Justin Sevakis: “Current System Is Broken Beyond Repair”

This morning ANN published an editorial by Justin Sevakis, the founder of ANN who now works for Imaginasian TV, in which he described the sorry state the industry is currently in financially, how it got to that state of affairs, and the problems preventing any significant change from happening. Apparently, the numbers are “terrifying” and the business model is clearly failing. His doom-and-gloom piece, I think, made many good points about how difficult the situation is now for licenses to break even due to years non-interference with fansub distribution.

The prominent theme throughout was that the industry, both Japanese and American parts, had allowed fansubs to propagate without taking significant legal action to defend their rights and let fansubbed anime to become, in his words, “effectively worthless”. Below are a portion of his piece that includes the above phrase:

I do not blame the fans who download with impunity and don’t buy a thing. Their attitudes, while damaging, are simply a reflection of the value of anime, which these days, is about $0.00.

That’s right. Anime that has been fansubbed is effectively worthless. It’s being given away for free. In terms of supply and demand, there is an infinite supply, and therefore the product is worthless regardless of how many people want it – it’s like trying to sell buckets of sea water to people on a beach. The only people who would pay for it are either older fans who are attached to the old ways of consuming media, or worse, are doing so out of charity.

That is the state of this industry. And the companies who depend on anime for their livelihood let this happen.

He continues with an overview of how digital fansubbing led to a shift in distribution from the rightholders to the consumers and the limited legal methods that a US company can take against a group, essentially a C&D letter and that’s it.

Legal rights, such as copyright to an anime, must be defended if they’re to be recognized. Anime has not been defended to any effective degree.

Sevakis then criticized the recent statements of Arthur Smith, president of Gonzo Digital Holdings Int’l, and ripped apart Smith’s flawed metaphor that downloading fansubs is like “smashing the window of a Mac Store [sic] and taking an iPhone the day before it is released”. Sevakis corrects him by suggesting that it is more akin to the store owner leaving a bunch of iPhones unattended on a street corner, filing a police report when they are inevitably stolen, and then refilling the stock on the corner. He finished that part of his editorial by saying:

You can’t guilt people into buying something they don’t want. If you can’t make them want it, you simply don’t have a business.

He gives two main reasons why Japanese companies seem to not taken any action to remedy this problem: fear of change and mistaken impressions of American fans. First, the internet has impacted their business and they have made it worse by not taking advantage of it to make revenue off of it. Second, American fans are younger and not as much “collectors” as Japanese fans. I’m reminded of the fan displeasure back in April when Bandai Visual announced plans to sell $39.99 DVDs with 2 episodes of content on them. Another problem is that smaller production budgets have meant more niche titles as a short-term solution that is bound to collapse.

In his conclusion, Sevakis doesn’t provide any concrete solutions but instead advises that companies rethink things from the ground up in order to prevent artists from losing their jobs and production from being severely impacted. I hope this serves as a canary in a coal mine and inspires companies to take a look at their business operations and improve their production methods to adapt to the new market conditions, whether it is better extras or some much better idea that would get people to support the industry through their purchases. I don’t want to see another Geneon-like halting of all production to happen but I also don’t want there to be overzealous litigation of fans, although I certainly wouldn’t mind there being some legal action against groups that illegally distribute anime through online and hard-copy piracy.

*sigh* This autumn season doesn’t seem to be making things much better with the following comments being made about the fall offerings:
- Mike Ray at Anime Diet: “[it] seems to be a little bit flat so far”
- muhootsaver: “either I’m losing interest in anime, or nothing this season fits my taste”
- Karura at Azure Flame: “It won’t take a genius to realise that this autumn has seen my enthusiasm for anime and thus the blogging of it fall to dangerous new lows.”
- Hige at Hige vs. Otaku: “this season has been pretty underwhelming”
- nirai kanai: “Who said mediocrity was a bad thing?…Every once in a while, I’d just like some pure entertainment…something stupid, something incredibly moronic, something shallow”

Last night I watched the first episodes of Minami-ke, Ghost Hound, and Sketchbook and found all three interesting enough to merit further viewing. Then again, I used a guide to help me narrow down my starting points of entry into the new season so the only thing I haven’t liked yet was Rental Magica. I still want to check out Bamboo Blade, Moyashimon, and a couple others – Clannad will likely be after I watch AIR and Kanon as the last leg of a KyoAni-Key triad. (Apparently an Xbox 360 port of Clannad will be released next spring – I wonder what the achievements will be…)

Anyway, I’m gonna wrap this up by saying “Anime companies, make better products to combat fansubs” and also “Downloaders, don’t be complete tightwads – at least try to support what you enjoyed watching for free”. Not the best ending but I guess it’ll do.

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