Interview with Jerome Mazandarani of Manga UK [Transcript]

On Friday 22nd October, we had the opportunity to catchup with Jerome Mazandarani from Manga Entertainment UK following our interview prior to the May MCM London Expo.

To set the scene somewhat, the last time we spoke with Jerome was shortly before the May London Expo. Since then Manga UK has continued to provide quality Anime and now Live action films to the masses. We’re now one week away from the October MCM Expo with you having revealed some new acquisitions which have got people excited and by the looks of things, there’s more to come!

Here the complete transcript of what was said –

AC – To begin with, are you happy with how Manga UK has progressed in the last 5 months?

JM – Yes, I am very happy with the shape of the business this year. I was a bit disappointed with how The Sky Crawlers performed compared to Ghost In The Shell Innocence, especially because the theatrical screenings did so well for us. Oh well! I am very happoy with how well Naruto Shippuden has performed. The sales are as good as when we launch Naruto back in August 2006.

AC – As I mentioned, you’ve revealed some forthcoming titles for 2011. These being ‘High School For The Dead’, ‘Cashern Sins’, and ‘TO’. Can you enlighten us as to how and why these titles became targets for Manga UK?

JM – We will be licensing these 3 programs direct from Showgate who are an excellent License partner of Manga’s for the UK. The contracts are currently being finalised and we will start production early in the new year.

AC – Are you happy with the reaction to the announcements?

JM – Very happy, but I did not expect anything other than a positive reaction from the UK fan community as these are very eagerly awaited franchises from Japan.

AC – In the build up to your announcements, you made it clear that they wouldn’t be One Piece and/or Dragon Ball. Can you give us any indication as what it is that’s preventing Manga (and perhaps, UK Anime distributors in general) from being able to bring either franchise to the UK in any capacity?

JM – While we have not yet done any business directly with Toei Animation Europe for the UK, we maintain an open and constructive dialogue with the company and I like the licensing team there very much. What fans have to understand with many large Japanese licensing companies like Toei is that there are many levels of bureaucracy that any proposal has to go through before we can even discuss terms and aim for an agreement. In the case of our UK business it means that I have spent a lot of time guiding Toei through the ins and outs of the UK anime video business. Educating them, if you will on our peculiar retail landscape. Basically, there are no real objections from any Japanese Licensors to releasing their programs here, if the offer from the licensee is right for them. Sometimes, it’s an exercise in managing people’s expectations.

AC – Following on from our last interview, you gave us your thoughts on the Blu-Ray Anime market including the fact that certain Anime titles on Blu-Ray outsell the DVDs (Evagellion 1.11 being a prime example). Is Blu-Ray a market that Manga UK intends to have more active involvement in?

JM – Yes, we intend release even more titles on Blu-Ray [BD for short] next year. What I’d like to try and communicate to the fan community is why some titles come out on BD and others don’t. As usual the explanantion is cost versus return. The cost of authoring the Blu-ray discs, manufacturing and paying the license fee to Sony for use of the BD technology is very high. Our rule of thumb is if we can sell at least 3,000 Blu-rays we will release it on Blu-ray. So, it’s safe to say we will release ‘High School Of The Dead’ on as 2-Disc Blu-ray set next year. Our movies will also get the HD BD treatment including Summer Wars, Redline, T.O., Musashi etc.

AC – One big development for Manga UK you were excited about back in May was the inclusion of Martial Arts films not only in the Manga UK catalogue, but being retailed on supermarket shelves. How has that venture been for you?

JM – The venture has been successful, but not as successful as I would like. When I say that what I mean is that ‘By The Will Of Genghis Khan’ and ‘Kamui’ have both sold as well as if not better than other similar titles released by oiur competitors. However, neither has achieved the lofty targets I set for them. Nonetheless, there is definitely a good market for Japanese swordplay dramas and action films and we will continue to release live-action titles. We have ‘K-20’ out on 10th January and ‘Tajomaru: Avenging Blade’ out on 31st Jan.

AC – Another interesting topic of conversation at the moment, is legally streaming anime.
We’ve brought up Crunchyroll in previous interviews with you, but we wanted to focus on the market in general and how secure it is.
You experimented with having Fullmetal Alchemist: Brotherhood streamed on your site (Manga.co.uk) prior to the release of the first volume on DVD/BD. Looking back, what was gained from this venture?

