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The Manga Industry Speaks: Taking Stock in Tough Times

As part of our recent editorial about the upheaval in the manga industry, ComicsAlliance had a chance to speak with some of the most influential tastemakers working at American manga publishers today, and their answers were so frank and informative that we thought they deserved their own feature. We asked Ed Chavez, Marketing Director for Vertical, Inc, Michael Gombos, Director of Asian Licensing for Dark Horse Comics, and Marco Pavia, Tokyopop’s Associate Publisher, four questions regarding the practices, status, and mission of the publishers they represent, the state of the manga industry in America, and what they see coming in the future.

ComicsAlliance: How has manga piracy impacted your business, beyond the obvious? Has it made it tougher to acquire licenses or properly market titles?

Michael Gombos: Some people attribute “Berserk”‘s success to the fact that it was so heavily scanned and disseminated before its legal release. But, yes, Dark Horse has the same problems with piracy as any other publisher…. I think that fans, given the opportunity, will pay for it if it is available. I have talked to so many people that didn’t know that scans were illegal. If I had a nickel for every time I heard, “So wait, that scan I have been reading of (insert title here) is illegal?” I’d have retired by now.

Ed Chavez: Piracy has hit Vertical hard. Many of our books are not on the mainstream, so logic would say that we would be immune from it. Unfortunately, with our books online pirates go beyond the norms of fan translations by literally scanning our books including covers and copyright pages for people to distribute online. Our numbers are not huge to begin with, so when we see hits on scan sites that are many times larger than our sales figures we are mortified.Others have argued that scans can be used to promote lesser known titles. Well in our case when pirates start scanning our books, we immediately see drops in sales. And in two cases where we got scan sites to comply with our cease and desist requests, we have seen sales go up to their previous numbers in the months after the pirated pages were removed from the web.

Piracy has complicated things for us. We try to avoid titles that are heavily scanned online. There is just no way for us to compete with free; even with our production values. We have looked at sales data for licensed properties that were previously scanned and we can see the trends. Quite often they do not project well, leaving American publishers with tons of extra stock. So instead we have to be vigilant and we also have to be very smart with the titles we do select. Thankfully there is plenty of content available overseas, so that has not been too much of an issue.

Marketing has not changed for us as we do not market to the pirate; we market to a wider audience. But at the same time I can say that because my staff reads Japanese we never have relied on scans. We let our books speak for themselves and more often than not they find their ways to get into homes.

Marco Pavia: I don’t think the obvious — if you are referring to a loss in sales — should be overlooked. Piracy not only affects Tokyopop’s business, but many of our partners, too, including retailers, artists & writers, distributors… Not to mention these illegal scan sites are making boatloads of money on advertising revenue. I saw one such site was in the top 1,000 of all sites around the world. Its impact with our licensing partners in Japan is significant — obviously artists and writers are losing money on royalties from sales; and I just read that last year alone Japan saw a more than 6% drop in overall manga sales, and a nearly 10% fall in the manga magazine market.

And the marketing of titles that have been illegally published on scan sites is challenging; when we preview manga on our web site — with permission from the rights holder, of course — it’s not as much an event if it’s already been up on an illegal scan site, where plot lines are exposed and spoilers are given away. However, we definitely want to be sensitive to the fans who love to read manga. Without question, we need our the support of our Japanese licensors to help our industry offer a reasonable alternative to these fans who want to read and absorb as much manga as possible.

CA: Has Dark Horse’s approach to publishing changed recently?

MG: We’ve just tried to really single out what we’d like to do. There might be three great titles we’d like to publish, but in some cases, we’ll have to think about how much our infrastructure can support, what other titles we’d have coming out around that time, and perhaps pay a little more for the rights to the title we REALLY want out of three, and focus on that.

In life and in publishing, you can’t be everything to everyone, so we’d prefer not to take that approach with manga… I’d prefer to sell the title and not the publisher, as fans read titles that they want to read, not because they’re from a particular publisher, but because they like the titles. I remember when we announced “BLOOD+,” and was reading some forums about fan-response. A couple of posts read something like, “I have never heard of Dark Horse, but I love ‘BLOOD+,’ so I will be sure to check it out!” and I was thinking, “That’s what I want. At the minimum that’s what I want. If they haven’t heard of us, that’s fine. They like the title and I want DH manga to be-title driven.”

This isn’t Abercrombie & Fitch. We’re not selling a lifestyle here. If people buy the product and realize Dark Horse is doing it, and say, “Oh, cool, DH is doing this!” then that’s just the cherry on top.

CA: Has Dark Horse taken any steps to weather the economic climate and rocky territory in the manga industry of the past two or three years?

