When I started watching anime fifteen years ago, there was a limited number of series and movies offered for sale. I quickly found the world of the fansubbers, where for a small fee to cover equipment upkeep, videotapes, and shipping, I received non-US-licensed series. The quality of the image and the subtitling varied but through them, I could get a look at relatively new series without having the uncertain filter of US commercial distributors who were unwilling to risk much on the unknown. Fast forward a few years and then an explosion of anime for sale bloomed both on TV (thanks to Cartoon Network's anime block called Toonami in 1997, featuring their runaway hit, Akira Toriyama's DragonBallZ) and video stores. Fast forward to 2007 and the sales of anime actually fell and then continued to fall all over the world.
What caused the dramatic drop? One could guess that fansubbing moved to the Internet. Fansubbers could upload a show within days (or hours) of original broadcast, and distribution became much easier, thanks to bit torrent, faster computers, and faster internet connections. So, what's an industry to do?
One fascinating development that I have been watching is the legitimization of a streaming anime site called Crunchyroll. When I first visited this site, I was amazed at the number of titles available that I could stream on my computer. Yes, many of them were licensed in the US but the site seemed to skirt this issue by only taking down those products when the license holder objected. This meant that companies had to know and actively seek them out; Crunchyroll could pretend to wash its hands about the legality of its actions. Not only that, but its actions seemed to irk some fansubbers who feared that the site was not only going to profit over their hardwork but also seemed to break their ethical code. You can read a particularly heated interview with a Crunchyroll cofounder here on the animenewsnetwork from March 2008.
In November 2008, Crunchyroll announced a partnership with TV Tokyo to stream anime straight from the source (not through fansubbers) to their audience, days or hours after the initial airing on Japanese TV. This meant that Crunchyroll would remove all unlicensed materials and drop fansubbers out of the equation. It meant higher quality video and probably higher quality subtitles (thought not necessarily). Their biggest coup was the wildly popular Naruto: Shippuden series which has become a cornerstone of their "coming out" party. (To put this in perspective for how popular this series is for non-anime viewers, the publisher Viz has been releasing the manga in the US, even going so far as to release three novels in one month. All of them hit not only bestsellers' lists for graphic novels, but also reached into overall bestsellers.)
With more and more applications done on the web, it's not surprising that Crunchyroll knew it had a moneymaking opportunity on its hands, but the question was how to do it. Despite alienating visitors to the site who wanted a return to the breadth of CR's catalog, this was a smart move. For a small membership fee, which they had offered before in order to recoup the extraordinary costs of running such a site, viewers can watch episodes quickly after they aired (non-paying members can watch them a week later).
It remains to be seen if more companies will partner with Crunchyroll and if this approach will restrain illegal distribution and even "save" anime beyond Japan.