Ask John: What is Reverse Importation?

Question:
Can you explain how a anime gets solicited? With a TV series, a liscenor can’t get the right to it until months after the broadcast (unless it’s a simulcast). If it’s a title was picked up during the run, why do they have to wait til after it’s run? For a movie, why do we have to wait til after the home video release most of the time? And for an OVA, why do we have to wait til after that series completes in most cases? Why do we have to wait months/years to get the title over in North Amercia?

Answer:
I don’t want to sound old or play some sort of grandfatherly “back in my day” routine, but to establish legitimate context, when I became a die-hard anime fan in 1987, my friends and I considered ourselves very fortunate when we were able to watch an anime that had hit Japanese home video twelve months or less prior. To us, an anime that had hit Japanese home video roughly a year before was still “brand new.” By the early 1990s, lead times had reduced to the extent that I was excited to be able to obtain and watch anime only roughly six weeks after its Japanese release. And I’m talking about obtaining anime through underground fan channels that don’t have to respect official, business terms and agreements. These days, even official digital distribution is simultaneous between Japan and America in many cases.

American home video releases have always lagged behind the Japanese release, with very rare exceptions. Due to co-production and early licensing agreements, anime titles including Gunnm (Battle Angel), Grrl Power (Makasete Iruka!), and Twilight of the Dark Master have hit American home video at the same time or even before the official Japanese release. But most releases hit Japanese home video months or years before coming to American DVD or Blu-ray. Some of the delay has to do with simple practicality. If an American distributor sees a show that it likes, the acquisition negotiations take time. Then the Japanese distributor has to send video materials over to America. Then the American studio has to translate the anime and produce American video masters and replicate discs for distribution and sale to consumers. Even if the American licensor acquires the American distribution rights to a show while the title is still in pre-production, the Japanese studio & staff involved is primarily focused on getting the show animated and released in Japan, so they typically delay or just don’t get around to promptly sending duplicate master tapes over to America.

Anyone that’s been involved in the American anime fan community for a length of time has probably heard the term “reverse importation.” A typical anime DVD or Blu-ray disc in Japan costs several times more than a comparable DVD or Blu-ray disc in America. Since Japan remains the number one market for anime, Japanese distributors want to ensure that they maximize sales in Japan before allowing potentially competing cheaper releases elsewhere. A Japanese collector may pay $60 for an anime Blu-ray disc with two episodes because the options are $60 Japanese Blu-ray or nothing. Japanese distributors don’t want to give consumers the option of $60 Japanese Blu-ray or $30 American Blu-ray. Although Japan has a population roughly the size of America’s six most populated states, in 2009 Japanese consumers bought roughly $865 million dollars worth of anime DVDs while the combined 50 states of America only purchased about $306 million in anime DVDs. America’s movie industry, for example, doesn’t release new films simultaneously in theaters and on home video, although it could, because if American consumers have the option to get the movie on home video cheaper or more conveniently on home video, fewer people will bother to go out to movie theaters, resulting in theaters earning less revenue, and theater employees losing jobs. So Hollywood intentionally holds back the home video release in order to force consumers to initially pay to see the film in a theater, then later pay again to own a home video copy. The anime industry works the same way. The Japanese industry releases a Japanese home video copy first, forcing the primary market to pay average Japanese retail prices, then allows a later international release to generate supplemental income. If Japanese studios allowed a simultaneous worldwide home video release, many astute Japanese collectors would buy the cheaper American discs instead of the Japanese discs, and instead of a bigger sales revenue staying completely in Japan, the consume would pay less, and a big percentage of that sales revenue would go to companies in America instead of retailers & distributors in Japan.

These days, in the rare instances in which America does get a home video release at the same time as the Japanese release, for example, the Gundam Unicorn Blu-ray release, Americans pay the same amount for the Blu-ray discs that Japanese consumers pay. When all releases are the same price, American collectors may be displeased that the discs cost exponentially more than typical American releases, but Japanese distributors are satisfied because they earn the same amount in sales revenue regardless of whether collectors purchase the Japanese or the American release. If anime sold better in America than it did in Japan, then America would set the standards and get new releases first. But these days Japanese collectors spend four to five times as much money on collecting anime DVDs and Blu-ray discs compared to American consumers, so the anime industry prioritizes Japanese consumers. Those who offer to pay the most are the first to be served, and the first to be exploited. That’s the nature of capitalism.