This is not a Brexit

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Soon after the Brexit vote, I was knee-deep in a pit of Chinese corpses. That’s not because of Brexit, you understand; that’s my job, making a documentary about human sacrifice in the Shang dynasty. But the cameraman’s phone kept going off with sales offers from British companies, spamming the techies of the film world with their chance to snap up cameras and lenses, RAM cards and drones while the pound was weak.

I cling to the belief that common sense will win out, and that the politicians who lied about the appeal of Brexit are just as liable to lie about their willingness to go through with it. In the meantime, while I’m waiting for all those promised new hospitals to open, and all those immigrants to be kicked out (goodbye doctors, nurses, any chance of a good plumber…), and while I am watching the architects run away from the mess they have created, and Theresa May rising to unelected power like some Cthulhu of Conservatism, I’m wondering about the impact on anime.

Fortunately, as far as most licensing contracts go, the United Kingdom is rarely regarded as “part of Europe”. It is already either treated as a separate entity, or attached like a sixth finger to deals involving the rest of the English-speaking world. For acquisitions agents sitting down at meetings in Cannes, Los Angeles or Tokyo, political divisions are less relevant than DVD and Blu-ray region coding, or online lockout.

Well, in all respects except one – money. Since last month’s issue of NEO, the pound has dropped 10% in value [now 13% –JC], which means all deals currently under discussion are going to cost UK companies a tenth more. Companies are unlikely to pass that cost on to you, so something that costs £18.99 in the high street will still cost £18.99 next month.

But that money has to come from somewhere, and I predict it is going to start to show in the autumn season, not in terms of things you can see, but things you can’t. Companies like Funimation, paying in dollars for world English-language rights, probably won’t even blink. The damage will be felt by those smaller distributors with a UK-only footprint, having to pay extra cash not only for the rights to the anime in the first place, but for the pressing of the discs, currently done in Austria or Poland, and hence payable in euros.

Faced with mounting bills, even without an official date on Brexiting, they will drop whatever tenth title looks the least appealing. They simply won’t pick it up, and you won’t ever find it for sale. They will also think twice about re-pressing any other shows that go out of print. Anything that’s say, six years old, approaching the end of its licence, and unlikely to shift more than a few hundred more copies, will suddenly become entirely unavailable. All of which means, in the short term, buy any old shows you’ve been putting off, before they disappear from the shelves. And in the long-term: you’ll probably need a year’s supply of baked beans and a shotgun.

Jonathan Clements is the author of Anime: A History. This article originally appeared in NEO #154, 2016.

Variety is the Spice…

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I’m taking the chance to publish the unexpurgated version of Mark Schilling’s interview with me for his piece last week in Variety. My comments were, naturally, reduced to a couple of soundbites, but I think some interesting things came up. Sometimes my brain doesn’t grind into action until it’s asked the right question, and some of my ideas here were straight off the cuff. The question was that old favourite, the “new Miyazaki” in the light of Michael Dudok de Wit’s forthcoming Red Turtle and Makoto Shinkai’s Your Name but as ever, I preferred to think of it not in terms of the creative abilities of modern animators, but of the ways in which the industry can find an equivalent revenue stream for the biggest money-spinner of the last generation.

Mark Schilling: In your view, has the torch truly been passed?

Jonathan Clements: No. There is no torch, at least not in the way that the public expects. Hayao Miyazaki wasn’t just a one-off, he was part of a trio. You can’t have the Miyazaki phenomenon without Isao Takahata and Toshio Suzuki as well. All three of them are retiring. Suzuki spent ten years not just looking for someone to take the torch, but examining the torch itself, trying to work out what parts of it could be replicated by other means. He concluded that there was no torch but the legacy of Ghibli itself, and that’s why the Ghibli Museum is so crucial to understanding the studio’s late period.

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Do you view Shinkai, de Wit and others as “Miyazaki heirs”?

Studio Ghibli spent a decade looking for some way of continuing Miyazaki’s momentum. Takahata couldn’t get the same numbers, although Suzuki did hope to hide that by releasing The Tale of the Princess Kaguya on the same bill as The Wind Rises. When Kaguya was delayed, its box office numbers made it very clear that Takahata didn’t have the following that Miyazaki had. None of the non-Hayao Miyazaki films from Ghibli have done Hayao Miyazaki numbers.

