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At the risk of sounding catty, this panel may as well have been called the “State of the FUNimation” panel. Despite the fact that Dave Williams of Sentai Filmworks and Adam Sheehan, Charlene Ingram, and Justin Rojas of FUNimation were in attendance, only the FUNimation crew attended the panel. Anime News Network’s Gia Manry served as a moderator while Ingram fielded audience questions, and Adam and Justin answered to the best of their abilities, though answers were definitely from FUNimation’s point of view, due to the circumstances.

The discussion began with a question about how FUNimation felt about streaming services, like Netflix and Hulu. Both Sheehan and Rojas agreed that they like such services, as they offer viewers a chance to sample a series that they are on the fence about, or explore new titles, which leads to increased results at the cash register. The exposure generated is similar to that created by a television run, which creates a win-win situation, as it helps the industry as a whole. Sheehan added that Hulu particularly likes FUNimation’s titles, and actively tries to promote titles on the front page.

The next question focused on what FUNimation’s plans to grant access to mobile platforms, to which Sheehan replied that apps are being worked on, and that they are coming in the future. The company is trying to take a smart, measured approach to such a service, but it will occur.

The panel's question-fielder and FUNimation's Brand Manager, Charlene Ingram

The conversation shifted to the idea of a question about how the two felt about Japanese companies, like NIS and Aniplex, opening their own distribution titles. Rojas answered this question, stating that they aren’t against the act, as they want the industry to grow. They don’t want to be the only players, and accept that they will miss out on titles they would like to do, but it is still a favorable sign on the whole. Sheehan agreed, saying that the influx of these companies is incredibly encouraging. The Japanese companies favor a different philosophy than FUNimation, and it is good to see them finding success.

The next question was from Gia, and was focused on the history of FUNimation’s website. Sheehan took the charge on answering, and revealed that prior to its current form, FUNimation hosted a social media platform known as FUNimation Fans. The site was launched in the late 1990s, and allowed users to have a profile, and subscribe as “fans” of FUNimation titles like Dragon Ball Z and Kiddy Grade. The profiles were then linked to a general forum. After FUNimation Fans, the company launched the current FUNimation website, as well as a digital distribution company known as Anime Online. Anime Online was an experiment by Navarre in digital distribution. From these startups, FUNimation learned to run an experience effectively. Sheehan noted that the social site was stopped within a year of its inception, just before the social media craze hit. The company will launch its new site, the current beta, as the new incarnation of FUNimation on the internet.

Another audience question was asked next, and was an inquiry as to whether the industry is turning around, with Aniplex opening an American office and online revenues increasing. Rojas responded, stating that, while they can’t speak for other companies, FUNimation is seeing definite improvements. Companies are beginning to adapt to the changing landscape, and the growing legal accessibility of anime is helping to increase exposure to the hobby, which leads to increased sales… in theory. So long as companies can provide anime in a convenient manner to new and old fans, the worst of the decline is over. Sheehan agreed, stating that the industry bottomed out last year, and is slowly beginning to turn in a right direction. With Japan making more shows, and making riskier products like the Noitamina block (which included shows like Eden of the East, Fractale, and Tatami Galaxy). At the same time, FUNimation and American distributors are beginning to adapt in their distribution and their packaging. He cited the company’s change in packaging, and their drive to return limited-edition versions of titles to the market, as well as an increasing focus on Blu-Ray. The industry has needed to devise back-up plan after back-up plan, going ahead as far as possible, to try and capitalize on the market at the right time. He cited that Blu-Ray sales have skyrocketed, especially at conventions. Rojas noted that anime is a part of the entertainment industry, and needs to focus on trends like other companies. He quipped that it was basically “them against Disney,” as they compete against cartoons, movies, and even video games.

Gia chimed in, stating that the industry is in the middle of the “big right turn”, and noted that the industry needs another big hit. both Sheehan and Rojas agreed, saying that they need a “mass hit.” Sheehan noted that Summer Wars did well, as did Evangelion 2.22 with successful theatrical runs and large numbers of sales from fans and non-fans alike. However, they’re still hunting for the next breakout show, the next Fullmetal Alchemist, Cowboy Bebop, or Trigun. It will happen, but there’s no telling as to just what it will be. However, the industry is in the right direction, and “cool” anime is beginning to hit again. Rojas added that the company’s focus on co-productions like Mass Effect and Dragon Age will be huge helps in generating interest, and are definitely viable options.

The next fan asked whether FUNimation will ever license “riskier” titles that may be popular overseas, but fly under the western radar like Oreimo. He also asked whether it would get to the point where companies would begin dubbing with the current season of anime. Sheehan stated that it’s possible that FUNimation would license lower-key titles, given that the market picks up. He cited that they currently offer streams titles like Galaxy Express 999 on their site, and offer them through the FUNimation channel but cannot do a physical release due to limited sales potential. As long as FUNimation can profit (as they are a business), they will consider all options. On the second part, Sheehan stated that it takes time to create a quality dub, as they need to translate, rewrite the dialogue into a natural form, and dub the title proper. In his words, “it’s like juggling chainsaws and cats at the same time.” Rojas noted that dubs increased in speed greatly, while Gia quipped that the last time simultaneous dubbing was attempted was with Kurokami, and that nobody wants to attempt such a feat again.

