business model because of piracy, is that not decreased sales?

If they go up because of it is that not increased sales?

Japanese government study on the impact of unauthorized file sharing of anime has concluded that unauthorized copies of anime often appear to increase DVD sales.
[ link to this | view in thread ]
Anonymous Coward, 7 Feb 2011 @ 6:03am

It is worth pointing out that most anime DVDs/Blu ray discs in Japan these days comes with tons of extras. At the very least you are usually looking at several pieces of merchandise, such as figures, art books, OSTs, etc. If rentals are down and sales are up as a result of piracy, the most likely explanation is that people want the physical extras that come with these releases. The sales are likely up because you have more people seeing the show thanks to piracy, and later deciding to buy thanks to all the extras. If you are renting though you aren't renting for extras and instead just to watch, so it makes sense that piracy would decrease the revenue created through rentals because piracy is a more effective replacement.
[ link to this | view in thread ]
Anonymous Coward, 7 Feb 2011 @ 6:05am

It is worth pointing out that most anime DVDs/Blu ray discs in Japan these days comes with tons of extras. At the very least you are usually looking at several pieces of merchandise, such as figures, art books, OSTs, etc. If rentals are down and sales are up as a result of piracy, the most likely explanation is that people want the physical extras that come with these releases. The sales are likely up because you have more people seeing the show thanks to piracy, and later deciding to buy thanks to all the extras. If you are renting though you aren't renting for extras and instead just to watch, so it makes sense that piracy would decrease the revenue created through rentals because piracy is a more effective replacement.
[ link to this | view in thread ]
Anonymous Coward, 7 Feb 2011 @ 6:06am

Re: Re:
I am not implying a "complete decrease in sales or income", rather that this study seems to suggest that inside the Japanese market, sharing (on Winny) has a negative impact on at least the rental market.

When put against the title of the piece, " Anime 'Piracy' Could Boosts Sales", it seems like actual facts are being ignored.
[ link to this | view in thread ]
Sean T Henry (profile), 7 Feb 2011 @ 6:06am

Re: Re:
Anime is normally based on a manga.
[ link to this | view in thread ]
fogbugzd (profile), 7 Feb 2011 @ 6:15am

Re: Re: Re:
The rental market for video is declining in general as rental outlets in the US fall victim to Netflix and streaming services. The decline in the rental income seen in the study may actually reflect the evaporation of the rental distribution channel.
[ link to this | view in thread ]
PrimeSonic, 7 Feb 2011 @ 6:23am

DVDs aren't the only things to sell
Something these studios should also check is how well their sales of licensed merchandise aside from DVDs. Sure, in Japan DVD box sets can come with some other stuff like art books and the like, but these companies also license their characters and IP for any number of additional merchandise.

We must look into this franchise on its own terms. I find it to be all too common that many who pirate the DVD content will still purchase alternative merchandise later on if they enjoyed the show enough.

I would love to see a study done comparing the DVD sales and the piracy of the content compared to sales of non-DVD merchandise. That could be very telling of what other media industries might want to do for a new business model in the future.
[ link to this | view in thread ]
Anonymous Coward, 7 Feb 2011 @ 6:25am

Re: Re: Re: Re:
Umm, Japan, not the US.
[ link to this | view in thread ]
Anonymous Coward, 7 Feb 2011 @ 6:27am

Re: Re: Re:
While anime's based on manga more often than not closely follow the manga... there are a handful of divergent animes that seemed to only pull likenesses and names from the source material.

Typically the anime will still have plenty of "filler" episodes that are completely original if they start catching up to the manga series.

Also plenty of anime out there that had manga made afterwards.
[ link to this | view in thread ]
Anonymous Coward, 7 Feb 2011 @ 6:30am

Re: DVDs aren't the only things to sell
I would love to see a study done comparing the DVD sales and the piracy of the content compared to sales of non-DVD merchandise. That could be very telling of what other media industries might want to do for a new business model in the future

I think that is a short term way to look at things. Merchandising is taking a "want product" and replacing it with a "want want product" (you have to want the dvd, and then also want the merchandise to go with it). As a bonus as part of buying the DVD (the original want product), it is a good way to continue to encourage the sort of consumer behavior you want without burning down your DVD sales market. But it should always be in support of your goal, and not counter to it.

Breakfast cereal companies has done this for years, with all sorts of give aways and promotions "inside the box", with the continued goal of encouraging people to buy their productions. You don't see free cereal if you buy a t-shirt, right? ;)

It always pays to pay attention to what consumers as a whole truly desire, not just what a few of them may buy.
[ link to this | view in thread ]
Anonymous Coward, 7 Feb 2011 @ 6:31am

"The study looked at both videos showing up on YouTube as well as those that appeared on Winny, the super popular file sharing platform in Japan."

