Making Money out of Free Anime?

Over at his post on copyright, omo got into an argument with Avatar on copyright over anime. Avatar’s argument is that, since making anime is so costly, you cannot let people torrent anime like music, manga, or any other media. Animators has to be fed so that they get their jobs done before the next episode airs. Someone has to pay for all this.

True. But that doesn’t mean that free download should be more controlled. Anime studios (not distributors) may be able survive through other means. In fact, in Free Culture, Lawrence Lessig (who Avatar claimed was going to kill anime) suggested a number of ways to make money out of free content. (His context is music, but it should be equally applied to movies as well.)

This picture has nothing to do with the content of this post. It is merely a shameless attempt to attract readers.

The first solution is attributed to William Fisher:

Under his plan, all content capable of digital transmission would (1) be marked with a digital watermark (don’t worry about how easy it is to evade these marks; as you’ll see, there’s no incentive to evade them). Once the content is marked, then entrepreneurs would develop (2) systems to monitor how many items of each content were distributed. On the basis of those numbers, then (3) artists would be compensated. The compensation would be paid for by (4) an appropriate tax.

If you don’t like central control, there’s also another business model based on the premise that handheld devices will be universally connected to the net:

[...] The question should be, what law will we require when the network becomes the network it is clearly becoming? That network is one in which every machine with electricity is essentially on the Net; where everywhere you are–except maybe the desert or the Rockies–you can instantaneously be connected to the Internet. Imagine the Internet as ubiquitous as the best cell-phone service, where with the flip of a device, you are connected.

In that world, it will be extremely easy to connect to services that give you access to content on the fly–such as Internet radio, content that is streamed to the user when the user demands. Here, then, is the critical point: When it is extremely easy to connect to services that give access to content, it will be easier to connect to services that give you access to content than it will be to download and store content on the many devices you will have for playing content. It will be easier, in other words, to subscribe than it will be to be a database manager, as everyone in the download-sharing world of Napster-like technologies essentially is. Content services will compete with content sharing, even if the services charge money for the content they give access to. [...]

We may have to wait another ten years before we see people streaming movies to their iPhones. However, I’m now willing to pay for a direct download service. P2P sharing has its limitation. Unpopular content takes days to download, and download speed drops a lot after a week an episode is released. My university network does not allow me to torrent before 9PM. Distribution via vanilla HTTP solves all these problems. I’m willing to pay up to $50 a month so that I have a large library of episodes to download from. People do pay for Rapidshare and Megaupload even though they can get everything for free via Bittorrent. Moreover, according to Darkmirage, Japanese anime consumers seem to think along this line.

Also, don’t worry about translation. Oversea distributors just have to post the raws, and the fan community will supply high quality translation for free.

Finally, to quote Lessig again:

As the sellers of cable television have known for thirty years, and the sellers of bottled water for much more than that, there is nothing impossible at all about “competing with free.” Indeed, if anything, the competition spurs the competitors to offer new and better products. This is precisely what the competitive market was to be about.

This actually brings a question of what actually is causing the anime industry to worry about the fansub issues. Is it P2P sharing’s fault or is it the industry’s unwillingness to change the source of revenue (DVD) and get up-to-date with the Internet?

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  1. Posted January 14, 2008 at 5:21 pm | Permalink

    I can’t see the first solution happening in a world like the current one. An appropriate tax? This is the era of small government, whether we like it or not (I’m probably in the ‘not’ camp – but I’m not telling whether I want it bigger or smaller than small).

    And I’ll believe the second one when I see it.

    Still, one lives in hope (among other things).

  2. Posted January 14, 2008 at 7:34 pm | Permalink

    “We may have to wait another ten years before we see people streaming movies to their iPhones.”

    LOL, maybe we just have to wait another 16 hours. Go Go MacWorld.

    As to the original argument, I don’t think most of us, even taking up opposite sides, disagree all that much. I feel that for the most part Avatar just got some stuff wrong in terms of his presumptions, and he’s saying those things are the weakness of my argument. I just think there was a lot of misunderstanding about some fundamental stuff that never got flushed out.

  3. cardcaptor
    Posted January 14, 2008 at 8:46 pm | Permalink

    Oh… I think I blew it on myself. -_-’

    *Hide face in embarrasssment.*

  4. Posted January 14, 2008 at 9:28 pm | Permalink

    Honestly, no matter which market it goes to, I probably will say the same standard question. For 1 anime fan who is willing to pay for an episode, there are 100 anime fans who are simply freeloaders and refuse to spend any money on it. That is why few market strategies will hardly work.

  5. Posted January 14, 2008 at 10:04 pm | Permalink

    And while Impz may be right about freeloaders, he’s totally wrong about market strategies. Who gives a damn about freeloaders? If your anime is crappy enough that only 1 person wants to buy it, then you’ve got bigger problems.

  6. cardcaptor
    Posted January 14, 2008 at 11:56 pm | Permalink

    Impz: True. I don’t think a single or a few market strategy can be the panacea. But many of them, employed in parallel, might actually work. I think that buying DVDs is troublesome, but I’ll go at length to get a dakimakura of some loli character I like. There’s more than one way to get creators compensated while keeping downloads relatively free of regulations.

    If you’re pushing for a particular ethics that fans should support those who make anime possible, then it’s a different problem. Lessig pointed out that, while freeloading is wrong, laws that try to regulates it have many undesirable consequences and are costly to enforce. We have to think carefully whether the hand of law should enter this realm. But as things are, the fan community is doing its job spreading awareness of fan ethics. Many think that it’s not effective. However, the solution to this perceived lack of effectiveness is probably not to resort to the law, but to campaign harder.

    Now, the most pitiful people in this whole debate are Japanese animators who toiled their days drawing key frames and in-betweens only to get not much more than working part-time at 7-11. I think buying DVDs alone is not the only way to help them. (I also think it’s the slowest way.) It’s the company that decide their salary. We can support their labor union. We can write letters to animation studios. We can refuse to buy DVDs of company that do not raise animator salary. Et cetera. Now, I have to admit that I’ll not practice what I preach. But if there’s somebody who leads the way, I’ll follow suit.

    But, hey, all this evil is created by the scarcity of anime production right? Why don’t we remove this scarcity? Why don’t anime studios get together and fund academics who get their papers to SIGGRAPH (like this guy) to create new technologies that make creating anime easier and more cost effective? If making anime is as easy as making music and live-action films, I think the whole dilemma would just go away.

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