
Anime Site Treats Piracy as Market Failure - jcr
http://arstechnica.com/tech-policy/news/2011/04/competing-with-free-anime-site-treats-piracy-as-a-market-failure.ars
======
dangrossman
I get really angry with this site. I signed up and paid for a premium
membership to watch a TV series the same day it aired in Japan each week. When
the series finished I cancelled my membership. Ever since then, I get almost
twice daily "private messages" from fake people, which generate e-mails to me
asking me to log in and read them. When I log in and open the PM, it's an ad
from Crunchyroll offering me a discount on upgrading my account again.

I e-mailed customer service to let them know I was unhappy with the constant
and deceptive advertising through PMs from fake personas and they essentially
told me to bugger off. "Minor things like this" (being upset over deceptive
emails) are just "an excuse to validate pirating anime"... they write this to
someone who's never pirated anime and has paid them to watch it legally.

~~~
modeless
Strange, I did the same and didn't get these messages.

~~~
freakwit
I feel obliged to say that I've not had spammy emails from crunchyroll,
either. Their "notifications" are quite spammy, however.

------
astrange
That article skips over some of the actual details of the way the site was
founded, like how the founders uploaded US DVD rips/pirated content to the
site themselves, or the way they started charging for accounts _before_
removing that content, or the way all the site announcements were written in
textspeak to make them look like teenagers.

I guess that's called bootstrapping.

~~~
DarkShikari
Beyond pirating the content, they also went out of their way to steal fan
translations. They eventually hired their own translators, but not before
making boatloads of money off selling other peoples' work.

~~~
guelo
I don't see selling pirated works as any worse than creating the pirated work.
There is no honor among thieves.

~~~
DarkShikari
It's legally dubious as to whether or not translating someone else's text is
piracy.

But that's irrelevant: this is supposed to be a legitimate business.
Legitimate businesses aren't supposed to build a business model around selling
others' works without permission.

Unless you're claiming that Crunchy are just as equally "thieves" as the
pirates they supposedly work against, in which case I agree.

~~~
mukyu
Under US law copyright owners are given the exclusive right to create
derivative works[1] and translations are one of the things explicitly defined
as a derivative work[2].

The Berne Convention also guarantees that authors have the exclusive right to
make translations. [3]

Dubious indeed.

[1] <http://www.copyright.gov/title17/92chap1.html#106>

[2] <http://www.copyright.gov/title17/92chap1.html#derivative>

[3]
[http://www.wipo.int/treaties/en/ip/berne/trtdocs_wo001.html#...](http://www.wipo.int/treaties/en/ip/berne/trtdocs_wo001.html#P138_25087)

~~~
DarkShikari
_and translations are one of the things explicitly defined as a derivative
work_

If this was true, Google Translate's "translate a website" feature would have
been sued into nonexistence years ago. In fact, it probably would have never
been created: its predecessors, like Babelfish, would have died first.

Translation is _format-shifting_. It is no more illegal for me to translate a
movie from German to English than it is to convert it from a DOC to a PDF.

What _would_ be illegal is if I paid for the movie, translated it, and then
_distributed it for free_. The mere fact that it's a derivative work does not
make it any more "mine" than the original, and thus it's just as much piracy
as me distributing the original, untranslated version. Similarly, converting
the movie from an iTunes MP4 to an MKV will not make it any more or less legal
for me to redistribute it.

The legally dubious part is distributing _just the translated script_ (i.e.
subtitles), but not the movie itself. A reasonable fair use case could be made
for this, though whether it would hold up in court likely depends on how much
money each side spends on lawyers. Most likely, nobody will ever even bring
such a thing to court, as there's no profit motive for doing so.

------
zzeroparticle
Crunchyroll has gone a long way towards providing a legitimate avenue for fans
to get access to anime and I hope things can only get better with time.

That's not to say there aren't any problems that need to be ironed out though.
Off of the top of my head, my two biggest complaints with CR stem from the
consistency of their subtitles, which can range from decent to atrocious, and
the lack of availability of titles that I had been looking forward to
watching. Obviously, they won't be able to get their hands on every show
that's out there since they're competing with the likes of Funimation, but
it'd be nice if they could wrap their arms around a greater percentage of
titles each season.

It'd also help too if the Japanese studios would try to embrace the internet
rather than constantly resisting against it. Sometimes, I get the feeling that
they're so stuck in the PPV television rut and aren't confident enough to
start releasing episodes online.

------
jcr
> Piracy may never go away, but Crunchyroll is out to prove that "competing
> with free" is possible by treating piracy like a business problem.

> the site has grown into profitability, trying to take away every advantage
> that piracy has—including price.

I think the above two lines are very telling. It's very interesting and very
encouraging to see how they are competing against a business problem like
infringing sharing by providing free versions supported by advertisements as
well as paid versions without advertising. It's essentially similar to many of
the freemium models being used but is being applied to media. I wonder if
something like this would work with books?

~~~
nuclear_eclipse
Amazon is trying this (poorly IMO) with the Kindle by offering a slightly
subsidized model that will show ads at certain points. I say poorly though,
because the subsidized price isn't much lees than the normal price, at least
making it seem pointless to me to trade $30 now for ads for the rest of the
life of the device...

------
CountHackulus
Nice to see a concrete example of someone treating piracy as a market failure.
The Michael Geist article [1] about it was very informative but light on
actual examples.

