March 10, 2008
Interview: CrunchyRoll Raises $4 Million in Funding
Posted by Devin
CrunchyRoll Inc., a leading destination Anime & Asian media fansubs, raised $4.05 million in Series A funding, according to regulatory filings. Venrock led the round, with partner David Siminoff joining their Board of Directors.
Crunchyroll, a website for fans, offers free content in the United States as well as internationally. Launched in the summer of 2006, Crunchyroll has taken off rapidly, particularly since the spring of 2007. To help with building the company as a business, Series A funding was secured.
Crunchyroll provides Asian-based streaming video that is uploaded by users and moderated by the community, specifically volunteer moderators. Premium users who “donate” $6 per month get "donate patches" added to their profile and access to higher quality video streams. While others feel CrunchyRoll is in violation of copyright & using of the DMCA unfairly, Crunchyroll does strictly comply by removing a large amount of licensed & distributed content (Dragonball Z, Cowboy Bebop, Death Note, Evangelion, One Piece, Gundam, Hunter X Hunter, etc.)
Up to this point, CrunchyRoll’s true intentions have been often misunderstood by industry peers and fans. To help clear the air, Kokoro Media met with Crunchyroll this week on their suddenly discovered VC funding and future intentions.
Starting Crunchyroll up: In 2006, the site was a hobby for Crunchyroll’s founders: engineers which wanted to make genre media easier than downloading fansubs via bittorrent. After tinkering around with Youtube, they saw how easy it was to build and grow their backend on their own. It took off from there– Managing growth: Around mid-2007, the venture capital community started taking an interest in their obvious high traffic numbers. It wasn’t long before Crunchyroll’s founders left their days jobs to work on the site fulltime. With a little more than a handful of employees, Crunchyroll now generates 4+ mill unique visitors, 250+ mil pageviews, and 50 mil video streams a month. 40% of the traffic is from the United States. Moving forward: Like Hulu, long-format video streams will eventually include in-stream advertising. "Pay for play or ownership downloads don’t work because the anime community has been living on years off free fansubs," explained Crunchyroll, "but if its long content, on a clean site" unlike Hulu, "part of a like-minded community" it can succeed.
The difference is the payoff after the ad: you’ll wait 1-2 minutes to watch a 24 minute episode of a 56 episode series, but you won’t wait through a 30 second ad for a 5 minute clip of user-generated crap. Additionally, this spring’s launch of new tools including collaborative subbing of video streams will only increase community stickiness and interaction. "We’re here to prove the model on a windfall of content."
Becoming legit: Crunchyroll has been in discussions with a "select number of Japanese firms" over legitimizing their streaming content use with licensing fees. A demonstration of the advertising business model with a select number of partners may be coming this spring. Generating revenue $$ would make future discussions "easier than asking the entire industry to take a small leap of faith." In the future, Crunchyroll’s true intention is "to reach out to any and all rights holders" and license the content legally.
March 6, 2008
E-Manga’s Second Coming or Still Treading Water?
Posted by Devin
Even though its been almost two years since the Sony E-reader debuted with electronic pages of manga, we’re no closer to discovering if e-manga will come home to roost. In the area of e-readers, the reviews for the Kindle make it seem better for text than graphics. Other platforms such as Cybook (pictured here with an example of manga) don’t have the available content. Frankly e-book readers cost at least $300, and then you have to buy the content. It doesn’t make sense tot he consumer.
On the other hand, the online format keeps growing: CPM, NetComics, and Del Rey along with quite a few other publishers have sample programs, subscriptions, or whole volumes, etc. The list keeps growing. Joining the mix is Infinity Studies this week with manga via PDF.
Handheld game consoles, phones, and other multipurpose devices have found their way into the hands of people from every walk of life. In some countries, mobile phone penetration is above 100 percent — that is, a significant proportion of the population maintain more than one phone, for example, a work cellular and a home cellular.
