ICv2 had a chance to sit down with Viz Senior Vice President and General Manager Alvin Lu at San Diego Comic-Con and ask for an update on the company and its plans in the wake of a major downsizing in May (see “Viz VPs Thinned”).  In this wide-ranging interview, Lu shared the company’s strategy on retrofitting the company for a rapidly changing and still uncertain environment and his perspective on the condition of the market. 


Maybe you could start out by introducing yourself to our readers and letting them know what your role is at Viz.

My title is Senior Vice President and General Manager. Together with Ken Sasaki, we oversee the day-to-day business operations of Viz Media. We sort of overlap and can handle all parts of the business, but technically the publishing side reports into me and the animation side reports into Ken.


One reason we wanted to talk to you today is to get an update for our readers on the personnel changes at Viz Why were those changes made? Do you see those as a response to the current market conditions, and is the market since then progressing or in the state you thought it would be at this time?

I’ll try to keep this answer brief. The changes that were made earlier this year were very difficult for the company. They were emotionally difficult because Viz, in my time there (it’s been a long time) has been almost kind of a family.  Everybody there feels like family so this was an emotionally difficult decision.  I’ll leave it at that.


As far as our perspective on the market goes, I want to emphasize that the changes that were made were less of a response to perceived weakness (although anytime you make this sort of decision, obviously there are market exigencies), but more sort of retrofitting the company to build strength for the future.


We are continuing to do what we do best. We’re a publisher of graphic novels and manga. We’re still in a very healthy cycle of enjoying the success of our premium properties that have been around with us for awhile—Naruto, Bleach, Inuyasha. 


At the same time we continue to enjoy a strong crop of newer properties.  Vampire Knight is a property where we’re seeing a continuing lift in a lot of different categories. It’s really exciting to see a newer title like Black Bird pick up. There’s a lot of optimism.


After the Shonen Jump panel tomorrow, we’ll be making an announcement about Nura: Rise of the Yokai Clan, a Shonen Jump fantasy action series. Currently we’re simulcasting that on Hulu and Vizanime.com. The viewership has been really strong. It’s our third most popular series after Naruto and Bleach on there. There’s Kekkaishi, which is on TV right now and getting great ratings on Adult Swim.  There’s a steady stream of properties, so we’re continuing to focus on that.


One of the observations we’ve made this year about the market in bookstores, which has been a real area of strength for manga during its growth period and throughout its history, is the in-stock level seems to be declining (see “Have Book Chains Lost Their Manga Mojo?”).  Do you feel that you’re continuing to get the kind of support from the book chains that you need to develop and nurture that base?   

We continue to get great support from our retail partners. They do see that these very popular series continue to do well. They are getting up there in the 40s and 50s of the volume count, and there is the challenge of bringing in newer readers, to catch them up.  I was looking though a calendar from several years ago when we were looking at Bleach Vol. 5 or something. That is a conversation we’ve been having with the bookstores, and they’re being very responsive on how to work with us, to continue to drive the category. They’ve been very supportive of helping us launch new series as well. So it’s a balancing act of getting the space to launch new series while nurturing the more mature series that continue to enjoy a loyal readership.


How many manga volumes does Viz plan to release this year, and have you started to think about next year and will that release count stay stable or change?

I was just reviewing the overall manga release counts.  Depending on how you look at it, that’s overall down since it peaked, in about 2007 I’m guessing.  However, in that period Viz has held pretty steady in release counts.  It seems that while the overall manga count was going down, Viz managed to support the market with continuing between 450 and 500.


This year, for a number of reasons, not with a deliberate focus on reducing the release count, the end result is going to be more between 350 and 400 [volumes].  We’re currently reviewing what the optimum strategy is for next year.


There have been changes in the market and some of the core parts of the market are probably smaller than they were a few years ago. As the market has been changing, what are the areas of particular strength and what are the areas where maybe the response has not been as strong?

We’re aware that we remain one of the top, if not, by certain metrics the top graphic novel publisher in the country.  With that sense we went into an imprint-based diversification program, as it were, feeling that in that position we would be able to offer a broader range of graphic novels for the graphic novel readership. That has not changed so much.


Of course the shonen boys action category remains a strong one for us. It’s always been the cornerstone. We are looking forward to the newer series, strong series--such as Nura, which I mentioned, Bakuman is coming out.  Technically it is a Shonen Jump title, not your typical fantasy action type series, it’s an adventure story about two boys who want to become manga artists, by the creators of Death Note. That remains a focus.


The shojo category, I’ve been happy to see, remains kind of steady.  As I mentioned, we continue to have new series that perform well. Black Bird we knew would do well, but not this well, so that’s been a pleasant surprise. We made an announcement at Anime Expo about a new Arina Tanemura titles--Sakura-Hime. So the shojo category continues to do well for us, particularly in providing strong series on a regular, renewed basis since the series don’t tend to run as long.  So those are the two main categories.


