Viz Director of Manga Sales and Marketing Dallas Middaugh told ICv2 today that Viz has decided to abide by its decision to eliminate most of its direct U.S. customers for manga, effective at the end of 2002. Among those affected by the decision are FM International and Cold Cut Distribution, who in addition to Diamond had serviced the direct comic store market. Viz had earlier made the decision to eliminate its direct-to-retailer sales, but was reportedly reconsidering its relationships with FM and Cold Cut (see 'Viz Cutting Direct Customers'). According to Middaugh, 'There was some back and forth and discussion, but at the end of the day that was a final decision.' Viz' U.S. distribution will now be handled by Diamond Comic Distributors (comic stores), Publishers Group West (books), Curtis (magazines), Ingram (periodicals), and Pioneer (videos).
We spoke to FM VP-Purchasing Wayne Markley, who told us, 'We have always felt the more distributors a publisher deals with increases their exposure and helps their sales. We feel bad for our accounts who will no longer have access to Viz comics because they do not buy from one of the remaining distributors. We are very sorry to see Viz go in this direction, but we are continuing to work with them in an attempt to resume doing business sometime in the future.' According to Markley, FM will continue to buy Viz videos (purchased through Pioneer) and its graphic novels (purchased through Publishers Group West), so the impact of the change will be felt primarily on periodical comics.
Viz also recently informed its distributors that they could no longer sell most of its products (Animerica being one exception) outside of the U.S. and Canada. This is in accord with its licensing agreements with parent companies Shogakukan and Shueisha, which are only for those two countries. While Viz had restricted the sales of its Pokemon titles outside of the U.S., those restrictions had never been applied to the rest of its line.
The biggest impact of the international restrictions, according to Middaugh, will be on retailers (and consumers) in English-speaking countries the United Kingdom, Australia, and New Zealand. There are currently no licensees in those countries for the titles being published by Viz; either Viz could acquire the rights to release its titles in those countries or another licensee could be signed.
These distribution moves are only one aspect of a sweeping reorganization of Viz being undertaken in the wake of the acquisition of 50% ownership by Shueisha (see 'Shueisha Buys Equity Interest in Viz'), and the launch of Shonen Jump (see 'Shonen Jump To Include Ultra-Rare YGO Card'). According to Middaugh, 'It caused us to re-examine our total business, and this is one small part of that....It's an opportunity to look at what you're doing and try to make it more efficient....Over the course of the next year there will be a lot of changes in what we're doing.'
The international moves were taken when the business review revealed that copies were being shipped outside of the U.S. The domestic moves (cutting retail and small distributor accounts) were made for the sake of efficiency. 'We have limited resources,' Middaugh said. 'We want to be able to satisfy our customers, but we really don't have the resources internally to handle the number of customers that we've had.'
We asked why resources weren't added to handle the growth, and he said, 'This kind of growth is an opportunity to streamline things to be more efficient.'
Middaugh also noted the success of the Shonen Jump launch. 'Shonen Jump is doing incredibly well, and it's taking resources from other areas.' According to Middaugh, the orders from Diamond for the first issue represented only a few percentage points of the total, and copies are now in short supply.