Ask John: Will HD DVD Affect Anime?

Question:
In the light of current shift to the new high-capacity DVD formats (Blu-ray and HD), what do you think are the chances that already-released on DVD titles will be re-released on this new format? For example, would some profitable and popular series like Gainax’s Evangelion or FLCL be re-released? What are the chances that if re-released they will be sold with more episodes on one disc (Blu-ray could fit the entire FLCL in better quality on one disc easily) but at relatively lower cost? I realize that no one can know with any degree of certainty at this point, so I would just like to hear your opinion on the issue.

Answer:
There are still so many unknowns about the next generation of digital video discs, and my own knowledge is rather minimal, so anything I predict will be very tentative and very susceptible to debate. As anime has moved from VHS to laserdisc to DVD and now to UMD formats, there should be no doubt at all that anime will appear on next generation DVD, whether it be Blu-Ray, HD or some combination of the two formats. And doubtlessly many, many titles currently available on DVD will get re-released on next generation disc formats. There will always be new generations of fans entering the anime hobby that will purchase older shows on whatever video format is current at the time. And there are countless anime fans who are also technology early adopters that want to upgrade their collections to the next, upcoming video standard. So as long as anime titles remain viable in the marketplace, distributors will continue to re-release them.

I may be a party-pooper, but contrary to a lot of the anticipation surrounding the next generation of DVD media, I don’t believe that second generation DVD formats will have a significant impact on anime or the way anime is distributed on home video. Regardless of what format the next generation of DVD turns out to be, it will have significantly higher storage capacity than current DVDs. But just because new discs can contain more doesn’t mean that they will contain more. Disc content isn’t determined by media capacity. It’s determined by financial considerations. For example, even current DVD discs in Japan often don’t use the full storage capacity of DVD discs. Many Japanese anime DVDs contain only one, two, or three episodes, not because the discs are full, but because it’s not economically sensible to include more content on each disc.

In America, it’s common to release new anime series on multiple DVD discs instead of initially releasing complete series sets because multiple discs allow distributors to reap profits from six or more separate sales. Of course, anime distributors are hoping to make profits, but anime distribution companies also need the revenue generated by sales of six or more individual DVDs in order to recover the massive costs of licensing and localizing anime. While it may be possible to put an entire anime series on a single HD or Blu-Ray disc, I doubt that any anime company will want to do that. Even at a higher price, selling one disc won’t generate as much revenue as selling six or more discs to roughly the same number of consumers. Although consumers will certainly prefer fewer discs with more episodes on each, high density releases may not be financially viable for distribution companies. When the cost of producing anime will remain the same, the cost of licensing anime will also remain roughly the same. If costs remain the same, distributors can’t afford to accept less revenue by selling fewer discs. If all factors remained the same, it would be possible to release high definition anime DVDs with many episodes on each disc. As an illustration, a given number of consumers will purchase a complete series on six discs at a total cost of $180 (presuming $30 per disc), but it’s unlikely that the same number of consumers would willingly spend $180 for one disc, even if that disc contained the same content.

In quite simple terms, given present day business conditions, there’s simply no viable way for American or Japanese anime distributors to consistently release complete or high volume DVD discs and earn enough sales revenue to stay in business.