Ask John: How do American Anime Companies Decide Which Anime to License?

Question:
How do U.S. anime companies select which anime to license in the U.S.? I’ve read that they get what is usually being fansubbed the most, but it seems now that they are buying shorter OAV series.

Answer:
The exact decision making process of what to license and what not to license is, I suspect, different for each domestic distribution company, but I think many of the same considerations are taken into account by every company in different degrees. And there are many factors that effect which titles do and don’t get licensed for American release including availability, cost, market potential, and viability. And each factor is comprised of numerous considerations. All of these factors are interconnected with none taking immediate precedence over the others because they all affect each other. But different companies may place slightly more importance on some factors than others.

When considering whether or not to acquire distribution rights to a particular title, it’s necessary to know if that title is actually even available for licensing. A select title may already be in negotiations for acquisition by another distributor. Or the Japanese licensor may not want the title distributed internationally. It’s commonly assumed that KSS will not license the Gunnm (Battle Angel) anime for American release because they want to keep it available in case Twentieth Century Fox decides to license it to coincide with a possible American live action Battle Angel movie. My understanding is also that many Japanese studios and distributors are only interested in supporting their current and new productions, and aren’t interested in dredging up old series. Furthermore, in the case of an anime series like Candy Candy, there may be legal disputes in Japan over its ownership that prevent any single company from being able to sell distribution rights to a foreign distributor. Availability also relates to Japanese distributors soliciting titles to domestic distributors. Japanese studios and distributors often provide samples to American distributors, and also offer American distributors the opportunity to sponsor or co-produce upcoming anime series. In the case of not yet produced titles, domestic anime distributors may have only a title or a brief plot synopsis or a production studio name with with to decide whether or not to pursue an acquisition.

Availability also covers the possibility that certain anime licenses come with pre-requisites, such as anime titles that may be available without television broadcast rights or without merchandising rights, or anime series that will only be licensed with minimum distribution or exposure guarantees, or anime series that are only available in conjunction with one or more other anime series from the same owner. Any potential domestic licensor would need to know these conditions and make their decision based on these conditions.

Naturally, how much an anime series costs to license affects which companies may potentially license it, or even consider licensing it. The licensing cost of an anime series is based on several factors including its Japanese popularity, production cost, and length. The more successful an anime series is in Japan, the more its Japanese licensor will expect to be paid for it. And longer series cost more to license than short series if only because the licensor is getting more animation. It’s not difficult to guess, without even asking, that Naruto will cost more to license than Maria-sama ga Miteru. Smaller anime distributors may not even be able to afford the licensing fees asked for some titles. And certain distributors may decide that particular titles may or may not be worth their asking price.

Domestic distributors also have to carefully consider whether an anime title is likely to be profitable in America, and whether it’s an appropriate acquisition for the company. For example, distributors like Viz and Geneon do not license adult anime while Manga Entertainment prioritizes the acquisition of OAV and theatrical anime. Distributors must also predict whether or not a particular series will sell well in America. As much as anime fans want to believe otherwise, the hardcore anime fan community in America isn’t really big enough to make the sales of most anime series financially successful, especially considering that even most hardcore anime fans don’t buy every anime DVDs that’s released. Any market watcher knows that life/dating sim, many shoujo anime series, family anime series, and most vintage anime series don’t sell remotely as well in America as “hot” new titles do. So titles with anticipated small market potential in America must be appropriately examined as candidates for American release. Traditionally, demand from American fans and the success of particular series in Japan are used as guidelines for American acquisitions, but increasingly, with the market moving toward co-production deals, domestic licensors have to judge by educated guess and previous experience to predict which titles will be successful in America.

Finally, certain companies may be predisposed to acquiring and releasing particular anime titles because of their affiliations with Japanese companies. It’s logical for Japanese owned companies like Geneon and Bandai and Viz to promote and distribute titles produced or owned by their Japanese parent companies.

To specifically address two points you’ve raised, first, I wouldn’t say that it’s becomming more common for domestic licensors to acquire more short OAV series simply because there aren’t that many short OAV series available. For the past several years the number of non-hentai OAV series released in Japan has been in decline. Furthermore, while traditionally American fansubbing has influenced which anime titles have been released in America, with the rise of digital fansubbing, of course, the most popular anime titles among fans will still be ones that professional distributors pay close attention to, but virtually everything is getting fansubbed these days, and with the massive competition for new anime titles these days, it’s not always possible for a domestic licensor to wait until a series is massively popular in the American fansub community to try to acquire that series.