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Otakon 2014: Ed Chavez of Vertical Press on How to License Manga

Ed Chavez of Vertical, Inc. did a panel presentation at Otakon 2014 on several of Vertical’s upcoming publications and gave an overview of the process of licensing manga and other publications from Japan. Upcoming Vertical releases include Attack on Titan: Before the Fall, a retrospective of Satoshi Kon’s manga works entitled Dream Fossil-The Complete Satoshi Kon and a Makoto Shinkai art book entitled A Sky Longing for Memories. The Makoto Shinkai collection in particular looks like it will be a beautiful set of art.

Once the new titles were out of the way, Ed was kind enough to give a repeat of his San Diego Comic Con presentation on the process that Vertical uses for licensing works. The process can be broken down into roughly 6 categories: Research & Development, Budgeting, Bidding, Contracting, Production, and Scheduling. While that may sound somewhat self-evident, there’s a lot more that goes into each of those things that it sounds like. R&D is more than just “Hey, I like this title.” Vertical is somewhat of a curated publication line, so each title has to be something that fits into Vertical’s larger scheme. There’s also some titles that come through other business deals or have tie-ins that have to be accounted for. If something has a television show attached to it, and the show bombs, that can make selling it difficult, and vice-versa. Productions that have never been collected into tankobon, or book, form are also very difficult to license.

Once a title has been identified, the next step Ed laid out was budgeting, which is not just how much to spend on production, but also takes into account the upfront licensing fees, royalty fees, production, marketing and potential losses on returns. Manga can have a return level of up to 60% of a production run in some cases. Comparatively Western productions average less than half of that and straight Japanese productions in Japan average less than 7%. Even when a budget is set, things can take some strange turns once the production moves beyond the theoretical stage. Ed gave as the example of Paradise Kiss. Once production got ramped up for the US, it turned out that the Japanese rights holder only had access to the old printing plates, not the base files. Vertical ended having to have the plates digitized at a greater expense, and then had to send the very heavy plates back to Japan when they were done with them.

Once a budget has been set, the next steps are bidding and contracting. Every contract Vertical signs contains the advance amount, sales price, production values, speed and volume of production, length of contract, location rights, distribution formats, and territories and potential derivatives. If that sounds overly picky and technical, well, that is the nature of a contract for a creative work. Localities especially get very strange according to Ed. Some contracts cover all “English speaking territories” while others are specific to continents or countries. Derivative rights also get very tricky as sometimes things, like other movies that want to feature the production in someone, aren’t always covered. There are also of middle men in the Japanese print industry who see some of the low sales targets that sometimes come up in US licenses and think it’s not worth their time, among other things, to put the title out. Finally, some artists are not alright with only selling 10,000 copies of something.

The final steps to getting a production to the customer are the production of a volume, translation, printing and shipping, and scheduling. A title has to be out the door in time to be able to make the semi-annual payment to Japan, and it has to make it to market at the right time to sell. A title that has another media property attached to it may not sell very well if the manga gets released too soon or too late. Ed also clarified what certain terms mean when you seem them next to a title that is no available. “Out of Stock” means more copies are being printed whereas “Out of Print” means no more are available and there will be no more made.

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