This Monday, ADV Films, a licensor of region 1 Anime announced that it would shut it’s doors for good and transfer assets to other companies. The announcement cause many people to be surprised and caught off guard. However this was expected because ADV Films for the past few years made several fatal mistakes that lead to the shutdown of ADV films.
So, what lead to ADV Films ultimately folding?
ADV Films was once a strong licensor and looked highly towards with the many successes with the dubbing aspect, but several mistakes they make caused them to ultimately cause them and their reputation to weaken in 2008 and ultimately crashing in 2009. The recession that worsen in late 2008 didn’t help either and made things a lot worse.
Ever since 2008, ADV had a bad year, ending up having to shut down the UK devision, suspending the Anime ADVocates program, ended the relationship with Sojitz (which may be the cause of not having enough funding, thus calling it the ADV Meltdown), and ultimately transferring 30 titles to Funimation since they aren’t able to continue distributing it.
On top of that, in early 2009, ADV flops again and said that Clannad won’t have a Dub which caused people to go in a frenzy and cause the reputation of ADV to go down even further, after they screwed up in 2008 with distribution of Anime availability. Lucky for them, Clannad actually sold better than expected despite fan reaction to no dub, but still didn’t stop the inevitable…
The problem with ADV is that a combination of mismanagement of their part and unable to meet the fan’s demands and giving them accurate information, it too contributed to ADV Films ultimately shutting down.
What mistakes have ADV done?
1. Not listening and informing the fans.
Besides from the negative reaction towards ADV for not providing a dub for Clannad, they never have a good system of informing the fans or even have any good communication by email. Another thing is that their website is hardly updated so fans could get accurate information.
Not to mention, ADV films for what I remembered never had a blog, unlike others. Funimation and Bandai Entertainment have one, so why not ADV? Perhaps they are too lazy.
2. Not providing accurate information
ADV is infamous of this for awhile. They pull the titles before they put the information back and also never give information about the schedule releases (going back with #1).
3. Decisions and Anime on DVD.
ADV seems to depend on listening users on Anime on DVD (now Mania.com) according to Zac Bertchsy, which is the worse possible way of deciding on what series to license/produce. (maybe too exaggerated, but they shouldn’t have depended on AoD too much)
4. Poor distribution and supply of DVDs and delays.
ADV also made this mistake… a lot. and they usually delayed various series with no explanation which was common in 2008 (aka ADV’s bad year). These delays, however cause negative reaction to fans, for example this post from the blog post of GAR GAR Stegosaurus… Great way to screw loyally paying customers.
5. Licensing more than they can handle.
ADV always seems to go and license a large amount of series and end up failing on a number of them. Instead of licensing a few of them and give them a quality release, they most likely do a wing job and just put it out in the market as fast as they can, which usually cause mistakes. This is also what contributed to their big downfall.
6. Depending way too much on Neon Genesis Evangelion…
and also ADV’s desire to make a Evangelion live action movie surely cooked up a disaster, which resulted in a big loss of money. You can only go so far with Evangelion…
7. ADV’s Mismanagement and Bad Business Plan.
If you have take a course in business, you know that the Business Plan. It’s what makes up your business and how will it operate. ADV took too many risky plans which resulted in a loss of money. Mismanagement on ADV’s part did not help either since they can’t seem to get the company on track and come up with a project that will be actually be successful.
What can Section23 Films learn from ADV’s mistakes?
Now since Section23 Films ultimately own all the companies that owned ADV’s assets, they need to learn from ADV’s mistakes and learn from them. They need to listen to the fans (through means of email, phone or even Twitter) and give accurate information instead of removing the listings and adding them again. Another thing is that they shouldn’t really take the suggestions from AnimeonDVD aka mania.com and figure out what would fans want instead of having a large number of failed projects. They also need to provide a well designed and regularly updated website with the latest information and also keep a blog on what they are doing. Lastly, they need to take their time on making a quality release instead of acquiring a lot of licenses and not being able to make a quality release.
Further Reading
What’s Happening with ADV Films – Anime News Network
Well, in the end, while I think it’s good for anime distributors to have good “fan relations”, their “downfall” was probably more about poor business decisions that resulted in an unmanageable debt load, rather than simple things like “poor communication”, “product delays”, and so on (things I’m sure they would have liked to improve on, if their company hadn’t been in turmoil at the time). The origin of ADV’s difficulties go further back than 2008; probably back to the collapse of the North American anime market. Section23 (and the glut of other companies that were formed to take over ADV’s assets) are just a way of restructuring things to eliminate the debt and get a fresh start. As long as they have a good understanding of what the current market can handle, there’s probably a way to carve out a niche, but it’s hard to do that when you’re saddled with debt from the past.
On a side note, you mention a few times that listening to the Mania/AoD audience was a root cause for their troubles. Out of curiousity, if you were an anime distributor, who *would* you listen to in the online sphere?
