Licensing
From WikiRoll
Licensing, Copyright, Fansubbing, and Crunchyroll
An arduous, yet slightly informative rant by Brennan.
I'm quite tired of a whole bunch of people crying foul over the fact that several good quality animes have been taken off Crunchyroll recently. They're saying that they hate CR for taking away good quality anime, yadda yadda, assigning blame and expecting to watch good quality entertainment for nearly no cost or risk whatsoever.
What a lot of people don't often get is what is the meaning of licensing, how copyright law applies to streaming media distributors, and the applicability of international laws to the whole affair.
And just in case you're wondering, I'm an admitted lawyer that has a good feel of copyright and media.
Anyway, first and foremost though: Stop blaming both Shinji and CR for what's happening. Licensing is NOT determined by CR, neither is it their fault if an anime has been licensed by one of the many companies who license anime for distribution in various countries. Shinji and CR is, for all intents and purposes, considered a distributor of streaming media. Regardless of whether they profit from this endeavour, if they continue to distribute a licensed anime, they risk being sued for every penny that they have. This means that CR will have to be taken down in the long run, and in the worst case scenario, Shinji goes to freaking jail for piracy. The risks of going to jail versus the payoff of continuing to host licensed animes is just not worth it.
Meanwhile, you whiny folk at home just continue to whine about how your favourite anime isn't available anymore. Grow some balls, grow up, and realise how much bigger this thing is than you. I love CR as much as the next guy, but come on. Grow up and smell the goddamn roses.
This rant will explain what licensing is and how it affects CR. But before it goes into licensing, it is critical to understand the basis of licensing - the law of copyright. It's also important to understand the costs and profitability of anime, as it will better allow you to understand why copyright is considered an important matter to uphold and enforce.
[edit] What is Copyright?
Do you know what copyright is? No? Right. Copyright basically applies legal protections to original material created by an artist, team, or company. It disallows anybody other than the copyright owner to distribute, market, or profit from the copyrighted material. Copyright's best visual mark is a tiny little (C) in brackets, followed the year the material was made, and the Copyright owner's name. You can usually find this mark right at the end of the opening number of an anime. Examples of companies who own copyrights to remarkably popular animes: Bandai Visual, Sunrise, Gonzo, Gainax, Tatsunoko. Why do they own the copyright? It's because they created the copyrighted anime in question. Now, creating anime is no small task. These companies write, animate, produce, market, and sink roughly 10-15 millon yen per episode of anime. That's USD$90,000 to USD$165,000 (Source: .ANIME USA). It's a hefty cost, and I think it that is their basic right to protect their interests. I mean, after putting that much money into things, they have every right to determine how it's to be sold and marketed, as well as who can sell it, right?
Copyright's duration does not last forever. Once a Copyright expires, the material is considered to be under the public domain and how it's used is limitless. However, most countries out there set copyright to end 50 years after the work was made. In the United States, there's even talk of extending copyright beyond this.
[edit] Limitations of Domestic Laws and Copyright
Barring international laws and conventions regarding the matter, laws only can extend to as far as the geographic and geopolitical influence of the law-creating body can reach. In layman's terms, the law of the US does not apply to Japan. Similarly, as the copyright of the material is only registered in Japan, the Japanese are typically powerless to enforce fansubbers outside their country to abide to the Japanese law. This doesn't mean that they can't - it means that it's tough. They'll generally have to identify the distributor, apply to the United States that the culprit be physically pulled out of America, and then dragged to a local Japanese court.
Case in point: In my youth, I got hit with a copyright infringement notice by Getty Images for taking three photos I found from the Internet (honestly thought they were royalty free). They demanded a total of USD$3,000 from me and to remove the content immediately, or face court action. Lucky for me, I live in a different country and there was no licensed distributor for Getty Images in my country. They didn't bring court action in the end, but I apologised and removed the images anyway.
[edit] International Law and Copyright
There are several international laws which specifically deal with copyright. Most international agreements on copyright state that other countries are to respect each other's copyright laws. That being said, there currently does not seem to be any international law dealing with the legal repercussions of streaming media distributors. This is partly due to the rapid growth of the internet and how it continues to challenge established ideas and concepts regarding copyright law. Another problem is due to how bulky and inefficient international law is, and how it fails to actually impose penalties on signatory countries. But that's another story for another time.
That's just international law. There are also international trade organisations who impose requirements that it's member countries follow and respect each other's copyright laws. Although not international law, it's scope and effect is similar. Examples of such organsations are the WTO, G8, and ASEAN.
