In this day in age, I think that the Japanese anime market has grown exponentially since the days of obtaining anime exclusively through VHS tapes via fansubbers or your local anime club. I believe the explosion in popularity can be attributed by the growth in fansubbing and the Internet. Traditionally, many Japanese anime series wouldn’t see airtime in North America unless American studios licensed it (which wasn’t very often) or fansubbers would record the shows from television and subtitle it themselves. But with the improvement in encoding and distribution technology, many anime series have gotten huge followings outside of Japan. I would venture a guess and say that a majority of shows are either streamed for free on sites or downloaded for free via peer-to-peer (P2P) sites like BitTorrent.

However, there are problems regarding this in that there are legal issues regarding the matter (distribution of copyrighted material) and that the actual market for selling anime is horrendous. I am not going to go through and discuss the whole situation in detail, but the bottom line is, people aren’t making money when selling anime because why would anyone buy it if it’s easily accessible for FREE on the Internet?

Recently, many licensing companies are taking notice of the habits of the current tech-savvy generation and are experimenting with the idea of utilizing P2P technology for distribution of their products. Kadokawa Digix company (a subsidiary of Kadokawa Holdings) will test the use of BitTorrent P2P network to distribute certain anime material starting December 22nd, 2007. The service will be hosted on the Anime Newtype Channel and will start off with the free downloading of the first episode Mushi-Uta and a trial episode of Rental Magica.

American licensing/distribution companies such as ADV Films, Funimation and Manga Entertainment have already started to provide free previews of their titles as well as paid full episode downloads via BitTorrent. I definitely think that if the anime industry adopted the same or similar model as Apple’s iTunes store, greater profits can be had. At the same time, I think companies need to provide more added incentives for people to go along with it (bonus episodes, merchandise, discounts etc.).

-Stephen