Tales Of The Industry

How To Torpedo Your Own License

Welcome to “Tales of the Industry,” a column where we will share stories from real working professionals in the anime business. This week, we have a story contributed by a long time industry member who acts as a consultant for companies looking to get into the anime business. We've removed the finer details, but everything else is as he told it to us.

Are you a current or former member of the anime business or convention staff? Do you have a story you've been dying to tell, but just can't tell it the normal way? Get in touch with Justin Sevakis through any social media you like. His Twitter account is @WorldOfCrap, if you aren't acquainted.

I'm an outside consultant for the licensing side of the anime business. I don't work for any one company -- I'm something of a freelancer, going from gig to gig. There are new companies popping up all the time that want to get into the anime business. Some actually specialize in anime, some are more broadly focused. Usually these days, they want to stream the stuff, and aren't satisfied getting the same stuff that Funimation and Viz give to all of their streaming partners -- they want to license shows straight from Japan. This is usually far, far harder than most of them realize. After butting their heads into a wall a few times, they hire me.

A few years ago, a new streaming video startup was one of these companies. They'd never done business in Japan before, but really thought it was important to have some anime in its catalog, in order to drive attention and viewers. But they didn't want just any anime, they wanted big titles, A-list titles. This was going to be very, very difficult. After all, they were a complete unknown: no track record, no reputation. Was anybody going to take them seriously?

I sent some emails and made a few phone calls, to introduce them to the various big licensors. As these things usually go, the licensors sent some documents about forthcoming shows, I shared them with the client, the client made their selections (with a little guidance from me), and made an offer. A couple deals came tantalizingly close to being signed, but for the most part, everyone wanted to be the second company to sign a deal with my customer. The licensors would then hem and haw for a little while before coming back to me and saying, "you know what? I like their offer, but I really don't want to be the first one to deal with these guys. If they turn out to be complete basket cases, or worse, that would be really really bad for me." And who could blame them?

What made matters even harder is that the company only wanted online streaming rights -- after all, they weren't a publisher or broadcaster, and couldn't really do anything with DVD or television rights. This means that several deals ALMOST went through, and then the licensor got a bigger, better offer that covered all rights. And so we lost those as well.

The client was getting nervous. They had investors that were breathing down their necks, investors who didn't appreciate how long deals like this can take, and wanted to see some major news coming out of the company to justify the money they were spending. They had to put out a press release, to calm them down. I told them to wait until we actually had a contract. That's actually rule #1 of licensing anything, in any country: don't shoot your mouth off until everything is finalized and all parties are ready.

After many false starts and many more almost-weres, we finally had one licensor who was ready to deal with us in a major way. They'd given us not just one, but several shows -- A-list ones at that. We had negotiated the finer points of the contract, and they were pretty much ready to sign. "Please wait a little bit longer," they wrote to us. "We need to finalize several points with the production committees." Standard operating procedure for the anime business, but I knew this could take some time. I updated the client by email, and went to bed.

I woke up to a phone call from Japan. This doesn't actually happen very often -- all the licensors know I'm in North America and respect the time difference. I jolted out of bed and answered the phone. It was the licensor.

"I am reading Anime News Network right now, and I see a press release from your client."

"What?!"

"As you know, this causes a very difficult situation for us." In case you don't speak Japanese business dialect, this translates to normal American English as a string of profanity screamed directly into the phone.

I bolted out of bed and ran for my laptop, tripping over a few cat toys as I went. I'd like to think that I didn't mutter anything too obscene into the phone. I loaded up ANN and clicked over to the press release section. There it was. My blood ran cold. My god, had those guys never licensed anything before in their lives?

And then I realized, the answer was no. That was why they hired me.

I started apologizing profusely to the licensor. "This statement that they have licensed these titles from us, it's not true. There is no signed agreement," the licensor told me, which was true. I apologized again, noticing that I was bowing over the phone. It was a reflex. "Additionally, such press releases need to be approved by us before being sent out. This is very basic part of licensing contents," the licensor continued. I continued to grovel. It seems like such a small thing to an outsider, but politically this could cause countless headaches in Japan. Imagine, the general public learning about a deal before one of the producers!

After reaming me out for the appropriate amount of time, the licensor said that they would discuss the matter internally and get back to me on whether or not they still wanted to move forward with the deal. The phone call ended, and I silently made my way back to bed. I proceeded to stare at the ceiling for the next 3 hours, my brain furiously churning out draft after draft of possible ways that this crisis could play out.

The most obvious one, of course, is that the licensor would decide these people couldn't be trusted, and pull out of the deal. That was almost a certainty. The client, who was paying me a lot of money to facilitate these deals, would almost certainly get shut out of the market, as word of this terrible breach of business etiquette spread among the industry. But worst of all, this whole thing might sully my name as well. Any one else I introduced would automatically get seen as untrustworthy. As a consultant, I'd be seen as an agent who "couldn't control his customer."

Just as my imagination had me dying penniless in a gutter, my alarm went off. After breakfast and some coffee, I sat down and pondered what I could do to smooth things over. There wasn't much, other than making some personal appeals. First, I called my client and told them what had transpired, and not to send out any more premature press releases. Second, I sat down and wrote a very heartfelt apology letter to the licensor.

For those who've never dealt with the licensing side of anime before, licensors have the unenviable job of finding these business deals, and then having to present those deals to the show's producers and the various members of the production committee. If any of those people get annoyed or butthurt about something, it's the licensors that have to try and smooth things over and make everything work. Since this incident made their jobs much harder, it was important for them to know that I respected them and their efforts, and had I known anything about these press releases they never would have been sent. I emphasized the fact that the client, although perfectly capable of fulfilling their agreement, was new to this aspect of the business and simply didn't know any better.

That night, once Japan had opened for business, I got a reply. The licensor had consulted the powers that be, and they didn't make a big deal out of it. They were willing to overlook this incident, and sign the contract. I breathed a huge sigh of relief. I felt like I'd aged 30 years over this.

The shows were posted on my client's website, but the client realized that being in the anime game was simply out of their league. They thanked me (and paid me) for my services, and told me that they were going to stick to other, easier-to-license sorts of shows. I wished them luck. I haven't heard from them since.

Later the licensor told me that they never would've done business with that client ever again.

If you are a current or former anime industry professional and have a story to share (we can keep everyone anonymous), get in touch with Justin Sevakis via social media.

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