top > blog > cinema industry > 08.Feb.2011

Free You Tube download increases DVD sales

  Tuesday 8, February 2011 
cont’d from previous blog entry
The Magic of Winning 8 Times

Freakonomics, the movie includes the story of fixed race of Sumo tournaments.


Did you know that a Professor of Freakonomics exists in Japan as well?


and is always seen sporting a checked flannel shirt.

I am sure he really is the professor of AKIBA-KEI (Akihabara style computer geeks).

He is Tatsuo Tanaka, who is a professor of Economics at Keiô University.


Recently, Professor Tanaka, I call him “Tacchan” secretly,

published a controversial report. In this he stated that

his analysis showed that although

 ”YouTube viewer numbers increased, so did DVD sales as well.

Don’t be afraid of illegal downloads.”


He published under the imprint of RIETI
(Research Institute of Economy, Trade and Industry agency).

However, the book contains a disclaimer at the beginning,

“This is my personal opinion that I take full responsibility for it.

It does not reflect the opinion of (Incorporated Administrative Agency) RIETI.”


What kind of perilous economics are in this paper? 


Professor Tanaka’s notable point is that,

the Japanese entertainment industry’s way of thinking that

any content that attracts large numbers of viewers on YouTube

cannot have any commercial value remaining.

However, the opposite is true, in that,

DVD sales increase in line with YouTube viewership.

So it is a nonsense to introduce a law that destroys illegal downloads.

You unconciously miss the nice film. 

That is called opportunity loss in economics.


The professor said in his book, “YouTube doesn’t damage sales,

if anything it increases sales. It is desirable to widen distribution via YouTube.

Any right’s holder who deletes content from YouTube,

will by it’s own accord become the loser. I mean by this sentence

that I think that stopping illegal downloading is a faulty policy.”


However, it needs a real example to be able to corroborate this opinion.

Don’t be bound a policy until it comes into force. Learn positively by trial and error,

by circulating a production, and then judge the loss or gain for the copyright holder.

It is logical that the independent business is judge by an independent party,

rather than the copyright management organization.


This is the assertion of the professor.

Professor Tanaka’s profound opinions.


According to Tacchan’s analysis, “YouTube viewership increases DVD sales,

not decreases them.

1% extra YouTube viewership equates to a 0.25% increase in DVD sales.”


You can read the full text of the discussion paper from this link.



A while ago, I was in the habit of watching some episodes of a variety programme

called “How Do You Like Wednesday?” on my iPad before going to sleep.

But one night they had all been deleted.

The next day I saw on a news programme that the affiliate of the copyright owner

has asked for them to be removed.


Well the affiliate is engaged in a cat-and-mouse game to get them deleted periodically.

I must admit I really enjoyed an episode showing a Journey Around Europe.

It made me burst out laughing, and allowed me to sleep well.

I was thinking about buying the DVD of “A Journey Around America”

after its European tour episode ends, but when the European tour episode was interrupted,

as a consequence I cannot be bothered to buy the America DVD now.

I simply lost my tension which I think this the consumer psychology of a great many people.


It is a strange thing to say, and I might be criticised for stating,

given that I work in the film industry sales arena,

but I honestly feel that as Japanese films cannot be sold overseas

I would rather people watched them for free rather than not all.

This really is my honest feeling.


In the case of a film that is worthy of appreciation,

we have to show it to people, it should not just be left on the shelf

because the market is not mature enough.

I think nothing shown, nothing gained.


However, I want to make it perfectly clear now that I do not mean

“dumping the films which cannot be sold”. That is not my opinion.


“It is possible to show films via internet distribution.

It is the one kind of a strategy for sale with the films that are worthy of a sale”.

This is my opinion.


It is possible to try and find “the appropriate size”
by aiming at the specific audience niche.

I wrote about this in a previous blog.


However, in the case of a premature market,

for example the position with Japanese films –

raise awareness >>> gain support >>>
win popularity >>> the market fixes the price.

When facing a new market the Market Penetration Pricing Strategy

described is needed. This is based on personal experience.


This is not an academic formula it is based on actual market criteria.


If it does not sell, keep it safe and sound in storage.

This vicious circle exists in the Japanese film industry

because it is overly conscious of protecting rights entitlements.


For example, the most widely used form of publicity in Japan

is the “free preview”, but it is only in theaters.

If you are not interested in that movie from the first place,

people don’t move to get your pen to write a postcard for lottery.

Sometimes the streaming video service, like Hikari TV

distributes a film for a limited time period, known as “Free preview at home”.

However, people have to apply and win a prize to watch the film free.

So audiences think it is a pain to spend time and effort on the entry application,

so it is not worth it. Then people lose the information

and the chance to watch the film. Finally, the film fails to garner an audience

and attract the attention of people who are not interested in it.


On the music scene, via Napster Shawn Fanning
built up a downloading culture rapidly.

He changed the face of music distribution forever.

I learned about this from the film THE SOCIAL NETWORK,

which is the running for Oscars. (LOL)


The film contains a negative attitude toward downloading,

in that it says “streaming is forgivable,

but downloading is outrageous”.

I am interested in what transpires.


In the case of the current target generation,

they have already moved away from TV
and the printed word to the Internet.

Time marches on, and we cannot resist any longer.

If you work in the reproduction business,

I have no doubt it is time to find a new business.

Tsutaya, a Japanese multi-media retailer,

has been moving toward an alternate delivery style for some time.

(Mr Takafumi Horie, popularly known as Horeimon said so too).


According to the analysis of Professor Tanaka, alias Tacchan,

it is still in the minority yet. It has been stated by the professor also.


Of course, we can’t agree with it unconditionally,

without taking the time to verify an example in a multilateral manner.

It is definitely “Freakonomics” now.

Time has proved the American professors arguement is sound.


I am sure that although the enthusiastic Japanese professor’s point of view

is in the minority at the moment, history will prove him right.


Professor Tatsuo Tanaka is attacked a lot for his point of view,

but he keeps proposing it in an attempt to change peoples minds

to a more positive view of his idea. I support his proposal.


Besides, the true meaning of “one man’s intuition

becomes everybody’s confidence” is shown in

Gem Partners, Ms. Umezu’s very precise “Box Office Market Analysis”.

 I think the film industry should use a tool like this.


Somehow, we have an inclination to understand

something when it is proved with statistics.


However, the numbers can beguile, and so should not be taken on blind belief.

We need to look at a decision from all angles.

We must remember it is only a tool, and avoid being tricked by the magic of numbers.


I call it the magic of “US No.1 Film”.

Recently a lot of films are promoted
using the catchphrase “America’s No.1”.

What is the point of calling a film “No.1”.

Anyway, apart from this question,

I really want to write about the style of advertising the hones on on this phrase.

Although this style of advertising is so old-hat and has lost it’s magic sheen.


Firstly, film marketing needs a sense of intuition, and then,

quantative analysis to back this up. This is what I think.

The important thing is not to reduce the width of
“choices” and “possibility”
with one’s own accord
with a pre-conceived idea.


We have to chose a tool that includes distribution to deal correctly.

Choose the best tool “strategically” for each film.

This is my reasoning.


That is why I am keeping an eye on Professor Tanaka, aka Tacchan.

I feel intuitively, “This is true”.

I want you to read the report for more details pertaining to economics and

He specialises in IT and Game industry analysis,