Toshio Suzuki tried everything in the noughties. He tried to lure big-name directors into Ghibli, but they didn’t gel with the studio. He tried to train up new apprentices, some of whom have gone on to make names for themselves elsewhere. But he couldn’t find a proper replacement for Miyazaki.

So Suzuki engineered Goro Miyazaki’s controversial directorial debut, and invited audiences to come and see the car-crash. That lured Miyazaki himself back for Ponyo. That’s where they started the “We Made This” alphabetical credit listings, which conveniently obscured the fact that Miyazaki didn’t actually direct Arrietty! He engineered the father-son team-up on Poppy Hill, and got audiences to see that. Then he lured Miyazaki back for absolutely anything he wanted, no matter how controversial, so he could go out with The Wind Rises. He’s played Miyazaki (and the public) like a fiddle! He’s managed to stretch the heritage of Ghibli since 2006 with only two genuine Hayao Miyazaki movies. But after The Wind Rises, it really is over. Ghibli has to admit it’s got no more features in it that are going to trounce the next five rivals at the Japanese box office. It’s a brutal, accountants’ decision, but it’s based on firm evidence from the last decade that not even the Ghibli name on a film will guarantee that it will match the success of a Hayao Miyazaki film.

Laputa_Robot_on_Roof_of_Museum_-_CopyBut that’s not good enough for distributors, and it’s not good enough for exhibitors. Cinemas are fixed sites, they need more product. July is going to happen whether or not the film studios have something suitable for a vacation tent-pole movie.

The Ghibli Museum turns over US$7.5 million a year, just on admissions. Throw in the restaurant and the gift shop, and the museum is making its owners a modest movie’s worth of revenue every year, just by managing Ghibli’s own legacy. It doesn’t need to make any more films – in fact, doing so would risk compromising the brand. It just needs to keep the conversation going. It needs people like us talking about it like it’s still there, so people remember they want to take their kids to see the giant fluffy Catbus.

So what does it mean when they say The Red Turtle is a coproduction? Is Ghibli just putting its name on it, like it did with the Japanese releases of Aardman films? I’m guessing that Ghibli is slightly more involved in investment than that, but not in actual animation. The Red Turtle will be imitation Ghibli, ‘inspired by Ghibli’, and it’s an experiment to see if a Ghibli imprimatur is enough to get a movie a healthy box office return; and if it doesn’t work, they’ve got plausible deniability to edge it out of the studio history. It’ll be a tenth of Miyazaki numbers, but it’ll keep that conversation going for another year. There will be a Red Turtle exhibition at the Ghibli Museum. Ghibli will keep trending. This is legacy management with very modest expectations. Everybody will be pleasantly surprised if The Red Turtle is a box office smash, but I don’t think anyone is expecting it.

This isn’t new. We’ve seen a lot of this lately, where studios will rent out their IP to someone else and take 5% off the top. A Nigerian Astro Boy? An Indian Star of the Giants? A Wachowski Speed Racer? Ghibli has shut down its feature production arm, but what the hell, if someone else wants to take the risk, Ghibli will put in 5% of the effort for 5% of the returns. This is anime Moneyball.

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Is there a “Miyazaki tradition” being passed on, even though Ghibli is not making features with its own directors?

That’s the conversation Ghibli wants us to keep having. Come and see this movie, to see if the director is The One! Will he save us? Is he the anime messiah? Or are we stuck hereafter with otaku-bait that can’t fill a single cinema for more than a couple of weeks?

That’s why Toei’s risk with Shinkai is so interesting. Shinkai has no trouble pulling in audiences on the small circuit. A Shinkai movie is usually a much more bespoke event. He makes a lot of personal appearances when his films go on tour, so it’s not just a trip to the cinema, it’s a trip to the cinema to see the director and get him to sign the DVD.

“Events” are a small but growing part of the Japanese cinema model, because if you have a small otaku audience, then you want to make sure they spend triple the usual money on a trip to the cinema. It’s not just about popcorn, it’s about T-shirts and phone cases, and often the limited edition Blu-ray. You limit and target the availability of the merchandise, and you make sure that you provide an experience which can’t be pirated. People are ripping off the software all the time, but Shinkai’s not going to sign a pirate copy, not of his movie nor the novel spin-off. He’s not going to shake your hand while you’re downloading the torrent.

