For a country with such a post-modern reputation, Japan loves paper, especially paper books and paper money. The ￥10,000 note, the equivalent of a $100 bill, is used and accepted everywhere.

Cash in circulation in Japan amounts to over 20 percent of GDP, significantly higher than the United States (8.3 percent), China (9.5 percent), or the Eurozone (10.7 percent).

Recent trends suggest that Japanese may be embracing electronic publishing faster than they are embracing electronic money. The ebook in Japan gained significant momentum in 2019.

According to the All Japan Magazine and Book Publisher's and Editor's Association, while print sales fell for the fifteenth straight year, sales of digital manga shot up 29.5 percent. Digital book publishing rose 8.7 percent. The entire digital market was up 23.9 percent. The overall publishing market even saw a small increase.

Physical video media also took a hit, with the Japan Video Software Association reporting that the market for physical media declined almost 11 percent from 2019 to 2019. Blu-Ray sales fell one percent while DVD sales were down 20 percent.

Like the ebook, Japan is also embracing the convenience and lower costs of streaming. Netflix, Hulu (wholly owned in Japan by Nippon TV), and Amazon Prime are making their presence known in a big way. Even NHK is jumping on the bandwagon, and will launch a domestic live streaming service in April.

Labels: business, ebooks, economics, hulu, japan, japanese culture, netflix, nhk, publishing, streaming, television

TV Japan is a great service. It's the "Reader's Digest" of Japanese television, the only (legal) way to stay current with the best of scripted television (often rebroadcast within days), live and long-format news, and infotainment from NHK and the major commercial broadcasters in Japan.


But $24.99/month is a ridiculous price for a single channel. By comparison, HBO Now charges $14.99/month. And if you're going à la carte, you've got to fork out at least $25.00/month more for a "basic" package and additional fees. Even Xfinity Instant TV hardly saves you any money at all.

Fifty bucks for the one channel I want. And a couple dozen other channels I don't. Except they have me over a barrel so I just may cave. But I'll be grumbling about it the whole time (and get off my lawn!).

The thing is, we've been down this road before, paying through the nose for stuff we don't want in order to get the stuff we do want.

Let's stop and remember how the music business came up with the "cunning plan" of making its customers pay twenty bucks for the CD of an LP they already owned to get the two tracks they wanted. How did that work out? In the short term, like gangbusters. In the long term, it was a disaster.

According to the RIAA, American record industry revenues declined by two-thirds between 1999 and 2014, from an inflation-adjusted $20.6 billion to under $7 billion. Marc Hogan calculates that, in 2015 dollars, average per-unit album retail prices today are half of what they were in 1977.

It has not taken long for history to repeat itself.

The "bundle" is a plodding dinosaur designed to keep the cash-hungry cable model from going extinct. It's not working. As Luke Bouma reports on Cord Cutters News, in the third quarter of 2018 alone, Dish lost 367,000 subscribers, DirecTV lost 346,000, and Comcast lost 106,000.

While in its third quarter earnings report, Roku announced a 43 percent year-over-year increase in active accounts.

Granted, unless you are willing to rely solely on OTA content (which is a perfectly rational option), you'll need a broadband connection. Though these days, that's like saying you need electricity. Even calculating overpriced internet service into the equation, the savings are hard to ignore.

Compared to TV Japan ($24.99/month), Crunchyroll is $9.99/month ($99.99/year). Funimation is $5.99/month ($59.99/year) and HIDIVE is only $4.99/month ($47.88/year).

Toss in dLibrary Japan, TV Japan's VOD service ($9.99/month), and you'll pay for all four what you would for TV Japan on DirecTV or Xfinity, minus the fees. So about half. For four on-demand channels adding up to tens of thousands of hours of programming.

Not to mention that ad-supported streaming services like Tubi are free. And for Roku owners, so is the Roku Channel. And NHK World is free as a public service. I mean, if you've got to watch ads on a cable or satellite channel, shouldn't it be free too? Like OTA always has been?

In any case, there is no way the average cable subscriber can consume even a fraction of the content in the typical cable package. If "all or nothing" is the only option, maybe "nothing" is the choice we ought to be making. It's a choice more and more "cord cutters" are actively embracing.

Which is no doubt one reason why, going forward, AT&T (which owns DirecTV, HBO Now, and Crunchyroll) plans to favor streaming for content distribution, with CEO John Donovan declaring, "We've launched our last satellite."

