Answerman

Who Profits From Selling Old Stock Anime Discs?

Anonymous asks:

I've seen Right Stuff selling old anime dvds like Rozen Maiden, Legend of Himiko, and Hayate the Combat Butler owned by now-defunct North American anime Companies (Geneon, CPM, Bandai). Do those companies still get the profit when the dvds are sold? Does the original publisher in Japan receive all of the revenue? Does Right Stuf get any sort of profit from selling old dvds from former rival companies?

Right Stuf and many other specialty retailers often have still have big stacks of discs that have been out of print for many, many years and have not been reissued. Many of them are from publishers that are long out of business. They're often being sold for very cheap -- sometimes only a few bucks.

Many of these discs were bought from the publisher during liquidation. Liquidation happens when a company is either in a money crunch, or has to stop selling something for whatever reason. Rather than trying to get the full wholesale price for sales of that product, they'll cut the prices to rock bottom. Often the wholesale prices they sold for barely even covered the cost to manufacture the disc itself. But faced with the choice of making no money or making a little bit, they're choosing to make a little bit.

Liquidation can happen when the contract to a license runs out and that license is not renewed. Typically, a publisher has six months to dump whatever they've made onto the market, and after that they're legally no longer allowed to sell them -- the discs would then have to be destroyed. Other times it's because the company is in severe financial trouble or bankruptcy and needs as much cash as they can get as fast as possible, at any cost.

Many of these discs are from the troubled era of 2005-2007, when a combination of declining disc sales and bad business practices by both retailers and publishers resulted in something of a perfect storm. The publishers would print way too many discs -- more than fans could possibly buy. Their salesmen, desperate to make their sales goals, would push retailers to buy, buy, buy. Retailers would over-buy, and then return nearly all of the discs they bought, sticking the publisher with huge piles of discs and a lot of money to pay back. This practice is a huge part of what nearly killed the DVD business back then.

With the market saturated and, in some cases, the publishers closing, a huge number of these discs ended up in liquidation. As a result, there are a few titles from this era that, despite not being in print for almost a decade, are still plentiful and can be had new, in shrink-wrap, for only a few bucks each. Most of them are "singles" -- single volumes of long shows that only contain 3-4 episodes. Successfully finding the entire run of a series this way can be challenging, but is quite possible for some shows.

At any rate, these retailers already paid for this product, and if any money from that purchase made it back to Japan, that all happened years ago. This inventory has been sitting there, unloved, for years, collecting dust. Which doesn't mean they're bad shows, of course. Just that they've been available for so long that many fans have forgotten about them. Any money that retailer is able to get from them at this point is theirs to keep.

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Anime News Network founder Justin Sevakis wrote Answerman between July 2013 and August 2019, and had over 20 years of experience in the anime business at the time. These days, he's the owner of the video production company MediaOCD, where he produces many anime Blu-rays. You can follow him on Twitter at @worldofcrap.