Entrepreneur Association of Tokyo
Seminar Summary - Stuart Levy, Tokyo Pop

Leading the Way in U.S. Manga Revolution
February 07, 2006

America is known for its big, bold, brashness, but when it comes to the multi-million dollar manga market, it's small fry. That was until TOKYOPOP Inc. CEO Stuart Levy, speaker at EA-Tokyo’s February 7th seminar, decided to grow the mammoth industry in his native country.

Founded in 1996, TOKYOPOP is the leading North American publisher of manga and positioned at the forefront of the fastest growing segment in the U.S. publishing industry. The company, which now employs 110 staff in 4 countries on 3 continents, is known as a leading youth-oriented entertainment brand and an innovator of manga creation. TOKYOPOP has achieved success in manga publishing and development of manga related film, TV and digital entertainment on a global level.
Levy’s multifaceted entertainment background includes more than 12 years experience in creative development, art direction, licensing, production, contract law and finance. Through his leadership the company has become an influential youth-oriented entertainment brand. From the introduction of the first-ever extensive manga publishing program in North America, to the development of its manga-originated intellectual properties into film, television and digital entertainment, Levy has built an international bridge that has transformed the way teens worldwide experience pop culture.

Sales explosion
The manga phenomenon was originally fuelled by the hugely popular works of Japanese manga legend Tezuka Osamu, who created famous characters such as Astro Boy, Jungle Emperor Leo and Princess Knight, and who was the artist behind the distinctive "large eyes" style of Japanese animation.
In 2004, total sales of manga in book and magazine form in Japan totaled 504.7 billion yen on volumes of a staggering 1,384.2 million publications.
With numbers like these, it would seem it would only be a matter of time before the manga craze rocked the outside world, including the home of much of the world’s popular culture − America.

Too late! The shockwave has already hit. Since 2000, sales of manga in the U.S. have exploded from $5 million to $300 million and sales of manga tripled in 2005 compared to 2004.

Most of TOKYOPOP’s product lineup has been in book form − until now. The company churns out about 400 manga books in the U.S., 250 in the UK, approximately 200 in Germany, but none in Japan where TOKYOPOP mainly works with artists and publishers.
“Books are what has built the company but we are now taking TOKYOPOP in some very exciting directions,” Levy said. “Our business focuses not just on the core product but ancillary products such as Cine-Manga, DVD, and turning our manga into film. In the U.S. we have built a brand name that is very well recognized especially among young people. The appetite of teenage American girls for this expanding media is a key driver of growth.”

The Real Deal − Authentic Manga
Levy explained how ‘Authentic Manga,’ a concept rolled out in 2002, was instrumental in helping TOKYOPOP shift gears to the next level. “We are not a service business,” he explained. “We are providing a diversion, entertainment, a way to take your mind off what is going on in your daily life. So, when we provide that, we want to make sure the consumer is very satisfied with what they are experiencing. So we created Authentic Manga.”

Recalling the past to provide a better understanding of the present, Levy said that in the early stages of building the business, manga did not exist at all in the States. “However, in the stores, there was a tiny little section we were able to convince retailers to create [for TOKYOPOP publications]. But between TOKYOPOP and other publishers, the manga books sizes and prices were all different and that always bothered me.”

So, how did TOKYOPOP shake things up?
Taking the bull by the horns and noting how Playstation and Nintendo have standardized their product branding, Levy came to the conclusion that uniformalization was also required in the manga business. “So we came up with Authentic Manga.” The company uses their ‘brand bar’ − a vertical stripe containing the company logo − everywhere − on their website, books, and other media. “Everything we do has consistent branding and keeping the essence and aesthetics of the brand is always something I have been really focused on. We made one price point, created in-store displays that were very brand-oriented, and the fans loved it − it worked. Consumers really appreciated it, they told their friends and people started buying manga and retailers began to make some really good money.”

