February 01, 2008

Bandai's prices

Don posts about the (insane) pricing on Shigofumi and True tears here. Pete comments here.

I fundamentally don't understand BVUSA. Seriously. I mean, I can see where it's coming from - it's the spitting image of a Japanese company coming into the US market with no local staff and trying to do things their way.

But what FOR? This isn't any Japanese company. It's Bandai, right? I mean, they already have a US company that's releasing anime here, right? Setting up a second independent company to compete with it seems... well, it's pretty stupid in the first place.

The only scenario I can think of is total dissatisfaction somewhere in the Bandai chain of command with BEI's performance - "we should be making way more money if only we did things the Japanese way!" That's the only possible way I can consider a sane person setting up a second company to compete with the first, and then essentially ignoring everything that first company has already learned about the market, at high cost to themselves.

But what about distribution? BEI distributes anime. BVUSA, well... it doesn't. They had commercial distribution for a short time from Geneon, but we all know what happened there. Since then, the only way to purchase their products (assuming anyone ever wanted to, heh) has been to go to the dot-anime online store. So they're dead to start with - there's no theoretically possible way that they could be making their money back with that method, none at all.

That, however, is the dumbest thing of all. BVUSA's business model is iffy anyway, but without commercial distribution, it doesn't have a chance in hell. They're not going to get distro through ADV or Funi, that's for damned sure. So there's only one big distributor left... and it's one that can't say no! BEI would have to distribute BVUSA's product if the company upstairs told them to, right? So why haven't they done it? It's like being homeless when you own an apartment complex in the neighborhood!

Maybe it's just some sort of weird intra-company politics, and we're seeing the bizarre results. You'd like to think that people aren't really that dumb...

Posted by: Avatar_exADV at 11:44 AM | Comments (18) | Add Comment
Post contains 366 words, total size 2 kb.

1 I think there's another choice. They could make a deal with RightStuf for distribution.

Posted by: Steven Den Beste at February 01, 2008 12:43 PM (+rSRq)

2 Right Stuf uses ADV for their commercial distribution.

Posted by: Avatar_exADV at February 01, 2008 01:08 PM (LMDdY)

3 I'll be damned. I didn't know that.

Posted by: Steven Den Beste at February 01, 2008 02:02 PM (+rSRq)

4

Who, as a retailer (online or brick-and-mortar) is going to bother ordering any at these prices, knowing full well that they'll be lucky to move any of it?

Posted by: Will at February 01, 2008 05:28 PM (WnBa/)

5

In the short run, probably a lot of them. They can return unsold product for credit, you know.

But they're unlikely to order anything like as many as they would if the price was more reasonable.

Posted by: Steven Den Beste at February 01, 2008 06:19 PM (+rSRq)

6 Since then, the only way to purchase their products (assuming anyone ever wanted to, heh) has been to go to the dot-anime online store.

I'll admit that I don't know squat about retail distribution and what it entails, but if they have no way of getting product to retailers, how are their new and upcoming releases showing up at Right Stuf, Animenation, and RACS, to name just three? Am I missing something?

So they're dead to start with - there's no theoretically possible way that they could be making their money back with that method, none at all.

They don't have a lot of money to make back, though; just about all of their releases have been stuff that the Japanese Bandai Visual had a hand in the production of, which (I think) means they're not paying exorbitant license fees. Reusing assets from Bandai Visual's R2 DVD releases and not producing dubs means that their production costs are probably relatively low. You get the sense that even if BVUSA crashed and burned, it wouldn't be a huge loss for their parent company.

Posted by: Andrew F. at February 01, 2008 07:06 PM (sUicM)

7 BVUS should just fold and Let Bandai Ent do what they have done for the last 10 years (founded 9 , Bandai's releases of late shows their ability to sense the pulse of the fans, BV should leave it to the experts........

-Gabe,

Posted by: firemage at February 01, 2008 10:12 PM (eXNHO)

8 Being able to return unsold product for credit is not universal. Particularly, you have to be careful with new/small companies on that score. If Bandai decides to fold up BVUSA, for example, it's highly unlikely that they'll make good on returns after that point.

It's also a big pain for the original company, who can end up with a huge whock of un-moveable merchandise to dispose of. Sure, DVDs don't cost a whole ton to produce, but they ain't free either...

Of course they have money to make back. The money that BVUSA isn't paying for licensing fees, Bandai Japan isn't getting for licensing fees. Opportunity cost and all that...

Posted by: Avatar_exADV at February 02, 2008 12:12 AM (LMDdY)

9

Andrew, the "distribution" we're talking about is sales to Fred Meyers, and BlockBuster, and Best Buy, and places like that. Dealing with specialty mail order houses is only a small fraction of the whole: less than 20%, I'm told. And dealing with the mail order houses is easier precisely because there aren't very many of them.

Avatar said that RightStuf has been using ADV for distribution (e.g. for Ninja Nonsense). I believe that. But I'm sure the Ninja Nonsense DVDs that RightStuf sells on its own online store didn't get given to ADV and then purchased back again.