Donovan and other AT&T executives said the rampant growth of Internet-delivered video services that bypass satellite and cable networks is so significant that it is now the company's future.

A streaming version of DirecTV will reportedly be less expensive as "there is no need for crews to come to your house and install a dish." Hey, unless those cost-savings simply accrue to DirecTV's bottom line, how about knocking twenty bucks off the price of TV Japan? That'd get my attention.

On the other hand, perhaps this really is a "cunning plan." The argument here is that cable companies make better margins selling Internet service and would rather not be joined at the hip with the content providers. Though if 5G lives up to a fraction of the hype, that's no guarantee either.

Incidentally, Cord Cutters News and Cord Cutter Confidential are two good ways to stay up to date about the state of streaming services.

Related posts

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Labels: crunchyroll, directv, dish, funimation, hidive, hulu, nhk, nhk world, roku, streaming, technology, television, tubi, tv japan

Thanks to the digital revolution, the business models of anime and manga distribution are converging.

Manga magazines in Japan function as loss leaders. Publishers use cheaply-printed magazines to "audition" series and artists. If successful, a manga series will be compiled into higher-quality paperback editions. From there, the cream of the crop become source material for anime, live-action television, and movies.

This explains why manga dominates the ebook market in Japan. Since publishers already have to electronically typeset any manga that makes it into the magazines, they can epublish everything in their backlists rather than try and winnow out the winners.

Unlike text-based ebooks, which originate with XHTML files (that are tricky to convert from typesetting files; it's easier to go back to the Word files), visual novels originate with PDF or image files, making ebook creation a far simpler process.

Anime series require more money, more people, and more time, but they eventually have to run a similar gauntlet.

Anime series (and movies) are produced with the backing of "production committees" (that often include the studio's "competitors"). Most are shopped to the networks using "brokered programming" (or "time buy") syndication agreements: they buy the air time and sell the advertising spots themselves.

The goal is to generate publicity among the fan base and then make an actual profit on DVD/Blu-ray sales and merchandising.

Anime series that get the DVD go-ahead get "cleaned up" in post-post production (TV series being cranked out at a pell-mell pace). The "cleaning up" includes what Steven Den Beste calls "Buy the Blu-ray!" scenes, gratuitous nudity obscured for broadcast television (fans know it when they see it).

With the exception of breakout hits and network-owned series, the studio (and the its financial backers) will be looking for any revenue stream to add to the bottom line. This makes the up-front licensing fees for simulcasting (over 40 titles on Crunchyroll) another plus.

Of course, simulcasting means that subtitling has to be done in-house before the broadcast date, rather than farmed out to the U.S. distributor at some future date. Which means that, like manga, almost all of the streaming costs will have been sunk by the broadcast date.

Thus the appeal of a distribution channel that can't rebound to hurt home-market sales, namely streaming video (and government export assistance programs don't hurt). The appeal is so great that Justin Sevakis fears we're seeing a repeat of the DVD anime boom and bust in the mid-2000s.

There is so much anime being released right now that Hulu has stopped taking everything they're being offered--old shows are being purged if nobody is watching them, and some new shows are being rejected if Hulu's anime team deems them unlikely to find an audience. They just can't handle that much content. We have too much anime, and there's simply no way for anybody to keep up.

The obvious downside is that irrational exuberance will again drive supply up and demand down and licensing fees over the edge. Expectations will collide with cold hard reality as they do in any marketing bubble.

This time around, though, there are no physical returns for publishers to worry about. Licensing fees can be adjusted on the fly. A title can be eliminated from inventory with the press of a button. As Sevakis puts it, "There simply aren't as many ways [as before] for the anime publishers to eat dirt."

And this time around, Japanese businesses may finally get that whole "Cool Japan" thing right.

Labels: anime, business, crunchyroll, hulu, manga, streaming

Scripted Japanese television series (as opposed to "reality," news, and infotainment shows) don't follow the "pilot" approach.

In Hollywood, that means "auditioning" a series by filming a "first episode" (which may not be the first or even shown). If the pilot is picked up, more episodes will be ordered. If those episodes get good ratings, the series will be picked up for a year (20-24 episodes, half that for cable).