JM – It’s been a far from satisfactory experience for myself, the company and most importantly, the UK fans. A lot of lessons have been learnt. Most importantly, at this stage it is more cost effective for us to focus on the Funimation content that is sublicensed by Manga for the UK and to work with Funimation.com on unlocking and windowing that content for YouTube.co.uk. One of the major fan complaints is the constant turning on and off of the streams via YouTube, which is not very well co-ordinated between Manga and Funimation yet. But we are working on it. Once again, I must beg our fantastic consumer’s patience on this issue.
With regards to http://www.manga.co.uk streaming. The cost of ripping, encoding and hosting the episodes exclusively for our site is not really cost-effective. So, we are investigating other solutions for how we bring content to our own website.

AC – Is it a concept Manga UK would consider being involved with on a more regular basis?
I would argue that all of the non-Japanese territories urgently need and want to further develop the digital delivery of anime to their customer base. It will become essential to our business year on year from now and for evermore. Will we ever see digital revenues equaling finished package good revenues. I doubt it.

AC – From you perspective, could streaming anime a profitable venture for Manga UK?
[See above.] I hope so.

AC – Following the recent incident with Anime News Network [ANN for short], can you give us an insight into what precautions you had to take to be able to stream FMA: Brotherhood successfully?

JM – Manga.co.uk and all of our digital activity is co-ordinated and serviced by Starz Digital in New York. We have an incredibly robust system. We have to! Starz/Encore is part of our company and as you may know is the TV subscription TV channel run by Starz. They have an exclusive output deal with Disney and Sony as well as some very high profile Starz Original programs like Spartacus and Pillars of the Earth. I would argue that their infrastructure is extremely secure without really knowing very much about the exact tech specs etc.

AC – Looking ahead to the London Expo next weekend, you’ve teased on twitter there will be more announcements from Manga UK. Can you confirm this will be case?

JM – Yep, I have 3 big announcements at least.

AC – How has the expo adding an extra day to the schedule altered preparations from previous expos?

JM – It actually gives us a bit more time to set up, which is nice because sh*t always goes wrong for us on set up day anyhow.

AC – One of the big aspects of the expo is the stalls packed with merchandise and DVDs. Will you have any forthcoming releases available early this time around?

JM – Not really. We’ll have Bleach Series 5 Part 2 ahead of it’s Monday 1st Nov release date. The problem for us is that we only get finished stock a week before it’s due on shelf whereas Bezz on the other hand have stock sometimes months before release schedule because they are manufacturing for France, Germany, Ital and UK etc and their lead times are much longer. We will try to do better.

AC – You’re going to be holding a focus group at the expo. How and why did this idea come about?

JM – It’s something I have always wanted to do, but have been unable to due to the costs involved. Usually you would hire a market research group to run it for you. We are doing this ourselves with our media and PR agency. It will be a learning experience, but hopefully it’ll be fun for our 40+ participants and we’ll all come out of it with valuable experience.

AC – Did the number of people willing to participate exceed your expectation?

JM – It certainly did. I love Twitter.

AC – What do you intend to gain from the focus group?

JM – Feedback on one new show we may pick up. We are working with the Licensor to see UK fan’s response to an episode. Test out some packaging and design ideas and generally pick their brains. Mwahahaha (Villainous laugh)!

AC – To conclude, aside from the fact it’s a very busy weekend for you as you’ve documented in the past, are you looking forward to it?

JM – I always look forward to it. I think it’s my eleventh Expo now. That means I’ve dedicated 11 weekends of my life over the past 5 ½ years (22 bloody days) to the Expo. I wish all entertainment marketing managers did it. It’s invaluable.

————-
Following the above, we came to the conclusion that that more questions had formed stemming from the answers given. Jerome was gracious enough to grant us more time to answer those questions! Here’s what was said –
————-

JM – There’s one [thing] I’d love to hear feedback from the fan community on, and it’s one of things we’ll ask when we do these focus groups [at the London Expo]. We’ve so much content being offered to us to release next year, that I really want to try and find out how much we can release! How many DVDs and Blu-Ray we can release in the market next year without killing ourselves and canibalizing ourselves and other titles? That kind of thing would be really interesting to gauge fan reaction and feedback on. You know what I mean?

