Tuesday, January 29, 2008

What's The Heck Is Going On At ADV? Don't Panic.

There has been a lot of rumor milling going on since Friday about a pending disaster taking shape over at ADV, especially since ANN posted the article about certain titles being pulled from ADV's websites.

I have been quiet for a couple of days because the folks at ADV have been working on the situation, but we've been absolutely flooded with e-mails yesterday and today from panicked fans looking for any information about the situation - so many that I felt that I needed to post something about it here.

Here is what we know:

1) I appears that ADV is having some unknown trouble with their licensing partners, and that there are a number of releases that are in jeopardy of being suspended, at least for a short time.

2) The executives at ADV are currently working to get these issues resolved, and thus NO FORMAL ANNOUNCEMENTS HAVE BEEN MADE regarding these issues. In fact, as of this writing there is nothing that can be announced since talks are still ongoing.

3) It has the potential to end up being an ugly situation, but as of now we DO NOT KNOW ANYTHING FOR SURE. Ultimately it may turn out to be a non-issue.

4) This is NOT another 'Geneon' situation.

I was not going to make this public, but someone has already posted a copy of this over at AOD so the cat is out of the bag now and I might as well make the following information available to everyone. This article was originally set to be posted to ICV2 yesterday, but it was pulled at the last minute and NOT published because the information it contains is NOT VERIFIED. It does NOT indicate that these titles have, in fact, been canceled. What it does indicate is that there is a serious problem that has developed over at ADV Films that management there is currently working on to try to rectify, and it was for this reason the article did not go live.

Here is the text of the article. Please keep in mind that the letter that is referenced in the article WAS NEVER SENT OUT.


ADV Cancels 37 Titles
Anime Offerings on 'Indefinite Hiatus'

January 28, 2008

In a letter to retailers ADV Films has identified 37 anime properties including Devil May Cry, Gurren Lagann, and Pumpkin Scissors that are "on indefinite hiatus, effective immediately." The list includes virtually all of the properties that ADV has announced since its financing deal with the Sojitz Corporation in late June of 2006. The properties that ADV has announced (and released) since then are from a variety of anime studios but they were all licensed through the ARM Corporation, a subsidiary of Japan Contents Investment, an investor group that included the Sojitz Corporation, the Development Bank of Japan and KlockWorx. In its letter to retailers ADV explained: "ADV has suspended certain elements of its former alliance with ARM Corporation, which financed the acquisition of these titles. ADV is working closely with various constituencies with the goal of restoring most if not all of these properties to our release schedule at a later date to the extent possible."

The list includes properties that have already been released in their entirety such as Nerima Daikon Brothers, Guyver, and 009-1, series such as Pumpkin Scissors, Kurau Phantom Memory, and Red Garden that have only been partially released, and eagerly awaited anime such as Devil May Cry, Gurren Lagann and 5 Centimeters per Second that have been announced for later this year. The complete list of ADV anime properties on hiatus is:

5cm Per Second
Ah! My Goddess: Flights of Fancy
Air Gear
Air Movie
Air TV series
Best Student Council
Blade of the Phantom Master
Comic Party Revolution
Coyote Ragtime
Devil May Cry
Ghost Train
Gurren Lagann
Innocent Venus
Jinki: Extend
Kanon TV Series
King of Bandit Jing: 7th Heaven
Kurau Phantom Memory
Le Chevalier D'Eon
Moeyo Ken TV Series
Moonlight Mile
Nerima Daikon Brothers
Pani Pani Dash!
Project Blue
Pumpkin Scissors
Red Garden
The Wallflower
Tokyo Majin
UFO Princess Valkyrie - Third and Fourth Seasons
Venus vs. Virus
Welcome to the NHK

Coming on the heels of Geneon's departure the ADV announcement is more bad news for the reeling North American Anime Industry. For the past few years ADV has been the number two anime company in the North America, with a solid 12-13% share of the anime DVD market. Recently though ADV has been showing signs of stress. It has pulled its support from its industry-leading collection of anime clubs and two weeks ago announced that it would cease publication of Newtype USA. The collapse of ADV's deal with ARM does not necessarily mean the end of one of the trailblazing American anime companies, which was founded in 1992. ADV still has an extensive library of titles including the ever-popular Neon Genesis Evangelion. Still the fate of ADV subsidiaries such as The Anime Network, the Newtype successor PiQ, and the ADV manga publishing program that includes the bestselling Yotsuba&! manga remains in the balance as does the future of one of the pioneering powerhouses of the American anime market.


A reminder to you that THIS ARTICLE WAS CANCELED PRIOR TO PUBLICATION. It is not gospel. ADV HAS NOT provided us with any sort of official notification of what the article states. I have been in touch with management at ADV over the last couple of days and they have indicated to me that they feel the problem is solvable and will be cleared up shortly. They have not offered any comments to the press due to ongoing talks.

