You heard it here first! Hit the jump for the full transcript of the interview, in which we talked about FUNi’s coup, the future of the anime industry, and Gen’s favorite titles from FUNi’s recent acquisitions. There are a couple of references to Gen’s keynote speech, so here’s my report on that. And now, on with the transcript!

GM: So, you’ve just announced about fifty new acquisitions for FUNimation– what are you going to do to top that?

GF: (Laughs) Well, it’s going to be a little hard to top. A lot of our things coming in the future are things I hinted at already in my kenote about what we’re trying to line up for VOD Internet, for the FUNimation Channel, for social networking, all these big initiatives that FUNimation is pushing in the digital area…that would obviously have some impact, we think, on the industry. The only other big announcements would be potential titles coming up of course, and those are probably the only things I see on the horizon that could be of any significance at this scale.

GM: You’ve said that Geneon will continue to produce their dubs; do you think that you’ll continue to work together in the future and that Geneon has a future in the western industry, or is this just a deal for their most recent licenses?

GF: That is an unknown, and actually Geneon hasn’t told us. So that’s probably a better question for them. If they do continue we’d be happy to continue to work with them; if they don’t, then this is just a one-shot to finish off all these good titles.

GM: You also said in the keynote that you’ll pick up where Geneon left off in terms of DVD releases for their titles; what about ADV’s?

GF: In most cases where things are partially released we’re looking at finishing out the releases in volumes. If there are any titles that we think are just a little too weak, then we may go straight to box set.

GM: What about video on demand, might we see it online before we see it in stores?

GF: Yes, there’s a good chance that we’re gonna see it online first, based on our online strategy. The problem right now is that we have a lot of things queued up in our online strategy, as I mentioned before, with our 1200 half-hours queuing up, so I’m not 100% sure what’s going to make it to the market first right now.

GM: Is the office sort of panicking about all this additional workflow, or is the reaction all excitement?

GF: Obviously these sorts of negotiations take many many months, so we had been preparing, already hiring people with the assumption that we were going to close one or both of these deals, so we’d already kind of geared up to how much we thought we’d need to hire to get both of these deals, so with the last couple of offers going out we were pretty much there and we’re ready to handle the volume. So we’re not too concerned about that at this point in time.

GM: So when can we expect to start seeing these DVDs actually on shelves, for the first few of them?

GF: Well, right now we’re shooting for the first Geneon titles actually next month, late next month is what we’re shooting for. ADV…we’re not as sure because we still have to figure out if there’s somet deal we can make with ADV on dubbing. My guess would be sometime in the fall is when we’ll be able to start getting some of the ADV titles out.

GM: At the technology and licensing roundtable a Bandai representative noted that Japanese voice actor unions make some digital distribution deals more difficult– are there other lesser-known problems that fans may not realize, aside from the approvals process?

GF: Yes, the voice actor thing, we haven’t run into ourselves, except for when it’s live-action. If it’s live action then yes, there’s a lot of issues because the actors guild there hasn’t figured that out. But the voice talent we haven’t run into that situation. For obstacles…really, the bigger obstacle is just getting the Japanese companies’ mentalities to switch to the new paradigm, that digital’s part of the overall distribution and marketing and branding mechanism for an entertainment brand. They still see it as a very different animal, almost a taboo animal. They’re way behind the curve, basically, in Japan right now. Trying to change those long-held policies is a big problem.

GM: But one of the companies that has been very ahead of the curve is Gonzo, who you guys have done a lot of work with, like Afro Samurai. Do you think there’s any possibility of collaborating on simultaneous releases with them?

GF: Yes. Yes, Gonzo’s very willing to cooperate, so I’m not so concerned about their titles. But almost everyone else is somewhat of an issue.

GM: Where do you think the US anime industry will be in a year? Five years? And what’s FUNimation’s role going to be during that time?

GF: We see a continuation of the fanbase increasing, for sure. We see con attendance growing and we see viewership on the internet growing, though that may slow down because it can’t keep accelerating at this pace, but it’ll continue to grow. We feel that the fanbase is expanding, so the big question right now is, what’s the monetization method? With the DVD sales at their current levels, the advance is so low that the Japanese would just as soon sit on a title sometimes as sell on it, which is bad for the overall industry because with the fanbase it just gives more credence to the illegal stuff because fans will turn to that as the standard way of getting anime. That would be a real detriment to the marketplace.

