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The Anime Market: In the Midst of Adjustment

Over the past year, we’ve been discussing the concept of just how the anime industry works. We’ve looked into the logic behind business decisions, dissected licensing agreements, and taken a look at the industry through the lens of the Blue Ocean strategy. We’ve watched as the struggling industry rose and fell, as fledgling newcomers to the market took seats as establishment icons and entrenched interests exited completely.

As Sentai and FUNimation compete for the newest on the market, we’re seeing an interesting phenomenon as a second tier of the market bubbles up from the cracks. NIS America and Aniplex gained recognition for their attractive-yet-pricey boxed sets, as entities like Nozomi and Discotek have become the go-to destinations for the obscure and old. The market today is almost unrecognizable from that which existed just five years ago.

However, I still don’t feel that this is anywhere near over.

The market is currently undergoing a correction, as the balance of power shifts and customer habits change. We’re seeing more consumption of digital media and streaming formats, as well as a greater fight for precious streaming rights that once would have been an afterthought. The window between a title’s Japanese airing and an American stream is now nearly non-existent: a concept that would have been laughed out of the room in 2007. As we continue our journey through the year, I don’t doubt that we’ll see our share of surprises and shocks, as well as plenty of gaffes and goofs.

For example, just today, we saw Aniplex announce that they would be re-releasing Baccano! on Blu-Ray, a move that few expected to see, due to the company’s focus on limited edition works. The re-release indicates that demand for the product was far greater than estimated, to the point that a reprint would be profitable enough to warrant the cost. Recall, dear reader, that Baccano! was released to market at a price of $69.98 in May 2011. The title sold out in a matter of days, and the price has since doubled on the open market. It will be interesting to see if the title has the same impact on the open market. There is clear demand, but one has to wonder if lightning will strike twice for the show or if it’s a case of “too little, too late.”

And, of course, FUNimation’s surreal Fan Appreciation panels to give an example of the more curious and potentially humorous experiences that are sure to crop up. What seemed like a surgical strike at gaining mindshare quickly came to be seen a surreal display of pandering. Tales that seemed to jump from the darkest recesses of LiveJournal were told by customer and employee alike, and many in the audience weren’t exactly sure if they saw a panel, or if they were simply enduring ten-minute peyote highs.

There are still seven months left in the year. There may not be another experience like Fan Appreciation or a surprise like demand outstripping supply by such a gross margin that a company that thrives on limited releases issues a reprint. However, there are certainly going to be changes and events that rumble through the industry. And, as they make their way into the public consciousness, a discussion will always follow.

A Different Ocean - Aniplex Announces Fate / Zero

[caption id=”attachment_3272” align=”alignright” width=”270” caption=”It’s not a release for the average customer, but there certainly is an eager market for these releases.”][/caption]

Aniplex USA is a truly interesting entity in the US marketplace. As a Japanese publisher in a western market, they stand outside of the mainstream market culture. Rather than adapt to western market norms, the company insists on a combination of premium quality and premium prices.

The company’s recent announcement of Fate/Zero illustrates this strategy, as the company plans to roll out a limited number of 13-episode sets at a suggested price of $498.98, though preorders through Right Stuf peg the release at $369.98. The sets are essentially identical to the Japanese release, with an additional English booklet that provides translations to the supplementary items. The kicker to the release, though, is that the American sets will ship on the same day as the Japanese release: March 7, 2012.

At a glance, this release sounds insane. People are already balking, and claiming that the sets won’t sell at five hundred bones. They’re running through the list of complaints: it’s too expensive, there’s no dub, the materials are in Japanese, and so on. The arguments would be warranted, had this been the company’s first attempt at such a release. On December 3, 2010, I reported a similar situation, when Kara no Kyoukai’s $398.88 Blu-Ray boxes were revealed. At the time, the same cries were made, the same arguments - even I joined in. When the title hit stores though, much to the chagrin of many, it sold,and sold well. The box sold out shortly after street date, and became an instant rarity.

What I,and many others, didn’t count on was the fact that Aniplex wasn’t competing for my dollars, or the dollars of someone pulling minimum wage. They’re not appealing to the mainstream anime fan, the cheap geek crowd, or the casual buyer. As far as Aniplex is concerned, these crowds have NicoNico and Crunchyroll to turn to for an inexpensive way of seeing the program, for now.

They’re appealing to a small, dedicated ocean of customers that have specific tastes and demands. They’re catering to a crowd that consists of viewers that want the full Japan experience. These are people that are willing to pay a premium to receive the product Japan receives, right down to the supplementary material. They’ll pay to get shows early, and they’ll shell out money for titles that they simply must have.

Most important, though, is that this crowd has the funds to partake of such a luxury.

In essence, Aniplex is catering to a new, uncontested ocean of upmarket customers. They are receiving the products that they are digesting through importers, in a format that doesn’t require knowledge of Japanese to appreciate. They receive translations for the literature and supplementary items, plus they’re getting the product much sooner than they would, had they bought through Amazon Japan, CDJapan, or another importer.

