At San Diego Comic-Con, ICv2 caught up with VIZ Media Vice President Publishing Leyla Aker and Director, Publishing Sales and Marketing Kevin Hamric to get an update on the manga market and VIZ's place in it.  In Part 1, we learn what VIZ is seeing in the overall manga and graphic novel market and in the market for its titles, by channel, along with some of the dynamics driving the market.  In Part 2, we talked about major VIZ publishing and anime programs in the pipe.

How were VIZ sales in 2013 and the first half of 2014?
Kevin Hamric: 2013 turned out to be a very strong year for us, both calendar year and the fiscal year which ended March 30th.  The performance was well above expectations.

What do you think drove that outcome?
Hamric:  There were a couple of things. One is the market stabilization since the downfall of '07-'08.  We had an excellent list to sell, and I think also that our competitors had excellent series and books that drove people into stores and online stores.

One of the biggest hits in the business for years is Attack on Titan.  Is that having a halo effect on the category?
Leyla Aker:  We were just talking about this with some of our retail vendors.  It’s pulling more people into the graphic novel section for sure, a certain demographic.  How much of our sales performance can be attributed to a halo effect is impossible to untangle.  Anytime you have a really big property like that come down the pike, it’s good for whole field.  The ‘rising tide lifts all boats’ thing.

But it's not just us.  In all the years we’ve been doing interviews with you, I remember that in the 2008 to 2012 period we just kept seeing decreases.  Starting in 2012, we started seeing the market stabilize again (see "The Manga Market, Kids Titles, Replacing 'Shonen Jump'").  So in the intervening year we've not only maintained that but we've gained some ground again.  I think that the market stabilization is a huge part of it.  And it's not just us, what DC has done with Batman, what Image has done with The Walking Dead, the total size of the trade market, not necessarily the direct market, has definitely increased.  So we're absolutely seeing the effects of that.  Not surprisingly, we're enormously relieved and very excited to take advantage of that in the future.

Can you discuss the three different print channels (book or specialty retail, direct and mass), and how they’re performing?
Hamric:  Book trade was up last year with the two big boys that are left--one online [Amazon] and the stores [Barnes & Noble].  We're very happy and it’s good to see that.  Our backlist grew larger than we thought it would, as well.

Why do you think your backlist sales grew?  Are Volume 1's selling?
Hamric:  The size of the market grew, and Volume 1's and new series grew, and our inventory position is much better as well, both with our inventory and what the retailers are carrying.  They’re not just bookending things anymore; they're bringing in books from the middle of the series.  We also brought back into print things that we had let lag for quite a long time.  There was quite a bit of clamor amongst the fans that wanted that.  Hunter X Hunter, for example, we immediately sold out of the first reprints of almost all of those.  We had to go right back and reprint those.

Aker:  It was a lot of our backlist titles.  It certainly wasn’t intentional, but as the size of our list grows sometimes that curatorial aspect isn’t in there.  As Kevin was saying, one of the huge things is that we went back to replenish it.

It’s interesting when looking at the trade market channels at how well DC has been doing because their inventory and fulfillment system is good.  They’re using Random House; they’re keeping everything in print; they’re soliciting.  You contrast that with Marvel (we were talking to some of our retail partners).  Why is DC going up and up every year and Marvel, when they have these huge properties, there’s no inventory, there’s no books.

You said the whole category has been growing with DC and The Walking Dead in the book channel.  For a while it seemed like the category was getting less space, but now do you see it gaining space again?
Hamric:  Barnes and Noble is re-laying out the stores and because this category--graphic novels and manga--has grown throughout the years, they're actually going to be growing a lot of the stores and adding a section or two.  We're lucky because we have a spinner rack in every store which really helps.  We sell a lot off that spinner rack.  They're looking at how that section is going to look:  number of face-outs; number of spine-outs; the size of it; whether they bring monthly periodicals and comic books over to that area as well.  They're looking at all of that right now.  They're a great partner and we like to work with them a lot.

What about the library market?
Hamric:  Libraries went up a percentage point in our overall business with us last year.  We just got back from ALA (American Library Association) in Vegas.  We’re very pleased with that.  The librarians are embracing more the graphic novels.  They have dedicated sections in the libraries.  You can learn to read with picture books.  It's very gratifying to see.  Our children's line has helped that as well.  We brought in Hello Kitty, Uglydoll, Ben 10 and Max Steel.

