The UK DVD Market – Sorry, how much?!

It’s been a few bumpy months since the last DVD article I wrote was published. Some anime disappeared from TV. ADV went down the pan and then came back again. ADV also held one of the biggest and best sales ever seen (which also broke the internet). You could say that while we left 2007 on a high, 2008 got off to a crappy start. But anyway, let’s put all that behind us and move on to today’s topic.

Now, in my last article The UK DVD Market – Why the wait? I attempted to shed the light on why the big delay between markets. I thought this would have been enough for you motley bunch, but oh no. Evidently there are still some problems with the DVD’s for sale on British shores. To you, the UK consumer, there are three main areas in which the market is deemed to be failing. These are; Availability, Time Lag – which has already been covered – and pricing. So today I’ll be looking at the biggest problem facing the UK market today; price.

This seems to be a recurring theme on the forums and in discussion in general. Obviously the weak dollar makes other markets seem oh-so-tempting, but that’s about it. When you compare prices in context (crucial word here) they are relatively the same. Still, that doesn’t stop most of us opting to buy from overseas. So, once again, I’ve donned my detective hat and dusted off my magnifying glass. It’s time to go get some answers.

Now the best place to look for said answers are from the industry itself. I decided to pester the lovely people at Beez Entertainment and Manga Entertainment to understand just how they come up with those RRP’s we all love to hate.

Q – Do you think it’s valid to compare the UK anime DVD market to the more mainstream DVD’s? For instance, comparing [Gunbuster 2 (31/3/08) or Bleach Series 1 part 2 (25/2/08)] to say, 300? which can now be bought for under £4. Is it fair for fans to criticise a niche product like anime to mainstream Hollywood block busters?

[Andrew@Beez] Well I’d argue it’s fair to compare them based on them being the same medium for release, distribution and retail. The same standards should apply, but given the niche market size at present in the UK we need to apply certain criteria for success that mainstream DVDs do not (such as lower sales targets, how long ago the title was available in the US, how long fansubs have been available for etc etc).

Is it fair for fans to criticize a product like anime and for them to compare it to mainstream DVDs? *chuckles* That’s a difficult one, I’m sure many inside companies would argue it isn’t – but then again as a consumer you have a right to compare to other industries and complain if you feel things are being badly handled. It’s a good way to help companies improve!

That being said, what isn’t fair is if you’re not willing to consider why certain things are different. Take the difference in price between 300 and Cowboy Bebop. Both in their genres are high sellers, the difference? While 300 may sell into the +10k units for 1 DVD release, with the latter you will be lucky to make that on all the units sold added together in the UK!

It’s that kind of difference that allows the price to be discounted, if you can guarantee an army of over 300(0!) are willing to pick up your DVD on launch!

[Jerome@MANGA] It is unrealistic to compare the anime market to the mainstream film DVD market for a number of reasons. Primarily, the film DVD market is run by the big Studios and independents such as Sony, Warners, Universal, Pathe, Icon, Lionsgate, Optimum, Momentum etc. Their releases are selling in the hundreds of thousands if not millions, whereas most anime DVD releases are lucky to shift 2,000-3,000 units in the product’s lifetime on average. The retail price is really a reflection of the overall volume of sales and the pressure put on the supplier from the retailer. Also, the retailers are always competing for that sale, so they also heavily discount their retail price. E.g. Bleach Series 1 Part 1 has a suggested retail price (SRP) of £24.99, but most stores were selling it on the week of release for between £17.99-£22.99!

When a title like 300 sells over 1 million units during the full price window (generally the first 12 weeks of release) it doesn’t hurt the studio to lower their price after they have passed that mark. In the past 6 weeks since 300 entered the budget chart Warners has sold another 305,000 copies of 300. They will probably sell another 500-600,000 units this year alone at £4.99. On the other hand, Naruto Unleashed Series 1 Part 1 which is a 3 disc box set with 13 episodes in dual language and one of the best selling anime DVDs of the past several years sold about 7,000 copies at full price, and another 15,000 at campaign price (between £12.99-£9.99).

I understand the consumers point of view. When they see a huge title like 300 or Spiderman 3 for £5 they may well be wondering why Manga is asking them to shell out £12.99 for Naruto the Movie? However, when it comes to box sets such as Bleach or Naruto Unleashed, I am pleased to say we are offering the best value for money out of all the anime labels in the UK. A 4-5 episode single disc release from ADV or MVM etc will retail around £15.99. That’s £3.99 per episode. Whereas we are selling Naruto at £1.92 per episode. You can’t really argue with that.

Q – Both Beez and Manga have [Gundam Seed (31/3/08) and Naruto The Lost Story (3/3/08)] coming out soon, can you give us a rough breakdown in the costs involved, bearing in mind you are in this industry to make money.

[Andrew@BEEZ] Ouch, difficult question here! As at present we’re trying out several different forms of release (with more news to come on that soon ).

In general however, the cheapest element is actually getting the DVD pressed (depending on the number you need) and the most expensive being the actual cost of the series per episode! The in between stages such as converting NTSC master tapes and acquiring materials like subs and dub materials from other companies.

BBFC costs are also high with the requirement to submit both versions.