On the other hand, I went to Best Buy today, and saw Ninja Nonsense boxed sets. I'm sure those came through ADV's distribution.

Posted by: Steven Den Beste at February 02, 2008 12:17 AM (+rSRq)

10 Yeah, I understand that you can't buy BVUSA's releases at brick and mortar places, or even Amazon. Just saying that dot-anime isn't the only place to get them.

The money that BVUSA isn't paying for licensing fees, Bandai Japan isn't getting for licensing fees. Opportunity cost and all that...

Only if the series in question could have been licensed in the first place, which I don't think is true for a lot of BVUSA's releases. They've put out a lot of niche stuff that would never get picked up in the current climate (Super Robot Wars, Gundam MS IGLOO, Wings of Rean), as well as older classics which would sell, but not well enough to cover Bandai Japan's asking price (the Patlabor movies, Wings of Honneamise, Gunbuster). Basically, stuff where there's an insurmountable gap between what the Bandai thinks it's worth and what American companies are willing to pay. Theoretically, they could lower the license fees until someone bites, but in practice there's a limit to how low they'll go before giving up and saying to themselves, "If those cheapskates don't want to release it in Region 1, we'll do it ourselves! How hard can it be, anyway?" Which may well be what led to the establishment of BVUSA.

Of course, that doesn't jibe with the true tears/Shigofumi announcement at all. They can't have given up on licensing those shows already, not when they're not even finished airing.

Posted by: Andrew F. at February 02, 2008 04:38 PM (sUicM)

11

It could be an experiment. There seems to be a lot of experimenting going on right now, between ADV experimenting with download sales, and Media Blasters starting to release a lot of titles sub-only.

I think this experiment's going to be a dramatic failure, but it's still worth trying, if for no other reason than to prove that this market won't stand that kind of pricing.

Posted by: Steven Den Beste at February 02, 2008 05:53 PM (+rSRq)

12

I wouldn't be suprised if their "mother company" keeps it alive by pouring money to BVUSA, regardless of its sales.

Why would a company do that? BVUSA is a valuable tool to BVJPN.

How so?

By releasing their titles in the R1 region the way they currently release them, they are able to counter two things that have bugged the Japanese market: Foreign fansubbing and Japanese reverse importation.

By minimizing the delays in having a title licensed in the R1 region and releasing the DVDs quickly via BVUSA, they can deter fansubbers who take advantage of long licensing delays but also stop subbing a title after it's been licensed. I believe True Tears only has a license delay of 1~2 months, whereas normal licensing delays take up to a year; I haven't seen a single fansub for that title floating around. Doing this reduces the chance of having their titles being distributed via fansubs, and therefore reduces the risk of having said fansubs downloaded by Japanese audiences.

In a perfect world, the above could also be done by other companies, but obviously, this isn't the case.

BVUSA works better for BVJPN because their pricing also minimizes reverse importation. If an R1 DVD sells for the same astronomical price of its R2 equivalent, they can eliminate the risk of having of having a scenario where Japanese buyers opt out in getting the R2 DVD for a cheaper R1 DVD. After all, if the R1 and R2 DVD prices are exactly the same, why would a person in the R2 region have to spend extra shipping costs buying the R1 version?

As long as BVUSA continues to deter fansubbers and reverse importers, then BVJPN will keep funding them regardless of actual sales here. It's a brilliant scheme that kills two birds with one stone.

Posted by: grgspunk at February 06, 2008 01:25 AM (cubub)

13 One points out that most Japanese fans do not download US fansubs - they just get a Japanese copy with no subtitles or anything. In fact, the availability of those copies for download is a prerequisite for practically all fansubs to exist - what, did you think the US fans were copying off Japanese TV? ;p

It also makes no sense to lose money just to deter reverse importation. You could achieve exactly the same function by not releasing in R1 at all.

The only sane reason I can think of to explain their business setup is this - it's designed to fail. Someone on the Japanese side is convinced that this is the way to go; someone else approved the decision, not because they were convinced, but because they were sure it would crash and burn, and have given the first someone just enough rope to hang themselves with. The two US businesses are being kept strictly sequestered, so that when the BVUSA model inevitably craps out, BEI is left standing with no damage to its commercial reputation (and without its distribution arm having been trying to push tons of overpriced DVDs on retailers.)

But that's way too Machiavellian for me to consider seriously. It's much simpler and more plausible to believe that somebody is just a flaming idiot...

Posted by: Avatar_exADV at February 06, 2008 10:16 AM (LMDdY)

14

Actually, there are fansubbers who copy TV broadcasts and R2 DVDs.  I heard from an ANN article that Japanese companies have complained about Japanese resorting to foreign fansubs as an alternative to DVDs, similar to irresponsible fansub downloaders in the US. That's probably one of the reasons why they urged foreigners to ditch their fansubs in the first place.  Though there are raw downloads are available for Japanese users, I think the companies have arrived to a weird conclusion that fansubbing has made anime downloads for Japanese fans far more abundant and that they're a lot more easy to go after.  It wouldn't be too far-fetched to assume that there would be some Japanese people who watch fansubs, especially if they're available in sites like YouTube.

