Why Manga sales in the U.S. is slow

Manga sales in Japan declining due to a falling birthrate, the predicament is compounded by slow sales growth in U.S. bookstore chains where they are mainly distributed. Licensed, english translated manga are not sold in great number in the present non-returnable direct sales market monopolized by lone comics distributor: DIAMOND Distribution who has been aggressively promoting the mainstream comics titles of Marvel, DC, Image and Dark Horse.

American mainstream comics publishers have apparently decided to "flood" the bookstore market with their monthly superhero comics compilations in book format termed "tpbs" (trade paperbacks) or "graphic novels" causing U.S. bookstores to reduce display rack space for Japanese manga. It is therefore incorrect to say that the slow growth of U.S. manga sales is due to waning public interest. This "flooding" of rack space is an old ploy used by underhanded publishers in driving out the competition. To recall, newsstand rack spaces were flooded in the 1970s by competing and unsold Marvel and DC comics that ultimately led to a near collapse of the American mainstream comics industry. This new "flooding" of U.S. bookstore chains by Marvel and DC against the Japanese manga is chronicled in the following online article From: http://www.icv2.com/articles/news/12416.html

"Graphic Novels Hit $375 Million
Plus Comics = $705 Million"
Published: 04/18/2008, Last Updated: 04/20/2008 03:11pm

"An ICv2 Release. The U.S. retail graphic novel market reached $375 million in sales in 2007, according to an analysis conducted by ICv2 and presented at its annual ICv2 Graphic Novel Conference at New York Comic Con on Thursday. The growth came from both bookstores and comic stores, which were both up around 12% over 2006 sales.

The periodical comic market was $330 million in 2007, according to the ICv2 white paper, bringing the total 2007 comic and graphic novel market to $705 million for the U.S. and Canada. Comics were up from $310 million the year before; the total was up roughly 10% from 2006 numbers. Graphic novels once again gained share of the business, increasing from a 52% to a 53% of the total.

Manga sales, including both comics and periodicals, were up about 5% to $210 million in 2007, up from $200 million in 2006 according to the white paper. This was the lowest growth rate for manga since ICv2 began tracking sales. Sales through bookstores were up by a mid-single digit rate, but direct market sales of manga declined 5-10%. The decline in direct sales of manga was due to a reduced emphasis on the category by comic stores, a significant percentage of whom reduced their manga floor space in response to the growing number of releases and the increased difficulty in choosing between them. Over-all, top manga titles continue to do well, but titles in the lower ranks of releases are having difficulty finding breathing room.

Another factor in the slowing manga growth rate may have been increased competition from publishers of American graphic novel material for space in stores. American “genre” (superhero, science fiction, fantasy, horror) releases climbed 31% in 2007, to 1268 releases from 965 in 2006, according to the ICv2 white paper. Manga releases also climbed, to 1513 new releases in 2007, up 25% from 1208 in 2006. Over-all, there were 3,391 graphic novels released to the trade last year, according to numbers compiled by ICv2 from release lists provided by Diamond Comic Distributors, up 22% from 2006’s 2785 releases."

Rack space in U.S. bookstores is limited and like a magazine newsstand, CANNOT exclusively sell graphic novels to the exclusion of other books and printed products. The risk is very real considering the still limited diversity of subject material being offered by American mainstream comics publishers.

The print run and circulation of U.S. mainstream monthly comics to the direct market has only slightly improved when compared to the growth of sales in the new bookstore market. To appreciate the magnitude of superhero "graphic novel-compilations" flooding the U.S. bookstore market over and above the number of Japanese manga, the following 2005 online article from: : http://www.animenewsnetwork.com/news/2005-03-03/direct-market-losing-manga-sales-share, is reproduced as follows:

"Direct Market Losing Manga Sales Share
posted on 2005-03-03 16:51 EST
Direct Market Sales not Growing as Fast as Bookstores

Over the past two years, the manga market at bookstores has exploded. Manga now takes up shelves and shelves of space at Waldenbooks, the Nielson Bookscan Best-selling graphic novel list is dominated by manga, and manga titles even occasionally make it into overall best sellers lists. In the past couple of years the total retail value of the North American manga market has exploded from approximately $30 million to approximately $140 million.