Cory also thinks “E-Ink” works, when prices go down will be the way to go. Maybe, but what’s popular online combined with the convergence of mobile & web may be our future, says Nokia CEO Olli-Pekka Kallasvuo
As the Internet is freed from the limitations of the desktop, we are taking mobility into a completely new realm of possibility. We are redefining the Internet itself as it increasingly becomes a medium of immediate and personal experiences.
July 19, 2007
AX Analysis: What About a Digital License?
Posted by Devin
Japan’s interest in cross-border licensing was pretty apparent from this years International Licensing Show last month in New York. According to LIMA Japan, at least 20 companies from Japan exhibited at the show in addition to Korean and Taiwanese pavilions that each housed a half a dozen organizations or more. No doubt, its now hot to license overseas.
But even with content licensing become much more common, the ‘hidden’ factor is content use and whether it can be used in a digital distribution. The issues related to digitization are not just related to weak government regulation but more than the way content is created and produced in Japan.
Right holders include talent as well as production companies and broadcasters, the search for permissions is frequently cumbersome or, in cases where rights holders have dropped out of the biz — or off the face of the earth — impossible.
Licensees have always had a tough time acquiring digital parts of licenses to use online. Sometime digital licensing for manga or anime for example “is not offered” in initial discussions. Digital distribution is often not a replacement license but an “add-on” costs to DVD or TV licenses. And knowing that, the US companies were quickly about to point out they are now “always asking” for digital rights. More than that, Japanese firms need to adapt licenses that are “multi-platform” or “advertising-based” like the a-la-Youtube model to successfully monetize in the US and European markets.
At the end of the day, Japanese licensing needs to change to meet digital demands. Per Discontent, we’re already seeing opinions change in Japan:
According to a Nikkei BP publication article, Japan’s Keidanren’s chairman Fujio Mitarai and Itochu chairman Uichiro Niwa has put forward a way to both allow for the full utilization of copyrighted content that may otherwise be ‘gathering dust’, and as enabler to fill the ever-expanding distribution channels with ‘much needed’ digital content.
“[The government should establish new legislations that include a] more simplified, convenient procedure that could replace pre-authorization by each right owner” in a bid to promote the distribution of digital contents.”
A later article by VarietyAsiaOnline.com was misquoted in suggesting a government panel had formally recommended rule changes to ease TV to webcast licensing woes. Foreign pressure as well as the promise of wealth will only help to alleviate the “uphill battle vis-a-vis opposition from incumbent copyright holders who fear an erosion of their market power.”
Hat tip to PW Beat for the licensing article-
July 12, 2007
AX Analysis: The Changing Distribution of Anime
Posted by Devin
For the next week, we’ll be providing Anime-Expo (AX) post-conference analysis on the industry presentations we attended. Today is on Anime DVD sales:
One apparent issue is the dropping of DVDs sales starting last year. Over in Japan, anime DVD sales dropped to $826 mil, or down 2% over 2006. In the US market, the number of DVD anime releases has dropped to 767 titles in 2006, a 9% title decrease verses 2005. Anime DVD sales are still outpacing regular DVD sales by a few % points even if total DVD released decreased by 8.2%.
Because the audience anime companies serve is some of the most proficient online, there’s no doubt that anime more any other medium is shared on p2p networks. The danger is fans often don’t understand the rights and wrongs of IP. Take the quote from one 17 year old:
“I wouldn’t steal a car. I wouldn’t steal a DVD. But I might borrow a DVD from a friend. And what’s the Internet these days, but a big group of friends sharing stuff?” [And] ultimately, because downloading is just too easy…too attractive to resist. A click of a mouse and “it’s all at our disposal.”
Because of revenue declines, the anime market is changing the way they distribute in every channel. Debra J. Kennedy, Vice-President of Marketing and New Media, of FUNimation, during her “Future of Anime” keynote at AX, acknowledged the fight for retail shelf space is becoming more and more difficult. The retailers like anime because it supples them with higher margins, however their lack of shelf space and category management is a problem. Companies are also getting more promotion-minded by pushing catalogs and online contests. And its working:
Manga has had one of its biggest years, selling more than 750,000 units of Ghost in the Shell’s six volumes, Manga’s senior VP sales Ray Gagnon said. “It’s challenging for anime companies, because the price points are high,” So specialty chains such as Best Buy and Trans World rep prime retail outlets for Manga titles, Gagnon said.
