[darktruth]

Geneon Exits American Anime Industry
Geneon USA has officially informed retailers that as of 5 PM PDT this Friday, September 28th, the company will cease all DVD production, sales, and distribution.

All Geneon USA DVD titles scheduled for release after November 11, 2007 have apparently been canceled.

Link

Damn, this sucks. They had announced the license for the OVA of Shakugan no Shana a few months ago with a box to fit all the DVD of the TV series and now it looks like it won't ever happen. I thought Geneon was one of the good companies as I liked quite a few of their titles and dubs. I'm just hoping the second season of Shana and the rest of Kyo Kara Maoh gets saved by being picked up by another company like Funimation or ADV.

[Lynk Former]

The first thing that came to mind is...

WHY?

But then it is obvious why. It is a company and a company can't survive if its business isn't profitable...

Well, now, now... I wonder WHY anime isn't profitable for Geneon USA anymore... *looks around* I'm sure everyone here can give me the obvious answer.

Some people are saying that this is the beginning of the end of the anime market in the US... I wouldn't be surprised if it is.

[darktruth]

I'm curious if this will affect Madman down here as they have a few Geneon titles they licensed (I think) but haven't released them yet. I guess we shouldn't worry too much though as I recall Madman seems to get their licenses directly from the Japanese companies, only that it seems they may have to release their Geneon titles sub only. They're in the middle of negotiations with Tokyo Night Train/Magna Pacific on releasing the rest of the first season of Shakugan no Shana that TNT started. I'm hoping things goes ahead as it'd be a shame for a series like Shana not make it here.

You guys in the US should buy any of the Geneon DVD's pronto if you had plans to before they go OOP, looks like prices will skyrocket for a lot of the R1 Geneon series.

[Rach]

it's strange somehow to see companies like that closing by this time in the US and companies here in brazil growing up with anime dvds.

well, too bad about the Shakugan no Shana set =/

[Lynk Former]

I don't think it's strange at all, I mean the anime market down here in Australia continues to grow rapidly and we're connected to the US market in terms of English dubs and distribution, etc.

I think the biggest clue as to why Geneon USA is closing down is in its catalog. When you look through all the animes they have, you can see that the kinds of animes that are in there seem to be more popular on the fansub side of things.

Now I'm not bringing up the whole "fansubs are evil" thing. But it seems like the imbalance and the abuse of all of this has finally taken hold, at least in a way that is obvious now.

[darktruth]

They could've been saved with the deal with ADV on releasing their titles a few weeks ago, but for some reason it fell through...there could be a number of reasons for that like the Japanese licensor pulling them back from it. Still...it's all speculation on why Geneon USA and ADV couldn't join forces to save the titles Geneon USA had licensed and ones they were in the middle of releasing.

[Lynk Former]

It seems that Geneon USA was dealing with ADV but then Geneon (as a whole) decided to discontinue Geneon USA and go another path. I think now the only way to save the titles is if ADV and FUNimation license them from Geneon Japan to continue distributing them in the US.... which makes sense.

[darktruth]

Here's an interesting info from a now ex-employee of Geneon USA posted over at the ANN forums.

Ahh, the ugly news is finally out, eh? Apologies, I just crawled out of bed.

This is basically what we all knew was going to happen from the start. I wanted to tell you all this, but an NDA is a pretty strong deterrent. But as Chris' linked cartoon said, the press release was worded as confusingly and misleadingly as possible. It honestly disgusted me. We'd finish producing what we had left on the table, and then just shut down.

Continued licensing? Sure! That is, issuing licenses to merchandisers and to overseas territories like Europe and Australia, for the remaining life of those licenses that Geneon holds. That's what the licensing group does. Business Development is the unit that negotiates licenses/coproductions with Japan.

I don't believe in karma, but the collapse of the deal really made me think about how we reap what we sow.

So, yeah...what does this mean? I've gotten a lot more pessimistic over the past month. And...I think I'll just leave it at that.

I salute my former coworkers at Geneon. We did what we were supposed to, and we did it well. We hit our targets, we pushed the envelope, we released great product, we loved the fans, we loved the shows, we got it done. It just wasn't enough.

And another that might shed some light on why the deal fell through between Geneon USA and ADV posted over at the AnimeSuki forums.

