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The How-To Guide to Making a Profitable Japanese AV Studio in the 21st Century First Half

My Dearest Desire Exclusive - Original Japanese Date: August 30th, 2016
English Translation Published: September 7th, 2016

The How-To Guide to Making a Profitable Japanese AV Studio in the 21st Century First Half

Preface: this is an opinion piece. Elements of it have already been incorporated here and there in the industry, but overall it’s an untested hypothesis on how AV studios can better manage their sales and become successful on their own. If you are planning on starting a Japanese AV studio or currently run/work for one and what we write below does not work for you, you may not hold us liable. These are suggestions, ideas, and hopes and nothing more!

Being an independent Japanese AV production company (hereon referred to as a ‘studio’) in the 21st century for most is a sad, sad affair. Sales do not match the golden age of the early aught’s (2000-2006 or so). Revenue is sliding downwards, staff are being cut, production costs and number of titles per month produced also are seeing massive reductions.

However, is the life of a studio nowadays all doom and gloom? Is there a light at the end of the tunnel? Can one not only survive, but prosper in this climate without selling out to certain 3-letter conglomerates or simply shutting their doors? After all, being one’s own boss is one of the most stressful, but most rewarding things a person can do.

Thus, as an AV studio, what can be done to recoup sales? Better yet, what if you were going to start a studio today?

Keep EVERYTHING first. Japanese AV studios are slaves to the distribution chain. In other words, the mindset for most is to take their wares and sell them in as many places as possible as early as possible. One one hand, having your goods out there easily accessible to your customers is Business 101, but with the power of the internet, this has now turned into a major flaw.

The biggest issue with having titles sold here and there—both in online stores as digital downloads and as physical media in video stores—is the cut. The most a studio can hope to receive per title sold is 50%. Surprisingly this percentage dives sharply when selling on certain extremely popular online stores. This leads to a vicious cycle of your fans associating buying your titles from these stores when they should associate buying movies DIRECTLY from the studio.

A few Japanese AV studios have online stores, but nearly every one this author has seen have come off more as afterthoughts. What’s more, their official sites still have links to other online merchants right next to their official store shopping cart links. This is insane! Why push your users off your own site to buy on a site they ‘might’ be more comfortable with if you’re not going to make even half the MSRP?

Thus, we believe a studio should ONLY sell new releases on their own sites digitally for the first 3 months. Going even further, a streaming-only delivery may be warranted with downloads becoming possible after the first 90 days. At this time it is then a good idea to push the title across that very comfortable, but highly not in the studio’s favor distribution network.

Why? Why sell first on the official studio site? A studio will make much more money this way. Take that ‘up to 50%’ and switch it to a solid 90% and that’s the approximate amount the studio would then make per title.

To be concluded...

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