The biggest problem with illegal downloads is the culture of freedom that purveys in the Net. Basically people expect, or even demand, all content for free thus they think they're entitled to download movies, music and books for free. This train of thought is encouraged by the fact they don't have to walk into a store to steal something, there's no risk.
As for Bryant's question about Anime, well if it wasn't hurting them why would one of the most popular US anime companies--Genon who has Cowboy Beebob--close shop because no one is buying DVDs or digital versions? If people were buying legal digital copies, which would offset the drop in DVD sales, this wouldn't have happened. And as Ookla said ADV (which has a wide digital distribution reach for an anime company) havening lost of problems too? As both the articles stated Anime in the US is becoming more and more popular yet DVD sales aren't just stagnate, aren't just low like the rest of the DVD industry they're down 50% compared to 20% for other DVDs?
The worst thing about this discussion is you seam to be defending people stealing content, tens of thousands of dollars go into make a single episode and there are lots of jobs at stake, do you honestly want no more Anime over here in the US as well as less stuff made in Japan? Do you honestly see nothing wrong with this (even if the numbers weren't as staggering as they were)? You called it illegal yourself yet seam to have no problem with it.
I would appreciate it if you wouldn't jump to conclusions and put words in my mouth. I stated fairly clearly in my first post in this thread that I am neither for nor against file sharing, as there are some stories out there that point to file sharing having a positive impact.
Tech N9ne, a rapper from the midwest, is fairly well known for his decision to release his album Absolute Power on the internet. Sales for this album are by far the highest out of any of his work, even including albums which have multiple tracks featured in motion pictures, etc. Yet, quite obviously, people will aways choose to take something for free, when faced with the choice of getting it for free vs. having to pay for it. One aspect is positive, and the other is negative.
And my question wasn't about DVD sales, but rather overall sales. I realize their DVD sales are going down. The thing is, that doesn't tell the whole story. Even anime dropping a larger percentage than regular movies makes quite a bit of sense, concerning the digital medium, for several reasons. One is the audience: Anime fans are largely a geeky population my nature. The average anime fan is far more likely to be interested in computers, etc, which places them in the market that digital download services cater to. You then also have to consider the fact that anime DVDs cost significantly more than, say, an equal number of TV series episodes. I recently bought the 3rd Tenchi Muyo OAV. It cost me $35, for 7 episodes and 300 minutes of play time. Comparatively, House Season 1, 22 episodes and 970 minutes, only cost me $40. More than three times the length, and only 5 dollars more in price. Prices on the online stores are not quite as disparate, from my understanding.
Say I release a book. It is originally sold in hardcover format. Later, a trade paperback version is released. If I put out an article saying that hardcover sales have plummeted, I would probably be telling the truth. But that doesn't mean that filesharing caused it.
As for ADV's digital distribution, there are quite a few issues with it. $5 per episode is quite a price, with the average anime episode being ~20 minutes long. For an hour's worth of entertainment, that's $15! I can grab a regular TV show off of iTunes for $2. It also only works on Windows because of the DRM system, which eliminates Mac and Linux users from the equation. Again, while these are much smaller pieces of the market than windows users, due to the nature of the type of person who is a fan of anime, they are hardly market shares that you wish to ignore. By requiring Windows, they are definitely losing sales.
I also disagree with the downloading = stealing sentiment. You have to realize that a significant portion of those who download things off the internet are teenagers, etc, with no jobs, and very little disposable income. Some 15 year old who's only source of income is a weekly allowance might have downloaded 17,000 MP3s, 600 movies, and 74 anime series, but it is quite obvious he never would have been able to buy all of that. You can't lose sales that you never had. Am I saying that it's fair, or even right that this kid has these, when he didn't pay for them? Far from it - I buy my things, and so should he. But the RIAA in particular has left a bad taste in my mouth on this subject, where they make wild claims saying that a single person who has thousands of MP3s has cost the industry hundreds of thousands of dollars - quite obviously, these people would not have actually bought all of this music, even if it was not available for download.
By no means am I saying that file sharing is correct, nor defending file sharers. I would agree, even, that for products that are already popular, it is a bad thing. However, there is proof out there that it can help people gain recognition and popularity. That, coupled with the ridiculous strong arm tactics of several organizations, such as the RIAA (Who has been lobbying for the penalty limit to be increased - they're saying that every single shared MP3 file is $150,000 in damagers. More than a million dollars for a shared CD!) makes me believe that the issue is hardly black and white. There are multiple sides to every story, and to make an informed decision, you need to know all of the sides. And, at this time, I do not know all of the sides, so I can not comfortably make a judgment one way or another. This does not mean that I am for, or defending, filesharers. All it means is that I'm not ready to roast them on a spit, either.
Edit: I didn't even consider economic issues, either. With the US likely in a recession, the higher priced luxuries are going to go away faster. I don't believe this is a major contributor to lost sales, but it could be one of many minor ones. Thousands of untreated small cuts will bleed you to death just as surely as several big ones.