I thought this sentence from CoreMaster's post seemed significant:
"Geneon USA's parent company, the Japanese advertising firm Dentsu Inc., said that "from October 1, 2007, Geneon USA will focus mainly on management of its works portfolio."

It sounds like Geneon was having problems building up the marketing and distribution infrastructure it needed to operate effectively in the US. I'd guess that was a reason for the negotiations with ADV. The fact that ADV bowed out suggests that ADV determined Geneon's limited US assets weren't worth what Dentsu was asking. If, as Dentsu claims, Geneon will now focus on managing its portfolio, I wouldn't be surprised to see sub-licensing agreements with companies like ADV who already have the infrastructure in place to produce and distribute DVDs.

I remember when I was watching Black Lagoon thinking that Geneon appeared to making a strategic choice to develop works that could have appeal on both sides of the Pacific. Maybe they were just too optimistic about the size or growth rate of the North American market.

[Hawkeye]

What the fuck is wrong with this company..... First the British market and now the American....

[Moelman]

Seems pretty sudden. Do you think this will lead to more US companies pulling out?

[darktruth]

No, I don't think so. It appears that Geneon USA's demise stemmed from a mixture of things...loss of profits (they started jacking up the prices for their DVD's), its parent company Dentsu pulling the plug on them and ADV pulling out of the deal to distribute their titles. Pretty much seems like Geneon USA had no control over the main fact of Dentsu killing their company.

[Maverick]

things are never simple...

[Scar da Kookee]

so thats how i got all 8 volumes of Trigun on a buy-one-get-one-free XD

[Rach]

I think the biggest clue as to why Geneon USA is closing down is in its catalog. When you look through all the animes they have, you can see that the kinds of animes that are in there seem to be more popular on the fansub side of things.

Now I'm not bringing up the whole "fansubs are evil" thing. But it seems like the imbalance and the abuse of all of this has finally taken hold, at least in a way that is obvious now.

Well, for the first time in my life, the fansubs are the free advertising for the companies here. They launch the series and make then famous, and then, those go to the dvd catalog and people actually get to buy it. The greatest example here was Hagane no Renkinjutsushi. Everybody knew even the movie story. And when you go to local stores, the dvd set is always sold out! Oh yeah, and the manga was released as well.

[Briareos]

On another board focussed on what's becoming one of ADV's new successful titles, one the board members indicated that an ADV representative indicated the US distribution companies are now increasingly coming into competition with their Japanese counterparts who've got a sniff of the market.

Pioneer and it's bastard child Geneon made some rather bad marketing decisions, like not releasing the El Hazard OVA at a reasonable price until just recently. I don't think ADV, Right Stuf, or Media Blasters are in danger. ADV is out there actively influencing things and seems to have learned the lessons it needed to from its earlier attempts with things like SiN and BGC 2040. Right Stuf International has their purely distribution of other people's titles business to keep them afloat, and Media Blasters has been snatching up solid titles and doing decent releases at affordable prices like with Tekkaman Blade and MKR.

My only real gripe with any of them is ADV's habit of mysteriously dropping successful titles from their inventory with no comment. Examples include but aren't limited to: Nadesico, the Nuku Nuku OVA, Dragon Half.

[Lynk Former]

@ Rach: I'm aware of this, it's what happens everywhere else too. In fact, the anime industry everywhere else started that way. It took those old fansub groups to spark the interest and get this all started, and it's still a strong factor today.

The point I was making with Geneon USA and the types of anime they release is that a lot of them don't seem to be mass market or close to mass market potential titles. They're very "hardcore" animes that are suited to the lesser but more dedicated audience... it's hard making money that way, especially when you have people not buying the product because they've already got a downloaded version of it.

@ Briareos: To explain why ADV and other companies drop titles is because their licensing agreement has either run out or been revoked. These things don't last forever and once the contract is up, they'll have to renew the license or let it go... and some series aren't as popular in terms of sales as people seem to think.

[Analog]

I thought it was odd that the Geneon-ADV deal fell through, but I didn't realize that this would be the result. I'm guessing ADV is glad they backed out when they did now because if things were that bad at Geneon then they might have brought ADV down with them.

As it is, I don't see the anime industry dying here in the US... especially with all the live action movie projects underway. Probably just a bump in the road or perhaps a correction in the market for now.