My coverage of the ICv2 conference held at New York Anime Festival continues with the marketing panel. You can listen to the un-edited audio I recorded of the panel here. I hope to clean up the levels later for my podcast.

ICv2: Marketing to the Otaku Generation

Panelists included:
Liza Coppola, the Senior Vice President of Viz
Gen Fukunaga, President and CEO of Funimation
Rich Johnson, Co-Publishing Director of Yen Press
Al Kahn, Chairman and CEO of 4Kids
Christopher MacDonald, Editor in Chief of Anime News Network
Lawrence Neves, the Editorial Director of Pokemon USA

The big news from this panel was Al Kahn’s amusing back-and-forth with Rich Johnson. In short, Kahn thinks all the creativity has leaked out of Japan. According to Kahn, toy companies have been spoiled by the success of Pokemon and want every property to be guaranteed that level of success. Japan, in turn, is making a lot of Pokemon-derivatives like Dinosaur King. The Dinosaur King cartoon uses the same Japanese voice cast as Pokemon (this was not mentioned on the panel) and it has been licensed by 4Kids (Kahn’s company).

Kahn’s comments have been covered elsewhere on the web, so I would like to point out my favorite part of this panel; Chris MacDonald of ANN dropped heavy hints about Viz’s total failure to stop the one website still fansubbing Naruto. Funimation CEO Gen Fukunaga and Al Kahn had no idea what MacDonald was talking about. Read on for more details…

Moderator Milton Griepp opened the panel by asking panelist to highlight the differences between the U.S. and Japanese markets. According to Lawrence Neves, Pokemon games and manga must be localized for a much wider band of distribution for the U.S. than it is in Japan. Things that were funny in the game in Japan must be changed if they are not funny here, or else dropped.

According to MacDonald, a success in Japan does not equal a success here. MacDonald encouraged the industry to look at the success of related merchandise in Japan and in the U.S. If you only look at downloads, you might miss what fans will respond to.

Rich Johnson pointed out that the manga market in Japan is very mature, whereas the manga market here is only eight years old. As the market matures, it will stretch to cover more areas.

Gen Fukunaga said his company sees a lot of cross-over success, but with caveats. Some genres don’t work as well here; moe shows and girl-oriented shows don’t sell well here. He specifically named Lucky Star as a hit in Japan which probably won’t sell as well here. Lucky Star is scheduled to be released by Funimation next year.

Al Kahn claimed that the number of anime series being produced in Japan is declining. He complained about producers there being uncooperative. He has a number of co-productions in Korea. Korea, according to Kahn, is more agreeable and he hopes to see more creativity from Koreans.

Kahn ranted on about how later Yu-Gi-Oh series fail to have Yugi as a character at all:

“Every time we get a letter from our kids they go ‘Where’s YuGiOh [Yugi]?’ and I go back to Japan and go ‘Let’s put YuGiOh back into Yu-Gi-Oh.’ And they laugh ‘Ha, we’ve moved on from that!’ It’s like taking Pikachu out of Pokemon! I think there’s a real systemic problem in Japan… We as a company have walked away to some extent from Japan.”

Kahn went on to plug 4Kids original property, called Chaotic, which features a card game, a cartoon show, and an online component. It will hit stores in January.

“I think if you’re big in manga you should be looking elsewhere, because it’s going south,” Kahn added.

Liza Coppola countered Kahn’s remark saying that “Manga is not dead.” When Viz looks for a property to import they look at content and the storyline. “Content is content,” Coppola said. Great content can come from anywhere.

Rich Johnson jumped in, eager to respond to Kahn, recalling the sad state of the American comics industry in the 1990’s, and saying the industry is cyclical. He brought up the death of Superman in the 1990’s and contrasted it with the present “Could there be a richer time for graphic novels that you can remember?” Johnson asked.

From there on out the panel proceeded like a senate hearing.

Kahn: What has Japan done for me lately?
Coppola: Uh, Naruto?
(4Kids is missing out on a slice of the Naruto pie.)
Johnson: Graphic Novels! Borders! Shelf space!
Kahn: What drove Spiderman? Graphic novels? Or four movies that have grossed over a billion dollars?
Johnson: A combination…!
Kahn: Without the movies no one would care.
Johnson: But it’s a great adaptation…!

Johnson firmly believes in the boom in books, but Kahn’s game is merchandising and licensing. This stuff is about 25 minutes into my recording, and it’s worth listening to.

Christopher MacDonald went into his theory about Naruto. Huge titles are driven by merchandise, MacDonald theorized, but smaller titles are driven by DVD sales. Merchandising is more important for your Narutos and Yu-Gi-Ohs:

“These companies will market these titles in very different ways. I’d like to give an example of a particular title that’s exceptionally popular right now that I’m certain must be making tons of money in merchandise. We were talking about the problems of downloading earlier… Yet here we have an exceptionally popular title where the license holder is doing nothing about fansubs on a website that it could easily shut down, because those fansubs sell merchandise. So when you have a very popular title the whole skew will change. I’ll allow you to figure out what title I’m talking about.”

At this point Fukunaga from Funimation leaned back in his chair to whisper to Kahn, “What is it?” You can hear him ask at about 29 minutes and 19 seconds into my recording. Kahn only shrugged – he didn’t know either. I couldn’t see the Viz representative’s reaction at the other end of the table. Gen and Al’s interaction was pretty amazing – they are so out of touch with fans that they could not immediately pinpoint MacDonald picking on the fansub group Dattebayo, the main source of all Naruto fansubs for the last two years. MacDonald had even mentioned Naruto earlier.

Griepp asked the panel about the lag time “window” between the U.S. and Japan. Kahn said that it’s not a problem for kids under 10, who don’t typically download. He emphasized the importance of localization to make things more appealing, but generally supported the internet as a way to get kids interested in properties. Again, it was ironic to hear Kahn emphasize the importance of localization – isn’t that why he lost the One Piece license?

Fukunaga said the ideal solution is simultaneous worldwide release. What’s standing in our way is the Japanese structure – shows are driven to TV stations just days before the air date. He mentioned international co-production as one solution, and aggressively going after pirates as another solution.

MacDonald agreed on the “simultaneous worldwide release” solution, referring in a sidelong way to Justin Sevakis’s recent ANN editorial. He encouraged putting digital versions of episodes online if a simultaneous DVD release is not possible.

“The only way to stop piracy is to make it unnecessary. When fansubs are no longer needed then anime fans won’t make them. But the only way to make them unneeded is to provide quick, free, accurately translated anime. Even if you put the DVD out the same day, you’ll still have bootleg DVD rips.”

MacDonald expanded on his point, saying that the market consists of consumers and collectors. Collectors collect DVDs, but consumers just want to watch anime any way they can. “The majority of today’s fans are consumers,” MacDonald said, “And they’re the ones you’re losing due to that delay.”

Coppola addressed the fact that Viz streams several shows on Toonami Jetstream online and sells titles through the iTunes store. Viz hopes to shorten the release window for consumer, and they are working to add value to DVDs by adding extras for the collector, like toys that come with the DVD.

The discussion of electronic distribution continued later in the “New Media Frontier” panel.