The broadcast and cable networks juggle upwards of 300 pilots every year (see a list here), and pick up less than a quarter. At two to three million dollars an episode, it is egregiously expensive. But this is a billion-dollar business and Hollywood is the dominant player in a worldwide market.

Japan isn't. And shows no signs of wanting to be.

Oh, it pats itself on the back when happy accidents happen (Akira Kurosawa, Studio Ghibli, anime). But outside a handful of its (friendlier) Asian neighbors, Japan's industry leaders haven't traditionally treated media like cars and electronics. Pirates created the overseas markets for anime and manga in the first place.

As a result, sites like Hulu list many more live-action Korean dramas than Japanese. The streaming model is changing that, along with SoftBank's purchase of DramaFever and Rakuten's purchase of Viki, both distributors of Asian television programming (still mostly Korean but expanding their catalogs).

Not to mention that Amazon-Japan is already a major retailer and Netflix is launching its service in Japan this fall.

Japan's terrestrial broadcasters and satellite channels and theaters already carry every Hollywood production worth seeing. Having ceded that ground, Japanese television studios instead choose to compete in those niches that Hollywood can't or won't bother to enter.

Speaking specifically of the gaming market, Nippon Ichi CEO Sohei Niikawa adheres to a similar strategy:

The overseas market is key. It's not something we can turn our backs to. However, I think it's a bad idea to create products targeted for the West. Even if Japanese people try their best to make a game that feels Western, there's no way they'd outclass actual Westerners doing that. I could probably count on one hand the number of Japanese people who'd even have a chance. I know we can't, so our only choice is to make titles that hardcore Japanese fans go for, then bring them out overseas as a purely made-in-Japan product.

Sure, there's plenty of the same only different on Japanese TV: police procedurals and medical dramas but with Japanese actors, Japanese culture and Japanese sensibilities. Add to that samurai dramas. Slice-of-life melodramas. The whole swath of (badly stereotyped) reality television. And lots of anime.

The big bonus is that declining to compete head-to-head with Hollywood productions means not having to run up the budget.

When Samuel L. Jackson signed on to produce and star in Afro Samurai (bringing to the table first-run U.S. distribution rights), he secured a budget of $1 million per episode, a truly head-spinning amount of money in Japan, but par for the course in Hollywood.

An average anime episode costs between $100,000 and $300,000. Star Trek had a budget of $250,000/episode in 1967! (Adjusted for inflation, that comes to around $1.5 to $2 million, so television production costs in Hollywood haven't changed very much in the past half century.)

As a rough estimate, Japanese live-action dramas are made for a half to a third of the base production costs of their Hollywood counterparts. Start by paying everybody "above the line" the equivalent of "scale." This does mean that the best television actors in Japan are constantly working.

And they don't do pilots. Well, a lot of anime series are based on manga and live-action series are based on anime, manga, and "light novels." So producers have a good idea going in of how popular a series should be.

Once a series gets greenlit, the full slate of 11 to 13 episodes (sometimes half-slates of 5 or 6) goes into production and will be aired in full. This constitutes a "series" or cour (クール), a backformation from the French cours. With a handful of exceptions, this is consistent across the industry.

(Exceptions include NHK's year-long Taiga historical drama, the 15-minute Asadora dramas that run six days a week for six months, and popular anime like One Piece and Sazae-san that have run weekly for decades. The police procedural Aibo is produced in 19-episode seasons.)

On the air since 1969.

More often than not, a single "series" (cour) comprises the entire run of the show. However, popular shows (especially with low marginal costs) can go into "auto-renew" mode. The samurai actioner Mito Komon ran 1227 episodes, cycling five actors through the lead role.

One odd effect is that because of the short runs, popular performers like Masaharu Fukuyama will have already booked their schedules around the shooting. As a result, the two Galileo series were made several years apart. Ditto Takuya Kimura and the two Hero series.

In the meantime, Fukuyama made two Galileo theatrical movies and appeared briefly in a third spinoff.

At the opposite extreme, very popular shows such as I'm Mita, Your Housekeeper and Madoka Magica each ran a single series (so far). The producer of the former flatly stated there would be no more series. It's hard to imagine that in Hollywood.

Japanese television can be compared to the U.S. cable networks, producing episodic shows in half-seasons, with a wide mix of first and second-tier writers and actors, and third-tier budgets. It makes me wonder if there might be something to buying whole "mini-seasons" of shows.