MG: Absolutely. About four years back, we went through our titles with a fine-toothed comb, basically parsing up our entire line and looking at what worked, and what didn’t. Naturally, this meant that we had to end a few series [like] “Reiko the Zombie Shop,” along with most of our horror line, and Harlequin. Simply calling off a few titles was still a significant portion of our line, as DH Manga hasn’t ever really been a volume-driven publishing line. That is, volume-focused publishers probably had a dozen big money earners, but were faced with having to balance those against the hundred other titles that didn’t work out. This one of the reasons I believe that sales of Dark Horse manga are up 13% compared to this time last year.

We also had to re-evaluate our prose line, as well. I remember a few years back when [the] “light novel” was being bandied about by certain parties (and interestingly enough, non-publisher side) like it was the next big thing… I thought it was a bandwagon people were hopping on, and I believe that ultimately, that was the case. We have done quite a bit of Japanese prose, and “Vampire Hunter D” is one of the strongest-selling anime/manga-attached novels, but it’s an anomaly.

…We knew that we needed to narrow our focus not to a particular genre, but to a particular set of titles. We took steps to reinvigorate our classic lines, that have legions of devout fans, and bring new readers into an already strong core; “Oh My Goddess” and “Blade of the Immortal” are prime examples of this… We knew it wasn’t the best time to be experimental; if we had apprehension about a title’s commercial viability (even if it was, critically and artistically, the greatest thing ever made), we wouldn’t pursue it. It wasn’t that type of time.

We focused our energy on evergreen titles as well as classics (above) like “Lone Wolf and Cub” (Dark Horse Comics’s best-selling title of all time), “Hellsing,” “Trigun,” “Berserk,” etc., and supplemented those with some new, A+ releases, specifically the “Blood+” manga franchise, and “Gantz.” Working with Shueisha has been great; people told me to give up on “Gantz” when I started here, so naturally, I made it my mission to see A) an English-language edition of it and B) have said edition be released from Dark Horse.

Additionally, we focused some energy on producing high-quality artbooks from Japan, which I am responsible for acquiring the rights for as well, and those sold extremely well. We’re very close with [Yoshitaka] Amano-sensei, and his books have always done great for us. Releasing the “Final Fantasy: Dawn” art book in a slow month was just one way that we kept things sustainable throughout that year. Our art books continue to do well for us, and if you haven’t checked out the “Blade of the Immortal” art book, you are really missing out!

…It’s always a good thing when you see titles put on hiatus creeping back, too. “Eden,” “MPD Psycho” and “Ghost Talker’s Daydream” are prime examples of this (and “GTD” releases soon!) They were legit titles, but just hard to see amongst all the flotsam and jetsam on the shelves in 2007-2008. It’s good that orders on these picked up, and now they’re back!

CA: Tokyopop has suffered a number of losses and setbacks in the past few years, but seems to be bouncing back well. What changes has Tokyopop made to adapt to the new manga publishing and economic climate?

Marco Pavia: When the economy went south toward the latter part of 2008, and a number of our retail partners were experiencing intense financial challenges, we were hit hard by low sales and high returns — the returns were the bigger issue. We’d seen declines in sales before, but the amount of returns that were coming back from retail was significant. We had to make a number of tough decisions, including narrowing the focus on our stronger selling titles and on our core business; the result was publishing fewer books, which, unfortunately, forced us to lay off some very talented people.

Also, the impact of illegal scanlation sites should not be ignored, and recently, Tokyopop joined an international coalition of publishers to combat illegal piracy on the internet. Finally, we needed to be more creative with our marketing machine, and this year, we’ve been focusing our efforts on a grass-roots level, taking Tokyopop on the road nearly 15,000 miles across the nation to more than 25 cities, in which we’re meeting our fans and celebrating the manga lifestyle and Japanese pop culture.

CA: Vertical publishes a variety of manga, from Osamu Tezuka masterworks to titles with more niche appeal. Has maintaining this diversity been difficult in a market that seems to revolve around blockbuster hits?

EC: Not really. Vertical has had its share of hits in the past. We debuted as a company with Koji Suzuki’s “The Ring” (which was adapted into a Hollywood movie). And our recent release “Chi’s Sweet Home” is an internet sensation, and in only a few weeks is already becoming something of a hit. So we are not strangers with dealing with the market from all angles.

However, what we are aware of is how diverse the readers are for the types of books we release… While we will continue to have challenging niche properties like “Peepo Choo” and “Lala Pipo,” there will most likely be unique looks at modern Japanese culture like “Nintendo Magic” and “Parasite Eve” (the basis of the hit PlayStation video game) along side to balance out our catalog.

So even if Tezuka’s “MW” may not be the next “Watchmen” or “Naruto,” we understand that there are comic readers that hunger for more Tezuka. Therefore, we will make certain that our editions will satisfy them in almost every way possible. From our packaging to our translations, whether the book is from Tezuka or from our puzzlemaster Tetsuya Nishio, we make sure these book stand up to our high standards. And I think readers appreciate that.

