AX08: Gen Fukunaga Keynote
So the Anime Expo keynotes are not available to the general public– which makes it a kind of odd “keynote,” but whatever –but press and industry are hangin’ out in this nice, plush auditorium waiting for the keynote and then roundtable (on Technology, Entertainment and Licensing) to start.
I’ve decided to only sit through the keynote, in the hopes that I can actually hit up the Aurora Publishing first birthday party and see if they have any licenses (cross your fingers for me). But I thought I’d let you know what happens in these mysteeeerious keynotes!
Gen Fukunaga is the president and CEO of FUNimation Entertainment, and has been since before it was bought by Navarre in ‘04.
Fukunaga is going to talk about the future of the anime industry and how FUNimation fits into it, especially during a time where the industry is in flux. He says that change creates opportunity and that the company is still optimistic about the future of anime in the US and FUNimation’s role.
Japan’s animation industry has the most competitive environment of any animation industry in the world, which is why Fukunaga thinks they churn out generally high-quality content– whereas the US is more focused on live-action stuff while animation is generally just geared towards kids.
The manga industry helps create opportunity in Japan because the creators can inexpensively create content and send it to publishers who can potentially send it out to millions of people, who “vote” on the series– with their money, or occasionally literally. That system allows Japanese publishers to filter through thousands of possibilities from thousands of creators, whereas in America people generally take the animators who made the most recent popular TV show or movie.
To sum up: the Japanese animation industry is churning out the best content. The result in the US? There are clearly an increasing number of fans in the market, and the number of casual fans is increasing in particular. Conventions are seeing up to a 50% increase in attendance yearly, and more and more people are watching stuff on the Internet. Most of that viewing is, of course, illegal.
Hollywood is catching onto the trend, and lots of anime titles are being made into live-action movies as a result, and Fukunaga thinks we can probably expect to see more of that, and that we can expect it to spread anime into a more mass audience– not to mention anime versions of popular US titles, such as FUNimation’s Witchblade (or, for non-FUNi examples, the upcoming Terminator and Batman anime).
The problem, of course, is that DVD revenue– which makes up 95% of what anime companies are trying to make money off of –has fallen off significantly. The big buzz phrase in the entertainment industry right now is “brand engagement,” getting people more engaged in the brands to get people’s money. Just tossing out a DVD on the shelf doesn’t seem to be enough anymore.
Moving on to broadcast, DVD, and digital distribution. On the broadcast front, FUNimation has gotten along well with Adult Swim and IFC, but of course only a certain number of titles can get out that way, FUNimation is embracing video on demand. They hope to announce a few major deals on that front soon. On the DVD market, it seems to be stabilizing from FUNi’s point of view and has even increased for them lately. Regardless of the other aspects, he thinks that DVD will be the majority chunk of revenue generation for anime.
Anime fans tend to be early adopters, so Fukunaga thinks Blu-Ray will begin to compose 10-20% of anime DVD sales and on launch are finding it to get as high as 30%, much higher than for the general Hollywood market. The pricing and release schedules for anime are changing a lot as well, particularly straight-to-season-sets and the like…but Fukunaga doesn’t expect that to happen for “A titles” (which I assume is A-list titles), due to the demands of the Japanese copyright owner. But if the season set strategy doesn’t pay off with a 25% increase in sales, it seems unlikely that FUNimation will continue with it.
On to digital, including mobile stuff and the rest of the Internet: Japanese partners are giving digital rights whenever they acquire a new license, and in fact FUNimation won’t license a series that they can’t get the digital rights for anymore. On mobile– FUNimation has a partnership with AT&T and they will announce a deal with…you know, I’m not entirely sure I’m allowed to give that away, so I won’t until I get a release. It starts today though so that should be coming soon. They think it’ll be a little while before mobile will start to pay off, but they’re working on it.