[1] [http://www.thestar.com/business/article/956637--geist-
canadi...](http://www.thestar.com/business/article/956637--geist-canadian-
backed-report-says-music-movie-and-software-piracy-is-a-market-failure-not-a-
legal-one)

------
wccrawford
Actually, it doesn't quite treat it as a 'market failure'. It does indeed take
it seriously and beat it at part of its own game (releasing shows when people
want them) but it still can't compete on price.

And I think that doesn't matter. Give people easy, legal access to the shows
at a decent price and they'll pay. (Well, some won't, but some never will.)
That's the best you can hope for.

~~~
ZoFreX
I've always said this regarding piracy - the reason many people pirate is that
it is faster, easier and cheaper than paying for content. There is no system
by which I can pay money to watch TV shows as soon as they are done airing in
the USA, I either have to wait for the DVDs, hope the show airs here too, or
pirate it. To regurgitate a popular TV quote: Shut up and take my money!

Those services that do exist are all inferior to piracy. LoveFilm streaming
does not work well on my PC, and has a poor selection on the PS3 (not to
mention that if any torrent website was down as long as PSN has been, someone
would have created a new one by now).

Hopefully one day systems will exist whereby I can play any song and watch any
film or tv episode from my home via the internet in exchange for cash. I'd
probably pay £100 a month for that (Spotify is a bargain at £10 a month) - but
I can't. On the TV side of things, there is no existing service that even
comes _close_ to piracy + XBMC.

~~~
rick888
"I've always said this regarding piracy - the reason many people pirate is
that it is faster, easier and cheaper than paying for content."

It's the beginning of the entitlement generation. People aren't getting what
they want, so they take it. Unless the content is $0 and you can get it
whenever you want, the vast majority of people pirating will not stop.

I've haven't seen the end of the excuses. There are plenty of legal services
for music (trying for free and buying for cheap). Yet, piracy is stronger than
ever. What makes you think it will be any different for movies?

I also think about piracy when I start a new business idea. I no longer
release any commercial apps..only commercial services.

~~~
nitrogen
I see two troublesome arguments here that are often used by the media
industries:

1\. "It's those @$#% kids!" In other words, promulgating and perpetuating an
unnecessary generational divide. The "entitlement generation" will soon enough
be running the show, so the incumbents are only doing humanity a disservice by
taking a scorched-earth-like policy instead of figuring out how to run a
sustainable business that satisfies the demands of the technology-enabled
consumer.

2\. "Pirates gonna pirate." There is no "pirate" demographic, no one reason
why people copy instead of buying. Maybe they've watched the first season of a
show on Hulu, but the later seasons are unavailable. Maybe they'll pay for
content _or_ watch ads, but not both at the same time (Hulu). Maybe they
missed an episode of their favorite show and don't want to wait 30 days to a
year for it to show up on Hulu/Netflix/DVD.

Assuming that all pirates are of equally dubious moral character is defeatist,
elitist, and self-damaging. It's defeatist and self-damaging because it's
ignoring the potential to expand one's market to reach some of the pirates.
Each incremental step out of the inglorious dark ages of big media and into
the digital light will capture another _n_ % of the currently-pirate market.
It's elitist because it regards having a different moral code as inferior,
when in reality, it's just different.

This addresses your second-to-last paragraph. Pandora is a pain because it's
deliberately crippled. If you get a mix you don't like, you can only downvote
or skip a few songs before you're forced to listen to whatever they play, and
that restriction applies across all of your stations. In other cases, it's a
deficiency of marketing/awareness/trust, user interface, selection, ISP
bandwidth/throttling, or pricing.

Finally, give it time. The typical college graduate has probably "acquired"
more music over the past 7 years of their lives than they could ever have
hoped to pay for. Some of those will eventually convert to paying customers as
they begin earning real money, and their increased access to creative content
during school may have inspired them to greater societal contributions, from
which all of us can benefit.

------
jamaicahest
Silly that the anime studios have not learned anything from the recording
industry's last 10+ years battle with internet piracy and the success of
online music stores. But I suppose it is difficult to accept that your
business strategy, which has worked for many years, is now no longer working.

~~~
michaelpinto
Actually America is a secondary market for anime — it's only recently that the
Japanese have started selling here directly (in fact companies like FUNi are
licensing anime not producing it). Most anime is broadcast TV so they make
their real money from advertising and the marketing of merchandise, it's only
in America where the DVDs were a primary point of consumption. So they have
different issues (and blind spots) than the recorded music biz.

~~~
tsotha
This is a key point. Part of the reason they have such a piracy problem with
anime is until very recently only a handful of series were released in the US.
For most titles a fansub was your only option if you wanted to watch at all.

~~~
michaelpinto
Well in the old days we traded VHS tapes that weren't even subbed! ; )

~~~
tsotha
Heh. I remember watching the laserdisk version of _Laputa_ at a friend's house
circa 1990. Took me almost ten years to secure my own copy.

------
akozak
For a more in depth look at how piracy is a market failure, see the fantastic
Media Piracy in Emerging Economies study: <http://piracy.ssrc.org/>

------
tantalor
The iTunes Store works the same way. In general, if you offer content on
reasonable terms, people will pay for it, otherwise they will pirate it.

~~~
jarin
The other reason the iTunes Store works is ease and speed. No matter how good
your connection is, it's really hard to beat a one-click preview (which
torrents don't offer), one-click purchase, and having the entire album in your
iTunes library in less than a minute.

------
Apocryphon
I wonder if Netflix is going to buy them to create an anime division.

