More mainstream audiences can't get things done for them without e.g. a cross-subsidy from Nintendo who can afford to treat the anime as a loss leader for the video game or collectible tie-in.
This is a shame for folks who care about distributional access, by the way. For example, there exist people who think that shoujo manga is a Good Thing (TM) for the U.S. comic books industry because it provides young girls with stories they can relate to and helps counteract the insanely rampant hypersexualization and misogyny of the US comic industry. Unfortunately, shoujo manga has fairly few crossover hits and hasn't had a commercialization success in the US comparable to e.g. Disney's line of princess products, which means that the industry is largely a) not willing to devote marketing muscle to promoting it as much as Bleach / Naruto / Pokemon / etc and b) some would argue that the old guard justify their marginalization of the genre and its fans by saying that (because of their marginalization!) it failed to sell well.
n.b. I'm neither a fan of shoujo manga nor a great lover of women's studies but someone who was both had veto power on my degree, so you can bet I at least listened for the more credible claims.
On top of this, sometimes hardcore fans will buy multiple copies of their favorites to inflate sales numbers. For an extreme example, see this man who bought 5500 copies of a single AKB48 CD: http://blog.esuteru.com/archives/3347822.html
To put things into perspective, the Bakemonogatari blu-rays sold around 50,000 copies per volume during the release window, which catapulted it to the status of "most commercially-successful anime since Evangelion." Based on this, it's not hard to see how a base of several thousand really dedicated fans could be enough to justify an anime production.
Here's a nice example: http://www.wolfheinrich.com/wp-content/uploads/2009/02/dsc00...
One of the more interesting panel discussions was with an American voice actress. The economics for such a profession are discouraging of course, and she couldn't hold back the opinion that watching anime from the net was "stealing".
But you look around the audience and clearly the great majority of the fans are too young to have real jobs. Still, many of these young people have put untold hours of work into making these incredible costumes.
Then you go to the vendors (or anywhere) to look at a licensed DVD for a season or two of a popular anime: $60 !
1. It's outrageously priced.
And the hardcore fans don't even like the product as much as the "fan subs" available online. E.g.:
2. It's usually overdubbed instead of subtitled.
3. Often it's edited down for more commercial slots for US cable TV.
4. Where there are subtitles for the opening and ending songs they don't have phonetic Japanese (romaji) or karaoke effects (words exploding into pink flowers are hugely important to a certain set of customers).
5. The translation is often not accurate, all the Japanese idiosyncracies are ironed out to make completely bland English. (Was said to be usually at the insistence of the Japanese studio).
EDIT: Of course I forgot the most important parts:
6. The video quality of the fansubs is often much better at 720p.
7. The fansubs are often more available, sometimes within hours of something appearing on TV in .jp. Official DVDs may drag out for years of on-again off-again rumors.
8. The fansubs of course have no DRM. They're just files that play on your computer and can be shared among fans. (Though sometimes they require codec downloads from sketchy looking sites).
edit: the japanese market's willingness to pay high media prices is explained on page 2 of the article
Some fansub groups go so far as to provide signage overlays that move and scale as the scene itself moves. It's so subtle sometimes that I only notice it after the fact.
One idea I had was for there to be a way for fansub groups to distribute their translations in such a way as to layer on top of a licensed distribution. So you'd get the DVD/BlueRay for a particular Anime, and then layer on top of it your favorite fansub group's translations and translator notes, and somehow they'd line up.
This would require the licensed distribution to provide the original audio track and scene timing to match the original version, of course. US pricing and in some cases even US availability are another issue.
That's a really cool idea.
But how does this represent an improvement over what's available now via torrent? I can't help but be skeptical about a plan that involves riding on top of a DVD that's already priced out of the market by the studios.
How about just an improvement over the subbing tools? Many of them are simply immature software. Can you fan-source it? Make it collaborative, interactive? Link it with Japanese lessons or a native speaker somehow?
There are whole conference centers filling up on a regular basis with teenagers who, out of love for this aesthetic, have taught themselves to sew. There has got to be a business model there for someone!