Hamric:  With the mass merchant channel, we’re doing very well with Wal-Mart.  I wish we could get into Target.

What titles do you have at Walmart?
Hamric:  Every Naruto, Bleach, One Piece, and most Pokemon.

Yu-Gi-Oh!?
Hamric:  No Yu-Gi-Oh!.

Aker:  But we're trying again this year.  We just announced we're going back and doing Yu-Gi-Oh! in the 3-in-1 bind-ups.  When we originally released Yu-Gi-Oh!, we artificially broke the series into arcs to match what was going on on television.  Now we're going back and reconstituting the original single releases so hopefully that will be interesting to retailers.

Hamric:  And Walmart has expressed interested in looking at those.

Pokemon is having a fantastic year in other categories.  Are you seeing that across channels?
Hamric:  Pokemon in every channel is doing remarkably well.  The sell-through just keeps getting better and better.  Everything from book trade to online to the Scholastic Book Fairs.  It's incredible.

What titles have you gotten into the book fairs in the last year or so?
Hamric:  It’s mostly Pokemon.  They did take two volumes of Max Steel.

Aker:  We got some manga in there as well.  It’s mainly the younger stuff.

Hamric:  And Scholastic Library Reading Club has expressed interest.  It's a monthly catalog.  I met with them a couple weeks ago and gave them a box of books to review.

We just had our sales conference with Simon and Schuster and I met with their specialty division.  There's a lot more interest from non-traditional booksellers, especially with the types of books we have coming out this fall, more heavily packaged, higher-priced stuff.  So we’re hoping to grow that channel as well.

How are you doing with sales in the direct market?
Hamric:  Stable and growing a little bit.  Our liaison at Diamond is extremely bright and interested in our product and we have a very good relationship with them.  Our sales finished up last year and we’re in double-digit growth this year.

Do you know what percentage of stores carry your titles?
Hamric:  Of the number of accounts that Diamond has, we’re in about 64%.

Some of the store owners just don't understand manga yet.  They're like librarians were years ago.  They're afraid of it, but if it's children’s and Pokemon, or has a tie-in, especially to anime or television, then they're not afraid to take it.
 
Aker:  Especially the gaming properties like Legend of Zelda, which is a familiar property.  We have a Resident Evil tie-in coming out this fall and that is a natural for the direct market (see "'Resident Evil,' New Toriyama, More").
 
How are digital sales?
Aker:  Digital’s been good.  We went up with comiXology last month (see "VIZ Manga Now on comiXology").  I don’t know how many titles we’re at now, but within the next couple of months we'll have everything up there which is several thousand volumes.  They've been really easy to work with.
 
Hamric:  We went out with 2,500.
 
Aker:  I feel like the last few years it was still developmental phase and we couldn't see how it was going to shake out.  Just as a company policy we were a little more cautious with everything.  We were slow going into the channel purposely.  We had been talking to a lot of the channels for a long time but didn’t want to jump on board until the timing was right.  In the case of comiXology, that was the last major channel that we hadn't gone into. 
 
So far the preliminary results have been good.  The Amazon buy-out happened, so none of us know exactly what they’re going to do with that.  What we're hoping is that there’ll be a period of stability with that, where they do the Zappos model where they leave it alone.
 
It was easy because we had all of our apps and distribution through IOS, so for us it's more of a complementary thing.  At this point we’re pretty much extended across everything.  Like every other segment of the publishing industry, that rocketing growth that we saw for a couple of years where you're dealing with triple-digit growth,  that's slowed as the market penetration increases.  But it's still growing at a healthy clip.
 
The vast majority of our stuff is both e and p [electronic and print], but now we’re looking more into doing e-exclusives, e-advances, e-only.  We took a big portion of the Tokyopop catalog, carrying those series out from a couple of other licensors as well.  We’re doing a Vampire Knight digital exclusive single that will go out in the fall. We're definitely looking at ways to continue to develop that market.  Like everyone else, we're feeling our way forward.
 
Hamric:  We still do everything in-house, we don't use third parties or aggregators.  Everything is done at VIZ.

Click here for Part 2.