AC – Yes, definitely. And is that one of the goals of the focus group [at the London Expo] then?

JM – It is, but also to find out about their online activity, offline activity in terms of magazines, websites they visit, social networking. Obvisously you’ve seen what we do with twitter, that’s very important for us figure out what they’re doing there. It’s really important for us to figure out what they’re doing there. It concerns me [with how many titles Manga could potentially release next year] that it might be too much!
When making a statement like that, it also shows the [current] state of the business. I think in terms of our competitors and how little there putting out [and] how we’ve gobbled up most of the titles to release. [Look at] how much more active we are than Beez or MVM, we’d love to find out more [about what people think]. We really want to gauge how many DVDs a year UK Anime fans are buying. It concerns me, and I don’t want us to overdo it and ask fans to shell out more than they can realistically afford in the middle of a recession.

AC – From my perspective, I would say having that many titles potentially being available is a major step forward, but it would depend on the price! As you said, with the current economic climate it’s quite difficult to gauge how much I’d be willing to spend on DVDs and Blu-Ray.

JM – Yeah that’s totally fair!

AC – Even if I liked every single one I’d never buy all those personally in one year!

JM – No, no way! We acknowledge there’s a scale. You’ve got you’re ‘A’ titles, ‘B’ titles and ‘C’ titles. Something like ‘Naruto Shippuuden’ in terms of episodic Anime, is an ‘A’ title that 60 or 70% of the UK anime fans are buying. Then something like ‘Claymore’, that might be a ‘C’ title is likely to sell a lot less. We don’t expect every fan to go out and buy every title. But it’s trying to figure out if there’s enough fans, to go out and support each title to the minimum we need to make it viable to release. I guess the other thing in this business is that you can have a couple that don’t perform to expectation as long as a couple of other titles over perform. It’s like the classic Hollywood formula. You look at what movie studios like Universal who release 12 films in a year, 8 of them might fail, but two or three of them might do really well and that’s what’s makes them money.

AC – The titles you potentially have available to you, are these episodic series or standalone movies?

JM – There’s going to be a lot of movies to release next year. We’ve announced quite a few already. There’s ‘Redline’, which is really exciting! There’s ‘TO’, which is also the ‘2001 Nights’ adaptation from Fumihiko Sori and that’s four thirty minute OVAs presented together as a film. We picked that up from Shogate. We’ve got ‘Summer Wars’ at the end of March. Those represent I think, a quarter of the films we’ve got for next year. We’ve also some Live action stuff, there’s a lot of Anime. You know that Anime films generally take four or five year to produce, so you get a couple of quiet years where there’s not many films out and then suddenly bang, you hit a busy period which is next year in terms of foreign distributors picking up the rights on films. ‘Summer Wars’ came out in Japan in 2009, and it was out on home video when I was there in March for Tokyo Anime Fair. Funimation didn’t receive the masters until July, which means they’re turning in the finished masters of the English dub in November or December. Hence, the March 28th street date.

So, it just so happens next year that there’s a lot of great films available with English dub. We’ll also have ‘Eureka Seven’ ready for next year. We’re co-authoring that with a few different distributors to bring down the cost on the Blu-Ray, and that’s why that’s been delayed. But it’s all worth it. You get the DVD and Blu-Ray release to chose from with an English dub. Generally the relationship we have with Funimation means there’s a shed load of additional output. They’re coming to us with everything they’re picking up English territory rights for. Then you have to make judgement call on whether those are worth picking up because for them a low performing ‘C’ level title in American, it might be selling [a few thousand copies], but then not as much over here to cover the cost of authoring it and ‘BBFCing’ it. So that’s why we have to try and be careful about everything we release. I’d rather try and release [fewer] excellent quality titles that fans will go and buy next year, than double the amount, with half of them be mediocre and only appealing to a niche narrow audience. But it’s exciting!

AC – Do you think with the wealth of those titles, that might be where streaming Anime comes more into play with you distributing them if you’ve got the choice to have so many?

JM – Yes and that’s why one of the things with Funimation is that they can simply unlock their YouTube for the UK and we can manage that for them. The only issue currently is that their managing the streams from the US and windowing those episodes so it means for ‘Fullmetal Alchemist’ or ‘Soul Eater’ will be turned on and off at different times. I don’t know what the schedule is, so it’s random at the moment we’re not really coordinated very well and that’s something we’re going to work on, but yes. I am always encouraging Funimation with whatever UK rights they’ve got. If they’ve got the programs ready and am streaming them on YouTube in the US, then just unlock them straight away and make them available! If we can do a bit better coordination with them, then it means we can notify the UK fans via Twitter, Facebook and our website to go and watch those shows on YouTube.

