Otaku, No Video

First off, thanks to everyone who commented on the “Getting Past” post. Lots of interesting thoughts there. I’m surprised at how many folks basically agree that the solution to the weak anime market is for fans to actually buy anime.

Secondly, I came down with something after the New York Anime Festival, so I’ve been laying ill in bed for the past two days. Thus the late news video, and lack of other content around here.  I do want to push forward with more content soon; I watched a few bits of anime recently, and have a few things to talk about relating to NYAF (rather amazing number of manga licenses, for example…perhaps that’ll be the next growth market within the American anime/manga industry?).

Thirdly, here’s the latest news video:

Okay. We get it. We all know the anime industry isn’t doing so well.  Here’s just one example:

The sales of Japanese animation DVDs for general audiences was…91.2% of the sales in the same period last year. This is the latest annual drop in the segment; sales in the first half of 2008 had been 88.1% of the sales in the first half of 2007.

So what?

How can the industry get better? We want a healthy industry, so we can continue getting anime.

(In case you’re thinking you’ll always be able to get torrents or streams of fansubs:  if the Japanese decide to clamp down on that because they’re losing money, that stuff will dry up.  Fansubs are tolerated because anime makes money in America, and the Japanese don’t want to disturb the money-making machine.)

How does any market survive?  Money.

But even money-rich markets collapse (housing market, anyone?).  The money needs to flow into the right pockets.  Which means that the creators need to get paid.

How do the creators get paid?

You may not like hearing this.  But it’s true:  DVD sales.

To explain, I’ll need to shift my explanation a bit.

Imagine you’re a Japanese guy, working in the anime industry.  How will you get hired onto your next project?  What will your potential employer look at to determine whether to hire you?  Your hair style?  The size of your shoes?  No.

That’s right: your previous work.  What shows did you work on?  How well did they do?

Take your favorite director.  He’s going to need to pitch a show, and get investors to pay big sums of money to fund a show.  Why will they give him money if his shows don’t make any?

DVD sales are where it’s at.  That’s the key.  If the show sells a lot of DVDs, the creators get the thumbs-up.

What about merchandise?, you may be asking.  I buy lots of pins and artbooks! Well, unfortunately, merchandise tends to pass through a lot of third parties.  Someone has to actually make the pins/publish the books/sculpt the figurines.  They take their cut.  Moreover, merchandise deals tend to be separate from actual show deals (this is why George Lucas is so well-off; he took a pay cut on his directing fees for the first Star Wars film and instead got paid in ticket sales and merchandising).  So, while merch sometimes helps the creators and artists, it often doesn’t, and when it does, the effect is muted.  They don’t get much of a cut.

We need to buy DVDs.  We need to support these shows.

‘Cause it’s getting darned cheap. Amazon’s Anime section has incredibly low prices.  Cowboy Bebop Remix volume 1: US $3 new.  Fullmetal Alchemist: The Conqueror of Shamballa: $7 new.  Heck, the second Bleach movie–released a week ago as of this writing–is only $20.  That’s a third off when the disc’s only a week old.

(Don’t want to support Amazon?  It’s $22.44 at RightStuf.com.)

Buy the DVDs.  Buy the DVDs.

Am I getting through?

Just came across a blog called The Ranobe Cafe, a blog dedicated to light novels. These are the short novels (novellas, really) published in Japan as ongoing series that are so often turned into anime.  Popular examples include The Melancholy of Haruhi Suzumiya and Full Metal Panic!, among many others.

The blog’s well-written; the author has a solid grasp of English blog writing and posts on a variety of topics.  Good to see stuff like this out there.

There’s a particularly interesting post on learning the Japanese language so you can enjoy light novels in their original form.  Seems crazy at first glance, but really, is it that bad of an idea to take it upon yourself to learn another language?  It’s not exactly a waste of time.  That’s a useful skill right there.

ADV’s been around since well before I got into the anime hobby.

They were the cool kids, the ones we all wanted to emulate. They were über-fans who actually got the money together to license this stuff and bring it over to America. They dubbed things. They were in the thick of things.

They freaking licensed Neon Genesis Evangelion.

Not without controversy, of course. Their dubs were generally mediocre, and as the English dubbing scene improved, they didn’t improve as much as most others. They had decent packaging and standard extras.

And that was the problem, ultimately. They stayed in the middle of the pack, despite having a huge catalog of fan-favorite and broadly-appealing titles. Here’s a partial list:

• 5 Centimeters Per Second
• Azumanga Daioh
• Bubblegum Crisis: Tokyo 2040
• Le Chevalier D’Eon
• Chrono Crusade
• D.N.Angel
• Excel Saga
• Full Metal Panic! (original and Fumoffu)
• Gantz
• Ghost Stories
• Gilgamesh
• Golden Boy
• Grave of the Fireflies
• Hello Kitty
• King of Bandits: Jing
• Kaleido Star
• Kino’s Journey
• Madlax
• Magical Shopping Arcade Abenobashi
• Medabots
• Mezzo
• Nadesico
• Nadia
• Neon Genesis Evangelion
• Noir
• The Place Promised in Our Early Days
• Pretear
• Rahxephon
• Princess Tutu
• Sailor Moon
• Sakura Wars
• Rurouni Kenshin
• Slayers
• Utawarerumono
• Venus Versus Virus
• Voices of a Distant Star

Then things started going south. Business deals with Japanese companies fell through. Releases slowed to a trickle.  Their triumphant publication of Newtype USA collapsed.

And, on September 1, ADV sold off its holdings. Things looked bad.

Until ANN got hold of the story and started investigating.  Turns out ADV’s lawyer set up the companies to which ADV sold so many of its assets.  And most of ADV’s employees were now working at said companies.  The only conspicuous absence was John Ledford, co-founder of ADV.

