It’s one thing if you are booting a shady version of Microsoft Windows. In general those things are treated for granted, like they are the keyboard you hammer on (I guess with keyboard nerds excepted), or the car you drive (I guess gear heads and car types excepted) that gets you from point A to point B in typical nondescript, human-habitable Californian weather (what is that anyway??).

I want to make a case for otaku media and piracy in general. I understand this is getting into fandom gatekeeping, but this applies across the board. It’s like if instead of going to watch, say, Star Wars episode 7 in theaters you ended up pirating a cam rip. Maybe you’re okay with this, but that is the classic effect of displacement. Now that mega, billion-dollar number SWe7 is getting in the box office will be a few bucks less.

That’s not even what I’m talking about. I’m talking about how a core tenant of Japanese nerd scene and subsequent commercially produced content for said nerd scene is a self-regurgitating cultural recycler. People who enjoy this content outside of that context can still by all means enjoy that content as they see fit, but they’re then missing something. What I am definitely saying is that consumption in a legal way is a way to participate in this dialog. I might be saying illegally participating in this dialog might still be participating in this dialog, but at a reduced or different capacity.

What I am really saying is that we are building a culture based on the way we consume.

I said “might be” because honestly, I don’t know. My own anecdotal experience suggests, for example, if you are an oversea fan who can only participate in things in semi-legal manners, maybe that can speak volumes more than just one more Japanese comrade doing the same thing that 10,000 other, local otaku are doing. And in broader terms, while consumption and production in the world of anime, manga and games are the Ying and Yang of said world, that alone doesn’t necessarily mean illegal partaking (on either side of the ying-yang) is good or bad per se. Well, illegal per se is bad in the usual sense of the term illegal, but aside from that? What’s the impact?

So in a way the article I critiqued here addresses something kind of dear to me, because it’s one of those big questions that don’t have good answers (at least none I know), and it’s at the heart of the oversea anime fandom experience. I do appreciate the orders-of-magnitude estimate exercise, but that alone is a misleading approach to tackle a much larger question.

I have previously mentioned in my blog that it’s a damn shame when you go up to an anime creator at a con over here and tell them you watched all their stuff via piracy. It would be great if the world is made up of sensible copyright laws or if the world did not need balkanized licensing regions with different tiers of costs and fees, too. Heck, it’s probably too much to ask Japan to “get on with the program,” even if we must. The reality is murky, far from ideal, and sometimes unfair to consumers and creators. The question is, to me, is that are the laws, the economics, the industry, the fan organizations, the consumer culture, and all that meta-culture, help or hinder development of actual culture. Or maybe better put than “actual,” the overall exchange of ideas between people, in as much as we see pop culture as a massive interaction between individuals as ideas spread in the form of media or other widely-circulated ideas. How does the business dealing between two companies (or in the industry, we’re just talking about a few handfuls of people) affect thousands and more? How does Japan leverage its cool cultural creds built on pirated cartoons?

And unlike what logic dictate, this calculus has to take into account the cost of the protocol breach, which is what unlicensed streaming does. The observed consequences is that, in my limited personal experience, is that you have large newspapers and news people tweeting or writing articles linking to illegal scanlation sites. I’ve met people online and offline where they tell me to go watch a certain anime on a streaming site, when the same can be found on a legal streaming site in the same geographical region. In all of these cases paying a small monthly fee is not the problem. It’s more about these people and organizations have no awareness of this “context” so where they source their stuff matters not to them. And even if it does, they may not realize it.

So it comes down to the value of having that context. Which is why I think fandom gatekeeping is sort of another way to look at this. And by this I don’t mean whatever people say on tumblr, or not beyond the “so-and-so is not a fan.” But for example if you have a person who comes from the EN language yuri section of the internets who ships IDOLM@STER girls, would this person be a P? I don’t know, because being a Producer is more like being a fan of IDOLM@STER and doesn’t have anything to do with shipping. Of course you could say that being interested or liking some idols from IM@S makes you a P, and that’s a fair argument. My point is these concepts, issues and arguments have more to do with context than actually fandom. People might argue about these concepts without knowing the big picture, and that’s why these arguments usually don’t go anywhere.

The same thing can be said of being the kind of fan who buys $300-600 worth of imported Blu-ray box sets once a year or so, versus the piracy-or-die types who buys a $3000 NAS array to mirror BakaBT once every 5 years or so. Both might spend the same number of hours watching anime every year, and possibly even watch (and enjoy!) the same shows. But they are clearly not the same sort of fans–until we meet the guy who does both. Or rather that such a guy can exist sort of prove these two “fans” are operating from very different contexts, as these are not even conflicting contexts but rather overlapped ones.

