Forum - View topicAniplex's Pricing Point: Can it be justified?
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Dessa
 Posts: 4438 |
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I've been thinking a bit on Aniplex's price point, and, specifically, people justifying the price of the KnK DVD set, and I need to get out my thoughts (since this isn't really on the subject of solicitations, I've put it as its own thread so this doesn't go off-topic for that thread).
The biggest argument I've seen is "They're movies, you'd expect to pay more. Movies cost $30 each, you're getting a deal only paying $150 [after discount] for them!" Let's look at this. Obviously, this being America, the comparison is to US Hollywood movies. Which means there's a few problems with this comparison: 1) Budget: A Hollywood movie is, most likely, going to have a bigger budget. Which means they need to bring in more money to make a profit. Most (if not all) of this money is brought in by ticket sales, but it's brought in on DVD/BD sales as well. I only see $30 home media releases for 2 reasons: a) the movie is stupid popular and people will pay the premium for it, or b) the movie still needs to make back money, and they're hoping the higher price for fewer sold will get it back. And this leads to the next point: 2) Pricing Point: While I have seen Hollywood movies going for $30 rarely, most seem to be about $25... for a BD release. DVD releases are rarely above $20, and often in the $15-20 range, occasionally even only $10 (when they're on sale). So the "$30 for a Hollywood movie" doesn't even make sense, when you're comparing a DVD set. 3) Length: Most Hollywood movies are 2+ hours, with them occasionally coming in at only an hour and a half (90 minutes). Let's look at the length of the KnK movies (as given individually by Wikipedia): 1 - 48 minutes 2 - 58 minutes 3 - 56 minutes 4 - 50 minutes 5 - 115 minutes 6 - 59 minutes 7 - 121 minutes So, basically, we have 2 that are of "movie length", and 5 that are half to 2/3 "movie length." So, assuming a $20/movie price, and taking into account the length of these movies... 1 - $15 (assuming a 90-minute minimum "movie length") 2 - $15 3 - $15 4 - $15 5 - $20 6 - $15 7 - $20 That's a total of $115. We'll say that the box, OAV, and extras add on maybe another $25, and you're at a pre-discount price of $140. That's $50 less than Aniplex is asking. It's still pretty steep, especially compared to comparable anime releases (Broken Blade, a 6-movie series clocking in at 300 minutes, is $60 retail, over half of KnK's 532 minutes for 1/3 the price). |
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Blood-
 Bargain Hunter Posts: 23773 |
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In terms of trying to get a handle how over-market value AoA has priced its KnK DVD-only, sub-only Limited edition set, I think your Broken Blade movie series release by Sentai is a useful comparison.
KnK is a Limited Edition and has almost twice the running time of Broken Blade. However, Broken Blade is offered on Blu-ray and it is a hybrid, meaning it has a dub. Knk MSRP: $200 Broken Blade BD MSRP: $70 So, as you can see, KnK's MSRP is almost 200 per cent higher than Broken Blade's. I can assure you that AoA's production costs for its set aren't anywhere close to being 200% higher than Broken Blade's. So is AoA's price for KnK justifiable? Absolutely. They are a private business operating in a free market economy. They are justified in asking any price they please. You as a consumer are justified in reacting in any manner you wish to their asking price. If you buy it, you are justified in doing so. If you buy it, as I likely will, but hope that AoA eventually withdraws from the NA market so that other R1 distribs have the chance to distribute Aniplex titles more cheaply in the future, you are justified in feeling that way. If you'd like to buy the title, but feel you can't justify the expense, you are justified in feeling that way. But I know what the intent of your original question is and the answer to that is that while there is no "objective" reason that justifies AoA's KnK price (i.e. production cost, fear of reverse importation, etc), it is justified because nobody is being forced to buy it if they don't want to. This is business. AoA will either be rewarded for its assumption that they can put out the title at that price point and make money or they won't. The market will decide (although as a wholly owned subsidiary of Aniplex they are more sheltered from market forces than fully independent distributors like Funi and Sentai are - but that too is simply business). |
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jsc315
 Posts: 925 |
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Very good point but isnt that more of a case were fans of these show will more then likely pirate them then? These companies can complain all they want they are not making enough money but not making it reasonable price it just going to push people to steal the show more so.
