Answerman

Will Anime Discs Keep Being Sold At Major Retailers?

Dominic asks:

When it comes with selling anime to physical retailers, some publishers, such as Aniplex of America, Ponycan USA and NISA, only sell to specialist anime stores (for example: Anime Jungle in LA), while Funimation and Sentai discs can be found at large store chains like Best Buy, FYE, Fry's Electronics and MovieStop/Hastings. Will there come an era where anime companies will abandon having those stores sell their products and instead have them be sold only at specialize anime stores in the physical retail market?

Selling anime product to large retail chains was once THE way to get your product into the hot little hands of otaku everywhere. Sure, little mom and pop comic stores were once the place to order anime VHS tapes, but the business didn't take off until places like Musicland/Suncoast/Sam Goody, FYE/Record Town/Saturday Matinee, Best Buy and several other big chains started stocking whole walls of the stuff. The DVD boom of the early 2000s coincided with the rise of the internet retailer, and for a while, anime sales were split between online and brick-and-mortar retailers. And then the anime bubble of the mid-2000s hit and several major retailers closed, forcing most anime sales online.

The last few years have not been kind to the retail DVD market in general. Anime, being a niche category, has faced dwindling shelf space, and increased competition to be on that shelf space. These days, Best Buy, Barnes and Noble, and some other chains have at least SOME anime at most of their stores, but not much. The vast majority of anime sales in North America take place at either Amazon or Right Stuf, and most smaller titles aren't even stocked by the national chains. And those chains have seen DVD sales in general take a tumble, so they're dedicating less and less of their stores to DVD and Blu-ray in general.

Dealing with retail chains can be quite difficult. They buy a lot of discs, but reserve the right to return them to you later (and who knows in what condition they'll be in), and refunding that purchase months down the road can be really painful. (This is a big part of what caused the collapse in the mid-2000s.) Retailers also get to buy the product at 50% of suggested retail price or less (sometimes much less if they drive a hard bargain) -- their share of the money has to come from somewhere. If the disc is put on sale, the discount is often at least partially taken out of the publisher's share.

While the retail system in North America actually isn't too far off from how things work in Japan, Japanese companies looking to get into the North American anime business always seem to see the retail end of things and think they've found a huge chunk of revenue that they can absorb for themselves. The companies you mentioned -- Aniplex USA, NIS America and Ponycan -- are all Japanese owned companies who have intentionally kept their retail partners very limited -- sometimes limited only to themselves. By doing so, they can offer less of a wholesale discount to those retailers, and keep a tighter control over pricing. The end result is that instead of $25 per unit on a $55 disc, they'll make closer to $40. They will definitely sell fewer copies this way -- nobody is going to just stumble upon those discs while killing time at a Best Buy -- but if they make more money per copy, it's worth it in the end.

Sometimes this works and sometimes it doesn't. It sure didn't work back in 1999 when Bandai Entertainment first launched (as AnimeVillage.com) and tried to do the same thing. In fact, several publishers have tried to cut Right Stuf out of the equation over the years, only for fans to balk at the publisher's own store and eventually forcing them to add Right Stuf as a retail partner. But between Amazon, Right Stuf and perhaps the publisher's own store, the vast majority of anime fans will have access to the discs without the inherent risk involved in dealing with brick-and-mortar retail.

Selling through big chains is still probably the right choice for a handful of shows. It's a risky endeavor, and is now really only worth pursuing if the show has very mainstream appeal. When a series sells through to consumers, those retail channels can add a huge amount to your sales. But if the discs end up just sitting there, they'll all come back, and that expensive gamble will all blow up in your face.

Overall the days of DVD and Blu-ray sales at mass retailers seem to be on the decline. I'm not sure they'll ever go away entirely, but it is possible that a niche category like anime might eventually get its shelf space squeezed down to nothing.

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Justin Sevakis has worked in the anime business for nearly 20 years. He's the founder of Anime News Network, and owner of the video production company MediaOCD. You can follow him on Twitter at @worldofcrap.