Onto the rest of the Internet: most people connect to the ‘net at least once a week, and 77% of those surveyed said they could live without TV, but not without the Internet. FUNimation is going to see an increase in revenue from download-to-own, and FUNimation.com is where they’ll launch most of their titles for downloads.
Social networking, one of the highest-growth chunks of the Internet: but there seems to be a lack of an anime-centric social networking environment (*cough cough* that’s why animeOnline was made), so FUNimation is aggressively pursuing strategies there via partnerships that will presumably be announced someday. Fukunaga thinks it’ll be a brand engagement mecca.
Internet VOD broadcasting: Fukunaga thinks this could overtake broadcasting for FUNi. FUNimation is aggressively moving towards simultaneous sub-only releases with Japan, which is involved with their YouTube deal and some others that are being finalized.
And finally, piracy. There have been panels on the topic already, and Fukunaga acknowledges that it’s a problem. FUNi’s tactic is to educate against piracy, provide a legal higher-quality alternative (which they’re working on), and aggressively stopping infringing sites, especially since the Japanese partners are starting to give takedown rights prior to the series’ launch not just in the US, but in Japan– and they now have some full-timers for whom that is their job.
Fukunaga is now talking about FUNi’s major coup d’etats: the 10+ Geneon titles and the 32 ADV titles (Gen says 34– are there more to hear about? Hm).
Moving into questions…Will you go with box sets for the new titles? Yes if they can, but with Geneon most of the titles are part-in, so they want to start releasing the rest of the series. Also with Geneon, that’s a partnership and Geneon is continuing to dub and will finish all of their shows– it’s their productions still. So no dub changes! With ADV, they’re in talks to have ADV finish up the series, again to avoid dub disruption, but nothing’s set in stone yet.
On the merchandising rights, they have it for their series, and for the ADV series as well, but not for Geneon, who will hang on to their own merchandising rights. But the niche status of anime makes it difficult for companies to want to make merchandise; it’s expensive to do on a small scale.
More on the piracy thing: they’re hoping to cut off people from uploading the original raws and making the subs, rather than downloads, and they want to do this by discouraging them by beating them to the releases. Which I support immensely.
Last question: they haven’t launched ad-supported anime VOD yet, but they’re working on it and it should start in the fall. They hope it’ll become 10% of anime revenue when it starts. The end!
PS I think it’s okay to say– the mobile phone deal is with Sprint. :)
Tags: ax08, FUNimation, liveblogging
July 4th, 2008 at 10:41 am
[...] apologize to gia, but I think it will just be easier to quote from her post: Fukunaga is now talking about FUNi’s major coup d’etats: the 10+ Geneon titles and the 32 ADV [...]
July 4th, 2008 at 12:04 pm
“So we want to be involved in social networking. If only we had something like that to connect us to fans.” Was it something like that?
I like that Funimation is trying to let Geneon and ADV actually finish the production side of things. It’s really disrupting to have voices change from one episode to the next, as I’m sure Funi knows from when they took over DBZ and switched voice casts.
I’m interested in seeing how their internet VOD works out, particularly with youtube. It is nice to see Funi being so adamant about getting digital rights as well.
On a side note, I must have completely missed or forgot about any mention of a Terminator anime.
July 4th, 2008 at 12:19 pm
@Niko: It makes sense for Geneon, since they recorded in SoCal and getting those people to Texas would be expensive! ADV’s in Houston, so it’s more feasible that FUNi could, in theory, use ADV’s actors.
But they’re also just different deals: the Sojitz titles are now entirely FUNi’s, and FUNi could hire ADV to finish them, wheras Geneon is sort of “hiring” FUNi to handle production/sales/distro (for lack of a better way to put it).
As for Terminator…I’d forgotten too, but then I remembered: http://www.darkhorizons.com/news08/080114d.php
July 4th, 2008 at 11:07 pm
[...] 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 [...]
July 5th, 2008 at 3:37 pm
[...] So far it’s mostly the usual Sheehan notes about the industry combined with some quotes from Gen’s keynote. [...]