YouTube’s getting better as well in terms of quality. We want to direct the fans to YouTube because it’s where Funimation can collect revenue through advertising and it’s legitimate. You know, we don’t get very many complaints about YouTube. Some say the picture quality isn’t as good as on the illegal sites but I think the fans themselves would prefer to go there to watch it if it’s there. So like ‘Hetalia’, which a lot of fans are excited about, happily they can go watch that on YouTube at the moment in the UK. If you go on YouTube, you go on the Funimation channel and look through the menu, there’s about fourty percent of what’s there that on the Funimation.com channel that you can watch in the UK! So it’s just trial and error. Go on their page on YouTube, clock on the content and see if you can get, should be unlocked. Anything we’ve released in the UK on DVD should be on there and available to stream if it’s currently activated.

AC – Going back to forthcoming releases, you mentioned trying to judge or gauge how well a series could do. What were some of your reasonings or estimations behind acquiring ‘High School For The Dead’ and ‘Cashern Sins’.

JM – I knew about the ‘High School For The Dead’ manga ages ago. It was after I read an article in NEO that Johnathan Clements had written. So the first thing I did was try and find out if anyone had picked up the rights for it because I thought ‘that’s just perfect’. I think it’s got huge potential, not just for an Anime series but live action films and depending what the creator and publisher are like, there’s so much you can do with that with just for American television and movies! It might mean the end products are very different to the original material, but you can’t go wrong with ‘High School For The Dead’; it’s such a cool brand! The anime itself, I got to have a sneak peak of it while at the Tokyo Anime Fair, which was great! I think I was the first person outside of Japan (in terms of foreign distributors) to get to see it because the guys at Showgate knew I was really into it and I’d been asking a couple of years earlier if they were doing anything with it. As soon as I saw it, we put an offer in for the UK, and that was back at the end of March of this year. You’ve got ‘The Walking Dead’, starting on [the] FX [channel] really soon, I think that’s going to be a huge for TV and on DVD. Zombie DVDs, like the George Romero stuff, all these direct to video zombie horror films always do very well in the UK! So having a zombie horror themed Anime is an opportunity to get more non-Anime [and/or] non-traditional Anime fans picking up something. A lot of zombie fans are probably familiar with Anime, but they might not have bought a DVD or seen an Anime film since ‘Akira’, ‘Ninja Scroll’ or ‘Legend Of The Overfiend’. So ‘High School For The Dead’, has got huge potential I think, It’ll be one of our biggest releases for next year. Saying that, we never really get to carried away, because Anime is very niche and we always to focus on our target audience. I can’t imagine ‘High School For The Dead’ going into Asda or Morrison’s, but I think it’s something that most of our Anime fan community are wanting to see and check out, so that’s exciting!

AC – And for ‘Cashern Sins’, was that choice made purely because you’d releases previous incarnations of the same franchise?

JM – Yeah, but that wouldn’t be a good reason to pick it up. The original ‘Cashan: Robot Hunter’ Anime, was a complete bomb! We sold bugger-all copies! I saw the new series and thought it was very good. One thing that always factors in our decision is ‘has Madman [Entertainment] in Australia released it?’ ‘Have Funimation picked it up the English Dub?’ So that ticked those two boxes. When Madman picks something up for Australia, it means they’ve already created a PAL master, so it cuts down our cost on authoring and makes it a bit easier to turnaround the production and get it out for the UK. ‘Cashern Sins’, is a really great Animation stylisticly, sort of sci-fi. It’s not going to be as big as ‘High School For The Dead’ but we do take seriously all the questions and requests we get through our website and through twitter. [For example] People asking us ‘please say you’re going to be picking up this or that or the other?’ We take note of that, and ‘Cashern Sins’ is one where there is a vocal fanbase for it in the UK, so we thought we’d give it a try! We’re looking forward to releasing that as well! We might be able to announce more titles we’re doing with Funimation at the [MCM London] Expo. I’ll have to check with them and see if we’re allowed to do that, because the process is that they will offer us UK distribution rights, we come back and make them an offer, but then they need to get that approved by the actual licensor in Japan. And that can take some time. But, there’s some really cool stuff we’re going to be doing!