Other strategies include pushing anime to the TV networks, well illustrated by Kokoro Media in earlier posts. Ms. Kennedy expressed FUNimation was able to introduce IFC to anime. To help spur retail hits, Bandai specifically focuses on leveraging the TV exposure of properties such as Cowboy Bebop and Gundam. “Now we and also the retailers need to be more discerning,” observed Bandai marketing manager Jerry Chu.
Ultimately, digital distribution and Internet sales, the long tail of media economics help anime and other nitch genres expand the anime market. iTunes, XBox, Direct2Drive, Vongo, Akimbo, and other legal ways to download via the Internet is the future of anime distribution. Ms. Kennedy also noted the market is working to develop business models with new ways of reaching customers. The development of co-productions and simultaneous releases and the need for investment into infrastructure such as VOD and cable are all keys to future market success.
June 23, 2007
Anime Fans Spur Further Funding in Nitch Social Networks
Posted by Devin
One site they like to visit and show their skill is deviantART, an art community site of not just anime and manga fans, but for the world. If you’re a visitor of the site, you’ll see the influence from anime and manga almost immediately. Which is why its to no surprise the $3.5mil first round of funding as reported by PEHub (via PaidContent.org)
The site, which caters to a variety of artist categories such as painters, cartoonists and photographers, was founded in April 2000 and claims to reach over 14 million unique global users per month, with 5 million of those uniques coming from the US. DeviantArt did not say how it plans to use the funding, or who participated in the round, although it does list video compression developer DivX as one of its shareholders.
Also mentioned before with a high affinity of anime fans is Livejournal, one of the early open platforms for blogging. Another rapidly enclosed anime/manga community is Gaia Online, which in the last year has received funding rounds of $8.93M and $12.01M. Gaia Online’s highlights include more than 7M registered users and a message board with more than 1 billion posts! Social network Cyworld US, the American version of the popular Korean social networking site, launched last year as an ‘anime-like’ interface that’s been compared to Gaia Online.
June 13, 2007
More Digital Anime on the Horizon
Posted by Devin
Left out of my analysis of Anime on TV were the purebred digital anime station, the FUNimation Channel and The Anime Network. Both stations are starting to penetrate major metropolitan areas in the United States, with The Anime Channel now distributing in the UK as well. With 75% of the country’s 26 million TV households already digital, one of the highest in world, its an ideal place to get 24/7 anime to the fans.
Indeed, while other major European territories have digital penetration of 60%-70%, in Germany, only 27.5%, or 9.65 million of the country’s 35 million TV households, receive TV digitally. However, that number is growing rapidly. Since thebeginning of the year, some 740,000 new households have gone digital.
Even with this kind of impressive growth projections, its a small cup when compared to the larger foothold they have in South America (36 million homes in 38 countries and 11 languages) and to potential launching in the United States. As reported by the Financial Times by Anime News Network, there was the stirring of a Sony/Comcast network as far back as 2004.
Sony is reported by the Financial Times to be “keen” to launch an American version of Animax, a network specializing in animated content. [It] was mentioned by insiders as a network that could be offered to North Americans.
More Animax news: Sony Pictures Television International (SPTI) announced today the launch of Animax Mobile in Canada and Australia.
Animax Mobile is a dedicated channel for mobile handsets and is not a rebroadcast, simultaneous co-transmission or cut-down version of an existing television channel. “Animax Mobile is the ideal launch pad for SPTI’s multi-platform network strategy. Tailor-made for today’s young adult mobile consumer, Animax Mobile builds on the brand loyalty of Animax and extends the consumer experience to a vast and loyal fanbase seeking anytime anime content and culture in current and emerging markets.” announced Marie Jacobson, SPTI’s executive vice president, programming and production, international networks.