Some of the international laws relevant towards Copyright are the Berne Convention for the Protection of Literary and Artistic Works 1886 and the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) 1994.
The effect of these laws are that the Japanese copyright holder may bring action in the United States for infringement of copyright. They will however have to bring the action under US copyright law. However, even with the ability to take action in a different country, there still are multiple problems to overcome. Problems include language barriers, differences in laws, difference in applicabilities, as well as other problems associated with cross-national litigation. These are all sizable barriers to a Japanese copyright holder bringing an action under US law.
[edit] What is Licensing?
So that's copyright. What does this have to do with licensing? As you've previously read, copyright is heavily influenced by geographic location. This means that technically, although a person is offending copyright by downloading and distributing anime from Japan, they are unlikely to be prosecuted for such behaviour in the United States, where they are distributing the material.
So, in order to cure these problems, we have licensing. Let me explain by telling you what is licensing. Licensing can apply to many, many things, but it's most commonly defined as a permit to do something that would ordinarily be unlawful without a license. For example, you are not allowed to own a gun. However, if you have a license to own a gun, you are allowed to own a gun. Similarly, in the context of copyright, having a license to use copyrighted material is the permission to use copyrighted material in a way that would otherwise be a breach of the copyright owner's proprietary rights.
In the anime context, it can be used as a business model. The copyright owners give permission to a single party, or (multiple parties, if they really feel like it) to market and distribute their work. Marketing and distributing the anime for the copyright holder! The owner doesn't have to do a thing! The person that's been given the permission to do this is called a licensee, while the person giving the permission is called the licensor. Examples of licensees are ADV, 4Kids, Madman, and Funimation. Anyway, these people will import copies of the anime, apply translations and audio dubbings to the anime. In exchange, they pay what is known as a "licensing fee" to the original owners of the anime. This can take the form of a lump sum or royalties. As far as I understand it, this fee can be anywhere from USD$10,000 per episode, to USD$50,000 per episode (Source: Animenation News ). In addition, the license holders are expected to additionally sink up to USD$30,000 per episode for translation scripts, dubbing, marketing, and distribution, bringing up the total amount spent per episode to anywhere between USD$40,000 to USD$80,000.
Licensing does not last forever, nor does it last for as long as copyright does. The duration of the the rights contained under the license lasts for as long as the two parties want them to last. This sort of information isn't typically revealed to the public, being contained in a private contract between the licensee and the licensor. When a license expires, it is up to the licensee at that point in time to re-license. An example of a license which has actually expired recently is Patlabor. Another recent one is where 4Kid's license with One Piece expired; Funimation stepped in and licensed the rest.
[edit] Licensing Rights
The rights given to the licensee depends highly on what kind of rights the original copyright holder wishes to give to the licensee. It can range anywhere from full distribution rights and creative rights, to limited distribution rights within a certain territory. Licensing does not transfer rights, it just allows the licensee to do certain specific things that the licensor can do. The original copyright holder, the licensor, still retains all the rights over their work.
However the biggest right that a copyright licensee can have is the right to recover damages due to infringement of an exclusive right. If a copyright licensee has the exclusive right to market and distribute anime within a certain area or territory, and if somebody else offends that right by distributing anime within the exclusive territory that the licensee holds, then that's an offense against that licensee's rights (Source: Drowning D, Keller B, Cunard J, "Copyright Law: A Practitioner's Guide" (New York: PLI 2004 ) at 3-32)(Also see s501(b) of the US Copyright Law, aka US Title Code 17). The rights to prosecute for copyright infringement can also be given to a nonexclusive licensee, although this practice is rare.
In simpler terms this means that the license holder can drag you to court if it catches you doing something that only they can do. I mean, who can blame them? They just sunk upwards to USD$80,000 per episode to acquire and market anime, and someone's giving it out for free. Sure they would want to sue. Anyone would know that going into court is not a small thing. A matter that's begun in court can take upwards to 10 years, and the costs of doing so include the fees to lawyers, as well as the risk of paying the full amount of damages alleged. Which can be at the very least, half a million, if we're being conservative. Which sucks. No, really, it does.
This is primarily why fansubs insist that you stop distributing fansubs after the anime has been licensed, and that you should go out and purchase the DVDs, VCDs, what have you. Because they can't afford being pursued by a legal license holder, and being smacked the shit down.
This is also the reason why Crunchyroll takes down videos that have been licensed by exclusive licensees, and to a certain extent, non-exclusive licensees.
Another fun bit about copyright licensing is that copyright can be further broken down to individual pieces. For example, you can give a licensee the rights to distribute and market - but you can give another licensee the rights to create toys or miniatures based on the anime. A good example is the collaborative effort between Sunrise, Bandai, and Bandai Visual, who usually work together to produce both the Gundam Anime and the Gundam Miniatures.