Only a couple of years ago, the majority of manga was being sold not at bookstores, but at comic stores and specialty-shops. But a quick glance at the top graphic novel sales to the direct market through Diamond Distributors (archived at ICv2), shows that the direct market sales of manga haven't grown in the same way as bookstore sales.In January 2003, 19 of the top 50 graphic novels distributed through Diamond were manga and they accounted for 35% of the actual sales of the top 50 graphic novels. In January 2004 these numbers were 11 of 50 and 21% and in January 2005 they were 14 of 50 and 27%.

Steve Kleckner, VP of sales and distribution at Tokyopop states that the direct market only accounts for 12 to 15 percent of Tokyopop's sales.Similarly, Frank Pannone, Managing Editor at Media Blasters Press states that the large majority of his company's sales are made to bookstores. When asked why sales increased at bookstores but not the direct market, Pannone answers rather matter-of-factly, “Most women don't go into comic stores."

A few years ago most North American manga was geared towards a male audience, but this has changed significantly. Pannone says that women account for at least half of their sales. This is reflected in the top selling graphic novels at Diamond and Bookscan as well. For Diamond, the top selling manga in January were Samurai Executioner, Ghost in the Shell 2, Berserk, Rurouni Kenshin and Negima. At bookstores, the top selling manga in early February, according to Nielson Bookscan, were DNAngel, Rurouni Kenshin, Tsubasa, Gravitation and Legal Drug. The only manga in USA Today's bestselling book list last week, Fruits Basket.

However, both Pannone and Kleckner agree that there's more to the shift than just the female market. Kleckner points out that a lot of comic book retailers don't know or understand manga. “These guys have always prided themselves of being experts in their field, they're hobbyists. They've spent their whole lives with comics, but along comes manga and it's not something they know.”Pannone points out another big difference between comic bookstores and bookstores, “People that buy manga have learned to go to bookstores for it.

[There is a] better selection, and the opportunity to preview it without a comic store clerk breathing down their necks.”Kleckner also blames the manga industry itself for some of the failings in the direct market. Looking straight at his own company he states, " We never focused as much on the direct market as we would have liked. We weren't really advertising as much in Previews before." But this is changing; Tokyopop is intent on growing its sales at the direct market, "Now we have 20 pages a month. We started 6 months ago and that has been helping tremendously."

Tokyopop is offering different starter kits for comic book stores to help them introduce manga to their customers. Tokyopop also has account reps dedicated exclusively to the direct market and sales to the direct market in 2004 had doubled over those in 2003.For his part, Pannone sees potential in certain cross-over titles, “There are some books that crossover really well to comic store fans like Lone Wolf, Samurai Executioner and Blade of the Immortal.” Adding “There can be crossover if it were cultivated more with projects like Snikt! or the upcoming CLAMP project that I'd heard tell of.” However, Pannone doesn't see the current status quo changing much in the near future."

Will history repeat itself? Will the time come when U.S. bookstores stuck with a glut of unsold and undisplayed superhero tpb compilations, shy away depriving the medium yet again of another distribution channel?

The Continuing Decline of the Japanese Comics Industry

Has the tide turned? As of 1995, manga used to constitute 40% of all Japanese print publications. When the 1998 regional financial crisis hit, followed by several years of recession, that figure has dropped to 20% in 2006. Yet, this 20% is by no means paltry.

“According to a paper on the subject by the Nomura Research Institute, Japan’s three million otaku now command a huge market. More than one million comic-book otaku spend more than a billion dollars every year buying comics and traveling hundreds of miles to conventions. An estimated eight hundred thousand “idol otaku” –those who are obsessed with Japan’s plethora of pretty young pop singers—worship the individual stars and fritter away approximately six hundred million dollars on attending every single event in which the stars are involved. Around fifty thousand otaku devote their lives to the construction of computers from separate parts.

