Is The Anime Market Collapsing?
DVD Sales Down by 50%, Says ICv2 President Milton Griepp
Dec 19, 2007
All hell is breaking loose within the anime industry. According to a report by ICv2 CEO Milton Griepp, anime sales are down by 50% from their peak in 2005.
According to most sites, anime DVD sales slid from around $500 million in 2003 to about $400 million in 2006. Anime releases dipped from more than 600 titles in 2006 to about 500 in 2007. Griepp also cited high prices on DVD's as contributing to the problem.
Ironically, manga sales were up 10% over previous years.
"I understand the panic going on. I've seen the numbers myself," writes Justin Sevakis of Anime News Network. "They're terrifying. It's not uncommon now for a DVD to not even make back the cost of the dubbing, let alone the license fee. When only a few years ago it was commonplace for shows to get licensed for $70,000 or more per episode, today a show can be licensed for less than half of that. And they're still not profitable."
Anime distributor Tokyopop has withdrawn from the market, Geneon has gone out of business, and both ADV and FUNimation were recently forced to lay off employees. Musicland, one of the biggest American distributors of anime DVD's, has nearly disappeared. However, interest in anime has exploded in recent years, with more North Americans than ever discovering Oriental animation.
So why has the anime market collapsed while interest has increased?
Are Fansubbers Killing the Anime Industry?
According to many industry leaders, it's because of fansubs and piracy. Anime fans are no longer willing to wait a year for the DVD, when they can get their favourite shows through fansub sites, and without paying a dime.
In an "open letter to the American Anime Community," Gonzo Digital Holdings International president Arthur Smith targeted fansubbing as the main cause of the industry's woes.
"Yes - there is certainly a VERY (all emphases his) positive impact from fans sharing the 'buzz' for new titles and talking about them and sharing information," Smith writes, addressing the common fan belief that subbing helps build interest in new titles. "Up until 1-2 years ago, the industry in Japan was worried about such fansubs (having seen the damage caused to the music industry in the early days of file-sharing) but had no direct evidence to conclude that the negative impact was big enough to worry about (i.e. everyone hoped that the positive impact outweighed the negative). HOWEVER, now we know the truth."
Citing Central Park Media's John O'Donnell's findings that there are approximately 6 million anime downloads per week, Smith writes: "illegal file sharing is certainly happening in a MASSIVE way and its growth has certainly coincided with the fall in DVD sales."
What Are Some Other Factors Behind the Anime Sales Decline?
Emru Townshend of Frames Per Second disputes that digital piracy is solely to blame for the decline in anime DVD sales.
"First of all, DVD sales as a whole are pretty much flat," he writes. "This may partly be a reflection of the market for DVDs as a whole.
"Second . . . piracy has been entwined with anime in North American fandom for decades, and while I've made the case in the past that earlier bootlegging built up the market for anime, I'd argue that we can't really know piracy's impact on the industry as a whole right now—there are simply too many unknowable variables.
"Third, 100 fewer anime releases in 2007 may not be that alarming. Consider for a moment that over 600 releases in a year works out to 11 or 12 releases for every week of 2006. While I constantly state that anime is not . . . a genre, the fact is that it is often marketed and treated as such. Can any genre with such a relatively small consumer base sustain that kind of activity? Furthermore, anime companies don't only release current titles, they also release older properties. Even with re-releases in play, at some point there has to be a falloff. It's entirely possible that some of the shift in numbers may simply be due to a correction."
Companies Putting Out Too Much Similar Product?
Townshend also points out that, because North America has such a limited view of what anime actually is, companies distribute titles that are too similar, contributing to consumer boredom.
"The North American anime industry could stand to concentrate less on volume and more on the diversity of their offerings and narrowing the window between Japanese and domestic releases," he writes.
Smith, however, scoffs at the notion that there are factors, other than piracy, in play.
"Is the entire anime industry making such bad titles that even though more titles than ever have been released in 2007, still fans are so unimpressed that they are only buying 50% of the DVDs they used to??" he asks. "Maybe the TV broadcasts are actually not good . . . since fans now watch all their anime on TV? I doubt that either of these is the major reason for the anime DVD decline although I don't dispute that they could be contributing factors. I am pretty sure it is not a coincidence that file sharing has grown massively just at the time that anime DVD sales have dropped!! And I'm pretty sure it's not a coincidence that the same thing we're seeing in anime happened to the music industry!!
"Of course, we are all interested in using on-line activity to promote our titles," he says, "but not to give fans the ability to take our shows for free."
(Up next: why do fansubbers sub?)