The fact that copyright can be divided into little parts can also cause a fair amount of legal confusion. For instance, the original run of Super Dimension Fortress Macross was written and produced by Big West/Studio Nue, however they gave the rights for international licensing to Tatsunoko Productions, who in turn sub-licensed the anime to Harmony Gold. If I recall correctly, they further gave licensing to Bandai to produce figurines for the fans. Harmony Gold took the anime, and crammed three other animes from Tatsunoko together in the most epic AMV ever: Robotech. Recently Big West/Studio Nue took Tatsunoko to court to determine who owned the rights to Macross. The court found in Big West/Studio Nue's favour. Harmony Gold has called foul and asserts that it still has rights to distribute Macross. This gigantic legal confusion is the primary reason why the original Macross, Macross 7, and some of the other Macross films was not distributed in the US until recently. The legal drama is still unfolding. But that's yet another story for another time.
Another fun fact that not many people are aware about is that most anime adaptions of popular light novels or manga is actually produced under license from the mangaka that wrote it, as after all, the story, script, and characters are all equally protected under copyright. For example, Oda Eiichiro writes One Piece and has given Toei Animation the exclusive right to write and produce an anime based on his works. If TBS decided to write and produce and anime based on One Piece without Sensei Eiichiro's work, then Sensei Eiichiro (or Toei Animation) has every right to call them out on breach of copyright.
[edit] Licensed Animes in the US
The Anime News Network has a list of anime which has been licensed in the United States of America:
[edit] Why does CR remove licensed videos while Veoh and Youtube does not?
This is an incorrect assumption. Veoh and Youtube removes stuff all the time. It's part of their copyright policy to remove any copyrighted (or licensed) material from their website. However, you have to consider the difference between CR and Veoh/Youtube. Veoh and Youtube have several million viewers, subscribers, and people who upload things _every second_ to their website. They also don't have mods that clear videos before they are put up. In comparison, CR is a small, tight-knit community that have teams of passionate, dedicated moderators who monitor the uploads all the time. And in case you were wondering, CR does have it's own copyright policy in place which further gives them the obligation to remove licensed stuff.
The difference between the two is that because things are being uploaded all the time on Veoh/YouTube, and they have so few mods, it may take up to several months before they identify a copyrighted video and take it down. Meanwhile on CR, because our community is so much smaller, we can identify a copyrighted video almost immediately and take it down.
Veoh and Youtube have certainly have had legal challenges thrown at them as well for copyright infringement. Their argument in most cases tend to be, "We have so many users, and we're just a service to upload and view videos. We try our best to cut down on copyright infringement but, for the most part, our service is legal." This sort of argument may not work for CR, because CR is a very specific service that deals with uploading and viewing a very specific type of genre. It will be correspondingly harder to dodge that bullet should it ever be shot.
[edit] But TV shows anime for free, why can't I watch it online for free?
That's also another incorrect assumption. Television networks also acquire a license from the copyright holder to show the anime on television. They pay a licensing fee or a royalty to the original holder (or the licensee of that particular area). Television networks however, gain revenue by showing advertisements during their broadcast, or, if they are a cable television company, collect it from subscription fees. The type of license that the television network acquires to broadcast the show on network television is markedly different from the type of license that a distributor such as ADV would acquire.
There has been some discussion regarding internet broadcasting, but as I've said before, because of the lack of legal clarity regarding intellectual property law, the internet, and international law, having streaming network sites that just broadcast material with ads aren't going to be happening anytime soon. However, it's not to say that it hasn't been done. Recently the official South Park Studios, in response to other sites streaming their episodes, decided to fight back by providing high quality streams from their own website, with some advertisements in-between. This is also done by Comedy Central and the Discovery Channel.
I'm also certain that all of you are familiar with "Blassreiter" and "The Tower of Druaga", which is being aired by Gonzo on Crunchyroll, Veoh, and Youtube, in order to test the viability of the internet as a multinational broadcasting medium. Together with the blessings of the Copyright Holders, Crunchyroll can take steps towards making a breakthrough in how media is brought to you in this current day and age.
[edit] What about other streaming video sites?
While it's true that other streaming video sites do host licensed anime, it's also true that all of the above still applies to them as well, especially if they're hosted in the US. The fact that they host licensed anime does not make their actions legal. Usually other streaming video sites are much, much smaller than CrunchyRoll; this makes them less present and it hides them from the eyes of those who may bring charges against them. They still however do face the risk of having action brought against them should they ever be noticed.