The next question was focused on the impact of the Japanese natural disaster, and its impact on FUNimation’s business in general. Rojas stated that the industry as a whole remained incredibly resilient. While there were a few small delays, the larger impact was minor at best. Gia continued, with comments about the Tokyo Anime Fair and Anime Contents Expo’s cancellations, and when new dates would be announced. Sheehan chimed in, stating the the biggest impact was from the Blu-Ray production end. Blu-Ray master tapes were produced in one factory, which was destroyed in the disaster. So, there is a year delay in getting the tapes made, which caused prices to jump from $250 to over $1,000. He noted that the NBA stated that the tapes aren’t there, and companies are looking into short-term solutions, such as digital broadcasts. These short-term solutions may have a long-term lasting impact on the industry at large.

Questioning from the audience continued, and an attendee asked about Blu-Ray listings that were pulled from Amazon for Strike Witches Blu-Ray combo, and why it was removed. Sheehan noted that they want to release the Blu-Ray, but there is a delay in receiving the materials for the release.

The next fan asked whether FUNimation was contemplating dropping DVD in the near future for digital distribution and Blu-Ray. Sheehan mentioned that, while there have been dips in DVD purchases on the whole, their sales have remained constant on that end. He attributed much of this to fans’ openness to express their desires. He gave the classic “singles” example: only a few years ago, people paid $30 for four episodes of a show, while today, they seem to express sticker shock over a full season for the exact same price. Overall, they have made strides to make a better product, and notes that both DVD and Blu-ray will be around for several years to come, especially due to the backwards compatibility features in Blu-Ray’s format. The two are complementary, though one format will ultimately succeed the other.

The conversation moved to the company’s broadening of availability, and whether such actions are helping to attract fans. Sheehan stated that it absolutely does, as the barrier to get at content is shrinking at an alarming rate. As such, the only real barrier today is making people aware of anime as a whole. For this, properly targeted advertisements on web sites and other mediums are vital. Rojas mentioned that the growing influence of social media, such as Facebook and Twitter are helping to spread interest i the medium further, due to their inherent nature. He mentioned that FUNimation’s Facebook has over 200,000 “likes”, and new content is disseminated quickly by fans.

The next question focused on the FUNimation channel, and how content is listed and scheduled. Rojas mentioned that the network is owned by another company, which FUNimation provides content to. The scheduling of shows is decided by the network’s owners, and factors in exclusivity windows, timing plans, and other logistical issues. Sheehan elaborated further, mentioning that not all of their shows have broadcast rights, which need to be acquired before the title can be shown on the air.

Another attendee inquired about FUNimation’s thoughts on Hollywood adapatations of anime. Sheehan stated that, if it’s a bad movie like Dragon Ball, they aren’t generally thrilled. However, both bad and good titles generate publicity, and proper advertising can offer a boost in sales with property marketing. Good hits obviously get people buying the anime versions more often, which leads to experimentation with other titles. Rojas chimed in, mentioning that they’d love to be more involved with live-action adaptations, but don’t often have the rights. According to Sheehan, they offered to help with the Dragon Ball movie adaptation, though nobody called them back on it. Gia mentioned that Speed Racer was underrated. Sheehan said that he loved the beginning, middle, and end, but should have been thirty minutes shorter.

The next questioner asked about how the Tokyo Youth Ordinance Bill would affect the industry. Sheehan mentioned that it’s still in the “wait and see” phase. The law passed the Tokyo assembly, but it can’t be fully implemented just yet, due to the nature of the Japanese government, and how laws are enacted. The big question is how far the bill will go when it finally goes into effect. The bill passed.

Another fan asked the panel about FUNimation’s recent purchase, and how it would affect the company as a whole. Rojas noted that the investment group that purchased FUNimation was led by Gen Fukunaga. At the same time, Navarre is still distributing, so the situation will not change much from the outside perspective.

The panel’s questioning began to wrap up, as time grew short. The next question focused on whether streams actually help streams. Sheehan replied that they are an absolute asset, as streams give people to sample a show, and lets many decide whether to purchase a title or not. At the same time, the company can offer a show’s entire subtitled run, but only the first few dubbed episodes, which gives an incentive to purchase the physical release. Streams also allow fans to be recommended new shows from titles they enjoy. Another fan brought up the question of whether 3D anime would be viable in the near future. Sheehan noted that 3D is out in the wild, but the technology is currently too expensive to invest in. Because of this, they are taking a wait-and-see approach to the format.

The final question of the day revolved around the company’s upcoming streaming video plans. Rojas did not have a clear answer, but Sheehan answered to the best of his ability. According to Sheehan, certain titles titles can be offered both a dub and sub via streaming, while others can only be offered subtitled due to licensing reasons, or file size restrictions.