Japanese Content Importer Angles for a Backwards Hit

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Japanese Content Importer Angles for a Backwards Hit

Media & Technology

By CHRISTOPHER KEOUGH

Staff Reporter





It might seem unorthodox to read a comic book from back to front, but John Parker swears it’s going to be a big hit.

“All of the research and focus groups indicate teens and ‘tweens the 11- to 17-year-olds think this is a really cool thing,” said Parker, president and chief operating officer of Tokyopop. “It’s something they understand and their parents don’t.”

Next month Tokyopop, an L.A. company that imports Asian entertainment, translates and “localizes” it for American audiences, will launch its line of authentic Japanese manga, or graphic novels. Other than the Americanization of language, the manga are true to the original format, reading from right to left. Nine titles will be rolled out at 500 retail locations nationwide.

The manga titles are among a “product-a-day” release strategy that Parker said would put the once profitable company back in the black. It’s a move meant to recover from an expensive foray into DVD and soundtrack products that Parker said led to losses of $4 million over the last two years.

The company expects revenues of better than $16 million this year after bringing in $7 million in 2001. In addition to the manga and a Korean version called manwha, Tokyopop sells DVDs of Japanese animation, or anime, and video game soundtracks.

The U.S. market for Asian animation exceeds $100 million, according to Fred Patten, a Culver City-based anime historian and writer of freelance stories on anime.

Tokyopop has “not been in the market long enough to establish themselves as one of the majors,” Patten said. “But they’re definitely growing fast.”

From Japan to the States

Tokyopop has its roots in Japan, where in the mid-1990s Chief Executive Stuart Levy was running a multimedia consulting company called Japan Online Inc. Sensing a market for Japanese animation back in America, Levy raised $500,000 from Mitsui Venture Capital Corp. and Nippon Venture Capital Co. to form Mixx Entertainment Inc.

Mixx launched a magazine called MixxZine to introduce Americans to manga and other facets of Asian culture. The following year, Mixx went online with Tokyopop.com, a Web site to sell the company’s products, and re-branded MixxZine as Tokyopop.

While Mixx Entertainment serves as the Tokyo-based parent company, Tokyopop operates as an independent U.S. subsidiary.

Parker said Tokyopop raised another $2 million from Trans Cosmos USA, Rentrak Corp. and increased investments from Mistui and Nippon.

Things were humming along nicely. Then Parker looked up.

“The business was not scaling as we’d predicted,” he said.

So they went back to the venture capital community. The VCs told Parker that Tokyopop could get money if it agreed to focus on the e-commerce engine at the Web site and forget about retail distribution and the magazine.

Parker said he and Levy didn’t think that was the way to turn things around and ignored the advice and the capital. They turned instead to the Asian venture capital community and Softbank Finance Corp., the Japanese firm that owns 23 percent of Yahoo, plopped down 1 billion yen (a little less than $10 million).

Tokyopop shut down the magazine and the e-commerce engine on the Web sites kin favor of more traditional retailing.

Today, Tokyopop sells its manga, anime and DVDs through more than 100 retailers, including Best Buy, Borders, Suncoast Motion Picture Co. and Blockbuster. In April, the products will be available at discount retailers Target and Wal-Mart.

Tokyopop distributes its merchandise online through the Right Stuf International Inc., an Internet superstore for anime products. Tonette Yatsuhashi, a customer service manager at the Iowa company, said she’s amazed by the amount of business that Tokyopop does. Big buyers include college students and military personnel.

“We have orders for items we don’t even have yet,” she said. “People are waiting on products to be released by the manufacturers.”

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