The Profit of the Internet
Written by Winter Trabex.
The global economy is a funny place. With everyone interacting with each other, it becomes possible for all kinds of trades to happen. Japan, a country that has to rely heavily on imports, ends up exporting anime to the rest of the world. This is by far their most popular worldwide product. It has even grown to the point that people associate Japan with anime. Though Japan has far more than anime, it just seems that way because the rest of the world is exposed to Japanese culture through online streaming sites such as Netflix, Hulu, and Crunchyroll.
Now without being able to export anything, Japan’s economy would be in very bad shape (even discounting the destructive fiscal policies of its government). Its natural resources are primarily rice and fish. Those resources that it once possessed, namely minerals and lumber, have been shipped out at such a rate that very little, if any, are available anymore. In the northern island of Hokkaido, the forests have been depleted to such an extent that the local environment there is now changing. The nation’s copper mines are all depleted.
Rather than raw materials, Japan must rely on shipping out the products of its citizens’ labor. These include robotics, computers, video games, and anime. Such products can only be afforded with the discretionary income of the rest of the world. Before anyone in Poland wants to subscribe to Crunchyroll to watch anime, they must have a place to live, an internet connection, enough food to eat, and enough clothes to wear. That the anime industry continues to survive despite repeating the same folk tales and using the same plot devices and using the same locations (ie, high school) is a testament to the health of the worldwide economy.
This was not always the case. In 2010, the anime industry was in decline. It had to rely on ratings from inside the country and DVD sales internationally. The DVDs were expensive, and with an increase in content from television stations, people were tuning in less and less every week in spite of an increase in visual quality. Viewing options in America were very limited. Adult Swim might air episodes of Inuyasha, Bleach, or Cowboy Bebop, but the nature of long-running series with ongoing plots did not work well for day to day ratings. Adult Swim was, and continues to be, a fun diversion instead of the one place that could everyone could get their anime fix.
Then, the industry changed. Crunchyroll, which had been in existence since 2006, declared in 2009 that they would remove all copyright-infringing material from their website. They had reached a deal with TV Tokyo to air episodes of Naruto Shippuden. That marked the beginning of Crunchyroll’s rise to prominence as the place to go for anime. No longer would people have to download material online. They could watch for free. The pirate market that had been in existence since the invention of Napster now bore profitable fruit. The computer screen had replaced the television screen.
In 2013, Netflix acquired the rights to stream an anime show called Knights of Sidonia on its website. Previous to this, Netflix had not invested very much in anime. Over the next two years, the company added popular titles such as Hunter X Hunter and The Irregular at Magic High School, among others. Anime had always popular, but for the first time, there was solid evidence that people would be willing to pay to see a lot of it.
In order to offset the less-than-10-dollars charge a month, both Netflix and Crunchyroll have made it their business to reach as many customers as possible. This is the opposite of how most companies have done business. The initial high price placed on new items, such as DVDs, was designed to recoup the costs of producing it. Once the DVD entered the secondary market, the original producers would no longer make money on it. The only way to stay in business was to grab as much profit as could be made when individual product scarcity was at its highest.
Streaming services have more or less done away with this model of doing things. While there are still those who are willing to pay higher costs for new products, the economics of internet streaming make more sense to the consumer, the service provider, and the original producers of a show or movie. No production studio will give away the rights to a show for free. They will sell those rights to the highest bidder, or to the bidder they feel can best represent their product. Streaming services, who want to host the best content on their websites, are willing to pay to host such shows.
This includes old and new shows alike. Old shows, which would not have made a production company money before, now serve as an additional source of income. There are many old anime shows, such as Urusei Yatsura, that have been forgotten over time but which could nevertheless could make everyone money decades after their production runs ended. The potential for profit appears to have a much higher ceiling than the traditional way of selling media upon which the shows are recorded.
All of this only serves to benefit the economies, not only of Japan, but of every country in the world. People now can engage less of their discretionary income for their favorite products. They are getting more bang for their buck. With more money to spend, they can in turn invest in other businesses or put it aside as they chose. It is as if an automobile cost 4000 dollars one year and the next would only cost a monthly subscription of 14.99. In such a case, the car rental industry would be put out of business, just as the DVD rental industry was largely put out of business (with the exception of Redbox, which is the only remnant of a once-thriving industry).
This is how a country that has stripped itself bare in an attempt to stay prosperous can still manage to offer something valuable to the worldwide marketplace. It is how small towns, counties, states, and entire nations, can thrive during economic downturns. It is how America is still hanging on despite every indication that the dollar could crash at any time.
One day, it will not matter whether fiat currency is valuable or not. For this, we have to thank the power of the internet, which transmits packets of data to every location in the world. This data contains the hopes and dreams of people everywhere in the world. It contains profits and losses, innovations, stories, advice, music, and, thanks to 3D printing, instructions on how to make anything that could be conceived by the human mind.
Pitted against this force, as they all appear to be, the governments of the world have no other choice but to flail helplessly as they watch the world pass them by. They will huff and puff, but they cannot blow this house down. It is built too strong.
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