They're battered and bloody, but not dead (yet)!

It’s not even a full month into 2012, and we’re seeing what many have taken as the proverbial poo hitting the fan. Many were still reeling after the blow of Bandai’s recent exit from the acquisitions game. The news delivered a crushing follow-up today, when Media Blasters announced they’d be laying off 60% of their staff. From the looks of things,the industry is crashing down under its own weight.

This is a bit of an exaggeration, of course, but today’s announcement sends a clear message to anime fans across the country. “Things are bad, and they can easily get worse. Nobody is safe anymore.” Personally though, I have to question whether it’s wise to jump to conclusions right now. The news certainly isn’t good, but if we probe deeper into Media Blasters’s revelations, we see a slightly different story than the clear-cut doom and gloom that appears on the surface.

Media Blasters is using a classical cost-saving tactic. By releasing the staff, then re-hiring as frellancers, the company is freed from obligations to provide health benefits, insurance, and other perks that come with full-time employment. They aren’t obligated to provide the same hours or pay, nor do they need to pay for items like retirement programs. From a business perspective, this is a fairly sleazy way to mop up red ink. The fact that the company will continue normal operations shows that they intend to remain as an active part of the greater market.

Media Blasters is in a situation more akin to AnimEigo, in the sense that they derive a large amount of income from arms that aren’t related to anime. In particular, the company has a reach into art-house cinema, Asian film, and (of course) adult entertainment. The company is known to dabble in numerous areas, and have gone as far as to finance their own films in order to serve specific niches. In layman’s terms, they continue to seek Blue Oceans, as they seek new markets and sell to new audiences. And, like AnimEigo, they can sustain themselves on these established branches, even as contractions take their toll.

While things definitely seem dire for Media Blasters, it may be a bit too early to start the funeral pyres. They are on a stronger footing than Bandai at the moment, as they don’t have a debt burden or over-reaching Japanese parents that will pull the plug at a moment’s notice. Still, they are a small company, and a 60-percent reduction is something that should cause some concern. How Media Blasters acts in the next few months will be incredibly telling. The company’s behaviors and reactions to the market are sure to change, and they will dictate just how strong of a position they actually hold.