Well, they seemed to only listen to AoD/mania.com but thats not everyone in the anime fandom… There are other forums like AnimeSuki and also a large number of anime blogs and people on Twitter they can listen for ideas. The problem is, they rely too much on AoD and not the rest of the fandom… Also, ADV does not maintain any sort of communication like a blog or a Twitter account, so how you expect for people to give feedback… AoD again?
ADV is just like GM… they spend money in the wrong areas and also mismanage their business… from what I read, this have been happening way before the recession took full force, so it’s not a impact caused by macroeconomic activities, it’s just poor business decisions caused by their mismanagement and hubris (and their ego). If ADV Films followed Bandai and Funnimation”s example, they wouldn’t be in such a mess.
You know..I always thought that the downfall of ADV will be caused by their intention of doing a live action movie of Evangelion…
The project was too huge for them but all the things you said, just accelerated their downfall before even touching the drawing board for that movie. I wonder if someday We will see that. God Help Us if that happens.
@Toonleap
It’s alot more than just the live movie… lots more… I suggest reading the Further reading. Basicly, the meltdown caused after Sojitz broke up with ADV Films which cause ADV to split up their company since Sojitz was a hostile shareholder.
Re: ADV listening to other sites, blogs, and having twitter feeds and so on. Are we talking about today, or a few years back? I mean, even Funimation, the now-industry-leader, only started a blog within the last year, and Twitter only rose to prominence recently too. If we’re following the theory that whatever led to this re-organization is the result of events set into motion years before the killing blows, then you’re probably talking about at least 4-6 years ago, back when there were things like ADV Manga, the Eva movie that was discussed, and so on. Why did they need the Sojitz partnership to stay afloat in the first place? That’s why the five reasons are a bit “hollow”, so to speak; you’re sort of applying today’s “solutions” to problems from a “different era”.
And I’m quite sure that whatever you’ve heard re: them “only listening to AoD” is quite untrue. In fact, there’s no shortage of ADV critics around those parts, and their advice and requests were not often heard. They were by no means going by their license list either. Like all anime distributors, ADV had people who read all the major sites and followed all the forums — people who were wherever the fans are. But it’s a matter of knowing how to interpret the data. What people on the Internet say they want and what the market actually buys are often two different things. And both of those are probably different than what the distributor is able to license and produce for a reasonable price. Running an anime business is hard.
I think you’re giving ADV’s presence at AoD a little bit too much credit for their bad business decisions and consequent downfall. I stopped lurking on AoD’s boards around 2004, but for the few years I did keep up reading regularly, I thought it was a good place for ADV to get feedback. AoD up until that point was the place ADV got feedback to determine stuff like eps per disc count and packaging, and it was the regulars there that got ADV to get rid of bad practices like using overlays in favor of subtitling… something that would become an industry standard. It was a place ADV could talk to actual consumers who would buy their product because AoD back then was the place for people who actually bought anime… on DVD to go. The original owner made it a policy to buy every single DVD he reviewed. Again I don’t know what it has become because I stopped caring about the site years ago, but compared a site like AnimeSuki – which is first and foremost a anime torrent monitoring site – it would make more sense to put more effort into AoD or any other site where the ratio of visitors favors consumers to leechers. If ADV did solely based the majority of its licensing decisions on AoD feedback… then they are just idiots.
ADV’s downfall can attributed to one primary reason, a bad business plan. Where CPM failed with staying with older titles, ADV copied with niche. Having Evangelion as your flagship title can only get you so far. Viz is around because they pretty much release only Shounen Jump titles, which is very easy to get on TV and have mainstream appeal. Funimation can go licensing crazy because they have DBZ and a core of other titles that can sell easily. Bandai has Gundam, first dibs to anything Sunrise, and is more discriminating about what they pick up. Media Blasters diversifies with their H and live action labels, and, like Bandai, tries to be more judicious about licenses. Animeigo is becoming a bit irrelevant but like Media Blasters has diversified with a live action label. Nozoimi can go niche because they favor quality over quantity, and know their limits. ADV just overextended themselves with no diversification or AAA titles.
@relentlessflame
Yes, maybe I was completely wrong about the forums/blog part… Running any kind business is hard since it’s hard work, but they should have better manage their business and at least have their email and phone working. The part of the negative reaction is that they don’t deliver and often delay releases. How would a fan expect if ADV kept delaying the releases and not releasing them as promised? Maybe the fan won’t buy anything from them as a result and boycott until they improve. The problem with ADV, is that they delay releases too much.
