In Part 2 of this two part interview with Bandai Visual president Tatsunori Konno (see also 'ICv2 Interviews Tatsunori Konno, Part 1'), we talk about high definition, legal and illegal downloads, and Bandai Visual's pricing strategy.

Let's talk about high definition, which is obviously a major opportunity for the kind of things that you're doing.  How big is the high definition market for anime in Japan?
In Japan it's still small; it's only five percent.  If you add HD and Blu-Ray then the total is five percent of total sales of DVDs.  So it's quite small.

Is one format or the other dominant there?
It's one to three.  One HD to three Blu-Ray.  Blu-Ray is quite a bit ahead.

And you said for The Wings of Honneamise you're going to do both?
Both, yes.

And with Akira as well?
Actually, for Akira we don't know yet.

When do you think you're going to go all the way with HD, releasing HD and regular DVDs at the same time in the US?
We're not sure.  Probably, on the Honneamise release, we will put either HD or Blu-Ray with standard DVD discs.  We like to do the same thing as we did on our Freedom discs:  twin format discs with both high definition and standard on one disc.  But because Honneamise is quite long, the format cannot allow us to do that on one disc so we will separate it into two discs -- one with Blu-Ray or HD, and the other with standard. It will be in a box set.

Do you think high definition will replace the current DVD, or will it be more like Laserdiscs, a niche product for the hard core fan?
The Laserdisc situation was because of the players.  But both HD and BluRay manufacturers are trying to sell their players in huge amounts, so one of them or both of them will take over from DVDs because the quality is really good.  For example, with Freedom, the difference in quality is huge.

So you think high definition will supplant regular DVDs.

The gap between when an anime DVD is released in Japan and when it appears in the US is shrinking.  You're hoping that by next year this gap will be virtually nonexistent?
Yes, for new productions, of course.  We can't do it for every title.

Do you worry about illegal downloads?
That's a big headache, yes.  We do think we need to cooperate with some Internet distribution, but we know illegal distribution is hurting us and we have to stop that.

The reason we asked about illegal downloads in the context of reducing the gap between the release in Japan and in America is to find out whether reducing the gap is primarily to reduce the incentive for illegal downloads or more to establish a global marketing push?
We think if we distribute the DVDs as soon as possible then it's better for American distributors.  [Right now] American distributors need to wait a year or a year and a half to start distributing the products after they are released in Japan.  And during that time, the fans can watch the program through the Internet and get tired of it, or they forget about the title and go to the new title.  Then they become indifferent to the DVD releases, so we are trying to release it as soon as possible after they release the program in Japan.

You mentioned legal downloads.  Are you considering selling downloads of your material or using them for promotional purposes?
It's probably going to be a free download, we're working on that.  For example, in Japan we did the same thing.  We put some programs on an Internet site and let them watch for free -- only the first episode right after they broadcast it on TV.  If someone could not watch that program on TV they could see it on the Internet and if they liked it they would buy the DVD.  We believe this system will work in America also.

Your DVDs, in comparison to the average DVD in the U.S., are fairly high priced.  What has been the reaction to the pricing over here?
I get a lot of complaints; I know cheaper is better.  Putting a high price on our products is not our policy; this is the result of what we try to make -- really high quality products.  So if American fans notice that Bandai Visual products are really good quality and worth buying, then we will see more sales of the releases, and then we believe we can reduce the price gradually.  But at this stage, we have to tell American fans, or let them notice, that Bandai Visual's product is really good quality.

Do you have consistent pricing across your global markets of Japan, Australia, Europe, and the United States?
Yes.  The price we are putting on the American market is close to the Japanese market.  If we can expand the market in America, not only in America but also maybe Australia or England, then we can reduce the prices here and even in Japan.

What about your Blu-Ray and HD editions?  How are they going to be priced in relation to your regular DVD editions?
It depends on what the program is, and how we will package it.  But probably it'll be a bit more expensive than the single DVD.  It's really depends on the program.

Why did you switch your U.S. distribution to Geneon?
Geneon has good knowledge and experience for distributing Japanese anime videos.  That's the main reason.