Something of interest is that Winny, along with it's successors Share and Perfect Dark, give a sneak preview where other countries are going as penalties for copyright infringement become steeper. While it is true that in Japan, downloading content was legal, uploading of content has been illegal for quite some time. Furthermore, it's not just a civil matter, dozens of casual uploaders of TV shows have been arrested. In response, Winny was originally created to be a secured P2P file sharing system, where file sharing would take place without exposing your ip to the internet at large. This was cracked by law officials, and later the more secured Share was created in response. Years later, as Share was cracked for the first time, yet another new system, Perfect Dark was created and is replacing Share's role. Rather than halting piracy, the steeper penalties for copyright infringement in Japan have instead lead to an arms race between those using P2P and those enforcing stronger copyright laws.
[ link to this | view in thread ]
Dark Helmet (profile), 7 Feb 2011 @ 6:51am

Re:
"Rather than halting piracy, the steeper penalties for copyright infringement in Japan have instead lead to an arms race between those using P2P and those enforcing stronger copyright laws."

Huh. And just like real life arms races, it's a fantastic waste of time, energy, and resources....
[ link to this | view in thread ]
fogbugzd (profile), 7 Feb 2011 @ 6:53am

Re: Re: Re: Re: Re:
The report talks about and rentals overall. The US is a significant part of the market, and a decline in the US rental market is going to leave a mark.
[ link to this | view in thread ]
freak (profile), 7 Feb 2011 @ 8:13am

The benefit of piracy to anime is something most of us anime-watchers have known for many, many years.

And no, I'm not just being a freetard, anime studios in Japan have actually come out and said "Thanks" before to piraters.

I just watched it, so it comes to mind, and in Battle Programmer Shirase, in the last episode, the main character actually thanks, "All the people who watched, all the people who took special efforts to watch outside of the original broadcast zone or time, and all of the people watching it subtitled overseas without permission".

And, of course, as someone mentioned, the only reason we have anime over here in the US at all, (or an anime market worth, y'know, many many millions every year), is because of piracy.
[ link to this | view in thread ]
Greg G (profile), 7 Feb 2011 @ 8:22am

Re: Re: Re: Re:
there are a handful of divergent animes that seemed to only pull likenesses and names from the source material.

What?? You mean they're stealing the work of others and profiting from it?? How dare they make something that people want to view that's based on someone elses hard work. Ohh, the horror!

Why is this allowed to go on? Quick, someone call the copyright police to send out the C&D letters to these damn infringers!
[ link to this | view in thread ]
Transbot9, 7 Feb 2011 @ 8:29am

On a related note...
Online piracy of the manga (and anime) of the show Naruto greatly increased the fanbase and actually lead to a rapid increase in the release schedule for translated volumes of the comic a few years back.

Funimation, a major importer of anime in the US, has partnered with Hulu to display a sizable chunk of their catalog online, with links to where people can buy it if they like it.
[ link to this | view in thread ]
Anonymous Coward, 7 Feb 2011 @ 8:39am

Re:
If you have 100 people and each of them rent the same copy of "X" movie, and then instead of renting "Y" movie they all see it on YouTube, then BUY the box set of "Y" movie, which movie has a greater sales volume?

1!>100

Because of this you can say that sales are up even though rentals are down.
[ link to this | view in thread ]
KC, 7 Feb 2011 @ 8:49am

Value
Off the top of my head, I can think of almost a dozen cartoons from Nickelodeon (owned by Viacom) that are blocked from YouTube, not readily available on DVD and are not on TV. So the value of those cartoons is zero.

Now if those same cartoons were on YouTube (which in itself can make Viacom a little bit more money from YouTube advertisements) and available on DVD, somebody could think "Oh, I'd like to see [X] show again", find it on YouTube, watch it (for free), enjoy it, spot the link to the DVD release in the video description and buy it. The value of those cartoons would be more than zero.
[ link to this | view in thread ]
Anonymous Coward, 7 Feb 2011 @ 8:59am

The important part about the fan subtitles (fansubs) is that it is introducing the product (anime) to new markets and creating a fanbase (demand) for it before it is even available. What business person turns down measureable, free, demand in a new market. This differs from the scenario of file sharing the same product in Japan where it is available. Since the fansub groups can churn out a subtitled download of a new episode within the day of airing, there is demand to keep up to date with the series so people download it. What they need to do is coordinate to air a dubbed within a week of airing in japan to cut down downloading by meeting the desire of their consumer. I used to watch fansubs of anime ALL the time when I was in college. Now I have money, and a fianc� who doesn't want to read subtitles, so I have a wall of anime series. The thing is I refuse to pay $40 for 6 episodes or $100 a season, but a few companies are finding the right price point. There has a been a large increase in complete series ( usually 2 season ~24/26 episodes) for $30-$40 dollars. I mean really, your not fooling anybody that came from fansubs that your just licensing and then usually but not always, hiring some voice actors to read a translated script(which with fansubs is already given to you). Really, how brilliant do you have to be to work with that business model, your not even dealing with real content creation. License + translator + random voice actor = money!(if you don't get full of yourself and charge to much)
[ link to this | view in thread ]
Anonymous Coward, 7 Feb 2011 @ 9:19am

