We’re here at AX, and so far the con is… lackluster. But there were a couple industry panels today, the 4th, that were interesting. Here is my recap of the first.
Keynote speech by Gen Fukunaga, the President of Funimation.
The Japanese market is the most competitive Anime market in the world, because Manga drives the Anime. This is because Manga is exposed to millions of people first to determine what might be good things to animate.
In America there has been an explosion of casual anime fans and the number of internet viewers is increasing.
Hollywood is picking up on the popularity of Anime with live-action adaptations of shows and vice-versa.
So what are the problems in the industry? The DVD market is 95% of revenue. The future needs to be a mix of TV, DVD and the internet. Without all three problems occur.
The key to good sales is brand engagement, and just a DVD is not enough.
As far as broadcast is concerned, Funimation has good relations with Adult Swim, IFC, etc… They are looking at VOD with the Funimation channel.
The Funimation DVD market is stabilizing. Although DVD’s are still looked at as a major source of revenue, they are looking at Blu-Ray to be anywhere from 10-30% of sales. Their pricing is going to continue to be season set pricing (an entire season for around $60). Although their “A” titles will continue with individual releases, usually due to pressure from the Japanese distributors. Funimation needs to see a 25% increase in sales in order to maintain the season set pricing model.
The important thing for the three legs of the business model is to establish digital distribution rights. On the mobile side, they already have a relationship established with AT&T, and have just finalized a deal with Sprint. The future looks good and the only real problem is bandwidth.
On the internet side, DTO (Download to Own) is the new model. They did some studies and found that 96% of <= 24 year olds connect to the internet at least once per week. Also that 76% could live without TV, but not without the internet.
As far as DTO, on the XBox Live and iTunes side, they are seeing download numbers rivaling those of broadcast TV shows. But as those two services have limited bandwidth to accept new content, the funimation.com website will be the starting point where all new shows will appear first.
They are also looking into digital asset sales, such as branded gear on Gaia Online. Social networking will also be the new frontier, and there is currently not an Anime-centric social network, where you can watch Anime, purchase it, etc… DTO is in place to make huge strides, as well as ad-supported free VOD.
Another thing they are working on is same-day subtitled releases using partnerships with distribution sites like Youtube and others. The biggest problem is that you can’t watch the show on one of those sites and then immediately purchase it without leaving.
Their three pronged approach to the piracy issue is a combination of education, free internet VOD (launching in the fall) and stopping sites that include infringing materials. The Japanese distributors are giving Funimation take-down rights prior to finalizing licensing deals.
Funimation also has Geneon’s titles now, so they will finish releasing them. Also, ARM had financed ADV for the acquisition of 34-35 titles, those titles are now coming to Funimation to finish releasing.