Anime Expo 2013

Present and Future of Anime Streaming in North America Panel

The major players were brought together for Thursday's Present and Future of Anime Streaming in North America panel where representatives from Anime Bancho, Crunchyroll, Funimation, and AnimeSols came together to discuss the advent of anime streaming. The panel was moderated by Anime News Network CEO Christopher MacDonald. The panel opened with introductions by Anime Bancho producer NAME Tsunami, Crunchyroll Japan office Representative Director and head of acquisitions Vince Shortino, Funimation brand manager Lance Heiskell, and Anime Sols' Sam Pinansky.

MacDonald opened that regrettably Neon Alley and Daisuki couldn't be present at the panel due to time obligations. He also mentioned the importance of other services such as Hulu, Netflix, Viki, Youtube, and the new linear streaming channel SimulTV. While none have a large anime selection, their mainstream presence introduces new fans to anime. Macdonald gave the floor to Shortino to discuss the history of anime streaming from the views of Crunchyroll.

Shortino: Crunchyroll started in 2006, received funding in 2007, and I joined on in 2008. That's when we began going around to all the licensors and saying "Hey, we have a lot of really loyal fans that have gathered onto our site. Why don't you license our anime to us?" Some were mad at us but others were more open. In 2009, we shifted to be 100% licensed anime site, like the industry was pressuring us to do.

I began working with our CEO to push for simulcasts with Naruto being one of our first. ANN did a poll awhile back, and it was something like illegal downloads of Naruto dropped 70% once the streaming became available.

When we launched, we started with eight simulcasts; now we've had a season with over 40. Some series we don't get because they might not be what overseas audiences want, like children's shows or something like Chibi Maruko-chan that doesn't translate well. Right now, we're probably simulcasting everything interesting to overseas fans. It's just now starting to generate good revenue this year and companies are starting to accommodate simulcasting and it's becoming a legitimate, healthy business. The point is making the content and goods accessible to the globe.

Heiskel: It's all about access and demand. There's people across the world who want to watch this content and don't understand the hurdles. It's hard to be the first, once something works and its proven, it is easier. Then it's about education and education is a long road. It's getting friends and peers to quit using illegal sites and start supporting everyone. The interest expanded a lot with Adult Swim. People became more aware and then didn't understand why it could take a year for a series to get to the U.S. That's when the scenario becomes if I can't get it legally from you, I'll get it myself.

MacDonald: One of the common things fans don't understand is why they can't watch something. For instance, when Daisuki announced its licensing territories, fans in the forums wanted to know why they couldn't watch in their home country. Fans don't understand why Daisuki can't offer a show in Thailand. I can tell you why. It's because another country has the rights and they don't want Daisuki to infringe on those rights. They want to monetize it themselves. But fans don't give a damn, if they can't watch it, they'll do it themselves.

Shortino: There's a couple of streaming sites popping up around the globe to deal with that. There's a couple in France, for example. I think it won't be long before we can see all the anime streaming in Japan around the globe. I don't think it's that far into the future where we can see anime available all over the world in all major languages.

Pinansky: One of the changes going on in the industry is considering non-exclusive streaming licenses instead of exclusive streaming licenses. Streaming rights are starting to be sold on a non-exclusive basis. I think, though it'll happen slowly, I think many more streaming sites will pop up in the same territory. That will help sites to go international if they have the money for all the territories.

MacDonald: Let's do a quick poll. How many in the audience watch anime streaming online?

(Majority of the audience raises their hands)

MacDonald Of the hands raised, how many buy DVD or Blu-ray Discs?

(Majority of the audience has hands still raised)

Heiskel: I do polls for Funimation every six months. On the most recent poll, 60-70% of my survey showed that people buy DVD and Blu-ray because they watched the show on streaming. The DVD & Blu-ray market are still healthy, but with other revenue for streaming, this money goes back to Japan.

MacDonald: Of those who do not buy DVDs or Blu-rays, how many buy merchandise?

(A small portion raises their hands)

MacDonald: What were seeing is a lot of people who don't buy DVD & Blu-ray online also buy merchandise. What Crunchyroll and Daisuki started doing, and I applaud them for doing this, is selling merchandise tie-ins.

Shortino: A lot of what we do is parallel import, which isn't very good for the industry. We're trying to be more like a department store to bring you all the merchandise in a reasonable way. I want to talk about Anime Bancho, one important thing to do is find new talent. That's what Anime Bancho does.

Tsunami: We launched last December. Right now we have 25,000 subscribers, because, well, it's free. We have a contract with YouTube to make 100 episodes for one year. The budget is very small, but one of our works was made with Studio Trigger and the people who worked on Neon Genesis Evangelion and Gurren Lagann titled Inferno Cop. Most of our programs are based on comedy. What we're doing is kind of testing what is a good for a new anime. Inferno Cop had a larger American audience than Japanese audience.

Shortino: Did anyone watch the first commercial for Free! by Kyoto Animation? That's a situation where fans really influenced what got produced.

MacDonald: What you watch and what you're excited about that's what gets made. If you take a look at independent things, you have the potential of influencing what's going to be made with anime in the coming years.

Heiskel: Like Kick-Heart with KickStarter.

Shortino: Japan is saying they want to do more of that. The best way to show your support, is with your wallet obviously. But there's other ways to support as well.

Tsunami: And subscribe!

MacDonald Lance, maybe you can talk a bit about the concerns of streaming?

Heiskel: Whenever things are airing, you have to work on quick deadlines and having really talented people for encoding. And security is the #1 thing. You don't want to be that person whose file is leaked before the Japan airing. You also have to negotiate the time when it airs from broadcast.

Shortino: Basically, we run around Tokyo 24/7. Sam has been instrumental in teaching Japan on how to be more open to simulcast. Contracts are really difficult and sometimes they're not done until almost the end of the season.

Macdonald: You have four days to receive the materials, and sometimes are encoding from Digibeta. You have three days or less to translate, and you still have to send it off to approval.

Pinansky: One thing is making things faster, finally, and started to change the industry. Until very recently, all of this was still done on tape. HDcam tape or digibeta tapes. Usually the stuff for overseas are copies and not the original master. The digital footage is put on a copy and shipped, which is then received in the U.S., and sent somewhere else to be made into digital format again. They just recently started to sending the original digital files. It makes things easier on the streaming companies. We are also able to start with translation based on econte (storyboards) with the notes at th bottom.

Shortino: We used to get the scripts as a book; as a bound book. To get the pages out of the book, the easiest way is to put them in the microwave for 2-3 minutes. When I was at our office in Tokyo, an office owned by Mitsubishi, I took a script into the general eating area. I set the alarms off after leaving it in too long. I'm glad I don' thave to burn scripts anymore.

(The panel then opened for a short Q&A)

Q: When might stream sites start picking up OVA series and movies, like Kara no Kyokai and Hellsing Ultimate?

Heiskel Since movies and OVAs are direct to retail, it depends on what rights we have. Like if there is an OVA with a manga then the rights might different. Sometimes we have access, sometimes we don't or it's hung up in contracts.

Q: Is there a baseline marketability that you look for when picking content for Crunchyroll? Shortino: Our goal is try to license every single anime that's on Japanese TV. The only prerequesite we have is availability in English speaking territories. We want everything. Some we may go after more aggressively, but we try to get everything. Even shorts.