March 10, 2008
Interview: CrunchyRoll Raises $4 Million in Funding
Posted by Devin
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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.
Filed To: Distribution / Digital / Licensing / Adv/Marketing / Interview
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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.
Filed To: Distribution / Retail / Digital / Adv/Marketing / General
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June 14, 2007
WSJ Article Just Misses Mark on Manga Trends & Girls Comics
Posted by Devin
A few days ago the Wall Street Journal published the following video and article Pow! Romance! Comics Court Girls, a trend analysis of the recent popularity of manga for girls (Shoujo manga) and mostly about the reactions from Marvel and DC. According the ComicMix, the article “cannot resist using the usual balance superhero-reference exclamation-point-laden headline” and I tend to agree. In addition:
The new titles are inspired in part by the fast growth of translated Japanese comics called manga. While gory and violent themes aimed at boys are staples of manga, fantasy and romantic storylines meant to appeal to girls have helped manga capture the attention of female readers, an audience comic publishers have long struggled to attract.
One of the strengths of manga which most press and analysis don’t realize is that manga is a not just a genre of gore for guys or romance for women, but a medium for all: there’s comedy, adventure, fantasy, romance, sci-fi, non-fiction, etc. Japanese comics didn’t succeed in the US market because it was also geared for girls, but because of its diversity to find stories that were more in tune to what women are looking for.
Film Fodder referenced this “most telling part of the article”:
The artistic conventions and techniques of manga can differ markedly from U.S. comics. For example, female characters in manga tend to be less voluptuous than the superwomen in U.S. comics. Such curvaceous characters can be tough for young women to relate to, says Nicole Lewis, a 19-year-old manga reader who is going into her sophomore year at the University of Massachusetts at Amherst. “It’s a little off-putting,” Ms. Lewis says of some female superheroes in American comics. “Especially to young women who don’t look like that at all.”
Manga lines in bookstores in Japan are much more defined for girls and boys, with shelf space first per manga type, then narrowed down to individual publishers and their labels. This keeps girls separated from the boys giving them a different shopping experience, with little or few book covers and images to turn them off from the medium. The US market isn’t there yet with a smorgasbord of manga usually sorted on shelves by title name, but marketing is separated and buyers know what they’re looking for and why.
Also, I’d like to point out I applaud Marvel and DC (and CMX, DC’s line of Japanese licensed manga) for trying to emulate market-capturing manga a bit: DC’s new Minx series will mimic the general look and price point of manga, but its tailored with more of an American ‘feel’.
Filed To: Distribution / Retail / Licensing / Adv/Marketing
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June 12, 2007
Licensing 2007 Preview: Anime/Retailer Relationships
Posted by Devin
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The mega show for Licensing comes to New York next week June 19-21, 2007. Anime licensees, like many other smaller licensees are finding, that there are ways around all those mega retailers who won’t let them in. And at a show as large as Licensing 2007, even small players are the prize eye of many retailers.
“Smaller chairs are more likely to try something new,” said Carlin West, svp-new concept acquisitions and development. “They can house all this brand merchandise in one area. When you are creating a new brand, you want it all together so you can tell a story. They can offer a much more personal approach to building a brand.”
Hot Topic, a popular teen trend shop that in the past was perceived to only carry prep clothes is another example of a smaller retailer going the extra mile with licensees.
“Hot Topic [has] allowed more opportunities for marketing support to build awareness before we go out there in a bigger way,” says Tammy Knepher of American Greeting Properties, “What you don’t want to do is get too much product out [initially at mass-market retailers.] If it just sits on the shelves, its dead before it starts.”
Anime companies have been very careful about not ‘flooding the market’ with goods, though lately it seems the more product out there, the better.
Speaking of which, what about Naruto Nation? Will so much product be a flood to the market? And does it fly in the face of everything you would want to do as per above? Probably not as per a nice wrapup summary two months ago by Mangablog and her links. I’m sure with plenty of “Naruto Nation” displays, signs, and other tchotchkes, Viz is going to have a very successful sell-through.
Filed To: Distribution / Retail / Licensing / Adv/Marketing
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June 4, 2007
Anime Properties are the top search terms on Wikipedia
Posted by Devin
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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.