Added Bill Sanders, vice president, mobile network programming, “It’s not about the big screen vs. the little screen. Often, it’s a choice of small screen vs. no screen at all, and with Animax Mobile, we’re able to bring some of Animax’s most valuable programs to fans new and old at times and in places where they couldn’t see them before.”
And now according to unpublished sources, it looks like they’re getting ready to launch into the North America in the next month or so: our estimate here is not just on digital cable but in a limited form on the mobile platform as well.
June 4, 2007
Anime Properties are the top search terms on Wikipedia
Posted by Devin
Analysis by Compete, another estimator engine that tracks the popularity of web sites has yielded some surprising results. Compete tracked the 100 most popular words searched on Wikipedia, the top encyclopedia and king for information.
Here’s the surprise: 26% of those terms are anime & manga related, the highest % of any searching subject. Mind you, as reminded by The Beat, its outperforming the subject and keywords for sex.
When we compare it to Wikipedia’s top 100 most visited pages, the falloff for “comics” (anime isn’t broken out) is still a staggering 16% of total traffic, with plenty of interpretation of terms that were Japanese but labeled incorrectly (aka: Pokemon was labeled as a “TV Series”)
No doubt people are searching for anime and their related properties on Wikipedia not only because their popular. With anime as a small % of the US entertainment market, its the searching for anime/manga related keywords in ‘head-tail’ fashion there might show a true ‘lack of information’ on the properties. Either way, anime fans use Wikipedia more often like no other genre media.
Oh, and this isn’t the first time anime is at the head of the tail for searching. Lycos has been running their top 50 search keywords publicly for years–so care to take a guess on their top 4 keywords for the week? Naturally its Paris Hilton, Naruto, Poker, and Pokemon.
May 18, 2007
Anime BitTorrent Focus: Love the Sharing
Posted by Devin
Downloading unlicensed anime has never been easier. IRC used to be the place where fansubbers distributed their new releases, but five or six years ago BitTorrent and other p2p trackers sites like AnimeSuki took over. Now thousands of unlicensed anime (Unlicensed here, btw) can be downloaded and distributed.
A new study published today says that BitTorrent’s are hot…but for TV:
TV-series are by far the most shared files on BitTorrent. Nearly 50% of all the people who use BitTorrent at any given point in time do this to download a TV-show, even though the number of available torrents are much lower than for Music or Video. The second most popular torrent category based on the number of downloaders and uploaders is Video (15.7%), followed by Games (8.6%), Music (7.8%) and of course XXX (6.0%).
Next on the list is Anime (5.4%). When it come to shear number type of torrents are offered, Anime (4.3%) lacks again behind Music (25.9%), Video (24.2%), Applications (13.3%), and Games (7.8%).
However, not all is lost. It seems anime fans do have a spine:
Sharing is one of key features of BitTorrent etiquette. The more people that are sharing a file, the faster other people are able to download it. If we take a look at the sharing ratios of the categories we see that Anime fans have an impressive share ratio of 2.5, and are sharing the most. Anime fans are followed by people who download Music (ratio 1.9) and Applications (ratio 1.5) respectively.
Does that mean that people who share anime are more honest because they share so much? I wonder how that breaks down between anime that is licensed and unlicensed?
May 9, 2007
Add Anime & Manga Characters to your Blog in Japan — Legally
Posted by Devin
For the thousands of people who have blogs and images with plenty of scans from Japan, now there’s a way to legally use characters for your own blog. Its a great way for companies to engage with their customers by giving them access to exclusive content and news.
Production I.G., Trans Cosmos and Animo have joined together to create a new blog service “Decoblog”. The beta version launched on March 22nd of this year. They aim to attract 500,000 users within just three years. Production I.G. will allow several of its character properties to be used in the venture. Users can choose over 500 styles of these characters for their blogs. They exhibited their new service at the Tokyo Anime Festival, where they presented the Decoblog service with a promotional video and some trials for attendees.