“Events” at the moment are worth less than 5% of Toei’s revenue, but that’s a huge increase on just five years ago. It’s taking Japanese cinema back a hundred years to the days of the benshi and a cinema experience as a form of live vaudeville. But Kimi no Na Wa is different because it’s being touted, as you say, as a summer tent-pole movie. Shinkai can’t go to every screening; they can’t spread him that thinly. They’ll do some glad-handing for the hard-core fans at the premiere events, and hope that there’s enough momentum to keep it going with the general public. Watch the marketing on Kimi no Na wa, because I bet Toei goes all-out on interactivity. I bet they steal an idea from Mai Mai Miracle and try to engage the consumers with lobby exhibits. I bet they come up with a hashtag on social media and try and drag everybody into it. They are going to have to do this, because most of the users are going to have to bring their own event.

Look at the title, for God’s sake! They’ve called it Kimi no Na wa because I bet you half the general public will think it’s a remake. There was a radio series of the same name in the 1950s, adapted for TV in the 1960s, and again in the 1990s. Half the eyeballs for this movie’s advertising will only look because they think it’s something else. Much of the social media trending for this film will be people telling their confused friends that it’s not what they think it is. That’s some smart mockbuster marketing to get their attention. Then the pressure’s on Shinkai to keep it.

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Or is the Miyazaki legacy (including his box office supremacy) in danger from not only Hollywood hits like Frozen, but also domestic trends?

I think everyone would love it if there were a domestic trend that could compete with Miyazaki’s numbers. I don’t think there is. Everyone has to dial down their expectations to a level where domestic anime earn the kind of money they did in the 1980s, not the 2000s (or rather, the kind of money that people have earned all the way through if they are not Hayao Miyazaki). That’s the problem with movie punditry. Everybody wants to talk about the outliers. The successes are outliers! Miyazaki was an outlier. The general trend is much more modest in terms of returns, and Miyazaki’s success has hidden that for a generation.

Frozen is a red herring – Disney cartoons have always outperformed domestic product at the Japanese box office, with the exception of Miyazaki movies. A much more long-term issue is CG, because the stats for CG make it abundantly obvious that Japanese movies are getting their ass kicked by computer animation. Japanese movies are still struggling to compete with CG, because even when they get a hit like Stand By Me Doraemon, it’s not exportable like a Miyazaki movie. Nobody wants it abroad because nobody knows what Doraemon is; part of the film’s domestic success was because of the blue-chip marketability of the Doraemon brand, which still doesn’t travel far outside Japan.

Of course, it does export to China, but what happened there? Stand By Me Doraemon wasn’t in the 34 movie quota for foreign movies in Chinese cinemas. The Japanese had to sell it for a lump-sum and take no further profits. That’s not growing a business, that’s treading water and hoping that something will happen.

China’s the elephant in the room in all of this, because it’s the largest possible new market for Japanese animation, but Japanese animation is made to feel very unwelcome in formal distribution channels. It’s censored, it’s banned, it’s shut out of theatre exhibition. There are only two brands that get any love in China: Studio Ghibli and Makoto Shinkai…

Jonathan Clements is the author of Anime: A History.

White Box

shirobako-116501One of the big hits of recent anime seasons has been Shirobako (literally ‘White Box’), a show that shoe-horns an off-the-peg cast of perky graduates like refugees from K-On into the heady world of anime production. Shirobako is a workplace drama, but also a knowing parody of life in the anime industry, often with recognisable caricatures of well-known figures, and depictions, just the right side of actionable, of notorious incidents from business legend.

Shirobako successfully conveys the awful daily grind of working on Japanese animation. Entire scenes crawl past of people in messy, cluttered offices shouting each other about file numbers and storyboard pages, and losing the plot about frame counts. Despite occasional cutaways to the flights of fantasy they are working on, life in the fictional “Musashino Animation” company is largely seen to be a dull and stressful slog, with little obvious reward.

There is much of interest about the division of skills on anime productions. Artists go in at the bottom, but have a chance of getting swiftly promoted. Computer geeks get to faff with CG, but have to fight against unrealistic expectations of their technology. And the wannabe voice-actress is soon waiting tables at a restaurant…

Ironically, in the real world, she’d be the one on the highest wages. A study published by the Japan Animation Creators Association (JaniCA) claimed that the mean entry-level salary for new animators is (and has been since at least 2009) just £6,000 a year, with an average working day of 11 hours. Inbetweeners in Japan are competing directly with Chinese labourers who are submitting comparable work across the internet from a place with lower costs of living. If they don’t prove themselves worthwhile, they remain stuck on paupers’ wages, which have not gone up in five years. Put another way, the people who make your favourite anime can start on salaries as low as 65p an hour.