Netflix has previously acquired the balance of shows from network series that were canceled mid-season, or produced an abbreviated season of a canceled show, as with Arrested Development. Yahoo is taking over Community from NBC for a 13-episode run.

In the case of Tina Fey's Unbreakable Kimmy Schmidt, Netflix bought the entire 13-episode run when NBC didn't pick it up. I expect to see these arrangements get more formalized, with streaming services competing for second refusal rights or becoming a "farm team" system.

Under such a system, any television program that reaches the pilot stage would be considered good enough to be guaranteed an audience somewhere.

Labels: anime, crunchyroll, economics, hulu, japanese tv, k-drama, nhk, streaming, technology, television, viki

In Japan, physical media still rules the market. Resale price maintenance rules notwithstanding, paperback books cost about the same as in the U.S. and are better made. The page-turning part of the market remains highly competitive.

But physical electronic media? Here we find the kind of cartel that would make a Robber Baron proud. As a result, expect to pay two to three times or more in Japan for CDs, DVDs and Blu-ray discs.

CDs still account for 85 percent of album sales in Japan. As Monty Python would put it: Not dead yet! Clay Christensen be damned, the market will not be disrupted!

DRM-free MP3s are scarce on Amazon-Japan. But the times are a-changing, with entertainment behemoths like Sony gravitating to the walled garden of iTunes and its own proprietary formats. The Kindle is gaining ground with DRM ebooks that support right-to-left Unicode text.

The anime business is unique among IP exports in that it has a relatively large market in the U.S. Almost all anime DVDs sold in the U.S. preserve the original Japanese audio track (Appleseed: Alpha didn't). This leads to fears of reimportation.

The U.S. and Japan share the same Blu-ray region code, and region-free DVD players are ubiquitous outside the U.S.

Like the pharmaceutical business in the U.S., high prices at home support low prices abroad. Japanese distributors have at times tried pricing titles the same as in Japan. Most of the time: "Mr. Supply, meet Mr. Demand, and some very pissed-off fans."

In the case of Puella Magi Madoka Magica, though, the Japanese studio and distributors have held firm. A DVD "complete collection" that would usually go for $30-$40 dollars on Amazon is instead priced at $150. The "special edition" is twice that.

They are husbanding their hundred-million dollar franchise as a scarce resource, spacing out the spin-offs (such as Puella Magi Tart Magica, featuring Joan of Arc) rather than saturating the market.

They're certainly losing foreign sales, but I doubt those add up to more than a handful of percentage points. If they can sustain interest in the franchise, they can mine gold for decades.

To compare within the magical girl genre: Magical Girl Lyrical Nanoha has so far produced three series, three theatrical releases, with a fourth series in the works. Pretty Cure has racked up twelve series and eleven theatrical releases.

But then why is Madoka Magica available on Yahoo View and Crunchyroll for free? Because streaming really does change everything, without causing undue harm to the "traditional" economic model in the home market.

The other variable in this equation is HDTV. HDTV means that pirates can record a perfect version of a program off-the-air. But they still have to subtitle it and move it onto download sites (and not get nabbed by the DMCA in the process).

By creating a subtitled version in-house and simulcasting it to U.S. distributors, Japanese animation studios get a jump on the pirates and collect licensing fees and ad dollars to boot. Justin Sevakis sums up the effects on piracy in only a few years:

It used to be that fans who wanted to keep up with the current shows on Japanese TV were utterly dependent on fansubs, but thanks to legitimate streaming, most fans don't bother with torrents anymore. Pirate traffic is way, way down.

Regional restrictions are easier with streaming, including locking out anonymous proxies. And capturing (lower-resolution) streaming video in real time is just too big of a pain for most people to bother with. But beware, IP owners, of restricting access just because it's easy:

Most downloaders, I'm guessing, live in countries where legal streams aren't yet available.

Granted, this is the new "long-tail" economy, with revenue not so much streaming in as accumulating in drips and drabs. Internet advertising remains a work in progress (the biggest beneficiary being Google). Low income, yes, but coupled with low costs and low risks.

Hulu and Crunchyroll also offer subscriptions (for set-top box access on Hulu; for set-top box, simulcast, HD, and commercial-free access on Crunchyroll). Crunchyroll reportedly has 400,000 paid subscribers, the kind of numbers that can generate "real money."

