With the recent news from Bandai, it’s clear to see that 2012 has opened with a bang. In the blink of an eye, one of the biggest providers of content stopped acquiring new content, and began its shift toward a sub-licensing firm. I talked about this a bit last week, in the direct wake of the event. However, I don’t think I’ve fully explored the impact of the market at large.
With Bandai’ exit from the active market, the ocean that is our current market has shrunken immensely. In the physical realm, we have three major players: FUNimation, Sentai Filmworks,and Viz Media. While the three are currently stable companies, the exit of a competitor can do much to upset the balance.
It’s not unusual for businesses to change their behaviors, as the field of competitors gets smaller. Typically, as market conditions deteriorate, the major players begin to grow more conservative. Risks seem more like Herculean tasks, and the primary objective shifts to a dash to maintain core markets. In essence, the safe bet becomes the best bet.
However, “safe” is often the scariest proposition for a business. “Safe” bets don’t grow the market. Instead, they have a contractionary effect, in which old customers leave the market at a rate faster than new customers enter. The blue oceans don’t get looked at as closely, and many potential customers become missed opportunities.
In such conditions, a smaller company can capture a potentially greater market share by entering with a desire to grow the market. With an inexpensive product that appeals to a broader market, it’s possible to disrupt the market leader and usher in a new normal for the market as a whole. The rest of the industry, in this case, plays catch-up, as they try to rush into the blue ocean that formed while they were protecting their places in the bloody pools of the red ocean.
These products aren’t usually the most advanced, the most impressive, or even the most expensive. Usually, disruptive products are, as they say, “crappy products for crappy customers.” They’re cheap, they’re light-weight, and there’s more emphasis on being appealing and approachable, than there is in being the fanboy bait that most companies seek. On the contrary, the mainstream market will often hate such products, as they seek to disrupt the very comfort they’ve come to enjoy. Disruptive products are derided, mocked, and sneered at by the established media and the existing red-ocean customers, as they try to marginalize such a force. “It’s a companion,” some will say. Others will proclaim that such products are inferior, and demand to know why such items still sell even though “better” products are available. They’ll continue to try to maintain the charade that the old ways are king, and that they’re still the special anointed kings, even though they are outnumbered, outsold, and out-performed on every measurable metric.
Mind you, this isn’t a guarantee of things to come. Instead, it’s merely a series of observations, born from a life of observing phenomena in the greater market, with the intent of briefly explaining disruption in the context of the anime market. If a true competitor to the current status quo were to enter the fray, now is the best time to do so. However, what form it would take or how it would even be seen is a mystery best left to when, or if it happens.