Justin Sevakis presents an overview of the anime industry's current decline in sales, which he attributes both to digital fansubbing and corporate reluctance to adopt new technologies. Unlike many other authors who have written about fansubbing, Sevakis recognizes a qualitative break between the VHS distribution networks and current digital fansubs with decentralized distribution. The internet has dramatically lowered the barriers to obtaining fansubs, which are now easily available at the click of a button on a multitude of streaming sites. While fansubs might have previously been a non-rivalrous work that served a promotional function for the licensed products, digital fansubs have effectively usurped the licensed market by offering a product of the same quality for free and faster than legal avenues. The fansubbing groups, however, are simply responding to fan demands for timely releases, which the industry has failed to meet. In order to prevent further losses and rebuild the industry, companies must adopt a digital model that provides American audiences with “a legal, inexpensive way to watch new anime in English.”
Rather than idealizing the cultural benefits of fansubbing, Sevakis presents a practical understanding of how fans and the industry operate in the digital market. People watch fansubs because there is a market vacuum that the anime industry has ignored for several years. Rather than providing a legal avenue to meet this market demand, anime companies have responded like many other entertainment industries by believing they can guilt their fans into sticking with a failing business model. Furthermore, the industry has confounded the size of the fan community with the anime consumer market, which in fact represent audiences with varying levels of engagement and interest; not all fans share the same buying practices as collectors, and indeed many are simply interested in just viewing a series once and not owning it on DVD. These considerations complicate the perspective of fansubbing as an activity that promotes economic and cultural growth because they demonstrate the real harm to the anime industry being caused by illegal reproduction in fan communities.
Jordan Hatcher describes the fansubbing community as sitting at an interesting boundary between creative production and file-trading. He notes that fansubbers are guided by a cultural goal and attitudes that exist within the community itself, comparable more to the FOSS movement rather than typical pirates. After recognizing these nuances between fansubbers and pirates, Hatcher asks, “Do our laws stifle creativity and sharing to the point where it harms society?” While there are certainly cultural benefits created by the fansubbing community, there also exists the potential to replace market need for official licensed translations, thus causing an economic harm to the artists and creators of these works. He argues that a fair use defense based on these benefits, such as market enhancement or interest-building, are undercut by the reality of fansubbers' actual practices of providing a substitute product. While Hatcher concludes that it is still too early to come to any conclusion about the benefits of fansubs, he believes that the relationship between fansubbing communities and the anime industry will “reveal a great deal about copyright in a connected digital world.”
Hatcher challenges the model of fansubbing as an activity that creates growth and benefits for the anime industry by undercutting the traditional market enhancement argument that fans usually propose. Copyright should not be frivolously violated because protection of creative products is a culturally beneficial instrument that provides creators with incentives to produce new works. Therefore, in order to produce a culturally beneficial arrangement that incorporates the benefits of fansubbing communities while minimizing the harms to creators, both groups must respect the value each respectively generates and come to an agreement that meets their common goal of promoting anime. Such an agreement is possible because, unlike typical pirates, fansubbing communities operate around a code of conduct and thus have demonstrated a level of compliance with industry requests not seen in other areas of the piracy debate.
Sean Leonard extensively documents the history of anime in the United States from 1976-1993 in order to demonstrate how fan communities acted as proselytziation commons that shaped the formation and initial operation of the anime market. Leonard defines a proselytization commons as a free exchange of media in order to advance a directed cause, namely the promotion of anime to a wider audience. While these fan activities infringed on the copyright of Japanese companies, the companies nevertheless responded with either strategic ignorance – that is, they sought benefits that result from unauthorized use – or plainly dismissive ignorance. Leonard’s legal analysis classifies the fansubbers’ activities as producing a desirable outcome, but not being sanctioned by law. Since current copyright law prohibits these culturally beneficial activities, Leonard proposes a revision that excuses unauthorized reproduction of foreign works until they are actually licensed and distributed in the domestic U.S. market. He grounds this revision on the early American tradition surrounding copyright law based on an originalist interpretation of “limited Times” and “promote progress” in the Constitution.
Leonard’s analysis of the history of fansubbing presents one of the strongest rebuttals to the argument made by many media industries that the progress of culture requires “perfect control over copyright from fixation to expiration.” Grass-roots distribution of anime through fan networks not only promoted cultural growth by acting as a proselytization commons, but also created a multi-million dollar market for these products as well. Therefore, the example of fansubs demonstrates how culturally beneficial activities that in fact meet the goal of “promot[ing] progress” are nevertheless unjustly restricted by rigid copyright laws. The fact that current copyright laws are in fact having the opposite of their intended effect should prompt citizens and lawmakers to consider exemptions, such as expanding Fair Use, that legalizes these activities.
This panel discussion at Otakon 2008 brought together members both from U.S. anime licensing companies and fansubbing groups in order to discuss some problems affecting the industry, which are supposedly attributable to the prominence of fansubs on the internet. The industry representatives argued that the wide availability of anime fansubs on streaming sites such as YouTube have significantly impacted DVD sales and thereby led to reductions in series production. Actual market figures presented include a drop in DVD sales from $550 million in 2003 to an estimated $300 million in 2007, while an estimated 6 million fansubs are downloaded every week. Fansub members respond to these claims by arguing that (1) they serve an important promotional role for unlicensed anime series, (2) they preserve the integrity of shows which have been heavily edited or censored, and (3) the industry has not presented any alternatives that meet fan demand for timeliness. The panelists then discuss some approaches that companies could take in order to address these issues, such as streaming simulcasts of shows and digital downloads.
Just like every other media industry that has experienced declining sales, the anime industry has also attributed these losses to digital piracy and filesharing. However, the practice of fansubbing cannot be reduced simply to that of digital piracy since it developed prior to the advent of the internet and in fact served an important and acknowledged positive role in promoting and developing the anime market in the United States. Furthermore, the transparency and codes of conduct within fansubbing communities are often proposed as a basis that justifies their practices and separates them from pirates. Although the anime industry has undeniably been faced with a contraction in sales due in part to digital piracy, any legal response from these companies must be targeted towards the correct group of perpetrators, namely the pirates and not fansubbers. Furthermore, companies must leverage the influence of fansubbing groups within anime fandom by working with them to provide legal alternatives, such as fansite-based internet distribution, that balance respect for creators’ rights with the demands of fan communities.