"Most of which goes right back to the industry," says Crunchyroll CEO Kun Gao. And that industry is gearing up for more, what with Netflix's entry into the Japanese market and SoftBank's purchase of DramaFever (a distributor of international streaming content).

Streaming works for the same reason book publishers are now keeping an iron grip on their still-producing back-lists. Over the entire span of the copyright, a mid-list book that brings in, say, a mere $1000 a year in ebook royalties will rake in more of that "real money."

Which is a good reason for writers to hold on tight to those rights instead. Because nothing goes out of print anymore. As Mark Coker analogizes it, "the income stream from a [self-published] ebook is akin to an annuity, and specifically a variable annuity."

Thanks to the scalability and efficiency of online retailing, the digital bits and bytes that comprise your ebook can happily occupy an online retailer's shelf forever if you let it. Your book is immortal. You always have another day to find your next readers. You harvest your income over time as the book sells.

That may well soon become true of all published media, if it isn't already.

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Labels: anime, business, crunchyroll, economics, hulu, japanese movie reviews, japanese tv, streaming

The Peter Principle--that in any organizational hierarchy, every employee eventually gets promoted to the level of his incompetence--isn't only a management problem. In a world that expects "new and improved" on a yearly basis, the temptation is to keep tweaking a design until it fails.

The 1995 Taurus was the epitome of a conservative family sedan, that still doesn't look out of place 20 years later. But then came 1996 and Ford turned it into a squashed jellybean. "All the aesthetics of a beanbag chair," says Cars.com.

A car and a half-melted gumdrop.

This is an increasing problem with consumer PC products because there are fewer and fewer reasons to upgrade software or hardware.

Loaded with 96 MB of RAM, my old Windows 95 machine was a snappy and reliable platform for most routine Microsoft Office 95 chores. But the Pentium 100 could barely run Winamp (it couldn't run Media Player without stuttering), and I'd maxed out the 4 GB hard drive (in two partitions because of FAT16).

My 10-year-old Windows XP Thinkpad is mostly fast enough, the 2 GB of RAM an only occasionally bottleneck. Though the on-board video card can't handle streaming HD video, SD is fine on a 1024 × 768 screen. I've got a tad more free space than the capacity of old hard drive. Still, 4 GB isn't much these days.

But I can wait until Windows 10 comes out.

The only reason to upgrade from Office 2003 is buying a new computer, and Microsoft OSes since Windows 8 don't support 2003. I appreciate that Office 2013 can edit and save PDF files, though I can do that now with my ancient version of Acrobat 6.

Upgrading will be nice but not necessary. And it'll be a big pain in the neck because I'll have to upgrade most of my software.

Microsoft is betting its future on customers like me, and designed Windows 10 to appeal to us XP and 7 diehards. Even with Windows 8.1, Microsoft was quick to assure its user base that, "No, no, we haven't killed the desktop! It's still there! Promise!"

Windows 8 "improved" the interface in ways that nobody had asked for, hardly anybody wanted, and the tech press scorned. And yet now every other tech website sports big blocky boxes in bright primary colors surrounded by acres of wasted screen space, while giving barely a thought to actual usability.

At least the Google News page can be customized in a utilitarian, information-rich format. And Craigslist gives you lots of useful text in a few rudimentary columns. No fancy-dancy anything. Good for them.

The genesis of this rant was that Netflix has again "improved" its interface to the point of being useless. In the past, you could switch from the "video store" display, with its slow, space-hogging images, to a "spreadsheet" master list that was fast, flexible, and sortable.


Not only is the spreadsheet gone but so is the master list. Now to scan through the anime titles (the only category I'm really interested in), you have to sort the ten sub-genre lists separately. Netflix couldn't have made itself less user-friendly if it tried.

Or maybe they are trying. Netflix tried to get out of the physical media business before (turning the DVD business into a wholly-owned subsidiary), and I don't think they ever gave up on the effort. I can take a hint.

Netflix used to have the best anime selection anywhere. Its DVD backlist is still very good. When it comes to the new stuff, though, Netflix doesn't try to compete with Hulu and Crunchyroll. (This may change with its upcoming entry into the Japanese market.)

Given the first-sale doctrine, once the infrastructure costs had been sunk, each additional DVD could be warehoused for pennies. Mailing them cost the bucks. With physical media going extinct, long-tail streaming video aggregators had to allocate their licensing and broadband budgets more strategically.

