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I don't think this ordinance is the end of the world, but I do think it will hasten the end of the printed manga industry. Readers all over the world have been waiting for the push that will provide them with online versions of their favorite comics. I believe that this law will be that push. It will force publishing companies to move more explicit work underground - the online world is eminently suited for that. Less questionable materials will follow, because printing on paper costs more than not printing on paper and distribution costs less for digital material. There is a provision for the industry to self-regulate and, like most obscenity laws, this one may be hard to enforce, except for when someone is running for office and picks some scapegoat to make an example of. (As happened with Christopher Handley, who was sacrificed to a campaign strategy.)

I worry a bit about group shows like Comiket. Like Tokyo Anime Fair, it is held in Tokyo, where the ordinance has been passed. If you were a creator of materials that are regulatable, would you bring them to a public show right now? Consider that the law goes into effect on July 1, but in the half million people at Winter Comiket, there may be people who will be tasked with rounding up the creators next summer. Sure, it could go underground, become "a hydra," but what does that do for an already tenuous industry? It pushes extreme fetishists under the table to continue doing what they are doing, and leaves all the other creators sort of out there to be harassed. Probable? No. Possible? Yes.

2nd Update: Brian Ruh on Twitter has pointed out that this Ordinance focuses on companies and their access to distribution, not creators, so at least for the moment, Comiket and other markets are not targeted.