[edit] This stuff doesn't apply to me, I don't live in the US so US licensing law is not applicable to me
It doesn't matter. CR's servers and the fansubbers are primarily based in the USA, and therefore US copyright law applies to them. Unless I'm wrong, Shinji is also a US Citizen, and as a result, will come under these laws.
Of course, CR could move it's servers to Egypt, just like the Pirate Bay did. Taiwan also works.
[edit] Is there any way for "unlicensing" to occur?
Long story short: No. US companies have usually already paid good money to the Japanese production company to license the anime.
What you're essentially asking for is that the American company stop what they're doing, demand their license fee back from the Japanese, tell them that they won't be marketing and distributing their product in America any more, and that their mom is ugly. Okay, maybe not the last part, but you get the idea. This is considered Breach of Contract, and potentially can end up in a Court case in which the Court will basically side with the Japanese production company. Legally, unless there's a perfectly good legal reason to withdraw from a contract, the courts will usually look badly on a contract breaker.
So, no. The other alternative is to wait for the license to expire. But since it's uncertain how long companies license animes for, this is probably not a good idea. Worst case scenario is that you might have kids first.
This is in no way a definitive answer for the subject: a forum member pointed out to me that the fate of the recently deceased Geneon USA made it possible for all the animes under them to "not have a licensor anymore", in effect, "unlicensing" them. Some of their animes were licensed under different companies following this incident, but technically, for the record, unlicensing can happen due to a company collapsing.
[edit] By the way, Fansubbing is Illegal
Ah, this is always such a heated debate topic. Considering how widespread Fansubbing is in these days, it's no wonder that a lot of people are under the impression that fansubbing is actually a legal act. The truth of the matter is that fansubbing is actually considered to be illegal, even by most fansubbers. But I have to clarify what aspect of fansubbing is illegal.
The act of making a fansub isn't actually illegal. If you live in Japan and watch a series on network television, and tape a copy for your own private use and benefit, this is not illegal. If you have purchased a legitimate DVD copy of your favourite anime, and decide to decode it and place subtitles on it for your own use and benefit, this is not considered illegal.
However, Japanese Copyright law does not allow for illegal downloading or distribution of Copyrighted Material(Source: Article 113 of Japanese Copyright Law, taken from the Copyright Research And Information Centre of Japan.) It is, specifically, the act where fansubbers decide to spread the word, pass the subtitled anime around, that is illegal. If you think about it harder, this is pretty much illegal, the same way it's illegal to copy a movie to your hard drive and then share it on KaZaa, Limewire, Bittorrent, what have you. Magical Fairies do not pop out of a work being subtitled and give permission to fansubbers to share the love. What they engage in is widely considered to be piracy. In fact, Dattebayo, a leading fansubber known for doing Naruto fansubs, admits that their work is not legal (Source: Dattebayo PR page).
There are arguments that have been put forth that Fansubs have been worked (hard) on by people who apply karaoke, timing, translations, and effort, and because of this, may qualify for the copyright exception of "fair use". "Fair use" is basically an exception on copyright that states you do not infringe copyright if you had used the material in a certain manner. It is largely a US law, although some countries have similar regulations. The fair use doctrine allows for satire or parody shows to exist, or allows for people to make reviews of books or television shows. In certain circumstances, fair use may apply to any work done on top of a copyrighted work.
However in the case of fansubs, the video and the voice acting of the anime remains largely untouched, which disqualifies it from having the defense of fair use. To further make things worse, the Berne Convention - which deals with copyright - of which the US and Japan are both signatories of, says:
"Translations, adaptations, arrangements of music and other alterations of a literary or artistic work shall be protected as original works without prejudice to the copyright in the original work."
This is widely interpreted as "The translation, not the video, is copyright. The video and audio is still protected". As in, the translation script is fair use and can be copyright by the fansubbers, but not the original material. Now this is sometimes used by fansubbers to force streaming websites (like CrunchyRoll) to unhost their fansubs, saying that it violates THEIR copyrights. Of course, the irony of them doing that is lost on them (A person violating someone else's copyright telling someone else not to violate their own copyright? Hilarious!)
Why then does fansubbing remain popular and why does it persist, then? Believe me, if I had access to purchasing legitimate copies of the anime I wish to watch, I would. However, due to the licensing process, it often takes up to an entire year before a recently aired anime in Japan becomes commercially available in the Western World. Seriously guys, that's way too long. The anime I watch then would have the distinct danger of being out of style! T_T Because of this, fansubbing remains relevant as the quickest way to watch the most popular and interesting shows out of Japan right now. Fansubbing also promotes awareness of up and coming animes, and gives us a chance to see what's new and interesting right away. And as aware as I am that fansubbing is largely considered to be illegal, unless steps are taken to directly bring to Western audiences new animes or shows in Japan, fansubbing will continue to persist in both use and popularity.