Netflix has clearly focused on capturing cable and network offerings in the fat part of the Pareto curve (this graphic published 3/14). Except I'm not interested in subscribing to a glorified cable channel.

Cable TV for people who already have cable TV.

For the time being, Netflix is my Redbox substitute, good for the occasional Hollywood flick and TV series and the rare new anime DVD title from GKids. Otherwise, when the DVDs run out (though at two/month, it'll be a while), I can see a Roku in my future but not a Netflix subscription.

Labels: business, computers, crunchyroll, gkids, hulu, netflix, software, technology

I puzzle mightily at the extent to which Netflix segregates its streaming and DVD catalogs. If you're a DVD subscriber, there's no way to find out what's in the streaming catalog. Not using the Netflix website, that is.

On Hulu and Crunchyroll, the options are front and center: "Subscribe to watch premium content right now!" Amazon provides all the options available for every title in its catalog. Want to stream it? Want the DVD? Want the book? Click here!

But Netflix treats this information like a state secret.

Back in 2011, Netflix announced that it was splitting itself in two, turning the mail-order and streaming video businesses into separate and distinct corporate entities. In the face of a customer revolt, it quickly reversed that decision.

According to the abandoned plans, the streaming business would retain the name "Netflix." Since that's where they clearly saw things heading, why not entice the Luddites to join them? Why not dangle all those sparkly gems in front of our eyes?

A few possibilities spring to mind:

• Netflix still intends to separate the businesses: it spent zero dollars in 2014 marketing its (profitable) DVD business;
• It had already hewn the databases apart and is not about to glue them back together;
• Netflix would rather its customers not think about what's in its catalog.

I'm serious about the last one. Nobody would design a website this crappy by accident. So "How to get the most out of your Netflix subscription" articles once pointed you to third-party websites, until Netflix killed off that option too.

(Well, not nobody. A common complaint about Barnes & Noble is that for any relatively obscure title, you're better off searching on Amazon even you plan to buy it at B&N.)

As Alex Hern points out, "The paradox of Netflix's transformation from a DVD rental company to a streaming video firm is that as its star has risen, the selection has got worse." Don't look behind the curtain: there's a lot less there there.

Netflix clearly wants to be HBO much more than it wants to be super-Hulu. HBO will give you a programming schedule a month at a time, but won't tell you what's in its backlist. Because that's the way television broadcasters work.

The broadcaster broadcasts and the audience consumes what's being broadcast. HBO subscribers overpay for a handful of original series, recent releases, and access to a backlist that's like randomly punching buttons on a Redbox machine.

Based on cash flow, it's working brilliantly for HBO. (Skinner observed among his lab rats that random rewards elicited the most vociferous responses. See also: slot machines.)

And it seems to be working for Netflix too. Justin Fox at Bloomberg confirms that "Today's Netflix has a lot more in common with existing TV channels, most obviously HBO . . . its success doesn't have much to do with the [back catalog]."

With true on-demand video, there isn't any "programming," because the "programming" is whatever the consumer says it is. That was the promise of streaming. But streaming isn't going to kill television programming, after all.

There's a lot of blather about "curation" in art these days, how much better off we'd be if people with better taste than you and me decided what's best. The "tidal wave of rubbish" being inflicted upon us by self-publishing, for example.

Granted, when bandwidth is finite, curation is called for, even necessary. A museum has only so much wall and floor space. A physical bookstore can stock only so many titles. A theater can book only so many productions in a given year.

Once upon a time, the Internet and the "long tail" were going to obviate that need. But apparently not right away. And not for all people and all markets. Sometimes people really just want to watch "whatever's on."

The reliance on trend-setters and taste-makers is summed up in the Japanese word (working its way into English vernacular) omakase ("I'll leave things up to you"). I admit it: I pay attention to starred items and good reviews too.

But for those of us with (once) fringe taste in (once) fringe media trends, leaving it all up to somebody else meant getting nothing we wanted. Manga and anime first flowed east across the Pacific thanks to IP pirates, not "curators."

Though back in the day, the IP pirates themselves were, by necessity, curators. You could pack only so many VHS tapes into your luggage.

For now, our entertainment options are in a tug-of-war between the a la carte world and the omakase world. Netflix started out as the former and ended up the latter. I suspect we're heading for a "curated a la carte" future.