Filed To: Digital / Adv/Marketing
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May 31, 2007
Late Night Networks Scramble as Anime Captures Younger Watchers
Posted by Devin
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The major late night shows, once a sure bet for capturing younger demographics (those 18-24 yr olds), are now growing audiences long in the tooth. According to this week’s issue of Brandweek, The Tonight Show continues to skew with a 51.9 median age, while Conan draw the youngest viewership out of all major network shows with the ripe age of 44.2!
Among the sea of cable channels…none has made a bigger splash than targeted animated and comedy far like Cowboy Bebop, Aqua Teen Hunger Force, and Robot Chicken.“Adult Swim has really struck a cord, especially with young men who don’t want a lot of television,” says Brad Adgate, senior vp, director of research at Horizon Media. “If you have a show that brings up a large concentration of viewing males, marketers will be more than happy to participate.”
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While Adult Swim has been building their audience the last few years with now six days a week with their own shows and related anime properties, other networks have taken notice. The Scifi Channel announced earlier this month they are testing the waters with an anime block on Mondays. Per an earlier post, IFC has heavily promoted their late-night anime block while IATV has rolled out several evenings of late night anime. As more and more anime ends up on late night television, its being driven by the mobs of 18-24 males not watching Leno.
Filed To: Distribution / Adv/Marketing
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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.
New to the party is Aurora, a well-known Japanese nitch publisher of Shoujo and Josei. Here’s a summary from ICV2.
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.
Filed To: Distribution / Retail / Digital / Licensing / Mobile / Adv/Marketing
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March 7, 2007
NYCC: Digital Media Wrap-up
Posted by Devin
Sorry, but I’ve been a bit slow in compiling some of the awesome digital news in Anime & Manga. Here’s a summary of the good stuff happened at the show two weeks ago:
Webcomics have plenty of models: which is the right one?
T Campbell from Broken Frontier provides the stats. At debate is which model is best: Advertising/Ad-supported based on pageviews? A pay per view or paid content model? Scott Rosenberg, CEO of Platinum Studios, quoted is traffic as 10mil+ views a month, while Heewoon Chung, President of Netcomics and ecomixmedia had tried the ad-supported model in the past. I tend to believe a hybrid model may be best: better technology (thank you Google) have made ad-supported models all the rage– yet if the content is nitch enough, it may find an audience.
FUNimation launches social network
One of the quieter announcements was the launch of AnimeOnline which joins Tokyopop as the two anime-company sponsored social network for fans. FUNimantion’s field into the space also staffs some editorial direction and content. Two other pure comic/anime social networks were also launched in the last couple of months: the independant ComicSpace and Hypercomics owned by PlanetWide Media. There’s plenty of potential for more anime and manga-based social networks: after all, doesn’t LiveJournal have to thank us?
Mobile Comics for the Emerging U.S. Market
Filed To: Distribution / Over in Asia / Digital / Mobile / Adv/Marketing
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February 26, 2007
NYCC: ICV2 Graphics Novel Conference Wrap-up
Posted by Devin
This year’s second annual conference on Graphic novels was more focused on the printed word as the talk on anime licensing was shelved. I’ll go through each panel individually, discussing key stats:
ICv2 White Paper–Graphic Novels: Growth and Change
Quite a few bloggers, Mangablog, and Comics212 for stats. I’m going to pick at a couple of them and calculate some numbers based on what was presented:
Total US sales were $330 mil for 2006, with between $170 and $220 mil coming from manga. So now we can say 51% and 66% of total graphic novel sales were manga. In 2005, ICV2 presented a figure of $145 million generated in 2005 manga sales from a market size of $295 mil, a percentage of 49% of the total market. The market for manga has grown between 14% and 34% in one year. Wow, is that big: manga is out pacing the growth of the the rest of graphic novels by 2 to 1. Diamond tracks 10,500+ graphic novel titles, 46% manga/54% non manga. Manga, not having a significant history of more than 5 years, had an upshot of 120 releases (1088 vs. 1208), or almost 10% number releases growth. This confirms growth isn’t just more titles, but the selling of more copies. Just so you know its not only the Naruto effect. What I’d love to measure is the long tail number, but I don’t think we have enough stats yet.
Non-Fiction — The Real World of Graphic Storytelling
I do have to admit for being out of the loop on this one: I was surprised to hear how positive growth is and will be for this part of the graphic novel business. Also, a majority of non-fiction books in Japanese are manga-style. On the panel from this view: Glenn Kardy, Pres/CEO of Japanime Co. has been publishing in the international market for a number of years including the releasing of hit series, How to Draw Manga. His translated/localized series are translated to up to 12 languages. I do have to wonder if there are other licensing opportunities available for manga non-fiction work to be translated and released here.