[edit] And so is bloody AMVs!
Cutting and splicing several videos from your favourite anime does _not_ give you fair use rights. Distributing AMVs that have copyrighted material in them is illegal! They should also make it illegal to distribute AMVs with freaking Linkin Park in them as music. I swear...
[edit] Defiance of the Law
If Shinji and CR continued to host and stream licensed videos, two things can possibly occur:
- CR having court action brought against them by the license holders for loss of income. Worst Case Scenario: Bankruptcy. The license holders potentially have the power to do this under Section 501(b) of the US Copyright Law (US Title 17)
- FBI bringing piracy charges against CR. Worst Case Scenario: Fine and Jail time. The FBI potentially has the power to do this under Section 506(a)(1)(c) of the US Copyright Law.
As mentioned before, court action is not the nicest thing that can happen. If CR decides to fight any court findings, court can take up to 10 years to settle the dispute, 4 if you're lucky. As mentioned previously, it will cost thousands of dollars in legal fees as well as running the risk of paying a large fine, the corresponding loss of income, or even the other party's legal expenses. This is not an amount to be underestimated. Recently torrentspy, due to numerous legal challenges thrown at it, decided to shut down. They had already spent several hundred thousand dollars attempting to fight their case. In addition to this, the MPAA has obtained a default judgment of USD$111 Million against Torrentspy for copyright infringement. Torrentspy is working hard to fight against the case.
What's worse is that, in the worst case scenario, the court may decide to demand from Crunchyroll data relating to it's users. That's right, in the worst case scenario, Crunchyroll will have to tell the court who you are, what you've watched on the site, and your IP address, of which your home address can be traced from. They can then attempt to prosecute individuals and make them pay fines for breach of copyright. Torrentspy had previously faced this sort of order, and elected to shut down and declare bankruptcy for the sake of protecting it's users.
However should any action be brought against CR for copyright infringement, the result is that CR will be shut down indefinitely.
[edit] Conclusion
Copyright is a means of protecting original material. It works through a series of domestic and international laws, but it's limited efficacy outside it's original jurisdiction makes it difficult to enforce.
Licensing is where the permission to do something which is otherwise illegal. In the copyright context, it is where an original copyright holder, the licensor, gives authorisation to the licensee to copy aspects of the original material for certain purposes. In the anime context, it is a business model that can be used to cure copyright enforcement problems. It applies the copyright laws of the licensee's nation to the material and gives them the right to prosecute anyone who offends the copyrights of the licensee. In exchange, they pay a sum of money to the original copyright holder. This is not a transfer of rights; after a period of time, the License actually does expire. It is up to the licensee at that point in time to re-license.
Fansubbing is illegal. But supporters argue that it's necessary to provide the general public with exposure to the anime. There are lots of other arguments regarding the legality or illegality of fansubbing, and fansubbers insist that their work is fair and credits the original holders, and that they aren't doing it for profit. Critics however point out that despite all this, in the eyes of the law, it's still bootlegging.
AMVs are so illegal that Chuck Norris should roundhouse kick anyone who tries to work on any. And that's a fact.
In the end, CR and Shinji are not at fault for licensing popular anime. They don't even license them - people like Funimation, ADV, 4Kids, Madman, they are the ones who are licensing and having their legal teams issue cease and desist letters to everyone distributing their licensed animes. Stop blaming CR and Shinji and get off your high horse. In fact, for hosting anime on this website, they are actually taking the risk that they may be sued off their face and sold into slavery for the rest of their life. What are you doing? Sitting back and whining about how CR's taken Gundam 00 off the site? And then trying to boycott CR? ON IT'S OWN FORUMS? (Obviously someone doesn't follow the plot). I was disappointed too, but hey, the law is the law.
If you consider the law to be unjust, then do something about it. There are many organisations out there protesting digital rights management as well as the current forms of copyright laws. There are organisations out there that promote the freedom of the internet and the freedom of materials on it. There are organisations out there actively protesting that media record companies as well as Hollywood organisations are full of crap and take away much needed money from the scriptwriters, animators, and the like. Although these are primarily US concerns, they also apply to Japanese Anime. Do you know how much an animator earns in a year? Lot less than you think. If you are so concerned, read up and do something about it.
I hope this has been educational.
