Ill Winds

In late 2007, I was drawing money out of a Kyoto cashpoint at 240 yen to the pound. In the time since then, the relative value of the pound to the yen has fallen a terrifying 40%. What this means, for you and me, is that anything Japanese is 40% dearer. A CD that once cost you £20 is now more like £28. A tenner’s sushi is now four quid more.

Obviously, these issues trouble you a lot more if you are spending large amounts of money. One pound on the cover price of the magazines I read each month for NEO’s Manga Snapshot isn’t going to make that big a difference to me. But if you’re an anime distributor, used to writing cheques for six-figure sums, you’re going to feel the pinch. If you’re mastering or duplicating your DVDs in, say, Poland, you’ll be paying more in Euros for what used to be a cheaper option.

But it’s an ill wind that blows nobody any good, as a bunch of amateur economists recently realised. In late January 2009, as the sterling exchange rate sank to a shameful 128 yen, a blogger in Japan began posting his musings on grey imports. Blimey, he said, I can buy Monty Python for a fraction of the Japanese price, and have it sent to me from the UK. Come to think of it, I can buy a LAPTOP, too. A different plug on the cable, and I’m laughing!

Initially, activity was timid. A few early adopters broke out their credit cards to see how it might work out. When one of them posted a happy photograph of the battered but solid Amazon UK parcel on his Tokyo doorstep, the floodgates opened.

The first I heard about it was a day later, when a worried anime distributor called to pick my brains. UK online sales of one of his company’s titles, which we shall have to call Schoolgirl Milky Crisis, had suddenly, dramatically spiked. Initial elation turned to concern – why was he suddenly rushing to meet orders so much larger than usual? It turned out that the orders were mainly going abroad, and that’s when he asked me to dig around on the Internet.

It took less than a minute for me to track down the anime speculators and their excited bloggery. Which only made matters worse, because if I could do it, so could the Japanese licence holder. Many Japanese companies are utterly petrified of this sort of thing. You wish your anime were cheaper? They wish it were more expensive, because grey imports give them nightmares. It was only a few months ago, in this very column, that I was discussing the symptoms of Blu-Ray Blues, whereby a company tries to centralise and standardise all editions of a release into a single Japan-made disc. But if that super-master-disc, containing all language versions, is 40% cheaper abroad than it is in Japan, it would play havoc with a company’s Japan-based statistics, economics and decision-making. Domestic sales will always come first for the Japanese, as foreign money, in these credit-crunchy times, is back to being just gravy. This, in turn, will present accountants in a Tokyo office with a sudden desire to force distributors in the UK to raise their prices to discourage Japanese grey-import opportunists!

Of course, if the pound goes up any time soon, everyone will probably just forget about it and chalk it up to economics. What are the chances of that…?

Jonathan Clements is the author of Schoolgirl Milky Crisis: Adventures in the Anime and Manga Trade. This article first appeared in NEO #65, 2009.

8 thoughts on “Ill Winds

  1. I imagine that the USA-to-Japan gray market imports are doing even better, given that both countries use NTSC (instead of the UK’s PAL), and we get hentai mostly uncut. (I’ve been given to understand that NTSC–PAL–NTSC conversions do bad things to video.)

  2. @DocWatson:
    Ah, but that would only work for BD, not DVD as Japan is R2 like us, where as BD is R-A/1 same as USA, however there still isn’t that much anime on BD to really worry. Still the Japanese worry too much about this and really should get over it. I mean with their own economy still in recession, and recovering from all the recent natural disasters from Earth, water and air as well, Grey money is still has to be better than no money of any colour what comes from the pirates and bootleggers. If they feel they aren’t getting their fair share they should negotiate that before giving licenses to overseas distributors. They still haven’t got the hang of dealing with the rest of the world, have they? ~_^

  3. not really related to the exchange rate, but earlier in the year Games Workshop altered the license to an online retailer, to prevent them selling to areas where GW’s official pricing strategy was significantly higher than having the same boxes of plastic and metal miniatures shipped out to, say, the US, Australia and even Japan. (the fact that these prices are on the high side already in the UK says a lot about how much they are marked up abroad).

    This kind of licensing tactic could be their way to protect their profit margin (assuming they don;t want to anger their fans…. In the above GW example, a lot of potential customers quit the game due to being priced out of it without the cheaper mail order option), and it does remind me of the time Viz’s parent company forbade them from allowing grey imports to the uk out of fear it would damage a potential licensing deal in the uk (at a time when their was unlikely to be such a licensing deal)

  4. I asked Dai Sato to sign my Freedom Blu-Ray box at Japanexpo Paris in 2009 he was astonished to find out that the same box bandai japan sold for ¥20000 (about £120 at the time) was only £65 in Fopp Glasgow (that was the full retail price and the new version by Manga is only £20.00) but they’re starting to pay attention getting a hold of the Gundam Unicorn BR’s is a bloody nightmare and you don’t get much change from £50 when you do mangae to find them

  5. Mohawk52:

    > Ah, but that would only work for BD, not DVD as Japan is R2 like us, where as BD is R-A/1 same as USA

    That assumes that DVD region coding cannot be (easily) circumvented, which is not the case.

  6. Yay! I’ve been quoting this column for years, glad that I can now just link it 🙂

    It is somewhat insane that they demand that all UK discs be region B, but then still withhold the license for things like 5cm/s and Karas.

    Interesting fact: the Japanese PS3 is region 2 coded, but will not play PAL discs.

    @tzeenth: Those BV discs were manufactured in Japan and shipped out to Europe and the USA; we had to sit through the FBI warnings and they had BBFC logos on their discs. The only difference between the UK and US versions was the paper label on the back of the box under the shrinkwrap.

  7. >DocWatson

    Still, though, it is a small hassle for casual, non-technical consumers. I’d have to get a whole new region-free BD player myself.

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