As for funimation, that company sided with quantity over quality, which with the large demand and for a long time, very little competition, worked out well for them. I am certainly glad to see more competition especially siding with quality and decreased prices. Quality being alot of things such as good voice actors (that are not recycled for every series), proper translations (really, don't market a show with loads swearing and rewrite it for a children's network), and being timely in releases. My largest problem with funimation is they licence a series, do not release a product for years, meanwhile strongarm fan groups with legal threats and C&D's to crush their fanbase of a future product. Way to build resentment toward your company, you should give whoever thought of that one a bonus. Oh, and because the demand doesn't go away, fangroups that the won't listen to funimation spring up, provide fansubs, and the fans hate the company so they refuse to support the official product when it comes out. For awhile, funimation was sending C&D's on behalf of japanese companies they work with, not even for material funimation licenced. Really now? Why try harder to get rid of customers and at that, those with the highest demand and created the market for your product.
[ link to this | view in thread ]
Anonymous Coward, 7 Feb 2011 @ 9:50am

Re: Re: Re: Re: Re: Re:
rentals... of anime... in japan.
[ link to this | view in thread ]
Anonymous Coward, 7 Feb 2011 @ 9:51am

Re: Re:
Read the quote carefully:

"ith Winny, the impact wasn't as strong, and could decrease rental income, but did not decrease DVD sales"

A non-decrease isn't an increase, is it?
[ link to this | view in thread ]
Bryan Beals, 7 Feb 2011 @ 9:55am

Works for me.
I don't get cable anymore but when I heard there was a new FMA reboot i went looking on the net for info. I found FA had put the 1st few episodes online. I like what i saw so i started buying the blue rays (3 so far). its comes out to be about 2.70 an show so about the same as HD itunes or amazon. And I have a disk I can resell if i get sick of it.
[ link to this | view in thread ]
Transbot9, 7 Feb 2011 @ 10:41am

Re:
The company has made at least some adjustments. Some of their newer products are at least a little better in quality than some of the older stuff.
[ link to this | view in thread ]
Anonymous Coward, 7 Feb 2011 @ 11:05am

Anime fans tend to have a "Real fans don't bootleg" attitude. Not all, but many. I've seen it at many of the conventions I've been to.
[ link to this | view in thread ]
David Liu (profile), 7 Feb 2011 @ 2:00pm

Re: Re: Re: Re: Re: Re: Re:
But does this even matter? Unless the anime industry is also in the rental industry, the anime companies have zero responsibility to care about the bottom line of rental shops. Pointing out the diminished sales of rental shops when it doesn't affect the bottom line of the anime industry in the slightest means nothing.
[ link to this | view in thread ]
RadialSkid (profile), 7 Feb 2011 @ 3:20pm

Re: Re: Re:
Nor does "could" mean "will."
[ link to this | view in thread ]
Black Patriot (profile), 7 Feb 2011 @ 3:23pm

Re: Re: Re: Re: Re: Re: Re: Re:
Actually the anime industry should be happy, since they get far less revenue from the rental industry than they do from selling at retail. Most video stores would have at most a dozen copies of the latest films, so the studio would only get a dozen sales, but the rental store would rent out those copies potentially hundreds of times over the lifetime of the disk.

A decrease in the rental industry and an increase in DVD sales is a win for the anime industry.
[ link to this | view in thread ]
mirradric, 10 Feb 2011 @ 9:03pm

Re: Re: Re:
Actually it makes sense. Those people who only rent are those who would probably have watched it only once anyway. These people have their needs met by piracy. A portion of those who buy in the first place are die hard fans that simply have to own. You can throw the pirated copies in their faces and they'll consume it readily but will still want to buy even then. Piracy in this case cannot meet all their needs. Stupid irrational fans.
I know because I'm one of them.
[ link to this | view in thread ]
mimikun1, 8 Jan 2014 @ 1:45am

as i expected form japan... x_x

animeanime"
[ link to this | view in thread ]
Hakushaku to yousei, 8 Jan 2014 @ 2:59am

aw aw
Thanks for sharing. very helpfull :)

devilxmoe
[ link to this | view in thread ]