Ask John: Why Do American Companies License Anime?

Question:
Today’s question is a follow-up to yesterday’s article, “How Much Does Licensing Anime Cost?”

20,000 copies? My God! So where’s the benefit in licensing anime? Has any reached the half a million mark? Companies must rejoice when their titles get picked up to be aired on TV. And seeing as how there are more anime licensed than what’s on TV, do companies mainly do it for the fans? And how much do they charge, say, for instance, Adult Swim to air Inuyasha? Man, after hearing this I can definitely sympathize with 4kids.

Answer:
Honestly, I don’t know how many units major, best selling American anime DVDs like Disney’s Studio Ghibli titles have sold. But for reference, it took multiple DVD volumes and two years for Inuyasha to break a million units sold in North America. Cowboy Bebop had 6 volumes and took five years to break a million discs sold. By comparison, the most recent Harry Potter movie released on DVD sold an estimated 5 million copies on its first day of release. Regrettably, the market for anime is much smaller in America than average American anime fans realize. And American anime distribution is not remotely as profitable as many American anime fans believe it is. Anime may generate big sales in America, but profit margins are very small because the cost of distributing anime in America isn’t far removed from the revenue anime generates.

Many American fans know that many of America’s anime distributors are fans themselves. That does have an influence on why America’s anime companies import anime. That also explains why major Hollywood studios so infrequently license and distribute anime in America. Every American anime distributor hopes to earn a profit from anime distribution, but, for example, it’s true when AN Entertainment says that we license shows that we like ourselves and want to share with other fans; and true when AD Vision announces plans to distribute Prefectural Earth Defense Force on a very limited basis, despite the fact that it’s not expected to sell well, just because they like the show. America’s big studios like Sony, Warner Bros., DreamWorks, Disney, and Fox typically don’t handle niche market anime. These big studios only license and distribute major titles like Cowboy Bebop, Final Fantasy, and Ghost in the Shell because lower profile titles aren’t profitable enough to be worth their notice.

American television broadcast is literally the holy grail of American anime distribution, so it’s little surprise that AD Vision and FUNimation have developed their own TV networks to feature their titles. Anime broadcast on network American TV receives tremendously wider exposure than anime released only on home video. The best selling anime titles released in America are consistently those that have major television exposure. Anime distributors may receive minimal fees from networks in return for television broadcasts. American licensors may also provide programming to television networks at no charge, just in hopes of getting their titles onto American TV. The advertising and sales boost generated by television broadcast is far more valuable to small American anime distribution companies than fees paid by TV networks for broadcast rights.

The often repeated request for fans to support the anime industry isn’t motivated by greed; it’s motivated by practical necessity. Anime distributors like Geneon, Viz, and Bandai distribute anime in America because they’re subsidiaries of Japanese anime distributors. Media Blasters has buoyed itself by diversifying its catalog with anime, Asian live action, European horror, and American exploitation movies. Many of America’s anime distributors that have primarily remained strictly anime distribution companies now seem to be struggling with increased expenses and decreasing revenue. The diminishing number of anime titles licensed for American release over the past year, and the decrease in number of anime DVDs released by numerous American companies attest to this fact. I’m not trying to fuel hysteria that America’s anime industry is on the verge of extinction, but it is an acknowledged fact that America’s anime industry is in lean times and in dire need of quantifiable support from American consumers and America’s fan community.

Anime isn’t a career likely to make one rich. Even the highest ranking executives of many of America’s anime companies are still down-to-earth people who personally attend anime conventions to meet fans face-to-face. Anyone with aspirations to join any part of the anime or manga industry should do so out of personal conviction, not to seek fame or wealth. Fan translations of anime and manga, and fans illegally sharing anime among themselves creates influential word of mouth advertising, but malicious video piracy and fans who use free fansubs in place of legitimately purchased DVDs do hurt an industry that really can’t afford that damage. Companies like 4Kids Entertainment that target a mainstream American market by forsaking the hardcore fan community do so because that tactic is more profitable. Even fan oriented companies like AD Vision and FUNimation have taken liberties with English dubs of anime like Ghost Stories and Desert Punk in order to better appeal to a bigger mainstream audience. Companies that concentrate on licensing anime primarily for the fan community, and companies that faithfully respect the artistic and cultural integrity of anime do so out of respect for the art form, and with a desire to please the American anime fan community. (And, of course, there’s some desire to eke out a living.) I’m not sure if the majority of America’s anime fans are really aware of exactly how vital their support is to the sustenance of America’s anime industry.