There is a desperately-needs-to-be-written followup to the Steins;Gate post from this Tuesday. But first I need to talk about Section 23, what their releases are doing on amazon right now, and why that’s curious.
On July 8th, I started analyzing a big dataset of info on 38 anime releases due out the month of June 2016 – namely, daily values for the releases’ amazon rank and amazon price. All info used here is stored on the docs below:
Let’s start with the prices – how did they change while the month went along? Well, in all sorts of ways. There were 89 distinct price changes (technically 91 but 2 were just a change in Yona’s MSRP plus a discount that yielded the same net $50 price) of some kind for the releases in this dataset from May 22 to July 8th.
28 of these were what I would classify as ‘major’ changes, spread over 9 releases. That is, the release changed over 10% of its MSRP at once while the release was ranking in at least 4 digits (selling 10+ copies per day):
(2x) Psycho-Pass Movie BD/DVD [no $5 discount 6/30-7/3]
(4x) Fairy Tail p20 BD/DVD [blip no $6 discount on 6/25, 7/2]
(3x) The Girl Who Leapt Through Time BD/DVD RE [$15 discount on 6/28, 7/1-ongoing]
(7x) The Girl Who Leapt Through Time BD/DVD LE [14%-0% switching across the month]
(2x) Berserk Movie Collection BD [$14 discount removed from 6/5-6/9]
(2x) Boy and the Beast DVD [17% ($5) blip, down from 33% ($10), on 6/23]
(6x) Boy and the Beast BD/DVD [switching from 0% to 14% to 43% across the month]
(1x) Gaiking 1976 Complete [went from 0% to 28% ($17) on 6/25-ongoing]
(1x) Cross Ange p1 BD [43% ($27) to 0% on 7/7-ongoing]
13 more were what I call ‘semi-major’ changes, spread over 10 releases with one repeater from the ‘major’ set. Here, the the release changed over 10% of its MSRP at once, but was ranking in 5 digits or worse (selling less than 10 copies per day):
(2x) Wake Up Girls DVD [starts @ 45% off, goes to 27% on 7/1-7/4, snaps back to 40% off on 7/5-ongoing]
(1x) El Hazard Wanderers DVD [goes from 0% to 42% off on 6/16]
(1x) Lupin III Alcatraz [after grading from a 0% to a 30% discount over several days (6/8-6/12), snaps back on 6/23]
(1x) Shonen Hollywood s1 [goes from 0% to 22% off on 5/27-ongoing]
(1x) Psycho-Pass Movie DVD [17% off to 37% off on 6/24-6/30, snaps back to 31% on 7/1-ongoing]
(1x) The Girl Who Leapt Through Time BD/DVD LE [see above]
(1x) Berserk Movie Collection DVD [goes from 0% to 17% on 6/21, then fluctuates around that discount value]
(2x) Hakuouki Movie 1 DVD [from 0% to 16% on 6/28-6/30, then to 42% from 7/1-ongoing]
(2x) Yurikuma Arashi BD/DVD [23% off all days except for 0% on 6/23-6/27]
(1x) Dennoh Coil p1 DVD [0% off, then 42% off from 7/1-ongoing]
The remaining 20 releases out of the 38 had no semi-major or major changes in price, meaning they had starting discount values which they basically kept, with a few minor adjustments:
Wake Up Girls BD [45%]
Medaka DVD [44%]
Medaka BD [45%]
Twin Tail BD/DVD [0%]
Gundam ZZ c1 DVD [33%]
Gundam ZZ c1 BD [33%]
Yona p1 BD/DVD [23%]
Gundam X c1 [42%]
Rozen Maiden [44%]
Love Stage DVD [44%]
Love Stage BD [45%]
Space Pirates Movie DVD [43%]
Space Pirates Movie BD [45%]
Street Fighter New Challengers DVD [0%]
Yet the Town Moves BD [45%]
Cross Ange p1 DVD [45%]
Wixoss s2 BD [23%]
Hakuouki Movie 1 BD [45%]
Dennoh Coil p1 BD [46%]
One Piece c16 [0%]
So, basically, more popular releases were a lot more likely to play games with their prices in likely attempts to drive sales, while less popular releases stayed put price-wise. Section 23 titles were almost always starting and staying at 40+% off (13 of the stay-put releases were theirs, all of ’em with that heavy discount). Of particular note price-wise is the one that wasn’t, Cross Ange part 1 on BD. It held a 43% discount for months, snapped abruptly to 0% off 4 days ago, and has stayed there since. We’ll get back to that in a little bit.
