Interrogated by Another Blogger: Mostly about Crunchyroll and Viki

It’s fun and game time. Chain-blog-topic from Zzeroparticle on his anime music blog wanted me to answer 5 questions, and you can read them below. For people who don’t know what game I’m talking about, it’s like a chain letter where you read it, you answer the questions, and you “forward” it to 5 other people with your own 5 questions.

As it turns out, I am going to write about one question in some depth, because I feel I can do it. The rest are pretty much personal preferences. I suppose this is why I was pointed out in the first place.

1. While you’re watching an anime, what makes the soundtrack/music so memorable you’d actively seek it out?

Using past experiences as the answer to this question, there are three use cases. First, there is a specific track that stood out and I wanted to listen to it closely or in full. Second, because of name recognition. Third, which is not answering the question perfectly honest, is via recommendations. I’m reading the question strictly to mean “while you’re watching an anime.” It’s not often that I get recommendations to check out the soundtrack while I’m watching an anime, but it has happened before. Chalk one up for simultaneous and communal consumption of real-time media.

The first case doesn’t happen very often. The last time it has happened was Jormungand’s LOCO KOKO track. The time before that was this. But I can’t really remember an earlier time.

The second case, about name recognition, goes with the usual case that if I read in the credits “hey it’s Yoko Kanno” or something, I might be inclined to try out the soundtrack by itself. It also goes with the case when I see it’s the sequel of some anime whose soundtrack that I enjoyed, such as in the case of Last Exile.

I think I tried out the Full Metal Alchemist: Brotherhood soundtrack because while I was watching it, a friend was pestering me about its soundtrack. That’s the example for you for #3.

2. What do you think about Crunchyroll’s business model’s survivability 5 years down the line and do you think Hulu or Youtube are capable of becoming a stronger competitor?

While the question talks about Crunchyroll, my answer ends up more about Viki and how the two compare or contrast. Maybe the answer is in there.

Last I heard, Crunchyroll breaks even. They make money from subscribers, advertising, and some merch sales. They spend money via licensing (I count the cost to produce subs here), marketing (for example, seeing them at cons, running CrunchyNews, etc; as an aside… I wonder how much the PS3 deal costs), and obviously maintaining their corporate structure and paying to support their media services. Through licensing, they both pay via some form of a minimum guarantee and then a split on the revenue on top after hitting certain goals, or via their partnership with one of the TV studios in Japan in which I have no idea how the fee structure go (as opposed to just an educated guess–all of these are just guesses, folks!). Revenue split is based on video playback counts, so if you want to support a show on CR, it helps to just watch it or run the video on CR. Their bandwidth costs are probably tiered so it wouldn’t really matter.

At this past AX I had a chat with a marketing person who works for Viki and we traded our thoughts about the future of new media in this space. Viki comes into the picture in a similar sort of situation as Crunchyroll. The main leverage both of these organizations have (that you don’t get via Hulu or Youtube) is the combination of agility in their capacity to chase after market trends and their relationship with content owners. The recent find of Oniisama E on Hulu is largely because Viki is serving that stuff on behalf of Tezuka. In other words, they can get Tezuka Pro’s stuff out there. I don’t think Hulu would bat an eyelash about Tezuka anything, they just don’t care for that sort of thing.

Crunchyroll comes in from a different community space than Viki (for the unfamiliar, that’s K-drama and Telenovela type stuff): anime fansubbing. There’s a mix of pro and con to that, in as such I think Crunchyroll will be able to provide the sort of thing that fansubbing demands: in other words, quality speedsubbing. Viki doesn’t have as much pressure as they are largely focused on leveraging titles that nobody’s ever really seen in genres and categories nobody thought to explore.  Viki’s userbase is not after the newest sort of things; or rather, Viki provides the “structure” of fan subtitling that anime fans in the west has long created from scratch from ways back–this means not only the technology, work flow, infrastructure, know-how and resources, but also the distribution channels. Obviously. Because money has to get made somewhere. That allows K-drama fans to enjoy K-drama even if they live, say, in Argentina or something, since you know South Koreans really want to flex their Soft Power Muscles. Irony aside, that’s the kind of real market opportunity that no big media dudes would go after.

In a lot of ways the two companies are very complementary. You can look at their techcrunch profiles here and here and see that it does match, in the sense that CR does delivery and Viki connects the end points. I think, from a P/L perspective, it’s hard to run Crunchyroll to the ground because it took off during a pretty rocky time (in other words, begin in earnest after a major market adjustment). Unless they gamble big and loses, the only real risk on the horizon is market competition driving licensing costs higher and weakening subscriber growth. However I don’t really think that’s going to happen: the pond is just barely big enough for two big fish, if even that. It’s not very attractive. What CR has going for them is the slow awakening of the masses to new media models. As more people move to the internet for serious media consumption, I think CR presents a curious portfolio of titles that will tide them over in the next 3-4  years at least. On the other hand, I don’t expect them to explode, either positively or negatively, unlike Viki is likely to do.

