Wednesday, November 30, 2011

Jonathan Clements: e-mail Interview within the Industry

One of my professors at The University of Texas at Dallas (UTD) suggested I contact Jonathan Clements for an interview from someone within the anime industry. Clements is a citizen of the United Kingdom and works as a translator and script writer. He is the author of the book Schoolgirl Milky Crisis: Adventures of the Anime and Manga Trade and co-author of The Anime Encyclopedia: A Guide to Japanese Animation Since 1917. Clements also runs his own blog also called Schoolgirl Milky Crisis.

His answers to my questions are much longer than I anticipated, but I very much appreciate him for responding to me and providing such detail.

Do you own DVDs? About how many (approximate)? What genres do you prefer?

Yes. About two thousand, I think. I lose count, and a dozen review copies arrive every month, so it's an ever-expanding vortex. Much of the material here for my work is Japanese TV and cartoons. My wife is working her way through all the AFI, IMDB and Motion Picture Academy top tens and top 100s so we have a lot of old movies lying around, as well as many box sets of TV, particularly from HBO and Showtime.

DVDs are cheap enough now that I often treat them like a movie ticket. Even if it's £20, that's still more or less what it would cost for the pair of us to go to the cinema, so I happily pay that, and if I never think I am going to watch the film again, it gets recycled.

Do you own video games? About how many (approximate)? What genres do you prefer?

I think I own about four or five video games, all of which I wrote the scripts for, or translated, so they're on the shelf because they were "mine". I keep video games out of the house otherwise, as I know that I would never get any work done otherwise.

Do you import DVDs or video games? About how much of your collection? From what countries?

I import DVDs mainly from Japan. Some from the US and occasionally China and Australia. I suppose 60% of my collection is imported, but my "collection" is for work purposes. In terms of what I would actually buy as a consumer, maybe more like 5% is imported.

Have you had trouble getting foreign DVDs or games to play?

No. Amazon Japan and deliver to my door. But the threat of there *being* trouble has affected my purchases. See below.

How do you usually get around regional lockout?

I use a multi-region DVD player. I have not bothered to buy any Blu-rays because a multi-region Blu-ray player is much harder to get. A friend of mine tried to chip his to play all regions, and it then took itself online, saw that it was an abomination, and committed ritual suicide, turning itself into a hunk of useless, expensive metal. I'm not prepared to take that risk. Occasionally, I do hear of a Blu-ray disc that has some feature or functionality that might make it worthwhile for me to see it, but nothing has made me want to rush out and spend hundreds of pounds on new hardware. A lot of the stuff I write about is so old anyway that a Blu-ray transfer really isn't going to make that big a difference. It'll just cost more.

I think, if regional lockout had been less of an issue, I probably would have bought a Blu-ray player by now. But I just can't be bothered because of these risks. I do understand that Blu-ray has a higher level of quality, but it's not so world-shatteringly big an issue for me that I have to have it right now: Schoolgirl Milky Crisis - Perceived Value

What is your general opinion of regional lockout? Should it continue or be removed?

There has been some form of regional lockout for as long as I can remember. Originally it was accidental. America and Japan shared the NTSC video format, but I grew up in England, where the video system is PAL. So I've always had to consider conflicting standards, even in the days of VHS.

What irritates me about regional lockout in the 21st century is that it is artificially imposed, at least in part, in order to give one rights holder something to sell to another. I *understand* why this is necessary, but I still don't like it.

The last article in Schoolgirl Milky Crisis (the book) repeats something that I heard a producer say eight years ago: "the next format is no format." Regional lockout is an anomaly. It'll be gone in ten years, because media will be more centralised. Or rather, you will still be locked out in your region until you pay up, but then access will be immediate. There will, however, be other collateral damage: SMC - Blu-Ray Blues

There are other issues. Regional lockout allows for items such as music rights to be paid for on a limited or roll-out basis. Certain anime, for example, simply could not afford to have the music tracks they have if the producers had to buy global rights from the very beginning. If you were to insist that all anime had to be globally available from the first day, you run the risk of fundamentally altering what your beloved anime actually is. Are you, as a consumer, prepared to wear the cost of additional music rights, and up-front performer residuals, or perhaps a shorter series because 20% of the budget had to go on pre-emptive localisation costs?

