Just as a whole bunch of folks have been sued in one of these mass copyright infringement shakedown lawsuits over sharing of Funimation anime, it seems worth pointing out that a new Japanese government study on the impact of unauthorized file sharing of anime has concluded that unauthorized copies of anime often appear to increase DVD sales. The study looked at both videos showing up on YouTube as well as those that appeared on Winny, the super popular file sharing platform in Japan. The study found a very strong impact from YouTube -- even saying that it appears many people learn about potential anime DVDs by watching the videos on YouTube first. With Winny, the impact wasn't as strong, and could decrease rental income, but did not decrease DVD sales. Of course, the study only looks at the correlation of videos appearing online and sales, rather than proving any causal link, so it's possible that other variables are involved. At the very least, though, this study (which is similar to other studies we've seen) certainly suggests that having the video widely available doesn't kill off sales, as many industry folks insist.

We've discussed the state of "fansub" anime video and video games in the past, whereby many fans will team up and help translate a release for different markets. While there have been some complaints, many in the anime community have figured out how to embrace this and use it to their advantage -- in some cases using the fansubs to determine what other markets to look at for official releases. Earlier this year, we wrote about how one developer from 07th Expansion was thrilled about the fansub work being done -- thanking the fansubbers for "loving" his work so much.

An anonymous reader points out that 07th Expansion recently sold the rights of a new game to the company MangaGamer, which includes the right to translate the game. But the fansubbers were already working on their own version. So, would there be a clash? Apparently not. Both versions are moving forward legally with the approval of 07th Expansion. MangaGamer even did a good thing, offering to hire the fansubbers to do the translating for the official version, but they were unable to do so for work reasons. This did follow one bad move -- where MangaGamer asked the fansubbers to take down their version -- but after MangaGamer went back and learned of 07th Expansion's embracing of fansubbers, it changed its mind, and told the fansubbers they could continue with their effort.

Of course, even with the "competition" from fans, MangaGamer should have a huge advantage. The fansubbers admit that they're slow and doing it as a hobby -- so they fully expect MangaGamer to beat them to market by a long shot. But it's nice to see MangaGamer realize that this isn't the end of the world and to just compete in the marketplace, even without an exclusive monopoly on a translation patch to the game.

We've discussed a few times how the distributors of Japanese anime have often had something of a love-hate affair with "fansubbers" -- fans who take the original videos in Japan and subtitle them in foreign languages for fans in other countries. A few years ago, we noted that rather than set loose the legal hounds on fansubbers, many anime companies embraced the fansubbers and used them to learn where there were strong potential market openings for foreign distribution. It was like free market research. On top of that, many realized that the fansubs helped increase demand for the authorized product. Unfortunately, not all anime distributors have seen things the same way, but many have.

Matt writes in to tell us about the case of the Dattebayo fansub group, which has been doing rapid, high quality releases of certain popular anime titles. The company behind the anime has never bothered them. Rather than try to shut them down, the US licensee of the series has decided to put up its own free subtitled versions, knowing that if it tries to put significant restrictions on them, it will never work. The group is actually charging people for a week, right after the shows air in Japan (rather than the typical long wait), but then will offer it free. In response, the fansub group is going to stop creating their own versions, noting they only did so in order to watch the videos in a reasonable time frame. Once again, despite what some in the entertainment industry claim, we're seeing that you absolutely can compete with so-called "pirates."

You may recall that we recently had a post about executives in the anime industry blaming fansubs for ruining the business (even as we'd also heard others report that it was the interest from fansubs that had created the US market in the first place. The post was based on an editorial piece written by someone within the fansubber community, basically saying that the blame was misplaced and the real problem was that the anime industry wasn't giving fans what they wanted. This is a familiar refrain, of course, heard from fans and customers across the entertainment industry. However, normally, the big copyright firms respond either by ignoring the complaints of fans, or brushing them all off as "pirates." Apparently, that's not true with everyone in the anime industry. Petréa Mitchell writes in to point out that the president of one US anime distributor, Bandai Visual USA, has responded to the complaints on his own blog. He basically says that the company recognizes the complaints and has been thinking about solutions (including simultaneous release of titles in both the US and Japan, rather than waiting a while for the US release). He also notes that they're trying to decrease their prices, but Mitchell notes that Bandai's prices seem quite high, even compared to it competitors. Still, considering that most industry execs seem to completely ignore fan complaints, it's nice to see one (even if in a much smaller industry) take notice and respond.

Petréa Mitchell writes in to point us to an "open letter" to the anime industry, that is apparently struggling economically, with anime producers starting to blame its biggest fans outside of Japan for creating "fansubs": copies of Japanese anime with the fans adding their own subtitles. The editorial is a good one, highlighting many of the economic points we raise here concerning the dangers of sticking to obsolete business models and blaming your biggest fans for your unwillingness to change your business model. While I disagree with the description that anime has become "worthless," it is accurate to say that pricing pressure is driving down the price (that doesn't mean it's worthless, as "value" and "price" are two separate things):

"Anime that has been fansubbed is effectively worthless. It's being given away for free. In terms of supply and demand, there is an infinite supply, and therefore the product is worthless regardless of how many people want it -- it's like trying to sell buckets of sea water to people on a beach. The only people who would pay for it are either older fans who are attached to the old ways of consuming media, or worse, are doing so out of charity. That is the state of this industry. And the companies who depend on anime for their livelihood let this happen."

The editorial goes on to note that the industry has simply sat back and watched this happen for over a decade. Rather than recognizing that the reason fansubbers did what they want was because they felt they weren't being served by the industry, they just let it happen or complained about it. What's most interesting here, however, is that just three years ago, we had a story about fansubbers where the key to the story was the exact opposite: claiming that fansubbers had made anime a viable business proposition in the US, whereas before it had been almost entirely non-existent. On top of that, almost exactly two years ago, we had a post talking about how the industry had embraced fansubbers and learned to use them to the industry's advantage.

So what happened? Has the industry shifted so much in just two years? It would be great if those who followed the industry more closely could chime in, because it's odd to see such a divergent set of stories. However, from the various articles, it looks like fansubbers helped create a market in the US... but the industry misunderstood what that market represented, and by missing the actual market has now turned around and blamed fansubbers. That is, the growth of fansubbing created demand for anime in the US, but it wasn't demand for buying expensive DVDs for collecting well after the content had been released. It was demand for more content and other, ancillary products. Unfortunately, the anime industry assumed that the US market would simply mimic the Japanese market -- and even that it could hold off selling DVDs into that market until well after they were released in the US. This was a huge strategic error. It was holding back the one product that the market could get by itself, rather than focusing on providing new and different things that the market couldn't get and that the market actually wanted. However, without those fansubbers, much of the demand wouldn't even exist at all -- and to now blame them for not buying the late-to-market, seriously overpriced DVDs misses the point by a wide margin.