To that degree, fandom can definitely do away with so much judgment. But unfortunately, based on my own experience, that context often matters a lot, so it’s understandable why people judge. In some cases context matters so much that it is the most important thing. It can be the difference between Sekai Project licensing Clannad and Visual Arts saying bah humbug to all of the west. It can be like the difference between a bunch of white guys who marauder around Akihabara cluelessly or goes by some silly “OMG JAPAN” thing they read on the internet, versus some guy who takes the long and sweet time of going to Japan via an ALT program, make friends with locals, and eventually find himself experiencing Akihabara like a local. Well, I guess I won’t judge, as someone who is closer to the foreign marauder, but all this is just to say things are complicated and nuanced and you can’t really take an order-of-magnitude estimate to talk about this with fairness.

I believe it’s the same kind of context-free extraction that enabled fansubbers in the late 90s and 00s to put fancyass karaoke subtitles that covers half of the OP/ED visuals, or their own names as credits that obscured the OP/ED (or even the show’s own credits). Because, to them, it’s just the opening animation and it looks pretty. The meaning of those 90 seconds are really beyond them, or they simply do not care for the fact that some OP/ED costs 10% of the shows’ budget.

The piracy association with fansubbing also has its own contexts. For better or worse it is what it is, other than in rare occasions troublemakers reared their heads.

Contextless abstractions are, in some ways, the antithesis of the anime sakuga fandom, which generally cherish individual animators’ own unique styles. Needless to say animation is the core underpinning in a fandom, and oddly enough, animators typically go unsaid among otaku of any stripe. As you get closer to the core creative team more people start to pay attention. The original creators, the directors, the composer, the people who sings the theme songs, the actors and actresses, etc; these contexts, along with the animators, are first-party participants of the work. You would think these people matters to fans? Not always and often not! This is all just context, after all, just hidden behind credits not-legible and oft-untranslated.

And that is fine to a degree, because these are the context behind the work, the communique of their prima facie case, in which they speak to us. It’s what I mean by ideas and how people react to them. Even if in the west these names are closer to brand than human beings with faces, lives and personalities. What I do not like is when we blind ourselves to what comes with these ideas. OK, maybe you can say we’re building this database, as we database animals do, called TVTropes or whatever, that puts two and two together to build a context, but that’s still just looking in one direction and not all directions. We must go deeper.

We must go deeper to understand why Aniplex of America charges high prices. We must go deeper to understand why people whine about it in a race-to-the-bottom home video economy. (Or do we?)

Which is why, when trying to figure out the cost of pirate streaming anime, we can look at what Japan purports as its anime industry’s health, seeing the licensing costs and revenue, and understand the money is just a drop in the bucket of what else they are losing. It’s about the relationship and context in which content producer relate and interact with the content’s audience. You just don’t have it when you consume from an illegal source. You just don’t have it when you let Peter Payne get away with using unlicensed artwork for his web ads. You just don’t have it when you buy shirts at cons that infringes copyright or trademark rights. Because it’s participation in ignorance.

Anime fandom is in a fandom rife with copyright violations. Comiket and doujinshi culture is its arguably greatest festival of such, and it enshrines and frame this entirety of discussion in a way. Which is to say just because it’s illegal doesn’t mean it’s bad, but until you know why it is good or bad, how do you even start making sense of some other weird situation? At the very least, when you pay to watch something, some amount of money makes it back to the show’s creator, and that’s kind of the least we should be doing. That’s, Locke or not, just being not a jerk. Like, if you enjoy this dude’s work, it would help to pay him a little respect? Not even money here.

To go back to piracy again, rather than to say the guy who downloads but buy the blu-ray is the example where copyright infringement in “markets not sown” can reap profits, it’s like the superfan who wants to build a PC for his favorite seiyuu, it costs $2000, and it will directly benefit a creator. That is キモい man, don’t do it. Recognize the system and let the creators do their thing. Because supporting the creator means not just directly supporting the creator, but partly also the system that enables people to make a living creating stuff. Maybe we can shave it down to a patronage system like what crowdfunding has done, but when it comes to anime and games it’s rather complicated.

And once you get a handle on the context, maybe you can make better decisions on when to pirate and when not to, what kind, how, and why… And this goes not just to how you procure your anime, but also why I don’t really like to buy R1 releases anymore because they too often operate devoid of this context. Yeah, make special limited editions, but what does that achieve from the point of the fan? It is not a thoughtful product in the aggregate.

Uh so there’s this article. It’s ludicrously wrong yet kind of close.

Based on this article we know the Minimum Guarantee for a series is about 1000-2000 per episode streaming. But did a million people watch Sakura Trick on CR? To use rating as a proxy for video views†, There are 61 series rating. Episode 1 had about 750 ratings. In comparison Naruto Shippuden has 48000+ series ratings. So let’s say 0.1% of CR’s viewers watched Sakura Trick. We know CR has 20M users, so that is roughly 20000 viewers. If that GB article is right, then at 7 cents per episode Sakura Trick would have made just $1400 USD per episode. Sakura Trick is probably not a 2000-per-ep series, but it’s easy to see that CR probably is not making much money from this show if it’s gonna cost approximately the same as the MG.