I have found that one purpose to region codes is to keep customers from only importing from other countries just because it’s cheaper. How do expect media industries such as from Japan, America, and Britain to feel about “reverse importing”?

Yes, that's true. But how the industry might feel about it depends on the content. If, by some odd quirk, the Avatar DVD comes out in Australia a month before it comes out in the USA, you are free to buy it on import. If you want to pay shipping charges, and import duty, and have a set-up at your house whereby you can watch it region-free, then nobody is going to stop you. You're not breaking any laws, and you will have the cultural capital of being able to brag to your friends that you saw Avatar on DVD three weeks before them. Although if they're impressed by that, you need new friends. This is a victimless crime -- in fact, it's not even a crime. Avatar sells one less copy out of millions in the USA, and one more in Australia. Nobody cares, and James Cameron still gets his cut eventually.

Now, let's try a different form of content. What if you are an anime distributor who sells to a tiny market? And I mean *tiny*. What if you make a show that basically only monetises if you can find 500 single men in their thirties who will spend $500 each on bespoke box sets, tie-in figurines, and the like. What if you only expect to sell 500 copies of your niche-of-a-niche DVD box set, but you expect it to pretty much sell out on the day of release? And then some blogger turns up and tells your customer base that a foreign edition has your local language track on it, and costs 95% less than your domestic product? This isn't a hypothetical. This actually happened two years ago, when UK sales of a particular anime went through the roof overnight after a Japanese blogger realised how much cheaper the UK edition was: SMC - Ill Winds

That incident was embarrassing for all sorts of reasons, including the realisation that something getting hyped abroad as cutting-edge and super-popular actually had less fans in its home country than would fill a cinema. And that's the problem with anime and certain other niche areas -- it's not about the big sellers, it's about the little boutique titles that only sell three or four thousand copies, when a four-figure grey import will drastically affect profit and loss in your territory.

It doesn't bother North America or China, because those are both markets where the local language and domestic sales can monetize most titles on a domestic release alone. But it's a big deal in, say, the Netherlands, or Armenia, or Finland, where you have a customer base that would fit twice-over into metropolitan New York, and a language that nobody else speaks. There are also legal issues. Who's going to pay to make a Finnish-language track on a Japanese DVD, if not a Finnish rights-holder?

If there's a shared language, there's nothing *technically* to stop a US company making a Region 0 release and just waiting for UK private consumers to import. But UK *retailers* cannot legally import it, as they need to get it certificated by the local censor: the British Board of Film Classification. That costs money. Normally it's money that would be paid by the distributor, but if there's no distributor, there is nobody to pay for it. So in an entirely centralised world, the original licence holder would have to pay for (how many?) 30 or 40 language tracks, and certification issues in a dozen different countries, and cut stuff for one territory and stick it back in for another. In some senses, it is easier to farm that work out locally. But for there to be a local farm, there needs to be a fence for the local farmers to delineate their territory, and regional lockout is part of that fence.

This can also be an issue in industrial quantities. There was a case in the 1990s where a legal loophole allowed a German distributor to release a well-known anime, in English, in *Germany*. It was cheaper than the UK version, and imported into the UK in a four-figure quantity, seemingly at a retail level -- by which I mean, by wholesalers, not private individuals. This, in turn, completely skewed the sales figures. Although it sold in stores in predicted quantities, the UK rights-holder found out that they were selling 1500 copies *less* than they expected. 1500 is a big number in modern anime. For a region like the UK, it can be 50% of your sales, or more.

I have noticed that regional lockout is becoming less strict lately: Blue-Ray Discs use only 3 regions, the latest generation of game consoles hardly use region codes at all. I also noticed that in your blog you mentioned that Blue-Ray could eventually lead to the anime industry becoming centralized in Japan. Would you figure this to be a good thing or that translations and adaptations should be more left to local companies?

There are less regions, but if you are stuck on one side of the lockout and your desired viewing is on the other, it's just as strict as before. It's actually worse for me, because Japan, where I'd be likely to be buying most of my Blu-rays, is Region A, and I live in Region B. So I preferred the days of DVD, to which I am basically clinging now out of spite.