As for deterring reverse importation, something similar can happen if you don't even release it in the R1 region, but that's going to give fansubbers an opportunity to distribute their titles. A lot of Japanese companies have suddenly become afraid of foreign fansubbing, especially with the C&D news in October/November.

I'm not exactly sure how that "designed to fail" model would work. What exactly is creating a subsidiary going to do if you've made it to fail and you've got another subsidiary who could've done the same thing?

Then again, this could just be a case of corporate idiocy.

Posted by: grgspunk at February 06, 2008 03:33 PM (cubub)

15 As for deterring reverse importation, something similar can happen if you don't even release it in the R1 region, but that's going to give fansubbers an opportunity to distribute their titles. A lot of Japanese companies have suddenly become afraid of foreign fansubbing, especially with the C&D news in October/November.

Not many fansubbers are deterred by a C&D letter these days, and if one group stops subbing a series because it's been licensed, others will continue to sub it or pick up where the first group left off.

It wouldn't be too far-fetched to assume that there would be some Japanese people who watch fansubs, especially if they're available in sites like YouTube.

The thing is that Japanese-language raws also get posted to YouTube. Not to mention that there are Japanese video-sharing sites out there as well--maybe you've heard of Nico Nico Douga? I do often see Japanese IPs downloading fansub torrents, and can guess why--finding seeded fansub torrents is much easier than finding raws on Japanese P2P networks (yes, there are raw torrents, but those aren't well seeded after the first few weeks). Still, the convenience factor has got to be pretty high to justify watching a show with unnecessary subtitles in a language you don't understand, and even if fansubs for a series were to dry up I doubt most Japanese fansub watchers would run out and buy the R2 DVDs.

Posted by: Andrew F. at February 06, 2008 08:58 PM (sUicM)

16

Personally, I don't see it as all that crazy or even necessarily doomed to fail, even if the current experiments seem destined to sell like rocks.  With Blu-Ray now firmly on the horizon (which eliminates the region code barrier with the U.S.), Internet distribution an unchangeable fixation, and the overall DVD market continue to flounder, Bandai Visual probably figured that the only way to address all these issues (or "issues") was to merge the Japanese and North American markets.  Unfortunately, at the moment there's a huge value/pricing disparity on the DVD front, but I assume BV believed that by getting into HD releases before all their competitors, they would be able to help set the trend for how Japanese/English HD releases would be marketed and priced in the future.  The True Tears/Shigofumi experiment is to work towards shortening the release gap, moving eventually towards a reality (a few years from now) where the primary Blu-Ray releases of titles will contain English subtitles and be marketed in both regions at once for the same price from day one.  (I expect Gundam 00's Blu-Ray release this summer will be like this (even though it'll be many months after the DVDs), but we'll see...)

I suspect the reason they're keeping Bandai Entertainment seperate is because they recognize that, during this transition period, there's still a need to release the more mainstream shows the old way.  And since the market is still in flux, they're hedging their bets on the way things will go.  That being said, I certainly think it's likely that they'll merge the two groups down the road.  (And I'm not sure why they haven't relied on them for distribution... unless, I suppose, they just want to try to see how possible it is to go Internet-only...)

In any case, I think they're working towards an objective that's many years out.  So the steps they're making at the moment seem illogical on their own, but if they're able to achieve their ultimate goal (simultaneous "global" releases at one common price point), it'll make a lot more sense.  They're just taking an extremely long-term point of view.  We'll see if it works out, of course...

Posted by: relentlessflame at February 07, 2008 10:11 AM (2GAbp)

17 I'm absolutely certain that the one thing that won't happen will be merging the groups.

Leaving aside all other areas of contention, BEI has the distribution that BVUSA needs; even if BV's model is doomed, without distribution it's doomed whether it ever had a real chance or not. BVUSA isn't using BEI's distribution. Why the hell not? We've speculated above as to a couple of possible reasons. But whatever those reasons are, someone at the top had one... and to later merge the companies to take advantage of BEI's distribution for BV releases would be a direct admission that the person who made the original decision was completely, utterly wrong.

I would be flabbergasted if that happened. It's completely against the Japanese style of management. I would expect BVUSA to go down in flames before such an admission was made. Or rather, if they had the sort of management that could make that decision, surely they would have already done it!

Of course, if BVUSA were to take off with wild success, then a merge could happen. But that's even more impossible. ;p

Posted by: Avatar_exADV at February 07, 2008 08:10 PM (LMDdY)

18

Just to add my completely uninformed opinion, actually the licensing of true tears and Shigofumi has not stopped fansubbing of the series. Whether it's ethical or not. Which I think is the real danger of BVUSA's business model, is that it actually encourages people to download the fansubs.

Just a thought.

Posted by: Cameron Probert at February 21, 2008 03:59 AM (+Xvl6)

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