I have made mention in the last newsletter of the supply problems we've been having with ADV recently, and I think this goes a long way to explain things. What we need to do now is take a breath, and wait to hear some official comment from ADV. We will not be making any changes to the availablity of these titles, even if they are currently on backorder status, until ADV tells us for sure.

An hopefully NO changes will be necessary.

While we're waiting, I'm going to go have a drink....

UPDATE (1/30): I have heard what I deem as reliable information this morning that ADV is close to a solution to the licensing problems and that there is a very good level of confidence that their existing catalog will remain in-tact with nothing more than a few bumped street dates. I've been doing business with this guy for 10 years and he never bullshits me, so I think this is as good of information as we can get less than an official statement. I have verified this info through a couple other inside industry contacts and it jives. ADV will probably not be able to make any official statement though until everything is wrapped up which could be a few more days.

Smile everyone, I think we will be OK. :-)

Wednesday, January 09, 2008

Bandai Recalls DVD's / Allows Us To Handle Customer Exchanges

In yet another new update today, Bandai did a 180 degree turn on how they want to handle exchanges for the defective DVD's out of their Jan 8th release batch.

Originally Bandai had wanted customers who already had a defective DVD to contact them and they would handle the exchanges, but the problems are far to widespread for that. Since many customers have expressed their desire for us to handle the exchanges directly, I have been strenuously arguing with Bandai for a full recall that would give us the ability to exchange these DVD's directly for our customers, not to mention preventing more bad DVD's getting put into new customers hands.

I think Bandai management was initially resistant to do this for two reasons:

-They would have to admit the full scope of the problems.
-Many other retailers, seeing the scope of the issues, wanted to pass the buck onto Bandai and not incur the extra cost associated with handling exchanges in house.

We'll, I didn't let the issue go and today Bandai relented and formally announced a full recall of all retailer stock on the effected DVD's and a replacement program that will be put into effect shortly.

Here is a summary of what's going to happen:

1) As of 4PM today we have suspended shipments and pulled ALL inventory on the following effected DVD's:

Eureka Seven, Vol #11 DVD
Flag, Vol #2 DVD
My-Otome, Vol #4 DVD
Gundam Seed Destiny, Vol #12 DVD
Gundam Seed Destiny, Vol #12 DVD Limited Edition

Bandai will be replacing these DVD's with fixed disks that are expected to ship to us sometime around the end of January. We are putting these DVD's back on pre-order status and I'll probably set a new street date for the corrected disks around February 5th. If we get them in sooner then all the better.

2) You have two choices for replacement of your defective DVD's:
  • RACS Direct: If you purchased your DVD from us, you can have us replace your bad disks directly. Just let us know and we will setup an in house replacement ticket that will be held pending new good stock from Bandai. Do not return the DVD's to us, we will provide a postage pre-paid mailer for you to return your bad disks to us in the package that contains your replacement disk. All existing replacement tickets that have already been setup will remain in force unless you tell us differently.
  • From Bandai: If you would prefer to deal directly with Bandai, they will be setting up a special exchange request page out at the Bandai Entertainment site that you use to request replacements for your bad disks. This page will be setup and available to customers by January 17th. I have no idea why it will take that long for them to set it up, so don't ask me.

If you do want to deal with Bandai directly on these and already have a replacement ticket setup with us, just let us know and we'll cancel it. Otherwise, we're going to assume that you want us to handle the replacements for you directly. If you've been fence sitting and need us to setup a replacement ticket for you, just e-mail me directly and I'll take care of it for you.

I'm very happy about this because it will allow us to take care of our customers directly as soon as good disks are available and you will not have to wait weeks to get your disks exchanged with Bandai. Thanks to everyone who wrote in and pressed this issue, I forwarded several of your e-mails to Bandai to help drive the point home.

Bandai's official press release regarding the recall can be found here.

Tuesday, January 08, 2008

Bandai to Handle Exchanges Directly for Defective DVD's

In a further update to the problems with the last batch of DVD's from Bandai, they have informed us today that (as expected) they would like to handle the customer exchanges.

If you are a US or Canadian customer and are experiencing play problems with one of the following:

Eureka Seven, Vol #11 DVD
Flag, Vol #2 DVD
My-Otome, Vol #4 DVD
Gundam Seed Destiny, Vol #12 DVD
Gundam Seed Destiny, Vol #12 DVD Limited Edition

Please contact Bandai directly using their customer service form here for an exchange of the defective DVD(s).

If you had already setup a replacement ticket with us, Bandai requests that you still go ahead and contact them directly for the exchange.

If you are an international customer then please sit tight and we'll handle the replacement for you directly. We ask your patience in this matter as we are going to have to wait for a new batch of disks from Bandai and we will need to test them inhouse before doing any overseas exchanges. I imagine this will take a few weeks.

For the record, no, I'm not too happy with this. I know they will be slow in taking care of these exchanges. Also, Bandai wants us to continue to ship these DVD's to customers, and then handle any issues directly on a case by case basis. I would have preferred that the DVD's all get recalled and new (corrected) DVD's issued out to retailers, but that's not what they wanted to do and the powers that be have spoken.