With so many pop-culture social networks popping up in the last six months from FUNimation and Tokyopop, there’s still a question of legally with their use of content from Japan. Despite numerous legal claims filed against operators of similar web sites YouTube and MySpace, it has not been untested whether or not such website operators are liable for copyright infringement from their users uploading and sharing protected content.
An acceptable solution might be blanket licensing, used right now in the music industry. ASCAP, BMI, and the Harry Fox Agnecy are all organizations that copyright owners can join to give it a mandate to license its content. Unfortunately, Japanese content organizations such as JASRAC have taken mostly confrontational situation against infringers like YouTube.
As a counterpoint, some Japanese firms have started to setup licensing arms: Kadokawa Group Holdings established a new company, Kadokawa Production, to manage the copyright of their contents. Kadokawa’s works will be intensively managed, with the eventual goal of licensing out of merchandising and screen rights.
So right now, there really isn’t a sure way to license those characters. Maybe what’s needed in the future is an international anime & manga rights organization, especially for licensing rights outside in Japan. Maybe we’ll be seeing it soon–
Source: 3/9/2007 Nikkei Sangyou Shimbun, 3/9/2007 RBB Today
April 6, 2007
Distributing to the US Market: Comparison to Mobile Content
Posted by Devin
The majority of Japanese media is brought to you by companies that were started by fans: whether it was fansubs on generation-made videotapes or scanlations before Bittorent was available, it was those early fans decided the best way to share the content by licensing and distributing it. Through time, early companies have succeeded like ADV Films, which other companies have not like Comics One and Studio Ironcat.
On the flip side are the number of Japanese firms that have successfully marketed their products over here. Anime-wise, Bandai and Pioneer (now Geneon) have had very successful releases over here. Namco Mobile has been a killer content for the phones over there, their Pac-Man game a top-5 killer.
The role of Japanese companies marketing their content in the US market is remarkably similar to Japanese mobile media market of 2002. Japanese firms such as Faith, For-side, and Index, took their mega-hit mobile content into the US by starting divisional properties or they purchased local content providers. With some successes, they had quite a few problems. Some Japanese companies have since left the US market as of 2006–2007, their ideology of ‘tackling the market’ lost.
So in lieu of recent news of another Japanese media firm entering the US market on their, here’s a summary of why its different. Perhaps we can learn from those mobile content providers after all-
Distribution is going to be different
Like the closed wall garden from carriers, the distribution of content is a big differentiator, whether it be in print or electronic. The limited number of necessary book distributors combined with retail limitations have shaped the manga market. Disruptions due to retail bankruptcies, logistical issues most recently mentioned by Viz’s Alvin Lu, and our censoring policies are all reasons that anime and manga licensers need to understand distribution rules are going to be different here than in Japan.
Copyright is not about who, but what rules
The mess that is mobile music royalties is a bit more completed when compared to book publishing and anime DVD Authoring. But the role of a localized licenser just putting out DVD’s is almost over. Can I get it on iTunes? What about streaming it? What if I want it on my mobile phone? Can I market better with podcasting? New ways to market and distribute content are coming to us every day, and if legal ways are to be provided, then we need more way we can adapt and change the content. And hopefully, it won’t be as DRM-laced as RIAA, MPAA, or JASDEC insists it is. Otherwise, there’s little incentive stop downloading via Bittorrent.
Lack of market knowledge
Ultimately, its about the product and the differences between the US and Japanese market. Japanese mobile companies came over with their month billing models, stood firm against the label licensees & carriers who wanted individual transactions. The stability of monthly subscription revenue never came and individual ‘carrier’ transactions are how most kids think of purchasing a ringtone/ringback.
A manga title like Yotsuba&! is marketed over in Japan as Seinen, a subset of manga that is targeted for an 18–30 year old male audience. Looking at the title and cover you may think that it actually aims for a younger, female audience. Its going to take some educational time to teach the distributors and sellers for this market.