I think it will be "left to local companies" anyway, in the sense that people will still have to outsource to the correct talent base. That means, if you are a Tokyo company and you need Czech subtitles for your film, you're unlikely to meet a Czech translator at the laundromat. You're probably going to end up Fedexing the work to a Czech. So that's not necessarily a problem.

For me, as I discussed in my article on the Blu-ray Blues, the problem is more of an organisational issue within Japanese companies, as many of them frankly suck at dealing with foreign markets in general. Selling foreign rights allowed them to simply forget about the "foreign-ness" of foreign markets and, hopefully, just collect the money. Some, like Ghibli, have made wonderful, top-class foreign contacts that can do their films justice. Some, haven't. Many Japanese companies regard Japan as the sole market of importance, and the foreign territories as gravy. It might be nice gravy, but it's not gravy that they can rely on.

Some websites such as host videos of anime often even “simulcasting” (uploading a currently airing series usually one hour after airing in Japan). The series on these sites are uploaded by the creators themselves and are very much official supported by ads or paid subscriptions. How do you expect sites like these to affect industries like anime?

The simulcasting model is the future. When there are no packaged goods to put a price tag on, media will be swiftly centralised on servers. Of course, that's going to kill an entire stratum of retail, and probably marketing, too, in many countries. But more work for tech support and programmers.

One of my - and I believe of other fans of foreign shows and games - dilemmas is that many series aren’t expected to be popular enough to be brought to the US. The only hope I/we have of experiencing them is to stream or download them (potentially illegally), which I would argue is unfair. What is your perspective on this?

That's not your "only hope", Princess Leia! And it's not "unfair" if you've decided to have a hobby that will cost you more money to access than Hollywood movies. This is a covetous argument that I like to call, with deliberate and calculated provocation, the "doctrine of lapse". It holds that if the rightful owner of something that you desire has failed to meet your arbitrary expectations, you are justified in acquiring their property by force. The British had great fun waving it around in India.

I don't accept that premise at all. But I concede that it is not your fault that modern media dangle such temptations in front of you, along with the ready technology to steal them. There are also issues here of Access and Ownership, not the least in the premise that anime is your destiny.

For all you know, your most divine and perfect media experience lies in the joy of watching the nose-flute opera of Upper Volta*, but you just haven't discovered it yet. When you do (if you do), will you demand that Upper Volta operas be freely accessible to you, immediately, or else you will steal them? I realise that this makes your point for you, in noting that there are some niches that are so obscure that they attract a smaller audience or even no audience at all, but that's why William Shakespeare at the theatre costs more than Michael Bay in the cineplex.

Crunchyroll have demonstrated that a model based, how can I put this, on what was once the technology of piracy, can be legalized and monetized. However, you need a *lot* of views to monetize on streaming, and while I can see that working for Naruto, Bleach, hentai and movies, I don't see it working for the niche titles that make up so much of modern anime. Subscription is much more concrete, in the sense that you can say to a fan that $40 a season will give him access to everything as often as he wants. Part of the problem with that is that anime fans often exist at a sort of liminal age where they are too young to own credit cards, but there are ways around that with gift cards and Paypal and the like. This is what Anime on Demand is trying in Europe, and I suspect that their fees are spread on a "stable" of films rather than specific titles. So even if you watch just some big-name fan favourite, a portion of your subscription is also subsidising some awful thing about ponies that nobody is really watching. But *both* shows are there on the menu, and people can pick and choose.

It's also worth remembering that the concept of paying directly for anime, apart from via movie tickets, is a relatively new development. It was only introduced in 1983 with the advent of home video. For the bulk of anime's 94-year history, and for the majority of anime's thousands of hours of content, it has been given away, for "free" to consumers in exchange for advertising messages about chocolate, or product placement and context integration selling robot toys. So I suspect that in a decade's time we may be regarding the period 1983-2013 as something of an anomaly, and everything may well return to "normal".

I've got more to say about this, but it's a chapter of the book I'm writing at the moment, and if I keep typing here, I shall never finish it!

