ICv2 continues its series of interviews with publishers in a discussion with Viz Senior Vice President of Strategy and Business Development, Dan Marks.  In Part 2 of this two-part interview, we talk about anime on mobile devices, manga downloads, and the future of print, DVDs, and digital delivery.  In Part 1, we talked about  digital delivery of anime and its potential impact on DVD sales.   

 

Do any of the services that you're using now make anime episodes available for mobile devices?

They may, but we are not permitting it.

 

So somebody would have to download to a computer and then transfer?

Yes.  For example, Amazon allows their users to use anywhere between five and eight devices, and those devices include portable devices and sometimes mobile devices.

 

That's Amazon's download to own service, but you're not on that service.

No we're not.  That was an example.  Each company has a different requirement.  We've negotiated different things with each of our providers.  IGN is two devices, I believe.  Once you have it, you can transfer it to another device.

 

Akimbo was kind of built like that, you take it from the computer to the TV?

There's a set top box, yes.  But we can limit things in various different ways.

 

I wanted to talk also about digital delivery of manga.  Is Viz doing anything with that?

In terms of do we have anything available?  No.  Are we looking into things?  Absolutely.

 

What business models do you see as the most promising in that area?

Whatever our parent companies allow us to do.  It's hard to say.  We're embarking on a research process right now that hopefully gives us that answer.  We're working very closely with our parent companies and in Japan, digital manga is available.  Manga over cell phones is available.  We're looking to see what Japan is doing and what our parent companies want to do in overseas markets.  Hopefully you took it as a joke before, about what our parent companies want us to do or let us do, but it's partially true -- we need to work very closely with them on this. It's not only our choice; it's what all the parties together decide is the best way to move forward.

 

There were some reports that came out of Japan earlier this year saying both manga and anime sales were down.  Some people were attributing that to the growth of digital delivery of anime and manga, although you seem to think it's not going to impact sales here.

The Japanese market is completely different.

 

In what ways?

One, it's a mature market.  On the magazine side manga sales have been decreasing for probably eight to 10 years.  The way the cell phone is used in Japan would boggle the mind of most Americans.  That has cut into manga sales for years.  I don't know if it's illegal downloads and the availability of the content digitally, actually that may help in the long run.  In the United States, manga sales have been growing for the past years and are projected to continue to grow because it's not a mature market -- we've barely broken into the market.  As far as the effect of downloads in Japan, yeah, it may have hurt, but the market had already hits its peak. In the U.S. there's so much room to grow, hopefully it doesn't affect the U.S. market that much.

 

The use of cell phones in Japan is very different than it is in the States.  Part of that is earlier adoption of the newer cell phone technologies, others are differences in the way people use desktops versus cell phones.  Do you think that Japan is ahead of the U.S. in the adoption curve, or are there cultural differences that are going to make the U.S. more reliant on desktops versus mobile devices in the future?

I think both.  There was just something in the news yesterday saying that Japan's broadband speeds are numerous times faster than the U.S., so the U.S. may lose out in both respects.  In terms of cell phones, Japan has always been ahead of the technology curve.  The way cell phones are used in Japan compared to the U.S. is completely different.  In Japan they've been doing e-mails over cell phones for years.  They've been surfing the Internet or finding information on cell phones for years, and the U.S. is just starting to do that.

 

Five years from now, what do you think the digital delivery share of the manga and anime markets will be in the U.S.?

(Laughs) Any guess I made would be so far off.  In terms of anime, I think it's going to be larger than manga.  At least a lot of what we've found right now on the manga side is that people still like to have the physical product.  On the DVD side that may hold true, but I think it's going to go away a little faster, unless HD and Blu-ray change that.

 

You still have to put it into a machine, where with manga you can carry around and you don't need a machine.

Right.  We are still finding -- at least in surveys, polls, etc. -- that the preference on the manga side strongly is for paper.  I think if you look at the sales of e-books, they still haven't really taken off in most markets.  I think that's not only related to manga, it's print in general.  The exception maybe being short newspaper type items.

 

In terms of anime, my daughter is 2 and 1/2 and she sometimes prefers to watch a DVD on the computer versus the TV.  I think her generation is just going to look at everything as the same; it's just content that's available on a different screen.  So I think anime is going to move quicker to the digital adaptation.

 

But you don't want to lay out any percentages?

It may make a nice quote, but it's going to be based on absolutely nothing.

 

You can't extrapolate the trends because they're so small?

They're so small.  The download-to-own market in the U.S., including music, is $237 million projected this year.  And if I remember correctly, and I may be off by a lot, I believe DVD is $27 billion.  You just can't compare the market sizes.  It's a watermelon to a peanut. DTO is trending up, and there are some are saying it's going to go away or be ad-supported or some that say it's going to grow 10 times every year.  It's just too hard to say.

 

Anything that I didn't ask about that you might see as a big trend?

Internet TV may be interesting -- things like Joost and Babelgum -- the reason being the streaming costs are a lot less, closer to zero, because it's P2P.  What they're trying to do, as I see it, is replace TV.  You can broadcast. It's video-on-demand with commercials inside of it.  It will be quite interesting to see if that takes off.  Joost has been in beta for quite a while and once it gets out it'll be interesting to see -- especially considering the marquee names behind it and has been able to do a number of major deals.

 

Then there are things like YouTube or Veeoh which have huge audiences.  It's always interesting to see.  YouTube just announced a deal in the U.K. to pay music royalties.  YouTube has started to put ads on their content, so it'll be interesting to see how fans react and whether that model really is a sustainable business.