The kids category has been fueled by Pokemon and Legend of Zelda.  We are actually doing some new things in that category which we are quite interesting:  Mameshiba and Panda Man. That is an area where we’re looking to do some exciting new things.


The seinen category, which we continue to stand by, we put out a suite of releases under the Sig Ikki imprint. It’s been interesting to see what works in that category. It’s something we’re going to continue to refine.


What is working?

Sort of what you’d expect. Black Lagoon does really well. There is potential in that category where we see in the more action-oriented seinen series the crossover with the American graphic novel reader.  Biomega as well.


In fiction?

Haikasoru is still getting out there. We’ve been putting out several releases. It’s been very well received in the science fiction community. I think it was important to build a presence in that community. They’ve really received us warmly and really welcomed us. We’ve been supported by a number of strong sellers so it’s working fine.


News came out this week that Onemanga.com was going to pull down its content. That’s one aspect of the sea change this year in terms of the scanlation sites and a real effort to reduce the amount of content that’s available there. What we haven’t seen is an increase in the amount of legal manga content that’s available, either available for purchase or any through any other business model. Viz does have some material available free on the Web as sort of a promotional tool, but people have not had a legal alternative to buying digital manga. What’s the future in that space?

Without giving too much away, we will have more to announce in this area soon.


Is there going to be any availability for purchase or primarily subscriptions?

Let me answer the question this way--going back to your very first question, when I was answering how we were retrofitting the company. We continue to enjoy, as a company, the luxury of doing what we do best:  focusing on being a publisher and an anime publisher as well. At the same time we’re looking at the same market conditions that everybody else is looking at.  It’s an exciting and “interesting” situation we’re in right now where everyone knows change is coming and some kind of change is going to happen, and the trick everyone’s trying to figure out is what kind of change that will be.  There’s a lot of uncertainty in the market, not just in our little manga pool here but in the larger graphic novel, book market, and in the macro economy. It’s working with that uncertainty which has been a challenge for the business.


We’re looking to rebuild the company to properly address those conditions, which is a long way of saying that we’re focused on our core businesses, the businesses we’ve been in, that the company has been built on. At the same time we are very seriously looking at the way things are going to play out in the future. If you look at the anime side of what we’ve been doing (and I don’t feel this has been pointed out enough), we are delivering a lot of content, almost all of our content, onto streaming video (free ad-supported), which is a monetization model that people were saying wouldn’t work, but it’s been doing really well for us. 


Through your own site or through Hulu or both?

Through both. Hulu’s been a great partner to work with. We’ve been able to leverage what they’ve been doing into building a robust anime streaming site.  The revenue tripled last year. It’s almost dot com-ish numbers you’re seeing in that area. Obviously it started small, but it’s growing rapidly.  I could say the same thing in the download to own category.


So Viz hasn’t been steering away from the digital business at all.  Anyone who is familiar with the history of how this is playing out knows anime on the Internet was the first thing that we had to address.  That was the first area that we really explored in terms of building a digital business and we’re looking at manga now.  The kinds of models we’ve been looking at in anime have helped us a lot in terms of what we’re looking at in manga.


Over the last 10 years there’s been a lot of change in the manga market--a period of very rapid growth, vast proliferation of titles, now pretty rapid contraction over the last couple of years--can you address the underlying causes for that rapid change and what that means for the future for the manga business?

The category overall obviously went through a period of extremely rapid expansion. In hindsight you could probably look back and say that there were too many titles out there at one point. What we’re seeing now feels to me to be a more natural balance and a sustainable kind of business.


It doesn’t feel like a crash to us. We’ve been able to hold our business fairly steady through what looked like a bubble-type rise.  We feel like we’ve reached a level where the business can be sustainable with a strong stable of newer titles coming in, so it feels like a very workable category right now.  A few years ago people were trying to figure out how big could this thing go, and I think we kind of figured that out; there’s been a period of contraction, it kind of leveled off and we’re kind of settling into where things are now. And there is sense of uncertainty now of where it’s going to go. We feel that it definitely can continue to grow, maybe more sustainably.


I’m looking around at, I don’t even think of it as competition, our compatriots. Tokyopop, after what seemed like some rough years there, seems to have settled into a sense of stability there. You can see what they’re trying to do, it’s really great.


Yen Press has been a great story.  Without flooding the market, they’ve been savvilly releasing some strong titles out there; it definitely seems like they know what they’re doing. 


It’s a good place to play in right now. Obviously, the North American manga market depends on content from Japan, and what is probably less visible to the media here as well as to the readers is the way the market is changing over there as well.  So there’s, a lot going on.


What are the changes in Japan?

There’s definitely a sense that things are going to have to change. How that’s going to play out will be a very interesting story to follow. The size of their business is enormous compared to ours, so the stakes are incredibly high.