My belief is that current technologies such as the Internet would more bring the world together, but it seems that region codes make it difficult to share media. Other than regional lockout the only real barrier is language. What are your thoughts?

Well, up to a point. Region codes are one barrier. Language is another, but those are only the first stages of "Audience and Reception". Culture is another, which is why Sazae-san has never been translated, despite being the top-rated anime in Japan. Technology is another -- not everybody has the means to watch anime. SMC - Lost in Translation

Are there any other comments you would like to share?

(*I made the nose flute opera of Upper Volta up)

I'm going to cut and paste an article from Manga Max #3, January 1999, p.63. I was the magazine editor, and when I was approached by one of the writers with the concept of Regional Lockout, I had never heard of it before. So I gave him a page to talk about it. It's how the concept
looked to us 12 years ago.


Last Word

Ben Carter is ready to crack the code

Territorial Lockout

The world may be made up of countless countries and cultures, but in the minds of many companies it is composed of only three parts – Europe, the US and Japan. These divides exist for many reasons, not least because big companies like it that way. Having three separate areas for product marketing, each with their own standards (both technical and cultural), makes life easier. Product launches can be staggered, and modifications made for each area as necessary.

For many products, the simplest differences – geographical, linguistic or even lack of interest – are enough to enforce the division. However, for some much-awaited new products, be they films or the latest games, there is a vast grey-import market. For companies, this is a blow for several reasons – it opens up the possibility of material “unsuitable” for a particular area appearing with their name on it, equipment may malfunction if forced to operate to foreign specifications and it may even distort sales figures with parallel imports. In one recent case, it was discovered that a quarter of a particular anime’s entire UK sales were being shipped to another European country. This was great news for the UK profits, but a potential time-bomb if the rights were ever sold in that grey-import territory, since thousands would already own the tapes. For these reasons, increasing numbers of manufacturers include security measures to stop products from functioning when used outside their country of origin – the “Territorial Lockout” device.

For a long time, the main worry for anime fans was the division between Europe’s PAL television system and the NTSC system used in the US and Japan. The vast majority of anime is NTSC format only, so fans in PAL regions have learned to cope with the format differences. The massive difficulty in converting between the systems meant that companies had few worries about importers – European and US systems were incompatible, and as far as mass-market media went, the level of imports to the US from Japan were negligible.

The main problems with PAL and NTSC compatibility stemmed from the analogue nature of the equipment. Digital signals are much easier to convert, and hence the probability of material being imported (particularly in the case of Europe where there are a large number of importers bringing in the latest US releases early) is much higher.

When true mass-market digital media began arriving, a lot of companies (especially US movie distributors) called for the DVD standard to be modified to include “region coding,” dividing the world into a series of numbered territories, with the target designation coded onto the disc. This number is also programmed into the player, and unless they match the player will refuse it. Similar systems have been used by video games manufacturers for years.

One interesting aspect of the DVD region-coding system is that whilst (predictably) the US is zone 1, and Europe is zone 2, Japan is also in zone 2. This was presumably due to technical limitations on the number of zones available, and the belief that the import market between Japan and Europe was small enough for this not to be a problem. Whatever the reasoning, the result is that while US fans are now locked out of Japanese DVDs, European fans can play them without any trouble (the differences between the PAL and NTSC systems are irrelevant, as it is the player which determines the output format, not the disc).

There is hope, however, for anyone wanting to import DVDs between regions – as has traditionally happened in the games console field, within days of new DVD players being released, unofficial modifications to change or remove the region coding appear from third parties and on the Internet. Often these modifications are as simple as pressing a special combination on the remote control, or flicking a switch inside the unit – many manufacturers admit off the record that releasing an easily-modifiable player boosts their sales, and as they usually have no interest in the “software” sales, is no loss to them.

Companies trying to divide and categorise sections of the globe can only be a bad thing for consumers, and it looks like the practice is here to stay. But as DVD takes off, anime fans will undoubtedly be among the frontline of those who make the extra effort to obtain and play discs from outside their region and society. We’ve never been the kind of people who enjoy being locked out of anything.

Ben Carter is a programmer and games designer.


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