Manga Ratings, Redactions, and Freedom of Speech
Tokyopop’s new rating scale for 2007 was passed out the audience members. Panelists and audience member supported their new approach to rating manga, even if it did mean becoming objective to the manga’s various content. When a librarian questioned the panel about a universal-friendly rating scale for all manga and how most manga falls into the T/Teen category, the panelists replied with no-comment or their self-policing rating systems were in reply to concerned parents. As long as self-policing policies like ratings and shrink-wrapping of mature publications take place, the industry shouldn’t have too many freedom of speech problems that have plagued comic books in the past. Is there a chance that someone who sees this as ‘universal cartoon art’ that hasn’t seen the umpteenth NYT article that comics aren’t for kids anymore? Sure–
Buyers Panel — Graphic Novels, the Next Three Years
More Yaoi. More all-ages books. There were a couple of differencing opinions from the panel on what works and what doesn’t. I think one consensus was for more single volume or short-series sets. A manga series that runs 5, 10 or 15+ books is a lot of $$ for someone to sink into a series at an average cost of $10 a book. One quoted book was Tokyopop’s single volume Kingdom of Hearts manga supported by $5.8 mil in video game sales. More pop-star licensed manga will drive traditional non-manga buyers into the market.
Filed To: Distribution / Retail / Licensing / Adv/Marketing / General
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February 21, 2007
Event Preview: ICV2 Graphics Novel Conference 2007 at NYCC
Posted by Devin
I’ll be attending tomorrow’s IVC2 second annual Graphics Novel Conference @ NYCC this year.
Last year’s graphic novel conference was a huge success and a benchmark for future industry events to come. Highlights to last year’s event include discussions on the ripple effect of Musicland shutting down, the effects of editing, censorship, and ratings in manga, and the cost of licensing a content series. One of the quotes that is long remembered from last year’s convention is from Al Kahn, CEO of 4Kids:
I think manga is a problem because we’re in a culture that is not a reading culture. Kid’s today don’t read, they read less today. In every survey, we find that they’re watching more television, they’re on the Internet more, and that content, although being king, is very disposable. Because the way content gets put out now, it gets put out free. We’re streaming most of our shows. The reason why we’re streaming them is we want kids to watch them as much as they can, and get vested in the concept and go out and buy products. The products ain’t free. The content is going to be free. And manga in my mind is trying to put a square peg in a round hole in the U.S. It will never be a big deal here, for the kids that are in the computer or the Internet generation, because they’re not going to read. They haven’t read, and they’re not going to start now.
A year later, and even I can firmly say that manga is here to stay and its potential is untapped as variety has diversified. Let’s take a quick look at tomorrow’s panels:
ICv2 White Paper–Graphic Novels: Growth and Change
ICv2 will present the results of its annual graphic novel industry survey, along with special conference-only info that will not be published in its magazines or on the Web.
Expect from new statistics from Milton Gripp of IVC2 that will run higher than the published Nielsen BookScan results that were published a few days ago (more on that in a later post)
Non-Fiction — The Real World of Graphic Storytelling
The memoir, historical storytelling, and education are among the fastest growing areas of the graphic novel (and we use the term loosely) category in North America. Is the N.A. market going to look more like Japan’s, where manga is a favored form for non-fiction as well as fiction?
I don’t think that non-fiction graphic novels are here yet as a primary vehicle for storytelling. To me, this is a surprise panel topic.
Manga Ratings, Redactions, and Freedom of Speech
Japanese culture is very different than American when it comes to controlling access to adult content, and publishers have taken a wide range of approaches when deciding how to deal with those cultural differences in their American editions. Retailers, libraries, and publishers all have their concerns.
Hot button panel. Tokyopop just published their new rating scale for 2007, and we’re just waiting for some conservative movement to discover explicit manga. Its at Wal-mart, yet no one has noticed–
Buyers Panel — Graphic Novels, the Next Three Years
A panel of key graphic novel buyers from multiple channels will discuss what’s selling and why, how the market’s changing, and what kinds of products will grow the market in the next three years.
Today’s word of the day: diversification. I’ve love to ask the panel what they think of limiting distribution for certain graphic novels to one or more channels (like Tokyopop has some with some of their recent graphic novel releases)
Filed To: Distribution / Retail / Licensing / Adv/Marketing / General
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