Labels: business, computers, crunchyroll, economics, hulu, movies, netflix, streaming, television

Hulu has a decent catalog of Japanese movies, though it's the same sort of selection you'll find at Netflix (and, back in the day, Blockbuster): heavy on the classics, art house, and genre flicks, especially samurai, yakuza, and horror. A handful of anime movies and remakes.

The Japan box office is, in fact, not that different from the U.S. box office--only delayed a few weeks--plus a bunch of home-grown films you will never hear about unless the list includes a feature-length anime or the odd Takashi Miike production.

Think Disney and Quentin Tarantino. That's the kind of artistic range we're talking about. In other words, the same as in the U.S., where you'll find Frozen and Captain America on the same list with RoboCop.

Then there's the old complaint that while PG and PG-13 movies make all the money, far more R movies are made. I suspect, though, that in bottom-line terms, R-rated movies are a safer bet. A studio can buy in with less risk and be sure to at least break even.

And those R-rated movies are easier to export. Takashi Miike cranks out a couple of low-budget films a year, producing a bona fide hit now and then. With low sunk costs, licensing is less of a concern. The licensees, in turn, can fill an established "same only different" niche.

By contrast, Japan's biggest big-budget film this year is Eien no Zero ("Eternal Zero"), a Gallipoli-style companion piece to another war movie you'll never see, Otoko-tachi no Yamato ("Our Yamato"), about the doomed crew of the fabled battleship.

After a film festival or two (though even that's doubtful), it will go straight to DVD when it arrives in the U.S. (and who knows when).

The better box office of big PG movies notwithstanding, U.S. audiences are less forgiving. Despite the marketing muscle of Disney behind it (its distributor in Japan too), Ghibli's most successful U.S. release, Arrietty (based on The Borrowers), grossed only $20 million.

Spirited Away, the top-earning film in the history of Japanese cinema, took in barely half that, despite an Academy Award.

An "agnostic" Hollywood hit in the U.S. will probably be a hit in Japan. (Frozen is huge.) But not the other way around, and that isn't going to change anytime soon. This is where the long tail could come to the rescue. As with ebooks, streaming media need never go out of print.

To be sure, to really work, streaming will turn every ISP into a CDN, but that was going to happen anyway. The only question is who will pay what to whom to make it so.

Infrastructure problems aside, there's a lot in the streaming universe to look forward to. Instead of gathering dust in a warehouse, content can be left on a server to find an audience. As Joe Konrath puts it, "Ebooks are forever. Forever is a long time to get noticed."

But the perennial problem is, that long tail will never get noticed if nobody's wagging it. Japanese distributors of live-action television fare are notoriously slow off the mark in this regard, especially compared to their South Korean counterparts.

Speaking of which, Crunchyroll recently gave the long tail a shake. It announced a partnership with Fuji TV to stream 21 live-action television series, including the classic GTO and the great police procedural Galileo (like Bones except the scientist is a physicist).

I can only hope that Japan's other TV networks and studios--especially NHK--will take note and soon follow suit.

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Labels: business, crunchyroll, hulu, japan, japanese culture, movies, movies about japan, netflix, nhk, yakuza

Manga and anime in the U.S. had a thriving fan base long before they were commercially viable. With an already established market, and since their IP was getting pirated anyway, Japanese publishers made the rational decision to license it.

The market for physical media—manga and DVDs—maxed out about ten years ago. Then the bubble burst, driving several established importers/distributors out of business. And yet the demand for content was still there and the licensors were still licensing.

So the sensible solution was streaming, with a side business in printed books and discs. Crunchyroll delivers many anime episodes a week after they air in Japan, beating the pirates to the punch. (Unsurprisingly, Crunchyroll was a pirate site before it went legit.)

Mid-list genre novels and live-action television dramas from Japan have never made that break. With no existing market to feed, Japanese media companies couldn't be bothered to try and create one. (Or they tried once and now are twice shy.)

NHK's year-long Taiga dramas and morning serials are often licensed throughout Asia. But to this date, never in the U.S., even though recent series like Ryomaden, Go, and Atsuhime have accessible storylines and attractive lead characters.

Korean television dramas, by contrast, can be found in abundance. The Japanese section of Netflix has a boatload of anime and only a handful of television series. The Korean section has over 100 live-action television series.

Despite the fact that South Korea has half the population of Japan and a third its GDP. This isn't a supply problem. But how can there be a demand when hardly anybody knows the supply exists, or thinks it consists primarily of gonzo game shows?

