How Hulu & Joost Deals Would Benefit Funimation, Viz, and Others

Earlier this week, both Hulu and Joost announced the launch of anime channels on their respective sites. While some people joked about the sliver of revenue publishers get from Hulu or complained about watermarking (get over it, it’s FREE content), I think these efforts as well as any similar future ones are beneficial for the licensing companies in terms of increasing reach and awareness.

The shows Funimation, Viz and others are providing to streaming sites have very likely already made most of the gross revenue they will ever produce. I doubt Slayers, Blue Dragon, and Astro Boy are generating any significant scratch for their rights holders compared to the bigger franchises (e.g. Bleach, Naruto) so why not let online users see half or all of a series they may not have known existed and might never buy on DVD. The more recent fare like the entire Death Note series, uncut and subtitled, has the potential of cannibalizing Viz’s sales of digital downloads through Direct2Drive, Xbox/Zune Marketplace, and the iTunes store along with physical DVD sales.

However, I believe that putting such relatively fresh content on as many services as possible broadens the reach of anime by having them among hit network shows and allowing people to stumble upon them while they are browsing for, say, House. Just as a serious social networker would send updates to all his/her sites in order to maximize the effectiveness of his/her message or marketing scheme, an equally determined content publisher would want to have their products distributed as widely as financially possible.

This “octopus approach” to selling and streaming digital versions of their content has bolstered Funimation and Viz during the past year. A majority of the hardcore fans buy the DVD’s within the first couple months anyway so trying to build upon an existing base through putting individual episodes online to attract a broader audience after a series’ or a specific season’s initial selling push dies down shouldn’t harm the companies involved very much.

You might recall that ADV rolled out their own download-to-own system two years ago this month called ADV Universe and that it flopped because of pricing ($5 vs. the now standard $2), Windows Media Player DRM, and maybe bad timing as well. They barely tried to sell anything through other digital channels and thus limited their potential revenue. Introducing a repricing scheme last November didn’t appear to boost their venture and the loss of rights to their recent catalog in February wiped out most of the series they were selling on there.

The company’s Anime Network node started to stream episodes online last November, which surprisingly still works, and they let Crunchyroll stream some of their properties in August, expanding on their May deal involving Welcome to the NHK (a title that Funimation intends to finish releasing on their behalf).

The act of offering up shows for free in an embedded format has a good chance of increasing brand awareness and driving users to other similar sites. For example, I saw an ad for Toonami Jetstream on Joost below the in-browser player when I was testing out the service yesterday with a Death Note episode. Streaming seems to be stickier and generally more accessible than dedicated digital cable channels – I don’t get why does Funimation still runs a linear channel – and it would be foolhardy for publishers to refuse participating even a little bit.

P.S. It took me a while to get the Joost plug-in to work on my Vista notebook because it was conflicting with Data Execution Protection. I have preferred Hulu’s interface for scrubbing and lighting effects but I might resume watching Death Note through Joost after putting it on hold in October 2006 following episode 3. Yeah, I’m WAY behind.