One wonders how the real-world versions of the breathless, gamine girls in Shirobako would come across if they couldn’t afford soap powder or, well, soap. It’s difficult to imagine these conditions lasting for much longer before there simply aren’t any Japanese animators in Japanese animation. Which means more producers and directors coming in sideways from other professions, not up through the ranks, and commanding a staff in a foreign country through Skype and shouting. Has anime, which always was regarded as a cheap option in the first place, successfully priced itself out of its own market?

Jonathan Clements is the author of Anime: A History (UK/US). This article first appeared in NEO #138, 2015.

Grey Exporting

milkycrisis-1His name was Supap Kirtsaeng and he made a few bucks on the side. While a studying in the USA, he realised that while his expensive college textbooks were also available in substantially cheaper editions in his native Thailand. So, he figured, why not buy a few and and sell them to his mates? Why not buy a dozen? A hundred?

John Wiley & Sons, a respectable academic press, took Kirtsaeng to court, claiming that his little sideline had already notched up lost sales of $1.2 million. And after appeal, Kitsaeng won in March of this year, with a Supreme Court ruling in his favour, stating that the First Sale Doctrine supported his little loophole. According to American law, in line with the laws of many other countries, once you buy an item for yourself, it’s your legal right to do whatever the hell you like with it, including selling it to someone else.

You may be wondering, what the hell does that have to do with you? Well… for starters, don’t be surprised if it’s a major contributor to the new X-Box policy on forcing people to rent access to their games instead of buying them outright. More importantly for the anime fan, it makes it unpleasantly clear to Japanese rights holders that if something sells cheaper, say, in the UK, than it does in Japan, then it is unlikely to be possible to argue someone can’t import it back into Japan. Take the argument to extremes, and it is a strong case for making all foreign fans pay the same high costs as Japanese fans, in order to protect the Japanese business.

Fast forward to June, and suddenly Macross Plus is released in Japan as a region-free blu-ray with English sub and dub. Great news for you if you want to drop £70 on it. But why on earth would a British distributor buy the rights, when they already know a substantial number of customers will have already bought it direct from Japan? The anime companies are now calling our bluffs. We said grey importing wasn’t worth worrying about. Okay, they’ve said, how do you feel about grey exporting…?

Jonathan Clements is the author of Schoolgirl Milky Crisis: Adventures in the Anime and Manga Trade. This article first appeared in NEO #113, 2013.

Things to Come

Tenamonya Voyagers was pretty awful. It was a cynical, half-hearted space opera that nobody found particularly amusing, and which plainly bored its own animators so much that they simply ended it in the middle. However, it remains a landmark in anime history because when Bandai decided to release this obscure 1999 title in America, they did so solely on the new-fangled DVD format.

The US release of Tenamonya Voyagers was the first real sign that VHS was dead. It was a message to those people who hadn’t yet bought a DVD player that someday soon, maybe not today, maybe not tomorrow, but soon, they would need one if they wanted to see all the new anime, because their VHS was going out of date, and would no longer be supported by new ‘software’.

I mention this in order to point out that Bandai is a company that often thinks way ahead of the curve. And in case you haven’t already heard, Bandai is a company that will now be dropping DVD from its activities in America.

Old orders will be met. In the event that a million people suddenly want a copy of The Girl Who Leapt Through Space, they’ll run off some more. But Bandai America is giving up on DVD and leaving it to others to take the risk on licences, spend the money and get pirated.

You can forget Blu-ray, too. Bandai can’t be bothered with that either. Why should they, when a bright digital future awaits of direct downloads and streaming, hopefully legal?

If you were wondering what this means for you… right now, not a lot. You’ll still see Bandai shows released on DVD by other companies, like Manga Entertainment’s Ghost in the Shell sublicence. But be aware, Bandai America just essentially announced what many in the anime business have been thinking for five years: that the next format is no format, and the smart money is getting out of what the Japanese call ‘packaged goods’ – which is to say the actual, physical discs that anime currently comes on. Ten years from now, I suspect, there will still be DVDs in existence, but they will be much more bespoke, much rarer, and hence much more collectible.

Jonathan Clements is the author of Schoolgirl Milky Crisis: Adventures in the Anime and Manga Trade. This article first appeared in NEO #95, 2012.