Japan's found a way to block playback of US Region A BDs

[Kentai]

Sorry to register just for this one topic, but this is a market that's always fascinated me, and I think there's a few things that may need to be clarified:

1) With the exception of family shows (One Piece, Crayon Shin-chan, Doraemon and what have you) no anime actually makes money on its initial broadcast - quite the opposite! For titles aimed at adult collectors - which is basically everything Sentai, FUNimation, NIS America, Viz, Media Blasters and the like distribute - the show's sponsors are actually purchasing the broadcast time out of pocket, similar to the way an infomercial buys time on cable at 3 in the morning in the US, hoping the visibility of the show itself will help move merchandise, including the Blu-ray release, which often features new shorts, improved animation, or uncensored footage to justify the price tag.

Exactly what shows walk away as "successful" is often a sliding scale, though; was the show produced primarily as an advertisement to the novel series it was based on? If so, even fledgling video sales might have pushed more copies of the original work, and give the author a higher profile for their next project. It might also have been a push to get the characters recognizable enough to justify producing licensed novelties and figurines, and if sales are good because the characters are cute, Blu-ray numbers might not be that important to the franchise's bottom line.

2) These shows are typically created for a niche demographic right from the start, and slashing the price won't necessarily equal more profits for anyone by default. The first Japanese volume of Inu X Boku SS sold 5,000+ copies, and was the second highest selling title the week it was released. In other words, it reached a decent chunk of the potential audience. If the whole show had been sold at comparable American prices (let's say 1/6th its Japan MSRP), they'd have to move 30,000 copies just to meet the same returns they already saw. That's also ignoring the fact that 6x the product produced means a larger up-front investment, and a much larger chance for over-production leading to unsold merchandise flooding the market. (Yes, occasional hits like Bakemonogatari and Madoka Magica sell upwards of 50,000 units - but those are the outliers, not the norm.)

Decreasing the price would certainly increase sales, but dramatically decreasing your price won't magically increase the demand for the product itself if that niche is already satisfied. Japan occasionally cuts the price in half on their "Best Of" titles for a period of a few months, but more often than not it's an effort to get rid of unsold stock rather than shift the market to a new direction.

3) Licensing anime for international sales as a means to make your costs back is not a sustainable business model. Sentai, FUNimation, Media Blasters, Viz, NIS or whoever you like pay a fee up front and typically split points on actual sales, too, but the market in North America is even smaller than it is in Japan, and with US prices being a fraction of what they are in Japan those licensing fees can't logically be worth much these days.

In other words, buying a US licensed product is better than not buying anything, but if that became the primary income for the show - which "Everyone Is Region A" could, in theory, lead to - you'd simply cease to get new anime. Even if the US set for Inu X Boku SS sells twice as well as its Japanese counterpart (which is kind of unlikely), it'd only make 1/3rd as much money, and that's further split between Sentai and the original production committee. That's not to say those sales aren't still good for the show's bottom line, they just wouldn't be enough to have justified making it in the first place.

4) Without this "Country Code" restriction in place, several currently available US anime releases wouldn't even exist, and I have little doubt that a number of titles currently in production for a US release were on the contingency that this little trick actually prevent Japan from accessing the content on US made discs. Inu X Boku SS is not the first title to implement it (just the first one that's been noticed), and it's surely not going to be the last.

Make no mistake, most everyone the world over agrees that this model is ridiculous; anime production has slowly become uroboros, and I've yet to find anyone who has the way to pull the industry out of its own mouth. International success isn't the answer, internet distribution just doesn't exist in any meaningfully profitable way, and merchandising has seemingly acted as a stop-gap until something better comes along. In the meantime, that niche audience of hardcore otaku buyers are what keep shows coming out at all, and about all we can do is either go broke importing, or get whatever the licensing contracts will let us have for a fair price. It's not ideal, but the anime market is what it is in Japan, and I've yet to see any suggestion to replace it with a model that would continue to allow these sorts of shows to exist while still turning enough of a profit to not collapse under its own weight.

All that out of the way... yeah, this secondary region lock mechanism is kind of a big deal. Even so, I doubt we'll see a lot of it in the immediate future for anything but anime, as it's about the only kind of video product with such a dramatic price disparity within the same region. It's going to stink for fans in Japan of their own local product, but I can't think of many other scenarios where the "Country Code" would even be a blip on a distributor's radar.

[manicsounds]

I just got Sentai's release of "The Garden Of Words", and just like the previously mentioned disc which they also released, this one is locked out when played on a player set to Japan's country code. But when I switched to any other country code (Jamaica, Jordan, UK, etc) it played fine.