Viz Media and FUNimation

Viz Media and FUNimation are both well known Anime / Manga distributors based in the United States.  Viz Media is in San Francisco, California while FUNimation is located in Flower Mound, Texas.  Their strategy is very similar to each other as the Anime has grown in popularity in the US. 

When I first attended AnimeExpo in Anaheim and FameCon in San Jose in 1998, both were still very "Underground" as the majority of showings were Fansubs and, in fact, a lot of the the merchandise being sold was not even legal imports.  In 1998, AnimeExpo had 4,883 attendees and in 2011, AnimeExpo had 47,000+ attendees according to Wikipedia.  Today, both anime conferences no longer show fansubs and only sell legally licensed merchandise. 

Traditionally, Anime and Manga were only sold in boutique specialty stores.  This later expanded to retail book chains and some video retailers.  A few years ago, websites such as CrunchyRoll.com started to monetize these products digitally by offering a premium subscription to those who wanted instant access to new anime and full access to a complete catalog versus the free version which was always one to two weeks behind.

This leads me up to where Viz Media and FUNimation are today.  As they own both retail and digital distribution rights to some of the most popular Anime / Manga in the West, they have started a combined digital and retail strategy.  If you go to there respective websites, you will notice that you can watch any anime that they have for free and they help monetize this by up-selling on their website.  

Will this strategy be effective? 

First, the fact that is free makes one wonder, but with the high amount of piracy in the industry websites that show this Anime for free on their own.  Showing Anime for free is an Anti-Piracy measure.  Since their Anime is higher quality with better subbing, they are able to compete with illegal fansubs.  Also, this helps grow their audience and their user base.    FUNimation is known for their aggressive anti-piracy stance suing a lot of illegal torrent downloaders, but this in itself is not 100% effective.  Per a recent anti-piracy case involving US movies, ISP's cannot disclose user information unless it is that user is confirmed to have downloaded the IP versus someone stealing bandwidth.  As in the case of the US movie lawsuit, after the action is filed, the ISP has 1 month to get these users confirmed and submitted to the plaintiff.  So some suspected users are able to avoid this by not identifying themselves. 

Second, this digital strategy helps promote the sales of their Anime / Manga / Other related products.  As hardcore fans will purchase these items as they are collectables, it will help increase overall sales box products.

Third, this strategy helps build a loyal fan community and an effective marketing tool.  FUNimation seems father along in this sense than Viz Media.  Building a community is very difficult, but very important as you can grow this community into evangelist to help spread your product.  Also, these users can be used as a test bed for what products will be successful to your core audience.  Of coarse, if your looking to expand your audience, these users would not be as helpful. 

In the future, I expect these websites to evolve their monetization strategy to include one or more of the following monetization techniques:  pre-post add rolls, a premium subscription for unlimited views and no ads, pay-per-view system like WildTangent (get involved with the community get more views), etc.  I eventually feel that other items such as games, icons, and other fan items should be included to increase the stickiness of the site.

In the long-run, content is king as everyone says in the gaming industry.  These two Anime/Manga heavy weights have the content.  It is a matter of time until they become king unless they rush it to fast or make any mistakes.  I for one believe the current path they are following may work.