Japan: “Piracy Increases Anime Sales”

Japan’s prestigious Research Institute of Economy, Trade and Industry (RIETI), a government-affiliated economics think-tank, has published detailed research suggesting anime piracy can boost disc sales.

The official English language abstract of the (lengthy and highly technical) research – the paper itself is only published in Japanese:

Do Illegal Copies of Movies Reduce the Revenue of Legal Products? The case of TV animation in Japan

Whether or not illegal copies circulating on the internet reduce the sales of legal products has been a hot issue in the entertainment industries.

Though much empirical research has been conducted on the music industry, research on the movie industry has been very limited.

This paper examines the effects of the movie sharing site Youtube and file sharing program Winny on DVD sales and rentals of Japanese TV animation programs.

Estimated equations of 105 anime episodes show that (1) Youtube viewing does not negatively affect DVD rentals, and it appears to help raise DVD sales; and (2) although Winny file sharing negatively affects DVD rentals, it does not affect DVD sales.

Youtube’s effect of boosting DVD sales can be seen after the TV’s broadcasting of the series has concluded, which suggests that not just a few people learned about the program via a Youtube viewing. In other words YouTube can be interpreted as a promotion tool for DVD sales.

The research itself provides detailed statistical analysis of each title featured (mostly popular late-night anime), even going so far as to incorporate such factors as the popularity of the seiyuu involved in the titles, what medium the anime was adapted from and which demographic it targets.

Each factor’s estimated impact on the likely effect of online distribution on sales is then extrapolated using regression modelling.

Sankaku Complex provides a translation of the study’s key conclusions:

We compared the DVD sales, DVD rental sales, YouTube viewing numbers  and Winny download numbers of various anime titles.

Our results suggested the following:

1. YouTube viewing did not decrease DVD sales, but actually increased them. For each 1% increase in YouTube viewership a 0.25% increase in DVD sales was observed.

2. The effect of YouTube on sales was particularly pronounced in the case of shows which had finished airing on TV. We can think of this as people who never saw the broadcasts becoming fans by way of YouTube and then going on to buy the DVDs.

3. There is no clear effect on DVD rentals from YouTube. At the very least we can say it seems YouTube has no adverse effect on DVD rentals.

4. Winny file-sharing has no effect on DVD sales, but does appear to decrease DVD rentals. People who download anime via Winny appear to be using it not to replace their purchases, but to replace their rentals.

As YouTube is having no adverse affect on anime sales, but is in fact increasing them, further distribution on YouTube is likely desirable.

Copyright holders who dislike YouTube and persistently request their works to be deleted from YouTube are likely to be harming their own business.

As a result of these findings, we can probably conclude that banning downloads of such material is a mistaken policy.

The usual proviso that correlation does not equate to causation naturally bears mentioning when presented with any study based chiefly on statistical observations. It should also be remembered these results solely concern the Japanese market and have nothing to say about fansubbing or otherwise.

Of course, these results should not be misconstrued as an endorsement of piracy – most anime production is funded primarily through DVD sales, so it is still essential fans at some point buy DVDs themselves, and the fact that TV, YouTube and P2P viewing is usually at much lower quality (whether in terms of image quality or dehumidification) than a disc always provides a strong natural incentive to buy.

Rather, it would seem online distribution has a crucial role to play in promoting anime to as wide an audience as possible and allowing this audience a preview of the full product available to paying customers – a fairly basic realisation to all but the most stubborn and unreasonable of copyright holders.

The research also tends to contradict government policy, which has recently seen unauthorised downloads criminalised, and soon threatens to ban ripping of DVDs and CDs altogether, a move which might have rather serious effects on the DVD rental business as well as on consumer freedom, and which, if this research is to be believed, would only further harm the anime industry.