Is this a sustainable market for all releases? Of course not. It’s a small, exclusionary market that will continue to shrink as time goes on. However, it’s also an ocean that most publishers aren’t fighting over at this point. There is no real competition for consumer dollars in this bracket, and they’ve proven eager to pay. Limited releases such as these, in moderation,can indeed be a profitable endeavor,so long as Aniplex continues to deliver the level of value the market now expects from such sets.

Anime Expo 2011: The Biggest Show Around

As many of you already know, Anime Expo kicked off earlier today. This is the biggest convention of the year, as it attracts over 46,000 attendees every year. For reference, Bristol County, where I was raised, contains three towns that span 45 square miles and have a combined population of 49,875. So, in this sense, Anime Expo manages to cram three towns’ worth of people into less than a square mile. This is where the anime industry struts its stuff, and shows off its biggest licenses.

This year’s already started with a bang, as a few titles fans have been salivating over were revealed, and old favorites were rescued. Aniplex was particularly aggressive, as they came out with announcements for Madoka Magica. Nozomi, on the other hand, represented a more conservative side of the event, as they revealed that they’d be rescuing Dirty Pair Flash, Gasaraki, and Martian Successor Nadesico. Even they had a surprise up their sleeve though, as they revealed that they had nabbed the rest of the original Dirty Pair, as well as all dub tracks available - which includes the long-lost Streamline dub. FUNimation held their typical “buffet style” license announcements, as they unveiled Deadman Wonderland, Steins Gate, and three other shows.

Every Anime Expo, I swear that I won’t go overboard, I won’t get too excited, and I’ll pretend like it’s any other day. However, every year, I also wind up breaking that vow. Even though it’s thousands of miles away, there is simply so much going on, so many things coming from the show that I can’t help but feel like I’m in the thick of it. Twitter feeds erupts with cheerful chatter, news sites refresh at an alarming pace, and I simply get caught up in the rush.

This year, I was particularly pleased to see so many classics get rescued. With the acquisition of Flash and the films, it will be the first time that Dirty Pair was entirely available in America. Dirty Pair Flash in particular was a fun follow-up to the original, and it is a title that I sincerely hope will become a staple of fans’ collections again. Martian Successor Nadesico is an adaptation of a Kia Asamiya classic that is well known among the older set for being a simple, fun show in a period when Eva controlled the hearts and minds of the masses. Gasaraki stands as the dark horse of the current crop of license picks, as it’s a Sunrise show that is very unlike the typical Sunrise show. It’s obtuse, dark, and very eager to delve into the technical aspects. The show is regarded as very “love-it-or-hate-it”, and seems to perform only with in a specific niche.

Anyway, the event has just begun. It’s a bit too early to comment on the big “winners” and “losers” of the convention. Although, in this case, it seems to be the attendees that are the big winners, as always. I do hope that the next three days will be as exciting as what we’ve seen already. It’s a long weekend, and the fun is just beginning. And to everybody attending the Expo, have fun, for those of us who couldn’t make it!

Persona 4 Anime Adaptation Announced
Earlier today, Aniplex revealed that Persona 4 would be receiving an anime series. The series will be directed by Seiji Kishi (Galaxy Angel Rune, My Bride is a Mermaid), and feature a soundtrack by Shoji Meguro. Kazuma Kaneko and Shigenori Soejima are credited for original design work and much of the original vocal cast is returning, including Yui Horie, Daisuke Namikawa, and Ami Koshimizu. The fanbase seems to be exploding in a wave of excitement of the announcement. I can’t say I’m surprised - the title was critically acclaimed and sold nearly half a million copies worldwide. Unfortunatey, I have to predict that a lot of people will be disappointed.
Unfortunately for many, this prediction doesn’t stem from my fiery dislike of the game proper. Rather, it’s the product of years of disappointments. Seriously, I was one of the crazy saps that bought Tekken on VHS! But I digress. Anime adaptations of video games rarely work. We’re constantly reminded of this by failure after failure. From Tekken, to Star Ocean EX, to Tales of the Abyss, viewers have been led from one disappointing adaption to another. While there have been a few stand-out features, they are very rare exceptions.

There is the off-chance that the show will turn out well. However, there are a few considerations one must take into mind before this even gets off the ground:
  • Persona 4 is an 80-hour RPG, while the average 26-episode TV season is 13 hours
  • The game was written with the expectation of user input and interaction
  • Much of the anime adaptation’s content will need to be condensed or re-written to include the major plot points, while fitting into the alotted time.