What the Nomura paper calls Japan’s “enthusiastic consumers” now command a market worth around three billion dollars a year, without even including otaku interests that have now become accepted parts of the mainstream, such as the multibillion-dollar video game market.” (Source: Roland Kelts, “Japanamerica: How Japanese Pop Culture has invaded the U.S.”, Palgrave-Macmillan, New York, 2006 ed., pp. 161-162).

Kelts chronicles his interview with Shinichiro Ishikawa, president of Gonzo Digimation Holding, the youngest of Japan’s listed anime studios. Here, Ishikawa gives the following description of the domestic 3 billion a year manga market:

“There are still at least ten weekly manga magazines that sell thirty million units per week. On top of that, there are monthly magazines and comicbooks. In the U.S., the total annual comic market is fifty million units. In the span of one week, Japan does a full year’s worth of U.S. comics sales. That’s a social infrastructure that has been place here for three decades, and it means we—the Japanese under fifty—are raised in a culture that has a huge creative advantage.”(Source: Ibid, p.196)

Kelts has also observed that imported Japanese manga has made considerable, if not significant, impact in the U.S. publishing market.

“In its generally august (or dryly parochial, depending on your passion for bookish Manhattanites) publishing industry pages, the New York Times reported in the winter of 2006 that manga represents one of the few quantifiable growth sectors of the U.S. publishing industry. A month later, in March, TokyoPop, one of the two major importers of manga to America, inked a distribution and publishing partnership with HarperCollins.The other major importer, Viz Media, had expanded its own distribution relationship with Simon & Schuster at the beginning of the year. Attendance at New York City’s first large scale comics convention that same month, the New York Comic-con, featuring numerous manga titles, so far exceeded expectations that organizers were forced to turn away hundreds of advance ticket holders—and city fire marshalls were called in to the Javits Center to turn away thousands more clamoring to get in.

American publishers, desperate for growth of any kind, are paying close attention. The word out of major book fairs in London, Paris, and New York is that book buyers are scrambling en masse to the manga booths and displays—first to find out what it is, then to start selling it.” (Source: Ibid, p. 19-20)

Despite the above data, the following news article from the November 10, 2008 international edition of NEWSWEEK reports of a decline in the Japanese comics industry:

“Japan’s newly elected prime minister, Taro Aso, is mad for manga, the comic books that embody Japanese pop-culture cool. Analysts say Aso’s been playing up his passion in order to wee young voters. Bad news for Aso then that manga sales in Japan are down for the first time in 12 years, indicating waning interest.

A decade ago, manga was a surefire cash-cow for Japanese publishing houses. But as consumers turn increasingly to the Internet and mobile phones for entertainment, manga publishers are having to find new ways to compete. They’ve expanded to mobile platforms like a manga channel for Verizon phones.

And they’re also eyeballing Hollywood, which has produced blockbuster hits like “Iron Man” and “The Dark Knight” at a time of resurgent interest in American comics. Whether such success will translate to manga remains to be seen—even though the U.S. constitutes the largest manga marketplace outside Japan, growth of manga sales is outpaced by growth of their American counterparts like “Batman” three to one.

Still, studios are starting to venture into manga territory: Warner Brothers is producing “Akira”, while Stephen Spielberg is adapting ‘Ghost in the Shell”, both for 2011. And this summer, manga publisher VIZ Media launched its own Hollywood-based production company to capitalize on growing demand from Hollywood execs for manga rights. Too bad Hollywood won’t be voting in the next Japanese election.” (Source: Kate Dailey, “Aso Plays a Cold Card”, NEWSWEEK, November 10, 2008 issue, International edition, p.8)

The decline has been observed as early as 2006 by Roland Kelts. In his same book, Kelts gives a more detailed explanation for the decline by citing Japan’s falling birthrate as the main culprit and not so much on the introduction of new entertainment technologies, which are merely tributary and incidental to the main cause:

“Various reasons are given for the drop-off in domestic demand, from cell phone advances—enabling younger Japanese to spend hours, and wads of money, each month communicating with one another, watching videos, cruising the internet, playing games, or just talking, all without ever cracking a manga – to the dearth of quality new manga and anime titles.