I understand Blood- point but it really is a backwards way of doing business in the U.S. But I don't think I need to explain they why the Japanese business model is broken. But if you will indulge me for a moment I will explain. The anime industry works in Japan is from a time back from the VHS/Beta Max days when new copies of a VHS was nearly 100$ or more because of how the market worked back then was that the vendors knew that rental stores would buy them to rent them out to their stores and the only money they would make were from die hard fans and rental stores since VHS was still a very new thing back then. This is pretty much the same model the anime industry in Japan has used for decades now and has just recently in the last few years have been adapting to new ways of making money. |
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larinon
 Posts: 992 Location: Midland, TX |
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I don't think the argument of money spent per minute of movie is something that is worth arguing. I tend to value quality over quantity myself, and most people don't decide to purchase one anime over another simply because of price. Either they want the show or they don't want it. Whether they have the money to spend at that moment is a different matter entirely. I can see purchasing a cheaper release over a more expensive one if the person wants both but only has limited resources available at that moment, but that doesn't mean they won't come back at a later date and purchase the remaining one.
So let's make up some numbers since we're speculating already: Scenario One Quantity Supplied: 3000 units Price: $150 ($125 before reseller's markup) Cost to Produce & Deliver each set: $50 Quantity Demanded: 2000 units Revenue = 125*2000 = $250,000 Cost = 50*3000 = $150,000 Profit = $100,000 Scenario Two Quantity Supplied: 500 units Price: $400 ($350 before reseller's markup) Cost to Produce & Deliver each set: $80 Quantity Demanded: 1000 Units (Sales = 500 units) Revenue = 350*500 = $175,000 Cost = 80*500 = $40,000 Profit = $135,000 So in Scenario One they overestimated the number that would be sold (as many companies do) and as a result they have reduced revenue from what they might have expected. Then in Scenario Two they can increase their profit while at the same time taking less risk by supplying fewer units -- specifically a number of units smaller than the expected demand, guaranteeing that they'll sell all of the product produced. Also notice that even though more revenue was received in scenario one, this does not correlate with profit, which is what drives these companies. |
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Blood-
Bargain Hunter Posts: 23773 |
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@ larinon - your example goes to the heart of the importance of price points with respect to maximizing profits. Price too high and you lose profits by scaring away potential customers. Price too low and you are leaving money in consumer wallets that might have been yours if you'd been a bit more daring.
Determining the "sweet spot" is not a science, although I'm sure businesses wish it were. My own completely unscientifically supported opinion on AoA's price points is that I think they are losing profits by scaring away potential clients. I base this assumption on two other Japanese companies that established NA outposts and tried out the "high price/low volume" sales model: Geneon and Bandai Visual. Both operations eventually withdrew from the NA market. And that was back in the pre-Burst Bubble days when NA consumers were more conditioned to paying higher prices than they are now. I'm hoping AoA follows the Geneon and Bandai Visual examples and withdraws. No, that's not quite right: my first hope would be that they bring their prices into line with NA market norms, but failing that I hope they get the hell out of Dodge. |
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Kruszer
 Posts: 7983 Location: Minnesota, USA |
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Justified? No, there's no excuse for them to price like that. (EX: Sentai's Broken Blade or Towanoquon releases as the OP suggests.) Will it be paid? Sadly, yes, if the demand for a sufficiently popular show is high enough people will pay it.
I also agree with Blood- that from how the other companies who tried similar business models did, I don't expect AniplexUSA to be long lasting business force in the states. Not to mention the total obscurity of their products doesn't help them much either. Sure they have some good shows, but you can only buy their products on one or two random websites, so lack of exposure is also an issue. Some fans of these shows might not even be aware they are licensed and that they could buy them. |
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Jon182
Posts: 105 |
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I don’t think the horse needs any more beating. I just have to chuckle when Blood mentions a free market economy. Such a thing doesn’t exist ,anymore than unicorns do.