Another problem is some people received a damaged product they brought from the mail and unable to get it replaced since ADV customer support is non-existant since they don’t pick up the phone or read their email… That’s a great way of running their business…
@nooneofconsequence
I guess you are right somewhat… Yes, most licensors won’t think about reading AnimeSuki since you already mentioned it, but I always try my best to buy the licensed DVDs since of the moral issue… but why don’t they also get their ideas from other sites… like the social networking site called MyAnimeList or other big-name anime forums… It doesn’t make any sense not to since most of these people would buy the DVD anyways if they liked the series or already licensed.
Note that I am in fact a Accounting major and I know some of the Business stuff, although I’m still learning..
To be honest with you, I wonder if a lot of this “they keep delaying releases”, “they don’t deliver”, and “there’s no customer service” is more the result of grudges due to personal or anecdotal experience rather than examples of large systemic problems that really brought down the company. While these experiences are certainly not good ones, did that really reflect a statistically-significant portion of their overall sales over the years (not just 2008)? Can we really trace these problems to a large drop in sales, or is it more like “the company went out of business!” –> “the sales must have been bad!” -> “some people said customer service was bad!” -> “sales must have been dropping because customer service was bad and that’s why they went out of business!”. That’s what it sort of sounds like, and I think that’s way too simplistic…
If we’re wanting anecdotal/personal, I never had any problems with any of the hundreds of ADV discs I bought over the years, and dealing with delays is not so hard when they happen (which, over ADV’s long history, wasn’t all [i]that[/i] often). The only thing that personally annoyed me, as someone who bought singles, was when they’d release the boxset immediately (within months) after the singles were over for 1/3 the price or less. That devaluing of the DVD single is what lead to a lot of my lost interest in the R1 anime market (which, in turn, led to increase in my spending in R2). But that’s just my own personal anecdote/reasons; I don’t necessarily think that is necessarily related to their financial issues, though I suppose it may be in a way.
You said…
“It doesn’t make any sense not to since most of these people would buy the DVD anyways if they liked the series…”
Oh how everyone in the industry wishes this were so!!! It’s more anecdotal evidence, but most of the anime fans I see online — be they bloggers, forumites, or other — hardly buy any anime at all, despite watching tons of it online. They treat online anime viewing like watching things on TV, and they don’t buy TV shows unless they’re *absolute favourites* with endless rewatchability. Some of them will be watching 10-20+ series at a time, but would only consider buying one maybe two of them. All that being said, many of these same people — who have the time to watch so much anime — are teenagers or poor college students who don’t have a ton of disposable income to begin with. But this is why it’s important to consider the context of the feedback you get online and the demographics of the audience you are polling. As nooneofconsequence alluded to, the AoD crowd has a much higher ratio of watching-to-purchasing than some place like AnimeSuki or MyAnimeList. Internet popularity and sales are not directly related.
Besides that, I don’t think the problem was ever that they needed ideas about what to license (every company in the industry monitors torrent statistics, forum traffic, twitter posts, blog posts, and so on — it’s part of their job). Again, the issue is what is available for them to license at a reasonable price, and what their marketing teams believe they can sell. So it’s not that they “didn’t know”. But just “knowing” doesn’t make business deals happen. It’s complicated…
Anyway, I’ve said more than enough, so I’ll leave it at that. ^^;
Although I’m not a poor college student but I’m not rich either, since I save my money and spend wisely, I cannot blow all my money on just a stack of anime without researching first before diving into it. Being picky with Anime is a good thing since I don’t have to blow a lot of money and I have money I can use later on other things I want.
Yes, buying the DVDs are expensive… The most expensive I bought is the two volumes of Kannagi and there is no other place you can buy it… damn monopoly… but that was a sub-only release and it had alot more episodes compared to just 3-4 episodes typically found on most licensed releases.
Note that this is a editorial and it’s not entirely accurate and some or most of it is my opinion expressed. For the full picture, you may need to read all those news articles on a site like ANN which can provide accurate information and conclude how the company shutdown in the end.
I guess one has to admire the companies that still operate after all these years. Selling anime isn’t an easy business when all you have to sell are video products. Almost noone but the hardest of hardcore buy video these days, you need something else to stay afloat. Perhaps licensing anime would work well with importing goods on the side? I don’t know… Still, I have to wonder, why are the remnants of ADV still trying to do anime distribution? People obviously still see money in this business, but I wonder where the hell is it?
Well, it’s amazing on how ADV Films last so long, about 19 years.. but the problem with most licensing companies now is that fans want the anime fast and for a reasonable price. I see no problem why licensing companies could sell their licensed anime over sites like iTunes which people can download episodes of their favorite shows often cheaper than those DVDs… The problem is, ADV Films could of took advantage of that and reduce the need and cost of making physical media. Physical media trend is pretty much winding down since digital downloads are cheaper and most people have access to broadband… the only problem with downloadable shows is DRM. Plus, the mishandling of the company since the last two years didn’t help either with failed projects.
years of bad decisions, poor management, wreckless buying sprees and failed ideads took a toll on adv