Monday, April 25, 2011

With apologies to Richy Jelica: Shared Psychosis of the TokyoPop aftermath

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Don't get me wrong; Some people are insane, some people live in a super-intense subjective reality of such mind boggling proportions, that they can see things that apply to them and their version of reality in every every potted plant in the universe. But then there are more subtle manifestations of such things, specifically the group-think common among American anime fans. Not only are these behavioral incongruities to reality not very visible to many, of those that do easily notice them a good portion do nothing to assuage these facilities because in fact they have a vested interest in their perpetuation. For this group, the vested interest is tangible such as revenue, market share, brand equity, etc. For the fans/masses however the barriers of this group-think are much stronger, because they are a self-imposed defense mechanism, shielding their soft personality matrices against the sharp uncompromising rocks of true objective reality.

Even without going into the extreme examples; religious wackos, birthers, and Mac fanboys who will never admit that Apple has become the totally Orwellian entity it portrayed in their "1984" commercial, and still defend a non-existant brand identity created by an advertising agency, it's still easy to see these defense mechanisms of the ego in action when people are confronted by them. Unfortunately this ease in observation is almost always comes with the codicil of having to have an outside perspective to begin with ie a non-Mac fanboy will see this and utter "duh" while the mac fanboy will instantly try to legitimize this inappropriate corporate behavior as totally cool or no big deal.

Add to this equation the ignorance of youth, and you get the kind of reaction that is happening in much of the otaku community when it comes to analyzing Tokyo Pop's shut down. For those of us who are literate in not only anime fandom but also corporate governance/asset management/business in general we know the correct way to look at the situation is from a perspective of fiscal fundamentals first, and only after that can we then superimpose the various unique operational maxims of the anime/manga market as they exist in N. America. Too many people have put the cart before the horse, and simply assumed that the industry was wholly profitable in the first place, because the books cost money. In a business where sell through operates as a merciless iron fist, consistent sales do not necessarily mean a company is healthy (believe me, I've been there). As a third party entity and not an IP creator, Tpop always operated in the chasm that would have been eventually closed by vertical consolidation the likes of which is what Shonen/Viz and Kodansha Vertical currently embody the late proto-form of. Once technology and market understanding are better at a management level, these entities will be able to close the window of opportunity for scanlation piracy and publish multi language versions very close together. They could have never sold the company off, because all the "assets" (which were licenses) had an expiration date on them... so the rate of depreciation is simply too massive to be reasonable.

Don't forget there are politics involved here too. As a 3rd party content licensor, there are licensees to keep happy. When these licensees are steeped in a Japanese business mentality, it's tough to satisfy them, because there will always be an impasse in seeing eye to eye in regards to what "doing it wrong" consists of. This is the only spot where the bulk of my experience is a bit different to what Tpop was dealing with, in that the Chinese were very easy to deal with; it was wham-bam-thankyamam, you signed the deal, they cashed the check, and you never saw them again. And if we were lucky and didn't fuck up (which happened almost always) we'd make enough money to post a profit and pay taxes on it, let alone operating expenses. However, there a lots of parallels do exist in terms of distribution pillars falling down hearkening the doom of the industry (Borders for books and Musicland + Tower for DVD... even Ingram had to get into the beer distribution business since DVD and Music was such crap in terms of the bottom line).

Ego Ego Ego. Everybody thinks their shit don't stink. They think because they like "manga title A" that it "sells" and would make money for the company. They think that since Tpop announced that it was going to put manga volumes online but didn't, it's a bad business decision and maybe the license didn't even cover doing something like that, because now that content can be accessed by mobile devices. This blinds them to the presence of a monster that is always sitting in the corner, and it seems only the outsiders can see this thing (which shouldn't be the case, but for the self imposed blinders of fandom). It's name is opportunity cost, and its bite can be fatal when inflicted on small companies like Tpop with cash flows that are susceptible to things like sell-through and other ongoing variables. Just because you bought it, doesn't mean it generates revenue for the company. ...Crystal Pepsi anyone? - Without looking at Tpop's financials, it's impossible for anyone (even me) to accurately formulate a good picture of what kind of shape things were in one way or the other. That's where the pitfall of overvaluation caused by inflated self-worth (I like manga and I am a customer, so therefore the company must be doing well) comes into play. It's easy to make assumptions that anime / manga companies are some sort of profit-machines, but where does that idea really come from? Fans who don't realize that $14.95 for a DVD is of licensed 3rd party localized content is such a low price, that the company can't function like that unless the sales are close to the millions of pieces.

All in all, this was a conservative business decision that made sense on paper and had a reasonable probability of being accurate. To throw reality into sharp relief to the ANN Cast; Tokyo Pop could have NEVER stayed in business as a book publisher because the event horizon of printed manga as a loss leader has been passed. That means manga is the dog and unless you have a business sector other than manga publishing that can be your cash cow, it's the end, plain and simple. This also happened in the DVD market (Mike Toole, I'm waiting for that Crash piece so people know what I'm talking about...) prompting the departure of many home media imprints a few years ago. It is a ridiculous assumption to "hate Stu Levy" because at it's core, such a notion has to make the incorrect assumption; that Tokyo Pop could have survived as a publishing company. No, I will call it sour grapes because all you are complaining about in really, is having your fandom-feelings hurt because your value as a fan has been called into question. I've been guilty of this myself and will probably never truly be able to keep myself from feeling bits of this kind of thing in the future. It's just human nature, but it's important to step outside your own emotional sphere in cases like this. The ANNCast mentioned notions of cutting the CEO salary to retain the "best people" on staff...? But for how long? Nowhere in the future was there an indication that the profitability is going to rebound any time soon, which will allow you to stop doing that and start paying everyone normally again. The ANNCast later mentioned that such an ides makes no sense when you think about it. So rather than run out of gas in the middle of the highway, Tpop made the calculated decision to drive to the dealership and trade it in for the best deal they could get. People feel betrayed, but in all honesty, you're not that important, and neither am I... Neither is Bill Gates unless he's an investor, because if you're a wage slave or a billionaire you're still just one sale of one book (again, unless you're an investor but that's a different post altogether). You can either go crazy with the subjective reality like this guy, or just deal with it. The downside is so many fans have chosen the first option and haven't even noticed how crazy it is since they are surrounded by so many people who think the same.

NASHUA UFO? ...yes, yes it is.

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