Anime and the Reverse Importing Problem

Why domestic versions of anime find their way back to Japan: costs

Ghost in the Shell 2.0 -- one example of a title where the U.S. release had less features than the Japanese one. Image courtesy Pricegrabber

The very definition of anime is a cultural product which is born in Japan and then exported to the rest of the world. But the reverse is also true: U.S. and other editions of anime titles also find their way back into Japan—a phenomenon known as "reverse importing."

Reverse imports have a big impact on anime. They make it that much more difficult and costly for titles to be licensed, force fans to wait that much longer for releases (yes, even in this day and age of simultaneous streaming), and cause the releases themselves to be crippled by omitting features (as was the case with the Ghost in the Shell BD, shown here; compare prices).

Why this happens, though, is worth a detailed look.

At first, no issue

For a long time, anime was made and sold exclusively for a Japanese audience, with only a very small amount of it licensed, translated and sold overseas. From the 1980s on, however, the pace of anime releases picked up considerably.

At first, there was little or no interest in Japan for foreign-produced editions of anime titles. From the Japanese fan’s point of view, the quality of the product was typically no better, and sometimes a bit worse—especially since such released either featured burned-in English subs (which were distracting) or were dubbed in English. If anything, it was non-Japanese hardcore fans who did the vast majority of the importing. They got their hands on titles which hadn’t been released domestically and circulated them with manually-added subtitles—the origins of fansubbing—or they eschewed domestically-produced anime editions on VHS for the pricier but higher-quality LaserDisc editions of titles from Japan, even if the latter lacked English audio or subs.

The problem grows

Reverse importing started to become a real problem when DVD emerged at the end of the Nineties and quickly became the dominant home video format. DVD discs lasted longer than VHS tapes, provided better-quality video than either VHS or LaserDisc, and—a key bonus for anime fans—could store both dubbed and subbed versions of a title on the same disc.

They were also far cheaper in the United States than they were in Japan, where the home-video market has both a rental-centric pricing scheme and a smaller sales base, and where most DVD titles are twice to four times as expensive as their U.S.-issued counterparts.

As the anime market expanded, so did the expectations of fans. It became standard practice to issue an entire season in a box set for $50 or under—where in Japan the same season might well cost $200 or more, depending on the title in question and the value of the yen against the dollar. That made reverse imports all the more enticing. Even with the cost of shipping, there were major savings involved for a Japanese fan.

DVDs had a native mechanism that at first made buying imports—either from Japan or from the U.S.—a problematic proposition: region coding. DVDs from the U.S. were marked as Region 1 (or, sometimes, without a region code at all); DVDs from Japan were marked as Region 2. Neither region’s discs could play on the other region’s players. But this defense soon proved to be no defense at all, since it was easily worked around by buying players or using software which could deliberately disengage region-checking.

Blu-ray’s bane

Reverse importing became an even bigger issue with the advent of Blu-ray Disc. The successor to the DVD format promised (and delivered) far better picture quality and even more interactive functionality … albeit at a premium price. A single anime Blu-ray in Japan, sporting no more than two or three episodes, could go for as high as eighty dollars. By contrast, the same amount of money could by an entire season’s worth of anime on a U.S.-produced Blu-ray edition of the same show, with enough left over for a T-shirt.

Japanese fans reasoned, quite correctly, that it made no sense to buy overpriced domestic editions of a title when they could just wait for the show to be licensed overseas and buy that at a fraction of the cost.

Even thornier for anime distributors is the way Blu-ray region coding works against them. DVD had six different region codes (or more depending on how you slice it), but Blu-ray has only three, A, B, and C—with Japan and North America sharing the same region code. What’s more, ignoring Blu-ray region coding has proven to be no more difficult a technical exercise than it was with DVDs.

Possible solutions, all problematic

Faced with these issues, anime distributors have taken several different strategies to deal with the reverse-import problem. All of them create problems of their own that further impact fans, creators and distributors.

Delaying releases. This is the single most common tactic—not releasing a title abroad in a typically-cheaper edition until it’s had time to sell through in Japan and recoup its costs.

A title can be delayed for over a year from its original Japanese release before its licensor will allow it to be sold overseas.

Omitting features. To make reverse imports less appetizing, the Japanese licensor may demand that foreign editions of a given title not include Japanese audio. Unfortunately, this also makes the title less appealing to all fans, many of whom do want to hear their favorite shows in their original language and don’t mind paying that much more for it.

The Blu-ray release of Persona 4 was hobbled in this fashion.

Not offering an optimal quality product. If a given title has a high-definition version, the licensor may not allow that edition to be sold abroad at all—instead, only allowing the licensing of a standard-definition version. This also cuts down on the amount of reverse-importing, since most such sales revolve around the best possible version of a title. The Blu-ray edition of Ghost in the Shell produced for the U.S. only included the drastically reworked "2.0" version of the film in HD; the original cut of the movie was only available in standard definition—and in a terrible transfer, too.

Distributing their own English-localized edition, albeit directly from Japan. This was the approach taken by Bandai sublabel Honneamise. They brought out their own boutique editions of high-end titles (e.g., the Blu-ray edition of Royal Space Force: The Wings of Honnêamise)(compare prices), which were pressed in Japan, featured English audio or subtitles (or both), and often included extras such as English-language making-of material or booklets. The prices were about what you’d expect for such editions: $60 and up for a single film, and three figures for a TV series.

Overseas fans didn’t open their wallets wide enough to continue justifying such a project—not when they could get a whole TV series for $50 or a movie for $20.

Adding minimal localization to a Japanese edition of a title. By adding English subtitles to the domestic Japanese version of a given anime title, the licensor can create that much more of a market for it—albeit only amongst the hardcore fans willing to pay Japanese market prices (plus international shipping) for it. But it also means having orders of magnitude fewer sales of that title to begin with. Again, the Japanese BD of the original version of the Ghost in the Shell film comes to mind: it runs some $80 but also includes English.

Conclusions

The differences between Japanese and non-Japanese home video markets (the United States in particular) all but guarantee that reverse importing will continue to be a problem.

Some licensors are working as closely as the market allows with their overseas partners to reduce the impact, but everything points to reverse importing, and its associated issues, being around for a long time to come.