Ask John: Does the Anime Industry Realize that Anime Fans Have Limited Budgets?

Question:
I understand that the anime industry wants fans buy up more DVDs, but does the industry understand here in U.S. current problems like dollar being low, people having paying more on bills, food bill going way up. What try saying is do they understand that fans don’t have money 24/7 buy the DVDs?

Answer:
Regrettably, anime is an expensive hobby. It’s always been expensive, and always will be expensive because it’s a luxury product made for a small clientele. There are legitimate avenues for anime fans on a budget, including anime club screenings, anime rental services, streaming video, and sharing DVDs among friends. But anime collectors will always be faced with the prospect of paying more for anime DVDs than the cost of mainstream American home video releases because Hollywood releases sell exponentially more copies of each release, so they’re able to profit on quantity rather than being forced to generate bigger profit margins on fewer sales. And anime is significantly cheaper now than it was a decade ago. In the days of American anime releases on VHS, subtitled tapes routinely cost $34.95 or even $39.95 each. Japanese prices were even higher. During the late 1980s and early 1990s, single Japanese anime VHS tapes frequently cost 9,800 yen up to 14,800 yen. Even today, anime DVDs are significantly more expensive in Japan than they are in America.

The American anime industry is making efforts to reduce the cost of anime for consumers. Complete set releases cost a fraction of the original total cost of individual disc releases. Domestic distributors including Bandai Entertainment, FUNimation, Geneon, and Nozomi Entertainment have experimented with premiering titles in America as affordable complete series sets. Many of America’s anime distributors now offer some of their catalog titles for low cost digital viewing. Unfortunately, many of these lower cost options are still not satisfactory for American consumers that don’t understand, or refuse to accept that anime is not an equivalent to mainstream Hollywood produced entertainment and therefore can’t compete with the price of mainstream Hollywood produced entertainment. American distributors do realize that average American anime fans aren’t a bottomless fount of money. America’s distributors are making obvious efforts to compromise with the comfortable spending range of American consumers, but the minimum threshold at which anime can break even is higher than it is for home video that sells millions of copies. So American distributors reduce prices as much as they can, offer incentives for consumers to purchase legitimate anime DVDs, and encourage fans to support the industry by ignoring bootlegs and video piracy.

Honestly, I’m not entirely positive that the Japanese side of anime distribution has a conscious understanding of the American anime consumer market. Japan’s core anime consumer audience is slightly older than the average of America’s fan community. Observation of any given day in the Akihabara otaku shopping district of Tokyo reveals an older teen and young adult collector market while observation of any given day at any American anime convention reveals a predominantly younger teen audience. The Japanese market also buys more anime, and spends more on anime than America does. In 2006 Japan’s anime market was worth over two billion dollars. By comparison, at the peak of anime sales in America, the domestic market was valued at only $500 to $550 million. The US population is more than double that of Japan, yet Japanese consumers spend more than four times as much on anime as America does. Although I don’t know for certain, I suspect that Japanese home video distribution companies and publishers think about their native Japanese market and don’t spend much time thinking about how much smaller the commercial market and annual revenue for anime is in America.

Bandai Visual USA may be taken as an example of a Japanese distributor that treats the American market comparably with the Japanese market. Bandai Visual’s domestic DVD prices are marginally less expensive than their equivalent Japanese market counterparts, but their products are still expensive enough to price them out of serious consideration for many American anime collectors. I concede the valid point that Bandai Visual USA is an exclusive boutique distributor that markets to high-end collectors willing to pay premium prices. But at the same time I can’t escape the feeling that Bandai Visual USA’s prices are symptomatic of a Japanese industry that doesn’t consciously realize that anime doesn’t command the same market value in America that it supports in Japan.

Although it’s less frequently and less loudly proclaimed these days, the mantra of the American anime fan community has always been, “Support the industry.” America’s anime distribution companies are closest to the American fan community, and are the most responsive to the American fan community. I think that America’s anime distributors know that anime fans can’t afford every title and every DVD released. America’s distributors simply hope that by offering fans a variety of anime titles presented with commercial grade quality and durability, fans will reciprocate by doing what they can to support the industry. I’m not entirely certain where it came from, but there’s a palpable and influential sentiment in America’s anime fan community that the domestic anime distribution industry is an autonomous corporate entity that exists to compete for consumer spending. I don’t think that’s what America’s anime industry is. America’s anime industry is a partnership with the American fan community. The American anime industry maintains a remarkable level of interaction with, and accessibility to, average consumer-level fans. America’s anime industry couldn’t survive without the support of the fan community, and American fans wouldn’t get archival quality, localized, commercial anime releases without the industry. I think that America’s anime industry simply hopes that American anime fans spend what they can afford to spend, and avoid actively harming the industry by relying on video piracy in place of legitimate spending. The Japanese industry may, in fact, not be as aware of the financial situation of American anime collectors, but that’s not really important. At the present time the Japanese anime industry doesn’t market directly to American consumers; it markets through domestic distributors. So it’s primarily the American anime industry that’s most relevant to American consumers, and I think that the American anime industry is trying to do what it can to accommodate the budgets of American fans while hoping that fans will reciprocate.