Ken Iyadomi on Bandai Entertainment's Downsizing

Ken Iyadomi is no stranger to the American anime business. Having been at Bandai Entertainment since its inception in 1996, and VHS anime publishers LA Hero and Manga Entertainment before that, he's seen a lot of changes in the business.

Unfortunately, his latest announcement is one he'd rather not be making. On January 3rd, the publisher is announcing that it will cease to release new DVD and Blu-ray releases in North America, effectively ending its 13-year run in the market. The majority of the division's contractors and three of their five full-time staff members will be laid off, and all releases scheduled after the first week of February have been cancelled.

In a decision made last October, but only now becoming public knowledge, Bandai Entertainment's corporate parent at Namco Bandai Holdings made the decision to exit the American home video business. Iyadomi says he wasn't privy to the fine details. "The decision was made in Japan by the contents SBU (Strategic Business Unit)." That business unit originally included the video games division, but recently was merged with all of the company's audio visual businesses, including Sunrise, Bandai Visual and Bandai Channel.

But the broader reasons are quite clear from the outside. The physical anime business in North America has shrunk substantially over the last five years, and shows no sign of returning to its former glory. "A couple of times we were hit with huge returns, and the financial result was pretty bad," Iyadomi admits. Still, he believes the division might have been able to keep going for a few more years, had the SBU allowed it.

"The pricing range for our products kept dropping in Western countries, and people tended only to buy sets with very reasonable prices, which we understand is what fans want, but it lead us to a different strategy than what Japanese licensors wanted," he remarked. "So we always had a problem [with licensors wanting something different than what consumers wanted]."

For now, nothing is going out of print. Iyadomi is careful to point out that, while new releases will cease and three of Bandai Entertainment's five employees will be let go (as well as most remaining contractors), the company currently plans to keep its existing catalog in print and available until their respective licenses expire. (No new re-releases or re-packagings will occur, however.) Retailers can continue to order those discs the way they always have, and when stock is depleted, new product will continue to be manufactured.

The timing of the near-shutdown coincides with the final releases of Star Driver, Tales of the Abyss, The Girl Who Leapt Through Space and Mobile Suit Gundam (the new release of 0079 with Japanese audio), which means that they will all be released in their entirety. However, all releases after February 2012 have been cancelled. Three series that were announced last year, including Turn A Gundam, My Ordinary Life (Nichijou) and Gosick, will not be released and their rights will revert back to their licensors.

The third volume of Gundam UC's DVD re-release, which would have comprised episodes five and six has been cancelled; the fifth episode is not scheduled for release in Japan until May. However, this news does not affect the availability of imported Japanese Blu-rays of the series through amazon.jp, which have included English audio and subtitles produced by Sunrise directly. Also unaffected by the announcement is the Ghost in the Shell franchise: the Stand Alone Complex series is distributed entirely by Starz Entertainment's Anchor Bay line (bearing the "Manga Video" brand), while the feature film Ghost In The Shell 2: Innocence was a short-term sublicense from Paramount Pictures (current owner of the Dreamworks back catalog), and has already expired.

The manga division, unfortunately, will not be so lucky. Kannagi, Gurren Lagann, Code Geass: Renya of the Darkness, Mobile Suit Gundam 00I, Lucky Star Boo Boo Kagaboo and Tales of the Abyss: Jade In My Memories will all see their releases cut short. Their fate had not yet been determined at press time. "All we can confirm for sure is that those series are not going to be finished by us," Iyadomi says.

As a corporate entity, Bandai Entertainment will stick around, albeit in a very different form. The company will continue to sublicense its shows to internet and TV broadcasters, as well as for merchandising. "The function of Bandai Entertainment will change towards helping group companies as opposed to making profit ourselves. We will continue handling licensing and sub-licensing for digital, tv and merchandise for group company properties," says Iyadomi, adding that this new role might even involve shows that Bandai Entertainment never had access to. "Whatever group companies want us to handle, we will help them. Our purpose going forward will be like it was in 1996-1998, before we started doing physical distribution."

But at this point, little is set in stone. Only one thing is clear: the role of a distributor for anime in North America is changing, and some well-equipped licensors can now cut them out of the process entirely, if they choose. Japanese publishers can now create Blu-rays with English subtitles, ready to import to English speakers worldwide. While those won't sell as many copies as American-produced discs, the higher price point and lack of middleman can still result in a decent amount of revenue with little additional cost. Bandai Visual Japan recently discovered this for themselves with their release of Gundam Unicorn. "They found the results pretty good, and that's how I think they would like to move forwards," Iyadomi says.

And so, for Bandai Entertainment, its days as a publisher are drawing to a close. Facing a massive restructuring, Iyadomi remains grateful to the fanbase. "I would like to say thank you to all the fans that have supported us. Although we no longer have new releases coming up, we will still have the catalog, so we appreciate your continued support."

Bandai Entertainment's Most Successful Anime (in no order)

Bandai Entertainment's Most Successful Manga (in no order)