Ask John: How Will Geneon USA Ending American DVD Distribution Affect Fans?

Question:
Why did Geneon Entertainment “exit” R1 distribution? Are they going to continue functioning at all in the States? What will happen to the titles they distribute, especially the ones that aren’t finished like Higurashi, Rozen Maiden, Karin, Kyou Kara Maou, and Hellsing Ultimate?

Answer:
Since this news appeared yesterday, I’ve been innundated with questions. This one is representative of all of them. While no one knows yet exactly what to expect or anticipate in the aftermath of Geneon’s announcement, I’ll do the best I can to provide what information and speculation I can provide.

No one besides Geneon itself knows exactly why Geneon USA made its sudden and unexpected announcement of its immediate withdrawal from the American anime distribution industry. The most logical and predictable explanation is that Geneon USA has been either losing money, or hasn’t been profitable lately. In fact, this announcement may be the culmination of a long period of trouble, given the fact that Geneon laid off a dozen employees back in November 2005. However, I can’t dismiss the timing of Geneon’s change in Japanese ownership. Mitsubishi subsidiary d-rights acquired 34% of Geneon in June 2006, but by August 2007 had divested that investment, reverting full ownership of Geneon to Japanese advertising agency Dentsu. Timing suggests that Dentsu may have reevaluated the viability of Geneon USA shortly after re-acquiring full control over the Geneon company. As recently as last year Geneon was statistically America’s third largest American anime distributor, accounting for 11.1% of America’s annual anime DVD sales. But the recent acquisition and distribution of acclaimed but relatively poor selling titles like Kannazuki no Miko, Kamichu, Strawberry Marshmallow, Ayakashi, and Rozen Maiden may have been a major burden on the company’s finances. Furthermore, declines in sales and profits that have affected the entire American anime industry over the past two years may have hit Geneon USA especially hard. However, all of this is mere speculation.

In its September 21, 2007 press release announcing the dissolution of a tentative product distribution agreement with A.D. Vision, Dentsu stated, “From October 1, 2007, Geneon USA will focus mainly on management of its works portfolio.” This statement suggests that rather than license and produce its own domestic anime DVDs, Geneon USA will shift gears to managing the placement of Geneon anime titles in the hands of other American anime distribution companies. Based on this press announcement, Geneon USA will not be ceasing operations altogether. Geneon USA will simply cease licensing and producing anime DVDs for American consumers. While that may be good for Geneon, it’s not exactly encouraging news for American anime fans.

AnimeNation has directly confirmed with a Geneon representative that the continuing release of all of Geneon USA’s presently ongoing titles, including When They Cry, Karin, Kyou Kara Maou, Law of Ueki, Shonen Onmyouji, Hellsing Ultimate, Story of Saiunkoku, Black Lagoon, and planned future releases including Magical Girl Lyrical Nanoha, Guardian of the Sacred Spirit, Familiar of Zero, Rozen Maiden Traumend, and the Shakugan no Shana OVA will cease in November. While countless fans desperately hope that some or all of these titles, along with many or all of Geneon’s catalog titles, will be “license rescued” or otherwise acquired by other American distributors, the Geneon USA spokesman that we spoke with could not discuss (or confirm) that possibility. So all that’s known for certain right now is that Geneon’s entire anime catalog is going out of print in America within the next two months, and there is no certainty that any of these titles will be continued or re-released in America in the future. One additional certainty is that if presently in medias res titles are eventually acquired for continuation or re-release in America by different distributors, fans of these shows will face a significant delay between current releases and any future releases or conclusions from new distributors.

Collectors interested in Geneon catalog titles needn’t be frantic about purchasing them immediately, although expediency may be advisable. The fact that Geneon is ceasing distribution does not mean that its DVDs will disappear overnight. The Geneon anime DVDs currently on the market will remain available for purchase until supplies are exhausted. Prudent retailers may even stock up on Geneon’s DVDs in anticipation of them becoming unavailable. Geneon’s anime DVDs should remain common and easy to acquire during the immediate future, despite Geneon itself ceasing production and distribution. But if Geneon’s titles are not re-licensed due to licensing conflicts or excessive licensing costs, eventually Geneon’s current anime DVDs will become more difficult to find and easily purchase. And even if certain current Geneon titles are re-licensed for renewed American release in the future, the odds of Geneon’s entire current catalog resurfacing in new DVD editions is rather unlikely.