An Alternative Universe? Authors As Copyright Owners- the Case of the Japanese Manga Industry
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University of Plymouth PEARL https://pearl.plymouth.ac.uk Faculty of Arts and Humanities School of Society and Culture 2019-01-22 An alternative universe? Authors as copyright owners- the case of the Japanese Manga Industry Schroff, S http://hdl.handle.net/10026.1/13218 Creative Industries Journal Intellect All content in PEARL is protected by copyright law. Author manuscripts are made available in accordance with publisher policies. Please cite only the published version using the details provided on the item record or document. In the absence of an open licence (e.g. Creative Commons), permissions for further reuse of content should be sought from the publisher or author. An Alternative Universe? Authors as Copyright Owners- the Case of the Japanese Manga Industry by Simone Schroff1 Abstract Comics today are a major business and they form the source material for a whole range of sectors in the creative industries. In an environment where major investments are necessary to turn a comic into a cross-media success, commercial intermediaries such as Disney have become the key copyright holders. By controlling the copyright, they ensure full control over all aspects of its monetisation. However, this is not the only way success can be achieved on a commercial scale. In Japan, the creators of comics (Mangaka) keep their copyright- a direct contradiction to current copyright thinking. This paper addresses this conundrum by examining both the Manga business and copyright law to identify if the reasons why copyright is not centralised in the hands of the commercial intermediary, especially the publishers. The analysis will show that while there are differences between Japan and the EU/ US, but these do not affect the role of copyright law and indeed failing to acquire the rights is a choice, not a necessity. Instead, this article will highlight that the competitive Manga market in combination with the uniquely Japanese publication right and social control best explain why Mangas are successful and Mangaka keep their rights. Key words: commercial intermediaries, Manga, copyright law, Japan, windowing strategy, business model 1 Canon Foundation Fellow (Waseda University, Japan) and Researcher at the Institute for Information Law (University of Amsterdam). 1 Introduction Comics are a major source material for the entertainment industries worldwide. For decades, famous US series like Batman, Spiderman or X-Men have made an impact as published books, on TV as cartoons and as feature films on the big screen.2 Since the mid- 1990s, Manga (Japanese comics) have added to this sector. The success of Manga is noticeable both in the domestic and the international context. Manga are a powerhouse in the Japanese economy: they make up 20% of the whole publishing industry’s income (Pineda 2017b). Indeed, Manga are so successful that they de- facto cross-subsidise other publishing activities (Brienza, 2016, 46; Schodt, 1996, 21). In addition to its domestic success, Manga are very popular abroad. The US market for example was worth $110 mio in 2016, an increase of 29% within a year (Pinada, 2017a). Manga are also the dominant export when it comes to printed matter: 73% of all international copyright- related trade in Japanese books comes from comics in comparison to only 20% that are derived from books (Japan Publisher Association, 2018, 26). Most notably, they have overcome a major hurdle in the monetisation of comics: the distinct distribution system. For example, most US comics are still sold via specialist comic stores rather than general bookstores,3 obviously restricting their potential audience.4 Manga, on the other hand, have managed to break into the normal distribution chain for trade books in the US and in Europe (Brienza, 2016). As a result, they are sold in high street bookstores, broadening their access to the audience. Overall therefore, Manga is big business both in Japan and abroad. Copyright is a key feature in the monetisation of comics. This article examines a key difference in how copyright arrangements support turning comics into revenue streams 2 Disney’s approach to the Marvel comics is a prime example of how coordinated the cross-media appeal of comics can be exploited. 