Due to the high defect rate reported in GSD #12 we are going to continue to hold new shipments of the individual version until we are at least able to get a new (and hopefully corrected) batch of the discs from Bandai.

Wednesday, January 02, 2008

More Bad from Bandai

There has been a lot of forum discussion over the long weekend regarding playback problems in the last batch of Bandai releases. I'm sorry to say that it's just about all true, and we came back from the holiday weekend today to deal with an inbox full of defective DVD reports, and since we were able to ship these titles a couple weeks prior to the street date, we're one of the first retailers to see and have to deal with the unhappy fans who have bad disks.

So here's what we know so far and see from our customer report data:

Disks effected:

Flag, Vol #2 DVD (some reports)
My-Otome, Vol #4 DVD (few reports)
Gundam Seed Destiny, Vol #12 DVD (many reports)
Gundam Seed Destiny, Vol #12 DVD Limited Edition (many reports)

We've already shipped approx 700 of these DVD's combined, the majority being GSD #12. We've received reports of various payback issues with My Otome #4. In the instances of problems with the Flag #2 the disk typically will not play at all (unreadable). For GSD #12 (the regular and limited version come with the same DVD), most customers are reporting that Eps #50 will not play, and in some cases the extra's will not play either.

The problems seem to be with the disk encoding. The problems are widespread (over 20% of total) but do not effect all the disks and, in fact, just as many customers have reported that their disks are playing perfectly, so perhaps the issues are systemic of certain types of players. Of the approx 700 disks we've shipped and have been out for at least a week we've received approx 80 complaints of play problems so far, and most of those are being reported by either Flag or GSD 12 customers. From this data I'm gathering that the defects are being experienced in 10-25% of the discs in each lot, and are concentrated in the GSD 12 DVD's.

Bandai has not yet made any official statements regarding this yet, but out the backdoor they have told me that they are still gathering data and will not make any announcements regarding these problems until at least January 8th which is the official street dates of all these DVD's.

The problems are widespread enough that it's likely Bandai will put forward a direct replacement program. Since the problems are only effecting a portion of the DVD's, we are still shipping these titles (as of today), however, we are not going to ship out anymore replacement disks until we hear the official word from Bandai next week.

For US customers you are still OK to order these, the chances are in your favor that the disks you receive will play fine. If they don't, just contact us and we'll setup a replacement ticket and hold it until we hear from Bandai as to what their procedure will be. We'll make sure one way or another that customers that are having trouble get good disks. I recommend International customers hold off ordering these for a couple of weeks until we know more about the issues. If you are an overseas customer and already have a bad disk just let us know and we'll act as your agent to get you replacement DVD's.

For the record, this will be the third GSD DVD of the twelve that has come from Bandai with some sort of encoding problem in the first batch. It really is time for Bandai to fire their replicator and hire a contractor that has some decent quality control. These types of problems are getting too common in their releases, and if they continue fans will become more reluctant to buy their DVD's - and then we'll have another 'Geneon' fiasco on our hands...

As always, E-Mail me with questions.

UPDATE (1/7/08): Our defective reported ratios for the GSD 12 DVD's has reached 50%, so we are suspending shipments of the individual DVD until we can get replacement stock from Bandai. All new orders will be placed on back order until we have good stock. Thank you in advance for your patience regarding this.

Happy New Year!

We find ourselves passing our 10th year serving Anime fans and entering our 11th. Wow! Who would have thought in 1997 we'd be running one of the largest online Anime stores in the country.

As we enter 2008, Downloading and bootlegging continues to destroy the industry as studios are forced to downsize or close, and the best creative talent is lost to more profitable and rewarding endeavours. How's the US Anime industry doing right now? About 'Average'. That is to say that today is worse than yesterday, but probably better than tomorrow, at least short term.

I'm satisfied with our results for the past year, even though the fourth quarter was weaker than we had expected, mostly due to the loss of Geneon's entire product line. We have not seen the sort of massive sales shortfalls that the mass market retailers have reported, but that's because we have always catered to the core Anime fan whos interest remains strong. We've never really cared much what box movers like Best Buy does, but sales shortfalls in those areas do effect the studios that have come to rely on those tenuous sales channels far too heavily. 2007 was a very challenging year for the Anime industry as a whole, and we'll continue to change and adapt as necessary in the coming months. You might see new product lines become available on the store while other lines may be reduced or phased out. We're also deciding if it's finally time to change the Store around and add more 'commercial' style elements and features to the shopping experience. I'm still not a big fan of that, but ultimately it will depend on what you guys tell us you want.

Whatever happens, we'll be here for another year continuing to help all of you enjoy the Genre as much as we do. As Farragut said - "Damn the torpedoes, full speed ahead!"

Here's to a prosperous 2008 for all of us. Happy New Year everyone!