2005 Year in Review
Industry

by Zac Bertschy, Jan 11th 2006
It was a busy year for the anime industry in America, as usual; tumultuous for some, prosperous for others, 2005 was the year we saw the playing field level off. As a whole, 2005 was largely shaped by what transpired in 2004, as companies adapted to a market that was no longer exploding in size.

Despite all the bad news of 2004, the only company to actually shut down in 2005 was Studio Ironcat, an indie label that had financial trouble for years.

Here's a look at how 2005 affected the industry at large.

A.D. Vision
Contrary to rumors that floated around the Internet for many months, ADV didn't go bankrupt and didn't shut down any of its major divisions, although their controversial decision to put most of their manga titles on hiatus until further notice is still stinging plenty of fans. The company also, unfortunately, had to lay off a portion of its workforce, close its Monster Island dub studio and move back to its old offices.

Still, ADV Films' re-release strategy – releasing entire series in thinpak boxsets – took off, selling very well in major retail outlets and online.

While the linear cable channel struggled, The Anime Network's video on-demand service continued to spread across the country, eventually proving to be a success for the company; in an interview, it was mentioned that the network was now ‘in the black’.

Central Park Media
CPM's year looked a lot like ADV's. Recognizing that the manga market had been oversaturated in 2004, the company was forced to significantly scale back its publishing, releasing less than 20 graphic novels in 2005, compared to 50 in 2004. With the decrease in publishing, the company was forced to let go of a lot of its publishing staff. The one thing that did do very well for CPM in 2005 was its Be Beautiful yaoi line. On the anime side, CPM only announced 1 new license in 2005, Kakurenbo. With the release of Shadow Star Narutaru now finished, CPM has no new anime titles to release. It remains to be seen if the company will begin to focus exclusively on other markets and catalog titles like Votoms, or if they will announce new licenses in 2005.

Geneon
2005 was a rocky year for Geneon; the biggest news from this company was their ill-fated partnership with Japanese media giant Toei, who entered the market with three titles: Slam Dunk, Interlude and Air Master. Geneon handled distribution and guaranteed a certain number of sales; when it was revealed that Toei's discs – which had had almost zero advertising - were of exceptionally low quality, the inevitable happened. Catastrophically dismal sales of all three titles resulted in a wave of returns to Geneon, which had to pick up the cost of the returns, which was no small fee. Toei, having ignored the advice of US industry veterans, retreated to lick its wounds, and may be looking elsewhere have its titles distributed in the US.

Still, it wasn't all bad news; Geneon aside for the disaster with Toei, Geneon's own year was rather quiet. Like ADV, they had to lay off a portion of their work force, but their release schedule does not appear to have slowed at all. In fact, Geneon has the fastest turnaround time in terms of getting new Japanese titles to the American market, and with more licenses announced in 2005 than any other anime company, Geneon has plenty of titles to bring to market in 2006, but releases don't guarantee sales and Geneon will be competing with the other companies for diminished shelf space.

Bandai Entertainment / Bandai Visual
While Bandai Entertainment's (BEI) biggest news was the recently-finalized merger of parent company Bandai Co. with video game giant Namco, arguably the most important piece of news out of the group was the announcement of Bandai Visual, a completely separate company designed to sell anime DVDs to the North American market under the label “Honneamise”. Named for the famous Gainax film from 1987 (Bandai Visual's first feature film), the label will concentrate on releasing Criterion Collection-level DVDs of famous and popular anime series. Notably, it has nothing whatsoever to do with BEI, the US licensing arm of Bandai Namco. Bandai Visual is directly entering the market, and going at it alone, without taking advantage of BEI's experience in the North American market, contacts, or distribution network. Perhaps this won't turn out as badly as Toei, but it certainly doesn't seem like the best way for Bandai Visual to be doing things.

FUNimation Entertainment
Funimation appears to be only one of two major anime companies (the other being Media Blasters) to steam roll through 2005 without any bad news. Earlier this year the company was purchased by Navarre Corporation for the tidy sum of $127 million. Funimation was only second to Geneon for the quantity of new licenses announced in 2005, and they're known to have many more titles waiting to be announced. Funimation's so-far-phantom TV channel, The FUNimation Channel, could be a huge benefit to the company if it gets off the ground.