Competition finding potential manga artists worldwide
Worldwide, manga was already a big deal and getting bigger, Levy said. He described how because many people have been reading manga for so long, the dream of thousands of young people is to create manga themselves. “So, what has resulted is a generation of children who are growing up whose heroes are the people who create the manga that they read,” he said. “It’s a global thing. So with TOKYOPOP, we not only publish titles from Japan, which is how we grew the business, but we also make manga with artists from all over the world.”
The result? A couple of years ago when Levy realized that the people who were reading the manga were also dying to draw it, he decided to run a competition − called The Rising Stars of Manga − in the U.S.
“We received over 1,000 entries. We have now just finished our sixth competition and are finding potential artists from all over the world. Basically, there are a lot of young people who are good enough for prime time, and if we publish a book that comprises their works, we sometimes negotiate a deal with them to become published. We have now signed up about 50 artists that have publishing contracts with us.”

However, it wasn’t as easy as it sounds…..

Lack of contracts puts squeeze on publishers
Levy highlighted an interesting cultural difference involved in the process of taking on new artists that has raised more than a few eyebrows within the company. In the U.S., he said, contractual negotiations and meetings with editors, creators and lawyers typically mark the final stage of taking on an artist. But when TOKYOPOP began working with Japanese, the company discovered that it was common practice for creators who are ‘green lit’ to go straight into creating the manga. “Most companies producing manga in Japan do not even have written contracts, which is amazing from a Western point of view. What happens if you are sued, or when there is a problem?” Levy asked. “They [Japanese] deal with problems like these when they happen. Our [Western] society is obviously a lot more conservative and a lot of times things will break down in the contractual negotiations, but it is also taking the bitter medicine in advance − you work out with the creator who gets the rights to what, who is paying who and how much, and if you can’t get to that stage, people go their separate ways. But in Japan, it is more based on an ‘agreement in the dark’; a unique understanding with each other that is reached before they start working when they hope there will be no problems. But right now, the Japanese publishing companies are discovering that hasn’t been good for them.”
Why not? “Because the Japanese publishing companies have never drawn up contracts,” Levy explained. “The manga on the mobile started to take off in 2005 and Sony came along and directly contacted many manga artists, asking them whether they had contractual limitations with their publishers. The common answer was ‘no’ so Sony picked them up and the publishers just got squeezed out. So the old-fashioned business methods that the industry had have now come back to bite them.”

North American market about to kick in.
So, what projects are in the pipeline for TOKYOPOP?
Levy described one of the recently launched key company ventures − using the Internet and other digital formats to not only promote manga but serialize it (35-40 titles free online to members). “This is aimed at spreading it out as much as possible to get people exposed to the content,” he said. “I think we are going to see digital based technology expand this art form even further than anyone has ever dreamed of so far.”

Levy said another big upcoming push for TOKYOPOP is the mobile business. “In Japan, it has already started with manga, and in the States, 3G networks are being installed throughout the country. People are starting to realize they can use their phones for more than just talking, which obviously out here in Japan and Korea and to a certain degree in Europe, people have known about for a while. But the North American market is really about to kick in. Manga is perfect for the cell phone and we’ll see a lot of these applications come on line in spring and summer of 2006.”

Where does Levy ultimately want to take manga? “TOKYOPOP is working hard to drive the term ‘manga’ into popular consciousness,” he said. “We want the word to come into popular usage in a similar way to how ‘sushi’ has. We really want to turn it into a lifestyle − where it affects fashion and attitude; it’s a global thing, it is beyond just the entertainment content itself.”


Further reference:
TOKYOPOP: www.tokyopop.com
Tezuka Osamu Official Website: www.tezuka.co.jp
JETRO Japanese Publishing Industry statistics: www.jetro.go.jp/en/market/trend/industrial/pdf/jem0507-2e.pdf

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Text: Jonathon Walsh

Jonathon Walsh is a professional Corporate Editor and Writer of more than 275 articles published in Japanese and foreign media. He is also Director of Business Grow, an innovative company specializing in providing a wide range of high quality Editorial Content and Advertising services.

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