3 $570 mio in comic stores v $405 mio in general book retail stores. (Comichron, 2016) 4 The digital sales component is insignificant in comparison with only $90 mio. (Comichron, 2016) http://www.comichron.com/yearlycomicssales/industrywide/2016-industrywide.html 2 between Japan on one hand and the US and Europe on the other. In particular, it addresses the question of copyright control by commercial intermediaries, here the publisher of comics. Creative Works and Revenues: the Role of Copyright in the Windowing Strategies Turning creative works such as comics into revenue streams is based on the well- known ‘windowing’ strategy. In this strategy, a creative work reaches the market in different versions aimed at distinct sectors of the customer base (for a structural explanation, see: Landes and Posner, 2003). In the traditional Western windowing strategy, the highest value customers, meaning those individuals willing to pay the most to enjoy a work, are targeted first. Those consumers who are willing to pay less are then addressed one by one as time proceeds. The strategy can be best illustrated using a feature film release. The exploitation cycle starts with a cinema release where customers pay for the right to watch a film once. A few months later, the film becomes available on DVD, allowing customers to watch it as often as they wish. It is then followed by pay-per-view, streaming and finally a TV broadcast. At each step, the cost to the consumer declines but he has to wait longer and has to accept inconveniences, such as when he can watch it or commercials. In other words, the windowing strategy moves down the spectrum from the highest to the lowest value consumers using time to separate out the different market segments. Finally, the windowing strategy is not only about the medium in which the work is issued but also versioning across different media types. If a work is exceptionally successful, it will branch out into other exploitation cycles on a large scale.5 For example, a successful book is adapted into a feature film, comics, a TV series and a whole variety of different merchandise. 5 The two most famous examples here are probably Star Wars (starting point: film) and Harry Potter (starting point: book). 3 The windowing strategy is also commonly used in the case of comics. Here, a series is first published as a comic book. Once it has proved popular, cartoons are made and broadcast on TV or streamed, allowing the work to reach a wider audience and generate income from licensing and advertisement. In addition, merchandise expands the income base even further as popular characters appear on all kinds of items, from pens to book bags. The most popular series are then adapted into feature films- launching the film exploitation cycle in addition to comic one. The same is the case if video games or other derivative works are made: each one launches its own exploitation cycle. This strategy was in the past used for major series including Spiderman, Batman and the different Marvel comics. For this model to work, copyright law is essential. In principle, creative works such as literary works, comics or films benefit from copyright protection. Copyright law is important because it prevents unauthorised parties from bringing competing products to the market. In this context, it prohibits third parties to copy the work, showing it to the public or to make other works based on it (derivative works) without the permission of the right holder (exclusive rights). It therefore provides exclusivity for the right holder. Under copyright law, the rights in the work rest with the author, meaning whoever has created the work in the first place.6 Nonetheless, reaching a work’s full potential in today’s markets with all the different ways to monetise a work requires extensive resources such as expertise and capital.7 Most individual authors lack these resources and therefore rely a partner to bring their works into the market, such as publishers, labels and film producers (so-called commercial intermediaries). Given the often substantial investments involved in these endeavours, intermediaries seek full control over the work to ensure that they have all the available tools 6 There are certain limited circumstances when this rule does not apply. The relevant ones are discussed below. 7 This is the idea of the value chain. For a discussion in the publishing, especially the comic and Manga context, please see: (Brienza, 2016, p. 30-31). 4 to minimise interference and earn as much return on their investment as possible (Landes and Posner, 2003; Barnett, 2013). These considerations are addressed in the rules on copyright ownership and transfer. In principle, the author as the creator is the copyright owner and therefore controls the work. However, copyright law recognises two broad mechanisms that provide the commercial intermediary with the exclusive rights copyright provides, giving him the control necessary to safeguard his interests and especially his investment (Gill and Balkwill, 2011; Thompson, 2012). First, if a work is made by an employee in the course of his duties, the employer is often considered the author or at least the right holder in the US, Japan and in most EU countries.8 However, these circumstances remain narrowly defined and a significant proportion (if not the majority) of creative works are not covered by these rules. If there is no employment relationship, then the author remains by default the copyright owner which explains the second key mechanism. Exclusive rights and therefore the economically relevant uses are transferable, meaning the author can assign his rights to another person, including a company.