Tuesday, May 22, 2012

What's Going on With Some of Funimation's BD Releases?

I'm cutting this into the blog from our last weekly newsletter . So many people are asking us about it that this post will give the issue a permanent home here that we can link to. :-)

We've had several people ask us last week about some of Funimation's recent quirkiness towards BD releases (stuff like Heaven's Lost Property Forte, Strike Witches S2, and Panty & Stocking to name a few) and thought I would clarify what's been going on since the beginning of the year. In a nutshell, it seems the folks at Kadokawa have become positively paranoid regarding the threat that international BD releases pose to their indigenous sales in Japan, and have decided to put the kibosh on international BD releases - at least for awhile.

We knew since January that the issue revolved around some bitching from the Japanese about certain BD releases being scheduled in the US a little too soon (in their opinion) after the Japanese BD release, but a couple of weeks ago Humberto Saabedra (who edits some of Crunchyroll's news feeds) posted a scathing editorial regarding Funi's plans to release Panty & Stocking as DVD only (for now) even though they have affirmed that they do have the BD rights as well.

Here's the full text of Mr. Saabedra's post:

"During a Twitter conversation last night, the subject of Funimation's release of Panty & Stocking with Garterbelt came up after preliminary listings for the show may have confirmed that the release would exclude a Blu-Ray version and only be released on DVD, despite the company confirming that the show would indeed be released on Blu-Ray the weekend before during its convention appearances at Anime Boston and Sakura-Con respectively. The discussion then circled around to Kadokawa's apparent new rules on international Blu-Ray releases. Back in February, Funimation Entertainment had finally confirmed that the second season of Sora no Otoshimono in Forte would be released on DVD/Blu-Ray as a combo pack in March after months of delays, only to be forced to announce to retailers that the release would not be released as a Blu-Ray/DVD combo as originally solicited, but would only be released on DVD, with no real explanation on why the Blu-Ray version was excluded only after being solicited to retailers 2 weeks before.

The sudden exclusion of the Blu-Ray version after being announced as such for months came as a surprise to fans of the show and led many to cancel pre-orders due to the lack of a Blu-Ray version. While many were quick to point the finger at Funimation for screwing up the solicitations, the real blame should be placed at the feet of the master licensor of the show in Kadokawa Pictures, which controls international licensing for many of Funimation's most popular shows.

Recently, in statements made by Manga Entertainment UK via Twitter, it was revealed that Kadokawa had issued new mandates on home video releases to its international licensing partners that allude to the requirement that no Blu-Ray releases by international licensors would be allowed this calendar year and to adjust release formats accordingly.

Specific reasons were not given as to why the rule was put into place by the company, but recent activity by Funimation involving home video announcements may have confirmed the veracity of the statements, as The Future Diary was only confirmed for a DVD release later this year while no mention was made of a Blu-Ray version. Kadokawa Pictures controls international licensing rights for the show as Kadokawa Shoten also publishes the manga.

While Funimation also announced Panty and Stocking with Garterbelt as a Blu-Ray/DVD combo release during Anime Boston, the earliest listings for the show are beginning to confirm that Kadokawa is indeed forcing international licensors to drop Blu-Ray releases from release plans and announcements.

Why Kadokawa is doing this now, when some of the most popular shows controlled by the conglomerate will see release on home video this year is unknown, but if I were to make an educated guess, the idea of reverse importation may be too great for the conglomerate to ignore and it appears perfectly willing to lose money on international licenses in order to protect its shrinking home market.

Unfortunately for Kadokawa Pictures, the home video market for anime in the US is moving swiftly away from DVD and rushing towards Blu-Ray as the preferred release method for newer shows, with many making purchasing decisions based on whether the series will have a Blu-Ray version available. For Kadokawa to make such mandates to its international licensor partners is not only short-sighted, but it only hurts those that want to support their favorite shows and the companies that work to license them. If I had the ear of the executives at Kadokawa Pictures, I would strongly suggest they reconsider their stance on international Blu-Ray releases outside Japan, otherwise they face the wrath of a fanbase that is perfectly willing to spend their money elsewhere, or worse, not give them any more money at all and even resort to piracy, which only hurts everyone in the end. I really would like to be proven wrong and see Panty & Stocking get a Blu-Ray release when it gets released later this Summer, but based on the previous release in Sora no Otoshimono Forte, that looks less and less likely and places other Kadokawa Pictures controlled titles in doubt for their own Blu-Ray releases."

This really looks like something I might have written minus the copious swearing. -_^

So it seems Kadokawa Pictures has suspended most or all international Anime BD releases for the time being. Now with the word that the upcoming release of Future Diary will also be DVD-only, this has fired up quite a shit storm around the community. I can attest personally to the massive amount of pre-order cancelations of Heavens Lost Property Forte, as that last minute change in particular caused us about ten thousand headaches and really hurt our sales of this title. So, does anyone out there still have any illusions that Japanese Anime producers care about any market outside of Japan? I think this issue should firmly put that fantasy to rest. Xenophobic levels of protectionism are nothing new to the Japanese, and the recession over the last few years has just made the situation even worse.