AC – And, as you mentioned earlier, you’re intending on announcing 3 more titles at the MCM London Expo correct?

JM – Yes. Yeah, that’s right, and you’ll have to wait and see what they are. We’ll announce on Twitter as well on the Saturday, we might even do on the Friday because the expo opens on a Friday this year. It gets so busy on a Saturday that we might announce it on a Friday night. Also, that’s when most people are on Twitter so we’ll probably do that. I’m really excited about what we’ve got to announce. It’s not usual Manga fair, but we’ve seen with releases like ‘Ouran High School’ that the fans tastes are changing, and we’ve got to keep up with that!

AC – Have you found with the current economic climate that Anime has become more niche, or do fans want more of the stuff they know. Going for almost like ‘ comfort food’ stuff, or is withdrawn a bit?

JM – Good question! I guess you could say… [pauses for a moment] Y’know, fans aren’t stupid and maybe they’re not as badly affected by the recession. I’d say a big chunk of our audience are college age, a lot are probably spending their grant money on a monthly Anime purchase, well some of it. They’re making their decision based on what they like. I haven’t really seen sales perform against our expectations. That would indicate fans are cutting down more than consuming. But you do have staples which can do well. You could argue that ‘Naruto Shippuuden’ wouldn’t have sold as well as the original ‘Naruto’ that we’re released. We started releasing Naruto [i.e. ‘Naruto Unleashed’] over four years ago. But we’ve seen our week one and month sales of ‘Naruto Shippuuden’ box one, box two and box three, have been consistent with what we did on ‘Naruto Unleashed’ series 1 part 1, series 1 part 2 and, series 2 part 1 which were released between August 2006 and January 2007. So that’s interesting. We’ve seen the sales on Bleach Series 5 are not as strong as they have were on series 4 or on series 3 and I think that’s not because of the recession, well it could be, but because it’s filler. They say series 5 is weak, there’s too much filler, and that could also [be a case of] they’re like ‘I’m only going to buy what I really want, so I can’t afford to make these discretionay purchases anymore’. Anime DVDs, while the price has come down, they’re still expensive compared to other things. And ultimately, the way the supermarkets [are] pricing, it’s affected the trade itself. You can go into Asda or Morrison’s or Sainsbury’s on Monday next week and buy ‘Iron Man 2’ for a tenner or on Blu-Ray for £14 or something ridiculous like that. Anime fans are going to go ‘if I can buy Iron Man 2 for £10, why the hell should I pay £20 for Naruto?’

Another thing that affects price is HMV. As long as they’re in the market, you’ve [also] got Amazon competing with HMV, and Play competing with Amazon, Amazon are essentially dictating the prices and that’s why on a £24.99 double disc, twelve episode set like ‘Naruto Shippuuden’, that suggests a retail price of £24.99! But you will find if you pre-order it on Amazon, or you buy it in the first four weeks of release, you’re going to get anything from £15.99 to £17.99. You’re making quite big savings and I guess in a way, we’re relying on the competitors and our retail accounts to keep the cost low without us having to drive down our real costs on what we’d sell it for. To be honest with you, once you deduct the licensing fee, mechanical royalty fees for the opening and closing credits music, once you deduct the sales fees, the distribution expenses, marketing, all of that stuff, you aren’t actually left with very much! Let’s hope the Anime audience here [in the UK] remains robust because it is being really good! Yeah, on the air it’s a pretty solid business, not like huge business, [profits are much lower than turnover] but that indicates you don’t have much growth in terms of audience or they’re moving onto other things and younger fans coming in, but it’s a cult niche, sort of underground scene. It attracts some new people but it never really blows up, which is cool. I think in the current climate, seeing a year on year decline in DVD sales and a year on year decline in value of the DVD business, we’re very lucky to keep such a loyal customer base. The way to keep that is to keep delivering quality releases, keep delivering the shows they want at the price they want to pay, and hopefully we’ll always maintain a balance between what the fans want and can afford, and what we can afford to do a business. I hope that’s educational for everyone and I look forward to everyone at the expo!

AC – Thank you very much for your time!

JM – No problem!

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