Let’s touch on ranks a little bit now, since I bet most people look at all this data with one question in mind. Namely, “Are these selling enough?”
This is, of course, a very difficult question. While we’ve been given spotty droplets of information that puts some things in the ballpark over the years, a rapidly shifting industry with more competition in acquiring streaming and home video rights does make it difficult to pin down important variables. That doesn’t mean we shouldn’t try,* but it does mean you’ve got to be careful in how you estimate things and that it’s better to work on ballpark ceilings and floors than trying to h4ck your way to the @n5wer.**
So let’s start at the ground up. On a basic level, you want a product to make back what you paid to produce it (the actual market is a little more complex with tentpoles, calculated risks, and brand image factored in). And in a very basic framework, there are 3 sets of costs that go into making an anime Blu-Ray in North America – licensing, production (including subs, dubs, encoding, etc.), and the physical materials.
First, the physical materials. These sites offer independent BD production at rates varying from $1.40-$5 per disk, depending on the quantity of the order and the layering of the disk. In order to press 2000 BDs, a typical number for a small-scale North American release, you’d have to pay about $3*2000+$1000=$7000 to press those BDs at those pricing scales. Answerman gave this number as somewhere between $5 and $20 depending on the release back in 2015, so I feel like I’m in the neighborhood enough to go by, could call it around $10k if I wanted a higher number to work with here without being particularly naughty.
Fuzzy math bit #1: I’m taking these numbers to be roughly accurate. I justify this because the cost here is a relatively small percentage of the rest of the total I’m about to calculate.
For the production costs of a sub-only and sub/dub, I’m using the baselines offered by the Time of Eve Kickstarter in mid-2013 ($4500 and $12500 per 25 minutes of anime, respectively).
Fuzzy math bit #2: The Time of Eve numbers may not be typical, but they’re definite and available, Also, the fundamental tech involved in making a computer disc involved hasn’t changed much since 2013, so insofar as they were maybe sort of typical then, they still are now. There is some independent validation that a dub costs about $8k/ep.
So, $4500*12=$54,000 for the production costs of a subbed TV anime season. This may be less valid for rereleases (i.e. Medaka Box and Rozen Maiden in June), where the translation script is already done.
Fuzzy math bit #3: I’m going to ignore licensing costs, set them to zero. I justify this because these series I’m going to be talking about are not fetching top dollar in the open market unless the bidders are trying to lose their jobs. And also because the prices themselves are always changing, more so than the other parts of the equation.
Anyway, this adds up to about $60,000 in production costs for a low-tier North American BD release. The MSRPs for a freshly available 12-episode box of eps ranges from $50 to $70, so we’ll use both ranges. Since US companies only make back about half of the MSRP per box, they’ll need to sell about 1700 to 2400 copies lifetime while holding that 50% value line. This is, again, without any licensing costs factored in.
To hit 2000 BDs sold in 1 year, assuming sustainable tails, you need to be at an amazon rank of about #25,000 (the equivalent of selling 5.5 copies/day). Looking at how the June releases stacked up, only 13 of the 38 I tracked were meeting that pace as of the 10th, and they were the series doing well to begin with.