At the same time I think it is both a risk (startups swim or die) and a reflection of the type of business CR serves. Yeah, I guess you can see what I mean if you compare the two. To be fair, I don’t really know where CR can go at this point. I think they have done a good job winning over that business (as Spotify would say, competing against piracy) but it is a good question regarding that 5-year plan.

3. What would it take for you to contribute to an anime that is aiming to get crowdfunded through a site like Kickstarter?

Another great question. I remember hearing the ANN Cast with Quarkboy, and his secret kickstarter that focuses on localization projects. October is just around the corner. But I’m guessing this question is not quite the same as “what would it take for you to contribute to an anime localization that is aiming to get crowdfunded through a site like Kickstarter?”

Personally? I have no idea. When I see it I will know. What I will say is that considering the price ranges some Kickstarters get, it doesn’t take a lot to push through a Kickstarter for an anime if it is the adaptation of a popular property. I wonder how many people would Kickstart a Megatokyo anime (written by Jun Maeda wwwwwwww). A typical 1-cour TV anime costs about 2 million bux to fund and produce, and that includes the marketing to an extent. You can do the math.

What I will also say is that I take Kickstarter seriously and vet the things I fund, unless it is some kind of smartphone adapter/holder, because you can never have too many crappy ones that don’t work as advertised. An original anime project on Kickstarter has to look like it has the financing to execute what it promises to do. I really don’t think it’s easy enough to fake this to worry about.

Of course, you could scale it back and just KS an indie anime short or something, which is much harder to vet. But since a lot of those get made for next-to-nothing these days, I probably won’t.

4. Which anisong artists who’ve debuted in the past 3 years do you predict will still be popular 5 years from now?

I guess Sphere debuted more than 3 years ago, huh. If you count April 2009 as “in the past 3 years” then that one is a shoo-in. In general, I think well-produced idol groups are very safe bets. To that end, Momoiro Clover Z, man. They will eventually make some awesome tie-ins. What I like about them is that they just don’t take it seriously, unlike most idol music. And on top of that, extremely amusing to listen to and have great tie-ins. I mean at this point I don’t even care how the five underage girls look. They could be 40yo babas for all I care. Also along the same lines, there are StylipS and ClariS.

5. What is the biggest barrier that prevents anime from being more popular in the West?

There are two sides to the question, and I’ll answer it both ways. I watch anime fully recognizing that nine out of ten times, I’m watching a Japanese story told to Japanese people. That it is the sort of story you don’t see in the West, because we are not Japanese and we don’t tell Japanese stories. This fact is not going to change, and this will always be that barrier that makes anime attractive to some but unpopular at the same time. More importantly, there just hasn’t been much in terms of anime that has a storytelling narrative good enough and western enough to make the jump.

The other side is what prevent any single anime from being more popular in the West. Violence, sexual content, incompatible ethnocentrism, adult themes, etc…these are all issues that concern anime as a whole, even if very few anime has all these elements. I don’t really think that matters. I’m not a big fan of violence or sex in anime, but somehow I can keep up with all this trash on TV, so it’s probably not what stop anime from being popular. It’s probably just because most late night TV anime are kind of bad.

The more I think about it, the less I’m concerned about it. If the stuff is good, I’m sure it will find an audience. If that audience is missing, it’s just another way to say there are market opportunities!

My Questions (and the people I’m tagging)

I’m tagging these people, because I have a personal policy of not perpetrating chain games. Maybe they’ll surprise me, who knows? Anyone else is also welcome to answer these questions here or on your own blogs.

Momotato, Jasc, Hayama, Jeff Lawson, Zepy.

1. How do you think Tari Tari has improved over True Tears? Or not?

2. Whose blogs do you read now?

3. Played any cool board games/tabletop games lately?

4. How much do you think a set of used (mint condition) Love Hina R2 DVDs go for these days?

5. Are you buying a Vita? Why or why not?

My Answers to my own questions  

1. How do you think Tari Tari has improved over True Tears? Or not?

I think Tari Tari looks better than True Tears, but I like True Tears somewhat more because it reinvented the romance-with-crazy-chick concept in some ways, and the background work just looks better. What Tari Tari has over True Tears is that it integrated that “angry adult because she shares her past with your present” schtik better. That was a letdown in True Tears.

2. Whose blogs do you read now?

Counting the # of lines in the OPML export from my Google Reader, somewhere about 300-400 sites. I bet more than half are kind of dead. Too lazy to list them all, but I did pick up like half a dozen from that Anime Blog Tournament a while ago. There are a couple seiyuu blogs that are worth sticking in your RSS.

3. Played any cool board games/tabletop games lately? 

Innovation is pretty neat. If that’s too hardcore/meta, Quarriors.

4. How much do you think a set of used (mint condition) Love Hina R2 LE DVDs go for these days?

$5.

5. Are you buying a Vita?

Eventually. Miku f is tempting but it doesn’t push me over the edge. I probably should have not bought the new Apple computer I got a few months back, and instead buy a Sony laptop and take advantage of their free Vita deal. Thing is, eventually I can see myself with a Vita. It’s still capable of playing games from different regions, which is way better than what I can say for the 3DS. And maybe my Japanese PSP games can be downloaded on to it, even if I had to pay extra. I don’t know.