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Blood-
Bargain Hunter Posts: 23773 |
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I assume people are sophisticated enough to understand there is no such thing literally as a "free market economy" but nonetheless understand the sense in which I mean the term. |
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PrecisionCrab
Posts: 215 |
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I thought it be redundant of me to post in this thread at first, but I figure there's no harm since this thread practically asks for it.
That said, most of my previous arguments have already pointed out, so I'll simply support those. In short: No, it cannot be justified. AoA can go f**k themselves until they grow a few braincells. |
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Jon182
Posts: 105 |
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I never did claim to be sophisticated. I understood the point you were trying to make perfectly well. I just find the faith people place in self-governing markets to be misplaced. I seem to recall back in economics 101, there was mention of rational behavior and logic dictating the choice of cosumers. Well, as has been proven, cosumers are not rational.
I’m sorry if my post came off as slightly snarky. It’s just a pet peeve of mine when people talk about market forces and economics as if they were a science, as opposed to theory. Plus, I’m pissed off about my internet services and the problems created by Bell and Rogers vis a vis government sanctioned duoplies. |
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Jon182
Posts: 105 |
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I never did claim to be sophisticated. I understood the point you were trying to make perfectly well. I just find the faith people place in self-governing markets to be misplaced. I seem to recall back in economics 101, there was mention of rational behavior and logic dictating the choice of cosumers. Well, as has been proven, cosumers are not rational.
I’m sorry if my post came off as slightly snarky. It’s just a pet peeve of mine when people talk about market forces and economics as if they were a science, as opposed to theory. Plus, I’m pissed off about my internet services and the problems created by Bell and Rogers vis a vis government sanctioned duoplies. |
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Blood-
Bargain Hunter Posts: 23773 |
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Actually, your post came off more douchey than snarky. You remind me of "that guy." You know, "that guy" who, if someone says, "Canada is a parliamentary democracy" gets a knowing smirk on his face and says, "Really? You think Canada is a democracy? How naïve." All because he once took a Poli Sci 101 course, so now he knows how the system *really* works, man.
All I meant when I said that AoA is a private business operating in a free market economy is that it operates in an economy where there is no central planning committee telling it what it has to charge for its products or any legislation that restricts what it can charge. You rather dubiously claim to understand that, yet somehow my innocuous comment sparked some bizarre thought process on your part to conclude that I was inferring that economics was a science or that consumer behaviour is dictated by logic and rationality? Huh? Well, my psyche is not carting around a handsome set of Douchey Vuitton baggage like yours obviously is, so I guess there's no real reason for me to understand. Yeah, I took a Psych 101 course when I was in university, but I'm not going to pretend that doing so somehow imparted some incisive knowledge to me that lesser mortals don't have access to. Ergo, I'll not attempt any theories to try and understand your psychology. Oh and my sincere condolences on that nasty Bell - Rogers sitch. |
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Sailor S
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Well Blood, look at the bright side to AoA's pricing. At least this way it's quicker to get to TRSI's free shipping for you Canadians. Just two sets and you're there! How's that for justification for ya?
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Blood-
Bargain Hunter Posts: 23773 |
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 Excellent point!
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Jon182
Posts: 105 |
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@Blood
Thank you for your sympathy. I think my bags of douchey Vuitton are getting lighter.  What I took issue with is the idea that the "market will decide", which to my mind is close to the idea espoused by some economists, with regards to a self regulating economy....which was probably not your point.
As for the science part, I was referring mostly to Larinon’s post about price points. I’m glad that he said that they were based on speculation, whereas many economists speak as if they’re quoting gospel when citing economic formulas and showing off graphs and pie charts. Sorry for the double post, it's hard typing posts on your smartphone(for me at least). I do agree that my grasp of economics is probably not that great. Nor do I believe that simply because I took some economics classes in university that I understand everything. I just find it amusing that so many expert economists got it wrong when we look at the state of the global economy. Which makes our analysis of Aniplexes’ pricing point a little absurd and humorous, as armchair economists. Who knows? Perhaps my posts are incomprehensible. Carry on. |
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