Viz Media
Viz's merger with ShoPro USA created one of the biggest manga empires in North America, and judging by the bookscan charts, it was a wise move. Almost completely dominating the US manga booksales with the phenomenal successes of its Shonen Jump line, coupled with the launch of their new Shojo magazine, Shojo Beat, Viz came out on top this year in regards to manga. Exclusive deals with some of Japan's biggest publishers should secure their future for the coming year.

Viz Media finally announced the hot property Naruto, which many hope will be the next big thing that jump-starts the anime industry. In fact, the other companies are watching Naruto very carefully, hoping that its success will bring new fans to the market and that they two will benefit from it.

It wasn't all good news, though; long-time anime magazine Animerica closed its doors after bowing out with its final issue in July. The magazine's name is now being used on a quarterly special free publication that informs readers about Viz product; the new publication is available at media retailers, major bookstores and conventions.

Tokyopop
2005 was the year of OEL manga for Tokyopop. Shifting its focus to books created by American (and European and Canadian) artists, Tokyopop rejected the title “Amerimanga” and began pushing its in-house work as “OEL” or Original English Langage manga. Although a glut of OEL titles filled the racks in 2005, only a few of them were well-received by fans; otherwise, Tokyopop's most popular titles remained Japanese, such as Fruits Basket and Kingdom Hearts. The company will also be releasing titles under the Blu imprint, officially an independant publisher, which will focus on yaoi titles.

The company had planned on going public in Japan, but American market conditions – the highly publicized downturn in the market for manga and anime – appears to have forced the company to push its IPO back to a time when conditions might be more favorable.

Thanks to Viz and Del Rey's exclusive contracts - Viz having a monopoly on Shueisha and Shogakukan and Del Rey tying up Kodansha's properties - Tokyopop may have trouble securing top-shelf titles in the coming months, given that the top 3 manga companies in Japan are effectively stonewalling them. It's no wonder they're diversifying their output and looking to other content providers, rather than attempting to work exclusively with Japanese manga publishers.

Speaking of diversification, Tokyopop is expected to announce a new product line later this year, but details aren't yet available.

4Kids
4Kids, perhaps the most reviled company among anime fans, announced this year that they'd be releasing the hit pirate series One Piece. The resulting dub – a heavily localized version of the show with most of the violence removed, and new hiphop opening theme - was so poorly received that the show became something of a joke among fans, and for a time, the series' ratings on Fox's Saturday morning block were sagging – but all that changed when the show began to perform much better in hour-long segments on Cartoon Network.

With less than stellar ratings for 4Kids!TV, declining sales of Yu-Gi-Oh! products and the recent loss of the Pokémon license, it's no surprise that 4Kids stock value has fallen. But don't count the company out; they continue to turn a profit and have plenty of cash on hand and not a lot of liabilities, so the company can afford to weather the storm till they find their next mega-property.

Others

Musicland's bankruptcy filing was, arguably, the biggest shocker of the year. The company, known for its Sam Goody, Media Play and Suncoast stores, has been a major market penetration point for anime in America. The chain is now closing all of its Media Play locations (the future of Suncoast and Sam Goody have apparently not been determined) and has had major problems with inventory checks bouncing; it's speculated that any anime company that dealt with Musicland might be staring down bankruptcy themselves, if they were already in financial hot water to begin with.

A few format questions were raised, as well; Central Park Media hopped on the Video iPod bandwagon, and the upcoming high definition format war between HD-DVD and Blu-Ray continued. Which format will dominate the anime industry? It's a little too early to tell, but Sony's Blu-Ray format seems to be an early favorite.


Editor's Note: You may notice that many anime companies aren't mentionned in this article, The Right Stuf International, AnimEigo, Media Blasters, Del Rey, Dark Horse, AN Entertainment, etc... This is not because these companies aren't important enough to cover, but rather that these companies did not undergo any major shifts in their business this year. Essentially, it was "business as usual" for them, which in this market, is a very good thing.

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