But the falling birthrate, falling since 1975, is the chief among all factors, and it puts into bold relief the risk that some in the industry took in turning inward and focusing almost exclusively on the domestic market during the 1970s and ‘80s. Though some of manga and anime’s finer artists may have produced the medium’s most adventurous works during those years—the works that aficionados like Alt wax nostalgic about when decrying the industry’s new global self-consciousness—many of its studios lost valuable time in which they should have developed coherent marketing and distribution plans to meet the demands of a growing international—and fully wired—audience of otaku.” (Source: Ibid, p.188)

A falling birthrate means no new and younger readers replacing a generation of now older manga readers. Japan is populated more by older people than by younger people. The chances of getting new, original ideas from a younger generation is consequently nill. When you lack that fresh, creative drive to make new, quality manga, you stand to lose some (not all) readers to new and competing technologies. Result: declining sales.

“In June, 2006, a few months before Japan’s then prime minister Junichiro Koizumi stepped down, the health ministry released a statistic that dominated national headlines: Japan’s birthrate had dropped 1.25, the lowest in its history, and a couple notches below its projected rate of 1.4.

According to demographers, the average birthrate required to keep a population stable is 2.1. The U.S. birthrate is 2.09. Japan’s most recent statistic drops it to number 218 on the CIA World Factbook national birthrate list—a list that accounts for 226 countries.” (Source: Ibid, p. 187)

Kelts opines that had the manga industry took note of their country's falling birthrate since 1975, instead of focusing solely in creating manga for domestic readership, industry players would have laid early on the foundation for the marketing and distribution of manga in the international market, especially focusing on intellectual property protection. Kelts takes note that after allowing foreigners to handle the international distribution and marketing of manga and anime', Japanese publishers and creators have since been left out in the profits. It is only now--however too late-- is the problem being addressed.

The situation is further compounded by a nurtured culture of apathy and indecision among today’s generation of Japanese youth which again affects the creation and patronage of original and innovative manga.

“…an aging population and a declining or stagnant birthrate; an expanding class of young, part-time workers (freeters) with checkered resumes and scant skills; and so-called NEETs (“Not in Employment, Education or Training”), with their CVs and skills sets suspended in mid-youth. Stories of hikikomori, pathological young shut-ins who withdraw into their bedrooms and virtual worlds to avoid the real one; and internet suicide pacts—through which young loners meet one another online in order to kill themselves together in the bricks-and-mortar world—have become common fodder for domestic and foreign media. “They know they want what they want,” explains Duke University Professor Anne Allison, author of Millenial Monsters: Japanese Toys and the Global Imagination, speaking of Japan’s current crop of liberated but lethargic kids. “The problem is: they’re not sure what they want.” (Source: Ibid, p. 230)

Not only in Japan but the NEWSWEEK article also states that manga sales in the U.S. is also declining. It claims that the “growth” in U.S. manga sales is being outpaced by mainstream U.S. comics by a scale of three to one.

Again, no elaboration or statistic is cited to support the claim. Instead, a vague reference to a resurgent interest in U.S. comics is made allegedly due to the success of recent American superhero movies. This is pretty hard to swallow considering that imported manga, have been outselling mainstream American comics for several years.

Well, there you have it. The decline in domestic manga readership is attributed to a falling Japanese birthrate; not to new entertainment technologies or an economic recession. Only time will tell whether or not this malady can be licked. Where will the new creativity and readership for today's manga come from?