[Jerome@MANGA] • BBFC fees: £6 per minute for reviewing the content plus a £75 surcharge on every disc submitted. So, for Naruto Unleashed we are submitting 3 English language discs and 3 Japanese language discs with subtitles. That’s 13 x 30 minute episodes x 2. You do the math.
• Marketing is in the region of 10-15% of the overall projected net revenues per release.
• Authoring fees cost between £1,000-£1,500 per disc.
• Creating subtitle files from the Japanese to English script is in the region of £5 per minute.
• Other costs include manufacturing, packaging, warehousing, shipping, picking and packing, returns fees, royalty payments to the Licensor etc

It sure ain’t cheap. This is also one of the main reasons why smaller anime series are not acquired for the UK. The costs are so high, that there is no hope in hell of even breaking even on a lot of it. Naruto is great, because even though the costs are high, there is a very good chance we will make some money on every release. There are also other ways of saving money such as sharing production and authoring costs with another PAL region distributor like Madman in Australia or Kaze in France. But, this is always not practical or necessarily allowed under our agreements with the Licensors in Japan.

Q – Are the BBFC really the evil villains that most fans perceive them to be?

[Andrew@BEEZ] Personally I don’t think their villains, I just think they got caught out once when they OK’d one version then found the second one to be a higher rating. Ever after they have had to check both to be safe.

We had a classic with one of the IGPX volumes where we were told we had to take a 12 for the DVD due to one use of the word “retard”. We also received an email of exactly what swear words we could get away with and just how many times they could be used before it would be a rating up etc!!

It is however a major bugbear when producing DVDs, with a system like in the US things would be a lot easier for everybody really it has to be said!

[Jerome@MANGA] No, in one way the BBFC provides the UK home video business with a valuable service. It is illegal for a UK based retailer to sell videos and DVDs that have not been classified by the British censors office. This protects our industry from parallel imports from Asia, Europe and North America as those releases do not carry the BBFC age certificate on their packaging. However, when you are only likely to sell several thousand copies of an anime DVD release, it seems like an unfairly high expense to pay in relation to the size of the audience it will reach.

I personally do not agree with this kind of censorship, but plenty of other people would disagree with me. I am a parent myself and I think that my attitude is likely to change as my son gets older and starts watching movies and TV and playing videogames. I do believe that we are obligated to submit the English VO and the Japanese VO with English subs as separate films because the subtitle script is often very different to the English language voice over script. Dubtitles can have their benefits in this case, but I know the fans hate them.

Q – Everyone knows about importing cheap DVDs from America. Do you have anything planned to try and tempt the importers back over to UK purchases?

[Andrew@BEEZ] Why yes we do! We’re taking several approaches – all of which you will see over the first half of 2008. Two of the three I can talk about in more detail just now!

Despite the general view, we’re not blindly chasing profits hence not pricing our products at the same rate as the US when you run it through a currency converter. At their prices often we would not be able to sell enough units to make back the cost of the DVD production and license, let alone actually make any profit!

However we have been able to provide UK fans with something special for the release of Gunbuster 2. Instead of the US release of $39.99 per volume, 3 volumes, 2 episodes a DVD – we will be releasing it in a digipack for £24.99 RRP. Whilst I personally understand why it was released in that style in the US, we believe the UK fans will appreciate a more European approach to the release instead!

The second method we are trying is because often it is impossible to match conversion rates to individual volume prices – we aim to offer the fans something extra for their money on boxsets. Instead of a barebones release at an expensive price – we will be charging the same as usual for 2 half sets of Gundam Seed.

The first release will contain:

• Volumes 1-5
• A solid artbox
• A Gundam Seed T-shirt (L)
• A Gundam Seed artbook

The second will contain:

• Volumes 6-10
• A solid artbox
• A Gundam Seed board game

As you can see, we’re going the extra mile for fans in the UK as our way of thanking them for sticking with our releases. These extras are unique, you won’t have seen them in the US, Japan or anywhere else!

The third method…well I can’t say too much about it without giving away what the title is. But let’s say we’re looking at bringing the best extras from the US over for the UK release…

All these methods will be tried and we’ll see what comes out as doing well – obviously if they don’t perform well we’ll have to sit down and consider what can be changed next time though!

[Jerome@MANGA] The most important thing is to try and close the window between Japan – America – Europe release dates. I believe fans don’t have a problem paying a premium price for their DVDs if they want to buy them as soon as they are released, especially if the UK release is close to the American release. Also, as is the case with our release of Naruto: The Lost Story OVA (Mission: Protect the Waterfall Village), we have been able to include a never before seen 17 minute Naruto short that has never been seen outside of Japan! So, exciting bonus material and exclusives can also help combat the cheap foreign import. I also think that our packaging is much nicer too.

Q – any comments for the fans/customers you would like to put forward?

[Andrew@BEEZ] I’d like to say simply thank you to those who are buying our titles at present! And to those who aren’t, I understand that in a free market you are tempted by the weak dollar at present but hopefully our newer releases as mentioned above will tempt fans into giving us a go

[Jerome@MANGA] Thanks for your support. 2008 is going to be a bumper year for anime. Don’t let the doom and gloom from the States concern you. All of your favourite series and films will get a UK release one way or another.

So there you have it folks. Right from the horses mouth. Hopefully these questions will help some of us understand just how things in this industry work. I know there has been a lot of guessing and assumptions flying around, so hopefully this can help us all move the industry that tiny bit forward. To be honest, i think 2008 will top last year and we will move from strength to strength.

But it’s up to you, the buyer, to decide with your hard earned Sterling as to who you’re going to back. People complain about companies closing, titles not getting released or cancelled and that they always get released in America, but never here. Well lets change it. Buy titles here, make the UK market more lucrative for companies. If no one buys anything here, then why should companies like Beez and Manga bother? Just to give the guys a little boost, i went and ordered both of thier new releases. At full price. And now i feel all warm and fuzzy inside.

Don’t agree with what’s been said in this article? Beez and Manga both have a permanent place on the AUKN forums. Check these links out to get your questions answered. [Beez Entertainment Discussion]

I would like to thank both Andrew and Jerome for thier contributions to this article.