Ask John: Who Still Buys American Anime DVDs?

Question:
Who buys anime on US home video? I ask because of the growing trend of DVD-only releases in the age of web-streaming and blu-ray, which I assume is a contrivance to accommodate Japan’s fear of reverse-importation. I assumed that decent-quality web streaming had already dominated the low-end market for DVDs, and that materialistic otaku would be more interested in blu-ray to replace widely available high-def fansubs… Yet DVDs still remain. Sentai Filmworks’ new DVD-only box set of Ikoku Meiro no Croisée provides a puzzling example — with its period setting, focus on Japonism and slice-of-life moé trappings, one would assume it’s a niche series for relatively hardcore otaku rather than the next breakout hit. The series is rarely talked about on the internet. It begs the question, who is the low-cost DVD box set for? Is there still a significant market out there for random anime on DVD, as opposed to low or no-cost web streaming & relatively premium blu-ray?

Answer:
I honestly wish that I could be more specific with my answer than I can be, but the nature of an online retailer is sales without face-to-face contact. Practically every anime fan knows that domestic home video sales have declined since 2008. Since numerous domestic releases are now DVD & BD combo packs and select domestic releases continue to be DVD exclusive due to licensing restrictions (either because of Japanese corporate fear of reverse-importation or because no Japanese Blu-ray version exists), I’ll simply refer to “home video” rather than make a distinction between domestic DVD and Blu-ray. Many American fans may not realize exactly how much home video sales have receded since that heyday. Niche titles that may have sold extremely well in the mid-2000s seem now as though they may sell only a tenth of the amount they may have sold six to eight years ago. I’ve attended several recent local anime conventions with dealers’ rooms that have had no home video on sale whatsoever because contemporary young, average anime convention attendees are more interested in the “culture” of anime and manga, and collecting cosplay accessories and character goods than actually collecting anime itself. The industry has also seen a sharp recession of repackagings and re-releases. FUNimation continues to re-package and progressively discount its DVD and Blu-ray releases, but other distributors including Sentai Filmworks (previously AD Vision) and Media Blasters that were once aggressive about re-releasing step-down pricing tiers are now very judicious about undercutting the value of their own releases. Distributors including Viz, Nozomi, and NISA are likewise very cautious about flooding the consumer market with multiple discount priced re-releases that the domestic market simply won’t sustain any longer.

I’m a middle-aged otaku fortunate enough to have minimal living expenses and a moderate amount of disposable income. While even I no longer purchase as many new releases as I used to, or would now like to, I do still purchase domestic DVD and Blu-ray releases. In fact, now that the total number of monthly domestic home video releases has drastically declined from its height of several years ago, these days I purchase a wider variety of anime titles and genres than I used to, and these days I consciously choose limited and first edition releases much more frequently than I did a number of years ago when simply trying to stay aware of all of the industry’s releases was a challenge. My broad observation is that a driving percentage of the remaining American anime home video consumer market is now young adults and adults rather than children and teens. Although the median price of an anime episode is now roughly half of 2007’s retail price, typical releases now call for a bigger one-time investment. In 2007 a typical home video release retailed at $29.95 and could be acquired for under $20. Nowadays a typical single home video release retails at $59.95 and can be acquired for as little as $35. While consumers now get much more anime content for their dollar, they have to spend more at once, and today’s youngsters don’t have a spare $35 to $60 to spend on each monthly DVD or Blu-ray release they’re interested in, especially when the cost of purchasing two DVD or Blu-ray releases is roughly the same as purchasing a full year’s worth of immediate streaming access to thousands of anime episodes.

In 2008 A.D. Vision, now Sentai Filmworks, CEO John Ledford explained ADV/Sentai’s new market focus. “Big titles still sell well… At the other end of the spectrum are niche titles. Or, since anime is a niche, maybe they should be called ‘super-niche’ titles. We can make money with these because the up-front licensing cost is low, and there’s a core base of fandom big enough to support them… Where things get tricky is in between the big hits and the smaller niche titles. Series that are strong but may not be world-beaters. Viewership is larger than ever, thanks to the Internet, but fans just aren’t buying DVDs like they used to… That’s why right now the best business to be in are the hits and the ‘super-niche’ titles. Anything in between can kill you.” When Ledford referred to “big titles,” he meant mainstream hits like Final Fantasy VII: Advent Children, The Animatrix, and new Ghibli titles. Now, “super-niche” titles are exactly shows like Ikoku Meiro no Croisée that are able to generate modest profit with a low-overhead subtitled-only release and sales to adult, middle-income consumers that are interested in owning and supporting the anime series that they especially like. Sentai Filmworks, for example, now has practically no brick & mortar presence. Mainstream retailers like Walmart and Best Buy don’t stock Sentai titles. Even mainstream specialty retailers like MovieStop don’t stock Sentai, Nozomi, NISA, Aniplex, or Discotek releases. So these active distributors rely exclusively on direct market and internet sales to the remaining niche consumer market of relatively mature consumers that know what they want and are willing to spend more up-front for good value and to support the select shows and genres they love. After all, it’s certainly not young, mainstream shounen anime fans that are supporting niche releases like Nozomi’s Dirty Pair, Utena, Nadesico, and Rose of Versailles DVDs; Discotek’s Space Adventure Cobra and Golgo 13 movies; NISA’s high-end Dororon Enma-kun Merameera, Natsume Yujincho, and AnoHana premium sets; or Aniplex’s ultra high-end R.O.D. and Kara no Kyoukai Blu-ray imports. To a very large degree, the domestic anime community has stratified into a young and teen audience that primarily relies on streaming and download and spends its money on “anime culture” rather than literally collecting animation, and adult collectors – probably no more than ten or twenty thousand in America, I’d say as a guess – in their twenties and older that prefer physical ownership and desire to own and support the particular titles and genres of anime that they like.