Upon reading this, many will probably point my attention toward Persona: Trinity Soul. Trinity Soul was a fantastic take on Persona 3, and the Persona universe as a whole. However, the show wasn’t a direct adaptation of the source, but an original story. There were definite links to Persona 3, but nothing that would detract from the overall experience, or prove to be a disadvantage for those who hadn’t played the game.
It’s still very early in the process to make a final judgment.There is an off chance that this adaptation could go above and beyond to create an absolutely mind-blowing experience. I won’t discount this possibility yet, but it is a definitey shot in the dark, given the historical treatment of game-based anime titles.
Aniplex: Out of Touch With American Fans

[caption id=”attachment_287” align=”alignright” width=”240” caption=”An attractive, but bitter pill to swallow for many.”]Is it worth $160?[/caption]

After what feels like weeks of agonizing over the issue, I reluctantly cancelled my preorder for Aniplex’s R.O.D box. This isn’t out of desire, or some perverted disgust with Aniplex. It’s just a matter of cruel reality. You see, I’m currently saving for a down payment on a house, so I can get out of this apartment, and into someplace that I can geek up properly (and with rates as they are, I’d be crazy not to!). Unfortunately, with this in mind, and other regular bills, a $160 lump sum is a bitch of a pill to swallow.


Now, my story has a bit of a point. It’s not to brag, or the like… frankly, I find that kind of chat to be insufferable. Instead, I want to make a point that, despite me liking nice things, this is one I might have to pass on. I’ve spoken with numerous other people in similar situations and, frankly, the overall consensus seems to be about the same. Lots of people absolutely do want to support Aniplex’s release but, due to some reason or another, can’t really pony up the $160 up-front fee. And I won’t even begin to get into the Kara no Kyoukai box, which sports an equally amazing presentation as the R.O.D set, plus a budget-crushing $400 price tag.

[caption id=”attachment_781” align=”alignleft” width=”300” caption=”Nice, but a bit too steep for many.”][/caption]

With this in mind, I can only think of how this applies to a broad spectrum and, frankly, I’m seeing Bandai Visual’s situation all over again. Remember, with Bandai Visual, we had people that absolutely wanted what they were selling, but for one reason or another couldn’t - or wouldn’t - pay the increasingly hard-to-justify up-front fees. And, while there absolutely is a room for the premium releases and badass goodies, both companies seem to fail to realize that there are tons of fans that would rather just have a bare-bones set for a lower price. After all, it’s a rule that anime fans as a whole are cheap. And, with the average Blu-Ray boxed set selling for under $60, even $50 now, it’s no wonder why Aniplex’s ignorance of the American market is going over like a fart in church.

In the case of R.O.D, it’s particularly embarrassing, since, well… it’s not as if I, or many others, are missing out on a hell of a lot. As many know, Geneon released the TV series on DVD in 2004 (and the original Read or Die OVA even earlier!) and, outside of the first volume, most of the series can be had for under a five-spot per installment. So, for about $60 (plus shipping), fans can take part in the fun and see the show itself. With an alternative like that, it’s not hard to imagine that there are a decent number of fans who will take the same route I did.

Sure, I’ll miss the shiny new releases, the awesome packaging, and glossy booklets but I’ll live. If my fortunes improve, I absolutely will support the Aniplex releases. But at the moment, I can’t. And, unlike many who will be shameless enough to pirate, I’ll simply do without. Still, the point still remains that Aniplex has a ways to go before they can even begin to appeal to the masses as well as they do the premium market.
Thoughts: ANN leaks Oreimo Episode 2 Early
Just over one year after FUNimation’s infamous “One Piece” debacle, and uh.. the Phantom debacle, ANN made the exact same mistake. In one way, it’s kind of interesting to see how they repeated history in this regard. After all - ANN is relatively new to this end of the anime business, and they’re bound to make a few mistakes along the way. They dealt with the situation quickly, commented on the matter immediately, and played the damage control card well.
As a software engineer, I can’t help but want to smack the person who uploaded the file (one week early) upside the head with my copy of Writing Secure Code. They literally did everything wrong in this case. They made the file available by uploading it this early (big hint: If it’s not on the server, it can’t be leaked!), they use an easy-to-guess filename, and they had some degree of trust in the users to not try and find shit like this. The biggest sin would have to be be #3, since we’re in a world where a good amount of fans view the American distributors as the enemy. They’re selfish, and some have this warped “Robin Hood” mentality where, if they bring down “the man”, they’ll become heroes therefore receiving many internets of win. Even a deny ACL or a password-protected directory would be better than leaving the file up for download.

As a fan, this troubles me. It reflects poorly our entire fanbase, and really gives off the impression that we’re a bunch of freeloading pirates. But, more important, huge inroads have been made since last year, and the Japanese have become more comfortable with the idea of streaming, Simulcasts have become more common, Crunchyroll has become a major legal hub for new shows, and anime has never been more accessible. It’s hard to say how big the effects will be on the broader scale, but the incident will definitely have an impact on our fandom. If history has proven anything to us, Oreimo’s streaming days are through… at least for the foreseeable future. ANN’s already removed all traces from their site, including the first episode. Aniplex is pissed, no doubt. They’ll probably be quite skittish about doing such an arrangement in the future, since the action is a display of both a incompetence and carelessness on ANN’s part.
This definitely isn’t a great way to start a distribution career, and there is no clear silver lining here. ANN screwed up big time. I just hope that it isn’t the company’s kiss of death.