ICv2 recently interviewed Bandai Visual president Tatsunori Konno.  In Part 1 of this two part interview, we discuss Bandai Visual's role within Bandai Namco holdings, and Bandai Visual's U.S. business model.

What role does Bandai Visual of Japan play in the Bandai Namco group?
It was a merger over three years ago.  Bandai Namco is a big game and toy company. Bandai as a toy company is doing the same thing as before, and Namco is still doing mainly games.  A part of Bandai that did games is going to Namco.  Except for that, the role of each company did not change a lot.

Is Bandai Visual a subsidiary of Bandai?
Yes.  Bandai Visual was a subsidiary of Bandai before the merger, but after the merger, Bandai Visual became a subsidiary of Bandai Namco Holding, which is a holding company, on top of Bandai, Namco, Bandai Visual, Sunrise, all the subsidiaries in Japan.

Was Sunrise part of Bandai before the merger?
Yes, Sunrise was owned by Bandai, the toy company, before the merger, and the Bandai holdings became subsidiaries of Namco Bandai holdings.  So right now, Bandai, Bandai Visual, and Sunrise are sister companies.

Are Sunrise and Bandai quite separate?
Actually it's a long history.  Let me explain about Bandai Visual first. Bandai Visual was established as a company about 35 years ago as an independent distributor of videos.  They started distributing mostly the products of Bandai; Bandai did not have any shares of Bandai Visual at that time.  Even the name of the company was different -- A.E. Promotions and Productions Company, something like that.  After four or five years, Bandai Visual was distributing for Bandai a lot, and Bandai thought they would buy the company to get Bandai Visual in the group. So Bandai became an owner of Bandai Visual.

Sunrise also had a long history.  When they produced Gundam, they asked Bandai to distribute the merchandise.  Since then they've had a tight relationship, with the Bandai toy manufacturing company producing and selling Gundam merchandise.  After some years, Bandai also bought Sunrise, and made [Sunrise and Bandai Visual] two subsidiaries.  So when they established Sunrise and Bandai Visual, they were independent, but then after 10 or 15 years, they became a group.  That's the history.

Could you explain the relationship between Bandai Visual U.S. and Bandai Entertainment U.S.?
Bandai Entertainment was established as a U.S. distribution company of Japanese anime about 10 or 15 years ago.  They had been distributing Japanese animation not only from Bandai Visual and Sunrise, but also from other production companies in Japan.  They were owned by Bandai America, which was a subsidiary of Bandai Japan. Bandai Visual U.S. is 100% owned by Bandai Visual Japan.  So Bandai Entertainment and Bandai Visual are kind of 'cousin' companies.  It's in the family, but not as close as a sister company.

Before Bandai Visual started the new company in America three years ago, Bandai Visual Japan licensed their programs not only to Bandai Entertainment, but also to Central Park Media, Geneon, and a few for ADVision and Media Blasters as well.  So, before we set up Bandai Visual USA, Bandai Entertainment was just one of the distributors in America for Japanese animation for Bandai Visual Japan.

The difference between Bandai Entertainment and Bandai Visual USA is that Bandai Visual USA distributes Japanese animation directly from Japan.  We're not licensing here, because we know American anime fans, real core anime fans, want the product from Japan as it is in Japan.  They don't like to see a change in the format, or any adaptation to something that seems like an Americanized product.  They'd rather buy the authentic Japanese product.  So, we decided to make them just the same as they are released in Japan, and distribute them in America.

You don't produce English dubs, you just do subtitles, and release just as they would be on a Japanese DVD?
Yes.  We like to concentrate on presenting our products to the really sophisticated American anime fans.  We know they don't need any dubs.  Of course, if we can put a really good dubbing on a program, they will appreciate that, but unfortunately it costs a lot, and we cannot raise the prices of our products more than they are now.  So, we aren't including dubs right now.

What is your estimate of the size of the American anime market right now?
There aren't more than 200,000 core fans.  In dollars, it's around $350 million.

Your business model is predicated on working with the animephile, the hardcore collector.  What is the best way you've found to reach that consumer base?
That's a very good question, and we're working on it.  It's not easy.  At anime conventions we sell our DVDs at the booths, and I've found that there are many people who want high quality products, but when I ask them where they get their information, they tell me that they don't read any anime magazines and they don't know really know about the anime-specific Webpages.

I think most people grew up with Japanese animation when they were young in the 1990s or maybe the 1980s.  Since the quality of Japanese animation wasn't very good, they separated themselves from the market, but they still have some knowledge and interest in Japanese anime, and if they find a high quality anime product, they'll still buy it.  That's what we're thinking about the market now.

Are the titles you bring over exclusively titles that Bandai Visual Japan has worked on or has an interest in, or are you thinking about bringing over things that Bandai Visual was not associated with originally?
Right now we are just getting programs from Bandai Visual, and maybe from Sunrise in the near future.  But, if we can establish this model, producing in Japan for American, or European, or Australian markets, we'd like to make our market global.  We'd like it to be one market.  Recently we've been developing programs in Japan, then releasing in America, then in Europe, but we'd like to combine all our markets into one, and release our programs at the same time all over the world.  Right now we're working with Bandai Visual Japan and Sunrise as a group company, but after we establish this model, then we will solicit other production companies in Japan to join our system.

Is your ideal for the future to release a region 1 DVD at the same time you're releasing the region 2 in Japan?
Actually, the DVD market will go into HD-DVD or Blu-Ray Disc, and those next generation DVDs don't have region codes, so, it's going to be the same thing.

So in the future with high definition, you can release essentially the same product?
That's correct.  So Japanese fans will get products with English subtitles at the same time as Americans do.

That's true in America too, you know if you buy a Die Hard DVD you'll have French or Spanish or Chinese subtitles on it.
Actually it's a bit of a project, but if we can we'd like to put many languages on a high-def disc, because they have a lot of capacity to put languages in.  So we may put English, French, Spanish, Chinese on one disc, produce it in Japan and ship it world-wide.

You started out talking about being sort of like Criterion with high quality DVD productions of classic anime series...
Actually we will balance it.  We are planning to release evergreen titles on HD or Blu-Ray in the near future.  Of course besides that, Bandai Visual Japan is introducing new productions in Japan at the same time for Japanese fans.

Bandai Visual is also producing these evergreen classic titles in Japan?
Yes.  The release of those evergreen titles will probably be at almost the same time in Japan and in America.  Currently we are planning to release The Wings of Honneamise on HD and Blu-Ray disc this autumn, and the release date will be something like a month later in America.

Click here for Part 2 of this two part interview.