After some very depressing reporting on the caustic soad/AcidFlask incident, Han presents his report and reflections on presentations by Larry Lessig and Joi Itou at the Alfred Deakin Innovation Lectures (2005-04-29 to 05-12).
I am in almost complete agreement with his agreement with Joi Itou’s point that file sharing can create “gained fans” and not “lost customers”. File sharing creates fans who might not otherwise even know about the anime. This increases the market for the anime. Hardcare fans are then likely to increase revenue and profits by purchasing the anime and its related goods, often through online merchants like cdjapan and Amazon.co.jp or even going to the Source (i.e. Jp). Hardcare core fans also tend to want to show their love and support for the anime, its characters, production studios, mangaka, seiyuu etc in the most powerful way by voting, capitalism-style (i.e. spending money to consume). Thus market, revenue and profits increase without the need to spend on advertising.
My views diverge at this point. Firstly, a lot of anime series are actually advertising, very compelling advertising with plots and recurrent characters. The main point is not to making money from the anime itself (pay TV subscription and DVD sales) but from the merchandising involved (e.g. all those anime with plenty of cute girls, countless robots models or monster minions). So actually file-sharing is just an unauthorised means of it achieving its objectives. Some companies might not object to the ends (more market, revenue and profits) but worry about loss of control of means (broadcast, distribution, copyright).
Secondly, companies tend to be obsessed with opportunity cost when looking at the file-sharing issue. Not everyone who downloads an AVI file of an anime will buy the DVD, even if they enjoyed the anime immensely and have great love/support/respect for the anime, its characters, production studios, mangaka, seiyuu etc. In Jp, if you buy the DVDs you’re considered a hardcore fan since you would have already probably seen it on pay TV. (In fact, it would be extremely interesting to do some proper qualitative research on what percentage of downloaders actually buy genuine after that.) Companies who naturally salivate at the thought of all that revenue that they could have gotten if all the downloaders had to pay first and this sum probably dwarfs the sum that results from fans who pay after. Counter-argument against opportunity cost is that fans who have never seen or even heard of the anime if not for file-sharing as no file sharing, no potential sales thus actually there is opportunity cost from stopping file-sharing.
The third point is an extension of the second. A lot of the argument for file-sharing creating market share lies in the inadequate and untimely process by which an anime is licensed and then distributed in countries outside Jp (after all, this issue does not even exist in Jp!) However if licensing and distribution is timely then file-sharing becomes a fairly clear-cut case of theft. There might be arguments over the poor quality of non-fansubbed subs or whether a licensee is really the license holder in your country (at least this issue exists in the minds of many Sg’rean fans) but if it is commercially available then the fansubs should be a complement to the genuine goods rather than a substitute, even you are a poor student. Thus fansub groups sometimes stop subbing and distributing after the anime is licensed in their country. They also often add a rider in their subs to urge people to stop distribution via file-sharing after the anime is licensed. Apparently the North American market has come a long way in this respect from seven to eight years ago.
Fourthly, prices also play a factor. Piracy of VCDs and DVDs of conventional movies was extremely rampant in the late 1980s and 1990s but was eventually subdued in Sg, partly due to heavy enforcement action (supply-side) but equally important, prices came down to earth (demand-side). While I was a great fan of Ghost in the Shell: Standalone Complex, the boxed set of 13 DVDs cost JPY 78,000 (SGD 1,200) without English subs! While this might be fairly priced for the Jp, it certainly won’t wash here in Sg. (This is less of an issue now, given what I see in the shops.)
In conclusion, I think file-sharing is here to stay, in a big way, until licensing and distribution is improved and pricing done fairly and sensibly. - Zyl