Wednesday, January 16, 2008

Another Domino?

So NewType USA is put to bed and the question on the surface of it all, now becomes “did anyone see this coming? Well I’d be lying if I said I pegged it for this exact place in time. But what about the questions below the surface? Mainly the question of whether this new development is a direct result of the shrinking anime industry in the U.S. (yes, an industry can shrink while the market grows, it’s a symptom of something very wrong), or would this have happened regardless of the downturn in home media of which Geneon’s exit seems to embody in a singularity? Well, if you have been reading this blog you know that the answer is complicated and you’re in for some serious analysis which may or may not contradict what you already think you know, or have read elsewhere.

To get that easy one out of the way, I guess I did see this coming, but I must admit I had this called for much earlier. Attending the NewType USA launch party at the Tribeca Grand way back when the magazine first hit, I knew then that this was going to be a long shot. The event was hosted by Taeko Baba of all people, and the mix-mash guest list did little to facilitate anything in terms of generating what the magazine would need, and what these launch events are supposed to do. I did manage to get a few minutes with the person that ADV hired to run the thing. He had been head-hunted from Time Warner and probably not cheaply, and it didn’t take long for him to start lamenting the problems stemming from the pressure ADV was putting on him to land major advertising accounts like Toyota, Coca-Cola, and so on but at the time, the only advertisers in an Anime magazine were going to be other anime companies and the occasional niche textile ad. The problem was not that their head honcho was in one of those pessimistic moods that usually indicate they were thinking of jumping ship, the problem was that this was the LAUNCH PARTY of the friggin thing, and this was already happening. He was gone after a few months right back to Time Warner, replaced with someone from within ADV. Based on the high cover price, the obvious lack of impartiality, and the fact that there was a gap between the owners and the real world, and the fact that Viz’s Animerica had exited the field not too long before (admittedly that was because Viz had problems and not a result of a shrinking market), I was betting that NewType USA was going to be a flash in the pan at best.

NewType USA lasted a lot longer than what one would call “flash-in-the-pan” but I think much of that was due to some extended life-support by mommy and daddy. Let’s be real here, having a publishing imprint makes you very attractive to possible investment companies from overseas, and if you’re ADV in the early 2000’s you’re not having too hard a time, things are going well and you can get a hand in a lot of cookie jars. But once you rapidly diversify in such a way, something else comes into play. As an illiterate moron I used to work with once put it, “you end up spread thin like Napoleon” and therein lies a very possible future where it can all come crashing down. If the tides turn against you while you’re engaged in other areas, you have very little time to adapt your way of doing things before it snowballs.

So combined with a downturn in the Anime Home Media business, the sorry state of the US Dollar taking away Canada’s status as a printer’s paradise, increased competition from the more impartial and less expensive Anime Insider and Otaku USA publications, and the average age of the target audience shrinking which means less disposable income, and you are going to have a hard time keeping sales of a printed media that charges the most for what ANN basically gives out for free, in the black. The idea that NewType USA operated as a loss leader is something I would argue went on for a while if not the entire time, and is only now approaching the level of causing a serious problem, so the valve is being shut off.

What doesn’t this mean? It doesn't mean we're seeing the beginning of the end. The company is not in a fatal situation. ADV saw the perfect storm heading towards a ship in their fleet, then turned it around and sent it back to port to be dismantled before it was too late. If this is proof of anything it’s an indication of cautious confidence that ADV can see a potential disaster on the horizon and take action to prevent it regardless of who’s ego is going to get bruised. Make no mistake, some belt-tightening is going to be seen across the board and this one closure isn’t the last of it, but the more lines you can keep in water, the better you will survive the coming tough times. Getting ready to exploit revenue generating avenues while knowing where to cut your losses and move on from is the hallmark of any entity that lasts, and this move is, I believe, indicative of that. The old cliché of “print is dead” will probably never fully come true in the next few decades, but it will surely become more commonplace. The kind of features and information delivered by magazines about anime, will still be a lucrative commodity, but the delivery system will not be traditional. So we are in that intermission wherein print will continue to exist, but the technology for providing this media via on-line services with revenue generated either via advertising or subscription services is something that is anticipated as a next evolutionary step, keeping everyone waiting in the wings. How long will this waiting last? Well that’s one question I won’t be tackling.

There’s a lot more I’d like to write but I want to try something behind the scenes here first.

No, not this Domino.


Eeeper said...

Domino's are falling in rapid succession, Jim. Now ADV's ADvocates club program has been suspended. According to ANN, they'll still give screening permissions but that's about it.

Link to ANN

The Angry Otaku said...

Well the ADvocates club program was put on hold back in 2007, and it's really no surprise that it's not coming back. Although philanthropic, it really couldn't generate any tangible revenue and the cessation of giving away tons of free stuff is just one more notch in the belt tightening of fiscal conservativeness that I think is coming to ADV. If they're not careful, they may end up like other companies in hibernation, but they'll still be around.