We’re trying to figure out ways to monetize it so we can pay higher advances, which would make things better for everyone. But that’s going to be the big question: is it ad revenue gonna be something, is it digital downloads, is it pay per view? Can we get more brand engagement out of these kind of mechanisms like social networking, so that we can sell digital assets and get people to spend more time with anime and generate more revenue because they’re there more, generating more ad revenue. If we can’t get that kind of monetization then we’re still sort of dependent on DVDs, then it’s gonna be a very niche-y play for everyone. You’ll sell your 5,000 units of DVDs and it’ll be very niche-y. Other ways of driving down costs will have to come from distribution companies, and that would be the threat to the industry.

My guess is the way it’s moving is that the negative side is not going to happen. With the fanbase increasing, the wider exposure– like I talked about Hollywood exposure –is really just going to make it bigger and there are going to be lots of ways to monetize that will keep the industry growing. Blu-Ray will also help in that area as people switch over to Blu-Ray. I truly believe what’s going to happen is that there are a lot more American brands that are already established that will be turned into anime.

GM: So on that note, in the manga world a lot of companies from Japan are starting to work directly in the US, like Aurora (Ohzora Shuppan) and now Kodansha. But that hasn’t been that successful in anime, given Bandai Visual USA and Geneon– but on the other hand, Gonzo has done quite well so far, or at least they’re continuing. Do you think we’ll see more or less of this participation in the future?

GF: I think that the reason the Japanese companies are not willing to come direct to the US market for anime is because the model is just completely different. In publishing, the publisher is king and there are only a few big kings out there– a handful of big players who have all the content. When you have all the content and just a few players, they have enough critical mass to go direct into the US market because they have enough titles. But anime isn’t built that way, it’s much more expensive to produce and is funded by committee, so the rights ownership is in the hands of 30, 40, 50 different companies. So nobody has enough titles to have enough critical mass for the US market, it’s just impossible. You can’t make a company out of two shows or five shows a year, you have to have a consolidator that can take 20 to 40 shows a year. So that’s the role that FUNimation needs to play, is the consolidator.

So on the question of FUNimation’s role in the futures, the benefit of the deal with ARM and with Geneon is that the market was getting unstable, retailers were getting nervous due to the fluctuations of the market, and now we can stabilize the situation and make sure we have plenty of shelf space and happy retailers. The other problem with a fragmented market is that no one was willing to make the big investment to worry about TV channels and social networking and other initiatives that take millions of dollars but won’t pay off for at least 3-5 years because they’re all in the trenches fighting for the next title and whatever right now, today.

This allows FUNimation to be the company that can take that long-term investment, so it’s going to be much better for the overall industry in the long run, so I think it’s a pretty good thing for the industry at this stage in its life. So we feel like we need to take the bull by the horns and push anti-piracy, push these long-term initiatives, that’s the role we’re going to play. We have to act like an industry leader and that’s what we’ll stand up to if we can.

GM: Some companies are doing well with sub-only releases, which FUNimation hasn’t really done. Is that something we might see? Do you think we might someday see online-only sub-only releases (to date only Neko Rahmen really fits that bill)?

GF: We’ve talked about that a lot inside the company and we still haven’t seen the data to see that people will really buy enough subtitle-only DVDs. It’s just not a large enough marketplace, we feel. So we’re continuing to watch it, but we don’t think the market’s going to go that way. We think subtitles will be all digital, and FUNimation for example is going to put out the subtitles first and foremost, as fast as we can get them out the door after we acquire a title. We’ll get the materials in and churn it out in subtitle form on the Internet. One of the things that does is it deters piracy because the legal, legitimate version is out there, and while that’s happening we’ll be working on the English version. Now the Hollywood model would never do that, but they don’t have that piracy window of time.

GM: Last question– all the titles you got are great titles, but which are your favorite from each of the two deals?

GF: Sure! From the Geneon list my favorites are Hellsing Ultimate– I guess that’s the obvious choice –Black Lagoon, and Ergo Proxy. And then out of the ARM list, my favorites are Devil May Cry, Guyver– I always love Guyver because I grew up on that stuff –and I think that Coyote Ragtime Show is a title that was a little overlooked and it really shouldn’t have been, it just needs the right marketing and it could be as strong as any of these big hits, so Coyote Ragtime Show is going to be the sleeper hit.

Tags: ax08, FUNimation, gen fukunaga

18 Responses to “AX08: Gen Fukunaga Interview”

Leave a Reply