Gundam ZZ c1 DVD
Gundam ZZ c1 BD
Gundam X c1
Psycho-Pass Movie BD/DVD
Fairy Tail p20 BD/DVD
TGWLTT BD/DVD RE
Berserk Movie Collection BD
Boy and the Beast DVD
Boy and the Beast BD/DVD
Cross Ange p1 DVD
Cross Ange p1 BD
Dennoh Coil p1 BD
One Piece c16
Even excluding rereleases and tougher-to-pinpoint DVDs, there were 8 distinctly new BD releases which didn’t meet this mark as of July 10th:
Wake Up Girls BD
Twin Tail BD/DVD
Yona p1 BD/DVD
Love Stage BD
Space Pirates Movie BD
Wixoss s2 BD
Hakuouki Movie 1 BD
Yurikuma Arashi BD/DVD
So if companies need these releases to consistently hit those already-lowballed targets, they’ve got a problem. Strictly speaking, they don’t, at least necessarily; tentpoles and brand image didn’t stop being important in the 500 words since I last mentioned them, some distributors sub-license out to Europe, etc. But it’s not supremely great to have a majority of new releases in that position. Frankly, that whole subject is a column in and of itself,*** but I make this statement here primarily to highlight that, whatever problem this poses weighs heavily on Section 23 releases making only two-thirds the gross per sale of their competitors – half of $40 is a painful degree less than half of $60 in this context.
But what if that’s not what’s actually happening here? While it’s entirely possible that this amazon pricing thing is Section 23 getting beat up for being a small distributor, this might be amazon’s response to a growing problem in their system. I know it didn’t always used to be the case that all anime releases were this discounted. What changed since then? A number of things within the industry, sure (including amazon’s own entry into the distribution fray ). But amazon itself is also facing new challenges that come with trying to maintain its position as a dominant retailer.
For a big-time retailer like amazon, shelf space is a valuable and increasingly scarce resource. So it’s important to keep things moving. On the flip side, it’s important to keep things in stock that consumers in various niches might want, lest they take their business elsewhere in the aggregate after one too many times where they couldn’t get their copy of Love Stage on launch day. That is no idle reference – the ‘bought together’ list on Love Stage’s page lists some of May and June month’s best-selling anime (Kuroshitsuji, Kamisama Kiss). Plus, first-week consumers are the more engaged ones likely to be buying lots of anime.
The solution, then, that meets both needs, is to stock these new releases while keeping pricing effectively cost-of-shipping low and supplies accordingly liquid. Hence, we see this glut of 40%-46% price cuts that never rise to 50%, for releases that are priced in the much more normal 20-30% range at other major websites. Cross Ange part 1’s BD dropping the discount fits within this – maybe it sold enough that what was left could be sold off at the full price without much consequence, or it was now seen as liquid enough to play maximization games with.
If this is the case, Section 23 is exploiting the systematic weakness of a bigger company to fund their own lesser titles. Doesn’t have to be the only reason for it, either, amazon could simply be trying to price competitors like RightStuf out of business on newer releases, in which case it will likely be a temporary blip in the market no matter how that works out.
Or maybe S23 -is- getting worked over big time on their cut of amazon-based sales as I originally thought. It might not matter if most S23 low-tier anime find their homes via independent retailers/convention booths, likely to not be tracked and maybe not represented here. It should be noted amazon was indicative for Vampire Hunter D, which was an S23 release. But there’s too much we don’t know to say anything for concrete. It is, at any rate, a fascinating situation to me as an outside observer.
*It bothers me personally when entities of any type try to control the narrative without being transparent themselves. It’s one thing to respect self-interest and the need to keep vital information private. That’s life, and I want to emphasize that that’s not a bad thing, though it can be difficult for sincere fans and people whose job it is to bridge the PR gap. It’s quite another to try to pull the Braun/Armstrong on people speculating and/or investigating into these things. It’s the same kind of self-interested move, but it’s an ideologically inconsistent attempt at claiming the high ground. If you really don’t want people speculating, if you really want agency in that narrative, put your own damn cards on the table. Otherwise, it’s going to happen regardless of who does it, albeit as a unfortunate consequence of a reasonable choice on your part.
That applies regardless of whether you’re denying things based on 100% truth not. Denials without specificity and detail create a culture where people in a similar position can perpetuate falsehoods with little to no risk to themselves. Specific information allows people to fact-check claims, which is why it’s important.
**Obviously, everything I’m saying about fact-checking and methodology and ideological consistency applies to me as well. As a rule, I’m a less reputable source than anyone with actual access to hard insider data. And anything I do that is inconsistent deserves to be pointed out and fixed.
***Coming sometime ‘soon’.