As an ethnic group, Korean-Americans (1,822,000) outnumber Japanese-Americans (1,411,000). I suspect the bigger reason is that Korean broadcasters (and the South Korean government) have more realistic expectations about the size of the market.

At Anime News Network, Justin Sevakis explains that anime continues to thrive because

License fees have fallen to a point where they are relatively reasonably priced, and an American publisher can reasonably be expected to buy the rights to a show, produce subtitles (or occasionally a dub), put it on sale, and make a decent profit.

Given its microscopic fan base, the cost of simply subtitling a Japanese live-action dramas would wipe out the profit margin for a series.

Korean television content is also more likely to be distributed with a second-generation demographic in mind, while TV Japan is directed primarily at an expatriate audience. This makes it hard to create a home-grown audience

There are plans in the works to create more export-friendly Japan channels. And NHK is slowly building a fledgling distribution network based on its news and infotainment programs.

Drama-wise, NHK has to put something good out there to start the word-of-mouth going. Such an effort would dovetail with the government's "Cool Japan" initiative, launched in 2010 with the goal of creating a profitable overseas market for Japanese culture.

Labels: asadora, crunchyroll, hulu, japanese tv, k-drama, netflix, nhk, streaming, taiga drama, technology, tv japan

In what will surely be a case study in a future edition of Clayton Christensen's The Innovator's Dilemma, Netflix out-innovated and out-marketed Blockbuster--in 2000 it could have acquired Netflix for a paltry $50 million--into bankruptcy.

Dish Networks scooped up the remains, only to dump the brick & mortar stores and the DVD-by-mail rental service two years later, leaving a few dozen franchise-owned stores still in operation.

But then something ironic happened: Netflix so thoroughly followed Clayton Christensen's advice "to kill its own business" that it actually did it.

I have to wonder now if Blockbuster had seen the writing on the wall even a year or two earlier it could have maneuvered itself to occupy the same retail space that Netflix is now abandoning and that Redbox quickly pounced on.

As Matthew Yglesias points out, quoting Chief Content Officer Ted Sarandos, Netflix has since set out to "become HBO before HBO became them."

The thing is, I'm not interested in subscribing to "HBOflix." With few exceptions, I don't watch serials dribbled out in weekly installments (cable or broadcast), especially the kind of programming that wins HBO and its kin all that high brow praise.

"Free preview weekends" only make me wonder why people are so willing to pay so much for satellite/cable "premium" content. Though you sure can't argue with the business model, not as long as people are shelling out $200/year to watch one or two shows.

I originally subscribed to Netflix because of its anime library, but it's all but stopped buying anime DVDs and streams only a fraction of those. Dozens of titles are listed in its catalog with no availability listed for streaming or discs.

If you haven't subscribed, you have to use third-party sites to find out what streaming titles are available. As far as anime goes, the results do not impress. Netflix is playing these bait and switch games while it figures out how to keep the licensors at bay.

And keep itself from being throttled out of business.

Deliberately welding itself to the old cable model gives HBO all the bandwidth it needs. Netflix ironically finds itself at the mercy of the same Internet providers who look to HBO as their bread and butter.

Sure enough, according to the Wall Street Journal, Netflix is paying Comcast for preferred access to its networks. Verizon wants a piece of that pie too. If Verizon gets a slice, every ISP in the country is going to want to slap on a cover charge.

But as XKCD illustrates here, the old-fashioned sneakernet has enormous bandwidth. Some of us were happy to put up with the equally enormous ping times, and Redbox has gone about picking all the low-hanging fruit.

There are a handful of companies that specialize in renting anime discs. But without Netflix's next-day distribution network, the sneakernet ping times do become intolerable.

The only options left are buying the discs (I do having a growing library) and getting a Roku. Both Hulu and Crunchyroll keep their anime catalogs well-stocked and up to date. And searching through them doesn't require you to sign up for anything.

With backing from Disney and News Corp., Hulu shouldn't have to worry about getting throttled. For now, though, Amazon and Netflix are outmarketing Hulu, making Netflix's decision to out-HBO HBO perhaps the better business decision.

But not better for the anime consumer. Once I get to the bottom of my current queue, I'll be through with Netflix.

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Labels: anime, business, crunchyroll, dish, hulu, netflix, streaming, television