I contacted Funimation for comment prior to putting this info into our newsletter - hoping to hear something about how they are trying to get this situation overturned and how they are fighting tooth and nail for their US fans base - but Funi's PR department has been quiet as a mouse and choose instead not to call me back. I can only assume that they would prefer that none of this information be in the public domain, or simply do not want to be critical of their licensing partner, even if that partner is giving the US market the shaft. As for Kadokawa's decision, not only is it stupid, my opinion is that if they are producing a product for Japan that is worth the Japanese market premium, they would have nothing to be concerned about from re-imports. Instead, they want to control the distribution of said product like gangsters in order to artificially inflate it's value in certain markets. This thinking is certainly not unique to Kadokawa - AniPlex does exactly the same thing here in the US. You know - make it available, but also make sure it's unaffordable so it doesn't compete with releases in Japan. I've been in this business for 14 years, and I can attest to the problems that Japanese Anime executives have understanding the US market, but sometimes I have to wonder if they even want to try. Or more likely, they probably really just don't care. ~sigh~

Anyway, now you know what's going on with some of Funi's BD releases (or lack there of) and that's the most important thing.

Quick Update: Good grief, Humberto Saabedra wrote me, via FB of all places (rather than sending me a personal e-mail for some reason - ahhhh you kids and your social networking...) and very nicely requested that if I'm going to use the text of his statement on my blog, he would appreciate a 'proper' citation including a link back to his site. Well, here is your link Humberto. FYI, I'm not much for asking anyone's permission about anything. I did cite you in the article however (twice), and in the future I would suggest that you not worry so much about etiquette of usage when someone is talking you up and giving you a little free publicity. Especially when I do it. Nuff said.


Ben said...

"Anyway, now you know what's going on with some of Funi's BD releases (or lack there of) and that's the most important thing."

And knowing makes Battle Cat angry.

But in all seriousness, I read somewhere that this "embargo" is for all Blu-Ray releases for the calendar year. Regardless, I hope common sense prevails... eventually (then again, I also hoped that the Baltimore Ravens and San Francisco 49ers would meet in the Super Bowl; whether the end of the "embargo" or "Har-Bowl II" happens first, I can't really say).

*End of rant.*

Ben said...

One additional note:

Something tells me that in light of Aniplex's "success" in the U.S. anime market, more Japanese licensors are going to take matters into their own hands and release titles their way. (Look at Bandai Visual Japan and how they're handling Gundam Unicorn Blu-Rays.)

Honestly, this is not something I want to see become a trend. A world with monolingual anime Blu-Rays selling for gi-normous prices is no world for me.

tenkenX6 said...

It's really sad that Kadokawa has taken this kind of stance on international blu-ray releases. Honestly, they're being way too paranoid about all of this. I hope this all gets taken care of soon and no one else follows in their footsteps.

Harold said...

Unfortunately Kadokawa's argument lacks any real logic. Nobody should "change horses midstream".

AND on another subject, I can't see why there are DVD/Bluray combo sets at all. You either get one or the other depending on your preferences.

Also I have seen Bluray releases cheaper than the DVD in several instances (?)

The entire thing is frustrating and yes, I have held off purchasing some series due to the waffling over policy.

mikeski said...

"I can't see why there are DVD/Bluray combo sets at all."

It saves on packaging costs. When you're only planning to sell a few thousand of something, paying for one type of packaging instead of two is significant. Even discounting the time/money spent on designing the package, you'll get a better deal from ACME Box and Label Corporation if you order 20,000 of one thing, rather than 16,000 of one and 4,000 of another.

And it makes it less likely that you get burned on extra inventory (or look silly by not having enough), since you only have to "guess" how many total items you'll sell, not guess individually for DVD and BD.

Compared to that, the cost of throwing a free DVD in with every BluRay is pretty small. (If it wasn't, they wouldn't do it this way.)

Robert said...

Retailers like us tend to frown upon stocking the same item in different formats. Combo packs keep our inventory efficient. The other benefit of combo packs is that it makes a release economical to folks who benefit from it being packaged both ways. Very few people rely on just one player for their viewing, and while many will now have BD players available on their primary TV or computer, they still probably have a lot of DVD only players on lesser used PC's, laptops, and peripheral TV sets. This is the way it is for me personally, and BD/DVD combo set ensures that I can watch the release in the highest quality on my primary entertainment system, but also on any other device I might own as well. Even playing in the backseat of the car. :-) I think the combo sets are really the best choice for new releases – one SKU that everyone can use.

Robert said...

"Also I have seen Bluray releases cheaper than the DVD in several instances (?)"

There is a trend in the industry to try to reach BD customers, and often BD is discounted more heavily than DVD now in order to give the greatest reach to that customer base. We do the same thing, often pricing BD at the same or very near the DVD price, even though the MSRP on the BD version is usually higher. That means we have a lower margin on BD, but hope the additional sell through will make it up while retaining more BD customers. That's the theory anyway. Some retailers are just using BD as a loss leader to lure customers. Best Buy recently did it with Arrietty, selling the BD set at a $4 or $5 loss per unit to attract customers.