A picture begins to emerge.  One based on massive speculation that will probably get me sued.

But first, an important point upon which this all spins:  How does a company with media assets as rich as the ones I listed above do so poorly in an industry that has generally done very well?  Okay, so they had mediocre packaging and dubs.  That’s not enough to kill a company.

We have a clue:  deals fall through.  It’s not a problem with their properties; it’s a problem with their deal-making (and deal-maintenance).

I suspect that much of the blame for those deal problems fell at John Ledford’s feet.  Rightly or wrongly.  I’ve no idea of Ledford’s role in all this, honestly, but based on what I’m seeing, I suspect that employees felt he was dragging the company down.  But he was co-founder.  He was ADV.

So, those around him performed an end-run.  They had their lawyer set up separate companies, transferred all ADV’s assets to those companies, and left en masse for those companies.  John Ledford was left with an empty shell called ADV Films.

This explains the smiles and reassurances from ADV personnel for the past year, despite all the problems ADV faced.  This explains the hastily-posted, poorly-formatted press release.  They had a way out.

Now, I don’t know if any of this actually is John Ledford’s fault.  It could be misconceptions on the other employees’ part.  This could all be a big plan by Ledford.  (Though this outburst by Ledford about file-sharing from March of 2008 suggests someone who’s looking externally rather than internally for scapegoats.)  Heck, I don’t know if this revolves around Ledford at all.  I’m just saying this is the only explanation that makes sense to me, that brings all the pieces together.  I’d be happy to be proved wrong.

ADV didn’t die. It’s being reborn as Section23, which now “has all of ADV’s former licenses and most of its staff,…[and] will continue to distribute the current orders and future pre-orders that ADV used to fulfill, without changing their schedules.”  Moreover, the day after all this ADV collapse, Section23 announced licenses for Blue Drop, Polyphonica, Special A, Tears to Tiara, and You’re Under Arrest second season.

If only they’d picked a less odd-sounding name than “Sxion 23.”  Ah well.

Ponyo

Watched Ponyo last night. It’s a wonderful children’s movie. Light, fluffy, and beautiful, with a few great action sequences and memorable characters. It lacks the narrative drive of Miyazaki’s earlier movies, but even so I thoroughly enjoyed myself.

Ain’t it Cool News has posted a horribly-formatted press release from ADV Films, A.D.VISION, INC. CONCLUDES SERIES OFASSET TRANSACTIONS.  (And when I say “horribly formatted,” I’m talking shifts from one font to another in the middle of a sentence.  Twice.  In a two-page press release.)

As I typed this blog post, the press release replaced ADV’s homepage.  So, this is serious.

Basically, it looks like ADV has sold a bunch of its assets to other companies.  From the press release:

Through an asset purchase agreement, AEsir Holdings, LLC (“Aesir”) acquired asubordinated interest in selected programming from ADV’s film library together with other intellectual property….

Which means, AEsir has bought that “selected programming,” whatever that is.  Some (or all?) of ADV’s anime, live-action works, etc.

Who’s AEsir?  No idea.  It doesn’t show up on web searches, except in three cases:  In relation to this story, as a business name registered in Colorado, and as a parked domain name.  Great!  So it’s sold to a shadowy company.

In the next paragraph, more sales!

…the Company [ADV] concluded an asset purchase agreement with SXION 23, LLC, doing business as â€œSection23 Films”…under which it assumes account servicing and distribution operations in connection with the library acquired by Aesir.

Okay. So, another company, that’s doing business under a different name, will be distributing the stuff that AEsir bought.  This is sounding increasingly complicated, which is rarely good news.  Especially considering I’ve never heard of these companies before.  Sxion 23 and Section 23 Films don’t show up on web searches either, except as part of this story.  I did stumble upon a record indicating that Section 23 has an office in Texas, so they’re physically close to ADV.

Valkyrie Media Partners, LLC (“Valkyrie”) acquired a 100% equity position in Anime Network, Inc. (“ANI”)…pursuant to a stock purchase agreement.

Plus, ADV sold the Anime Network to this company called Valkyrie (which at least has an anime-related name, intentional or not), assuming Valkyrie moves forward with buying out all the stock in Anime Network.  Valkyrie’s another company that’s not on the web.

But wait!  There’s more! If you order in the next 10 minutes, you get Amusement Park Media, an incredible value!

In another separate transaction, Seraphim Studios, LLC acquired Amusement ParkMedia, the production unit of A.D. Vision, Inc.

Whew.  ADV’s completely gotten rid of their production unit. This company’s harder to nail down, as there are multiple Seraphim Studios on the web. The most prominent works in stained glass in Mississippi, so I assume that’s not the one. There’s also a photography studio in Atlanta, GA and a group of programmers that mainly develops Asheron’s Call plugins.

So. ADV’s sold large chunks of their stuff (but maybe not all of it!) to various companies that appear largely invisible–or, at least, not online.

Anime News Network claims that this means that ADV has shut down; they’ve even got confirmation that several ADV staffers have been hired by Sxion 23.  If so, this is an even more horribly-formatted press release than I thought.  As bad as it sounds (“we’re selling off large chunks of ourselves to outsiders”), it doesn’t say that ADV’s going out of business.  Plenty of other companies have hemorrhaged subsidiaries without completely dying.

That said, if ADV really is dead, I’m not surprised. The published Newtype USA, then shut that down, then they launched PiQ as a broader-focused magazine, then shut that down after only four issues. They stopped doing hentai a few years ago. All their Sojitz/Klockworx titles were pulled and went over to Funimation last year.

They were a solid member of the industry for over 15 years, but it looks like their time has come.