Why Do Anime Discs Go On Clearance?

by Justin Sevakis,

Andre asks:

I always scour discount video bins for anime when i get the chance. Stuff from the 00s boom haunts them, with old Geneon, ADV & Funi discs to be had for cheap. But I've noticed some stuff never turns up, like Media Blasters, Honneamise & those Toei discs Geneon distributed never pop up in brick & mortar clearance bins. Did some stuff have really low print runs even in the boom? Or is there a landfill or warehouse full of unwanted Galaxy Angel Rune dvds out there? What do japanese licensors think about liquidated stock popping up at Dollar Stores? Is there a reason Sky Crawlers & Cyber City Oedo pop up so often?

Anime publishers have gotten very good at anticipating demand, and only manufacturing enough copies of their new releases to sell through -- that is, actually get bought by an end-user. The lower prominence of brick and mortar retailers means that far fewer discs need to be sent to far fewer places compared to the days of ye olde anime bubble -- for most titles, a few shipments to Right Stuf and Amazon will cover 70% of your potential sales. Minimum print runs on DVD can be as few as 500 units, and Blu-ray is still only 2,000 units (and far less for reprintings). With runs that low, you're not spending very much money, so if they don't sell immediately, there's no big emergency. You can just sit on the extra stock until a retailer asks if you have any shows you want to put on special.

Liquidation is failure. If you see discs being liquidated, it's because one of two things happened: either the publisher GREATLY over-estimated demand for the show and printed way, way too freaking many, or retailers greatly over-estimated demand for the show, and returned a ton of discs back to the publisher. Either way, the publisher got screwed, and gave up trying to make any money at all on them. They're blowing them out the door for next to no money. They're not making back much more than the cost of manufacturing the discs (~$1 per unit). Which means, they took a loss on everything else. Japanese-owned companies are usually so embarrassed by the prospect of liquidation that they'd rather quietly dump the extra inventory in a landfill than have their product show up at Big Lots for $2.99 each.

Sky Crawlers is almost certainly one of those. Sony Pictures is not a big anime distributor, and so they have a harder time gauging potential sales than a company who deals with this stuff every day. I would bet money that whoever was in charge of the title went, "oh! A big-budget action sci-fi action anime by the director of Ghost in the Shell! This will sell about 150,000 units!" Whereas someone who actually knows anime and watched the film would doubtlessly say, "hmm, a slow, talky art-house drama that will only appeal to intellectual anime fans, this will sell 2,000 units or so." It's the sort of film that Funimation probably wouldn't have even bothered to bid on.

Cyber City Oedo is another matter entirely. I was at Central Park Media when our license to that show was running out, and for reasons I was not privy to, it didn't look like we were going to be able to renew it. CPM was struggling at the time, and the show was a decent seller (or at least, the closest thing we had to a decent seller left to release), so it was determined that we would try to wring every last penny we could out of the show: first, we would release each 40 minute episode on separate discs. Then, after some time had passed, we would release all three on a single disc, for a reasonably low price. And then we'd make a ton of them and blow them out during the six month sell-off period that comes at the end of our license term, where we're not allowed to make any more, but we can sell off what we have.

"This is called 'scorched earth.'" company president John O'Donnell told me. Basically, this way we would collect every single penny we could from the show, and there'd be enough copies floating out there to make sure fans could always get their hands on one for cheap, long after our contract (and the company itself) ended. Additionally, this was a way to really stick it to the licensor, who might be under the impression that they could pull the title, sit on it for a year, and re-sell it to another publisher for a decent up-front license fee. With the show so cheaply and freely available, nobody would bother to license-rescue it. I have no idea whether CPM actually got a decent amount of money from this strategy, as I was long gone by the time it came to fruition. But sure enough, Amazon still has "The Final Collection" in stock for $4.99 as of this writing -- nearly seven years after CPM went out of business. I am somewhat doubtful that this tactic is used very often by any other publisher.

Hopefully, you won't see anime being liquidated. It's fun to go bargain-hunting, but most of the time it happens, it's a sign that (hopefully minor) bad things happened to the publisher. I wouldn't feel any real guilt in partaking of the bargains -- after all, the publisher has already decided to cut their losses by the time it shows up for cheap -- but it's hard for me to take too much glee in seeing signs that an industry colleague has tripped up.

Got questions for me? Send them in! The e-mail address, as always, is answerman (at!)

Justin Sevakis is the founder of Anime News Network, and owner of the video production company MediaOCD. You can follow him on Twitter at @worldofcrap.

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