In that GB article, the math to get to that point is protracted, and the logic is just wrong. It uses world-wide counts on US prices, it uses guestimate from Netflix’s 2013 PR, quoted from a Quora article you can now google, which are based on even more questionable numbers. Let’s forget the links I left up there as they’re not referenced, which is probably way more on target because we now respect the geography distinction (the Netflix number quoted by the GB article is for US/CAN really anyway).

The ballpark estimate, however, is done in a way that respect the rules of ballpark estimates. Like one of those order of magnitude interview questions (eg., “how many grains of sand is in a playground sandbox?”), you can’t know the specifics but you can make a good guess, by certain definitions of good. The problem in this case is that if you guess this way you’re bound to be wrong, when the wrong guess can actually skew people’s perception in a business of fairly tight margins.

Because, if you really need to understand the displacement aspect of illegal streaming, it’s worth asking the question:

1. Are any of the illegal streams based on views from regions not served by legal alternatives? In this case probably a solid yes for Sakura Trick.
2. Is there displacement if, say, a CR subscriber uses an illegal stream to watch something available on CR? The streaming version of the “download but buy” use case. It might be safe to say this isn’t likely the case.
3. For ad-driven revenue models, the revenue comes from ads served. Wouldn’t it make more sense to calculate displacement based on that (and not what Netflix pays to license stuff)?
4. For subscription-driven models, how can we calculate displacement?

We can probably ignore the marginal cost of the streaming service, although there is some kind of price tag attached to this in a way that satisfies demand (I’m looking at you, Funimation, will FunimationNow not suck so much…probably).

So like, if you estimate displacement based on #4 and, say, the average CR viewer (as model) watches 20 episodes a month, at $7. So that comes down to 35 cents an episode. Or using the same PR, 1.5B minutes per month is roughly 62.5 million 24-minute episodes, assuming sub and free users with the same viewing habits on average, we’re talking about 3.125 episodes a month. You can ratchet up a huge value for displacement with this math, up to $2.24 USD.

So yeah, that article manages to get the price to roughly where it really is, but doesn’t really do anything to calculate the cost of streaming piracy. So let’s do #3 real quick, using Daisuki as an example.

I don’t know what Daisuki uses for their video ads, but let’s say it’s something like Google and they take a roughly 50% cut. Then if the CPM is like $5, then Daisuki makes maybe $2.5 on a per X number of videos. I think they work with some small platform because the ads on there are location specific and not exactly very varied, so their rates may be good. If we use Google’s rates, we’re talking about anywhere between $1 to $20 per 1000 views, or let’s just say $10/1000, 3 times per ep, or 3 cents per episode. Which is $30000 per episode per million views of displacement.† Of course CPM is also region-sensitive so who knows?

I think that’s a much more reasonable number if you ask me. I mean LOL one million views of one episode of Sakura Trick LOL. Sure you can apply this to One Piece and get another zero attached, maybe two, but that’s getting into “reap where ye have not sowed” territory.

†Speaking of territory, because of the region nature, the ratio-to-Shippuden based on series rating is a safe bet to fold into a same-service comparison. Meaning that Sakura Trick on CR is for US/CAN only but that fact would fold into the small number of viewers as a result of more or less strict regional limitations. The same cannot be said of the CPM calculation, so it’s actually much harder to estimate displacement unless we get the country breakdown of all the pirate streams. All this is just to say calculating displacement based on a subscription model makes no sense, yet this is where everyone is going with streaming anyway.

PS. The most relevant way to look at piracy in terms of streaming is to look at the break even pageview. Meaning that if the MG is 1000 per ep, and you have a million total views for a 12-ep series, you’re paying $12000 and getting, say, $30000. And yeah if almost 100,000 people watched Sakura Trick that is a no brainer. Compared to actual TV ratings, for example, that’s quite a lot of people (like 0.1 of a rating)! But let’s say if 3333 people watched Sakura Trick all the way through, or one-thirtieth of people or so, that’s like where the break-even is. Which is not an unrealistic number for something streaming only in the USA, and obscure. Translated to DVD/BD sales, if something sold a 1000 units I think that thing is in good shape, so if 1 in 3 people watched the simulcast or whatever… something to think about, eh? And as usual region breakdowns will screw with anything you can think of concretely but if we think of the distribution globally as one single basket, and if the ad market can support that (big if), there is some money to be made.

Which is just to say that I keep on snickering on that 1M number because that’s ludicrous. We should do a pool and guess how many of that 1M is from Japan!

I figured I can travelogue a bit on this site, as much of my last trip to Japan and Taiwan were of the nerd interest variety. More fat cats pics below.

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