Right now it's being won by the guy who lugs cardboard boxes of $40 t-shirts from state to state in his van.
I'm not sure where you got this idea from, but it is patently false. Although the recommended software for playing anime fansubs is Media Player Classic Home Cinema, which is open source, I have had no issues using MPlayer either. And as of 2.0, VLC is supposed to have the requisite subtitle support as well.
Perhaps you weren't using a reliable website. I've definitely heard of sites out there that try to trick you into installing spyware by saying it's a codec. I always used torrents to download releases listed on AniDB (I searched using the CRC checksums, which anime fansub groups include in the filenames), so I entirely avoided that problem.
> Usually it would be open source but still not be practical to build yourself (if you wanted to watch any anime that evening too).
As for this, I've never seen any codecs that you had to build yourself, particularly on Windows, so I have no idea what you're talking about.
 I talk about the American licensors, industry, and fanbase here, but much of what I say is more-or-less directly applicable to the same in other countries, as well.
 Just so we're clear, I'm being sarcastic here. There's absolutely no reason to believe that if you treat someone with respect, they're going to turn around and hate you for it. There are cases where this happens, of course (and this response may be more or less likely then normal depending on the nature and reasons for your interactions with them), but it's by far the exception.
The main issue is licensing, and showing the "old guard" the new ways to capitalize on the market instead of relying on the current traditions.
Also wanted to add the "current traditions" are similar to the music and movie industry. More so in the vein of music, with the evolution of how fans can acquire anime. So they see no real need to pay for something that comes out months to a year later.
The key is to get some very old school japanese companies to change their way -- but the other issue is have a model to make money in a niche market that isn't too big. The later problem might have a long term solution, but the first problem is really the big issue. The only solution might be if the Japanese do their own version of Hulu, or partner with a player like that.
I've been an anime fanboy since 1980 (I ran the Star Blazers Fan Club) and now I'm CEO of Anime.com so this problem has always been of interest to me...
mikelbring [at] gmail.com
If this figure is accurate, then it represents a far better hit rate than what the US movie and TV industries usually achieve. (The rule of thumb in the US entertainment industry is that less than 25% of TV pilots makes it to the airwaves, and of those, a very small percentage last a full season; an even smaller percentage of those last more than a full season; a fraction of those, still, last enough seasons to become financially successful. I can't recall the film industry hit rate off the top of my head, but I believe the going theory is that 4 in 5 films will fail, and the remaining 1 must subsidize those failures).
In fact, I think the US entertainment businesses will need to learn a lot from the anime business. As distribution techology becomes more sophisticated, we're going to enter a world where two things happen: 1) opinion leaders within a certain genre (superfans, otaku, loyalists, diehards...whatever we want to call them) will discover new content via collaborative filtering as seen on Netflix, iTunes via the Genius algo, etc.; and 2) those folks will, in turn, share their discoveries with linkminded friends via social networks. These distribution patterns will be less than kind to the mass-market, "shotgun" approach as it's been practiced by Hollywood firms for nearly a century. Conversely, they'll be much kinder to niche-portfolio production and marketing. To patio11's point, this will mean resources being devoted to product differentiation: basic stuff for the casual fans, and more limited-edition, souped-up stuff for the otaku (where the real money gets made). It'll also mean that entertainment firms will need to get very serious about high-involvement CRM with their otaku bases, as video game companies currently do. (To some extent, this has already been happening in recent years, i.e., with everyone in Hollywood's annually bending knee to the kingmakers at ComicCon).
in my eyes, these fan sub groups aren't classified as pirate (nor are the peopel downloading them), because as far as i m concerned, the anime is recorded off free to air tv, and thus is meant to be freely available to watch. Add to that the fansubbing + cute karaoke, its a product it itself. The american distributors barely make the mark when it comes to anime distribution, and so no one i know buys anime dvds, and only ever watch fansubs.
Most legal systems come to a different decision from you about whether or not this is copyright infringement.