CA: How would you characterize your publishing line? Is there some aspect or feature that every book needs in order to fit the imprint?

MG: There really isn’t. Naturally, in Japan (and to some degree in the States), merely having the term “dark” in your company name suggests that you would be doing, well, darker manga. And let’s be fair — Dark Horse does do quite a bit of horror-related titles (both in manga and American comics) and some extremely gruesome stuff, as well. But that’s not all we’re about. I don’t subscribe to the idea that there should be a [single] manga title that pops into mind when Dark Horse is mentioned as a company.

Also… I never liked the idea of cross-promoting or coat-tailing manga unless it made sense; for example, the question or statement, “Do you like manga?” or “I like manga,” is really just the same as, “Do you like movies?” and “I like movies.” You’d be find hard-pressed to find someone that hated movies, much less someone who didn’t watch them at all. Summarily, I don’t think that, since they’re both manga, “Crying Freeman” and “CLOVER” should be sold together. Yes, we do them both, and yes, they’re both manga, but so what? You’d be better-served putting backlists in “Sin City” for “Crying Freeman” than in “CLOVER.” That’s one of the things I like about DH, the versatility. So, I suppose that strides were made to de-characterize DH’s manga line. On our manga books, the logos are small an unobtrusive, just like our American comic trades, and that’s something I like.

MP: [Tokyopop] has a solid teen-and-up fanbase, and from a publishing perspective, we look for compelling characters — the ordinary striving to do the extraordinary — who speak to our fans and us. We’ve been very successful with shojo — “Fruits Basket” has been an ongoing bestseller for us — and have some great shonen titles to compliment our list. We’ve also thrived with our brand-licensed original manga, such as “Return to Labyrinth” (the Jim Henson Company) and “World of Warcraft” (Blizzard), as well as our originally created IP, such as “Princess AI” and “Bizenghast.”

EC
: [Vertical's] comics tend to have the same tone as our novels… These comics cover everything; including a wide range of genres and themes. They are challenging, clearly laid out and very smart works. For the most part our comic catalog tends to focus on seinen comics. These are comics for mature and sophisticated readers. And while the characters and settings may occasionally skew younger, by simply reading the comic art (specifically the paneling and composition) it will become clear to the experienced comic reader that even our cute kitty comic “Chi’s Sweet Home” has much more to it than meets the eye.

CA: There are a few Dark Horse titles available online across a variety of platforms. Will we eventually see titles like “Gantz” or “Lone Wolf & Cub” on mobile or digital readers, or are there issues preventing that?

MG:
To say that each title is specific to that licensor would be an understatement: on some projects, there are as many as seven different rights holders, and many of them have designs for what they’d like to be doing in regard to the digital aspect, so it’s really impossible to answer this question piecemeal. We’ll be doing what we can to offer our titles digitally.

CA: Tokyopop has already begun dipping a toe into the online arena with the publication of OEL manga through Zinio. Is this a first step toward a larger digital presence? Will Tokyopop be embracing a more mobile platform, like Android phones, iPhones, or iPads?

MP: We have plans to publish across all platforms; we’ve just scratched the surface with Zinio and Overdrive (digital distributor for libraries), and in the not-too-distant future we’ll have plenty more titles available. At Comic-Con we just launched our “PRIEST” iPhone app, which will have updates with new and exclusive content regularly leading up to the feature film release next May. We received a great response to the app at Comic-Con, which is definitely seen in the amount of downloads during its first week of availability.


CA: Do you see Vertical moving into the digital distribution arena? Would the theoretically lower costs of digital distribution give Vertical a chance to publish manga that maybe wouldn’t survive in print?

EC: Vertical entered the digital comics realm last winter. A number of our Tezuka titles are available for purchase on the iTunes AppStore through an app called “AstroBoy Magazine.” Many of these titles have been successes for us in print, and we with our license partner Tezuka Productions are looking to see if the increased digital exposure will improve sales for some of the weaker properties and maybe build a market for merchandising and other forms of media. We are also speaking with Sony about comics on the PlayStation Network.

However, while traditional methods of publishing see lowered costs through digital distribution, the same cannot always be said about manga. Manga in general is a licensing game. Most digitally distributed manga tend to not be licensed. Instead these are original properties American companies developed and published. When a localizer wants to distribute a licensed manga digitally they often need to pay for a separate license and that new contract comes with a new set of terms and higher royalties.

So while the comics do not need to be printed, there are still other costs that come into play (such as file fees, file conversion costs…) if there already is a print version. When there isn’t a print version there biggest costs –licensing, royalties, translation, file fees, lettering, editing, distribution and marketing — are still there. Printing is usually only 10% of a book’s costs; the rest of the fees make up more than 50%. (And with digital royalties alone tend to go up 5 to 10%).

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