October 12, 2009

Somebody knows something

Kouji Taguchi, a producer at game developer Square-Enix, claimed at a convention appearance that none of their anime products "has lost money in eight years." In the fickle entertainment industry, about which William Goldman famously stated that "nobody knows anything," this is a remarkable track record.

Budgets for television series made in Japan are a third of those made in Hollywood. Hayao Miyazaki makes feature films for a tenth what Disney typically spends. It's the content that's selling, not the wrapper. Taguchi's expertise is making sure the content is delivered to the customers who want to consume it.

Comparing marketing to fishing, Taguchi says that

[I]t is essential for the [production] company to first search for where the fish are (search for a popular genre), then decide on a lure that these fish would like (deciding on the work to adapt), and finally get the fish to bite on the lure (selecting the anime studio).

Making his formula work in the U.S. is more challenging. Manga are twice as expensive in the U.S. as in Japan, making it difficult to achieve volume sales and overcome the narrow margins. Another critical factor explaining lagging manga sales in the U.S. is population density and ready access to retail outlets.

Taguchi observes that a "typical Tokyo resident can reach about three bookstores by bicycle." Consequently, marketers in Japan can use anime to directly push manga sales. In the U.S., the only way to get access to a wide variety of manga is through online bookstores, making impulse sales problematic.

An American kid can't watch an anime and then run out and buy the manga with his allowance. (Incidentally, this is also a product of the schizophrenic attitudes Americans have toward the commercial sector: we claim to want "walkable" communities but are loath to zone for them.)

A bigger problem that Taguchi doesn't touch upon is that U.S. licensing is so haphazard and slow there's often no way that a distributor can count on the anime and manga being available at the same time. However, it is possible that in the future, the "PlayStationing" of manga publishing could alter this equation.

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